The ‘just wage’ decision will affect more than 20,000 employees.
Woolworths will invest R120 million to increase base pay of store workers from R33.40 to R41.25 an hour by 2023, an increase of almost 24 percent.
This was according to the company’s annual report, released this week, which noted that there is a “critical need to close the remuneration gap in the context of the socio-economic environment in South Africa”.
At the current minimum Woolworths wage rate, it is estimated that store employees who work 45 hours a week earn around R6,000 per month. The decision on a “just wage” will affect more than 20,000 store staff.
The current minimum wage, as set by the department of Labour and Employment, is R21.69 per hour, and the minimum wage in the retail sector is R28.25.
Last year, Woolworths was criticised for its remuneration of executives and shareholders voted against implementing its remuneration plan. The vote is non-binding, and the popular retailer needs to consult with shareholders about their concerns – and it can still pay out the remuneration.
The remuneration committee has approved a 4.5 percent increase for executive directors for the 2022 financial year. Executive directors and all other managers in the group did not receive an increase in their guaranteed pay over the past year, while frontline store staff received a four percent increase in South Africa.
Wage ratios of lowest and highest-paid employees is one of the key focus areas of the Companies Amendment Bill of 2021, which was recently approved for public comment.
