I am writing in response to your article published in The Village NEWS of 29 January (Local builders up in arms). I wish to clarify that the calculations used are not accurate. A labourer is not required to belong to the BIBC’s medical aid. Only qualified artisans and employees that are voluntary members are required to belong. Please visit our website at www.bibc.co.za for all our wage schedules.
The total cost therefore to the employer in respect of a labourer is the minimum wage of 8 x R28.79 = R230.32 per day. Although overtime is payable after 9 hours, generally a labourer will work 8 hours per day. The employer then contributes towards the employee benefit funds (further explained below) namely Pension/Provident Fund at 8% of the basic wage or R18.89, a Sick Pay Fund contribution of R2.95, a Holiday or Leave Pay contribution of R18.31, a Bonus Fund contribution of R14.46 and the BIBC levy of R2.30 (for administrative costs).
The employer is required to contribute towards the employee benefit funds, of which the Holiday Pay (or leave pay) and Sick Fund (payment for when the employee is too sick to work) is similar to the provisions of the Basic Conditions of Employment Act, applicable to most employees in South Africa and therefore not only a “BIBC requirement”. The Pension or Provident Fund and bonus provisions are also benefits that are provided by most employers to their employees and are not unique to the BIBC.
It is important to note that, of the amounts paid over to the BIBC, 96% is for the benefit of the employee in the form of leave pay and a bonus in December, the payment of the employee’s wages when they are too sick to work, and retirement benefits (including death- and disability insurance and a funeral benefit).
The employee contributes the 7.5% pension or provident fund of R17.71 and a R2.30 administrative levy and therefore the labourer’s “Take-Home-Pay” (without considering UIF) is estimated to be R210.31. The benefits as explained above are not paid to the employee in cash, but are paid to the BIBC. The BIBC administers the Holiday, Bonus and Sick funds, while the Pension and Provident funds are paid over to Sanlam to administer.
Regarding the current actions by the group known as the Whale Coast Contractors’ Association (WCCA), the Department of Labour and the BIBC have had numerous meetings with them to discuss the various issues. It was explained to them that when benefits due to their employees are paid in full, fines are written off by the BIBC as a standard operating procedure. It was also explained that Bargaining Councils are established in terms of the Labour Relations Act, but the group refuses to abide by the law.
In addition, the group has vandalised the BIBC’s offices, including threatening to burn the building down with our staff still inside the building. This is particularly horrifying since one of our employees is a disabled lady. The group also threatened the family of our staff members and as such marched to the private house of our staff member, occupied at that stage by his elderly mother-in-law and under aged child. While the BIBC recognises the right to peaceful protest, we strongly condemn these criminal actions against our staff and their families.