PPC pay move: positive but not profound

13 March 2014

Five months after cement group PPC froze top management salaries in order to increase the wages of its lowest earners, analysts say it is too early to assess whether it will have a material effect on labour relations.

CEO Ketso Gordhan took a R1m pay cut, while about 60 senior managers’ pay was frozen in order to increase the wages of the group’s 1,200 lowest earners.

PPC’s annual report shows it was able to implement a once-off raise of R875 a month for semiskilled employees. The company’s minimum wage for permanent full-time employees was raised to R6,500 a month.

Gordhan says the gesture has been “very well received” by the firm’s employees.

Independent labour analyst Tony Healy says there is “no doubt” PPC’s actions were “very significant” and honourable, and will contribute “to narrowing the inequality gap”.

However, Healy says labour relations do not operate in vacuums and many workers may still feel frustrated by a lack of service delivery and high inflation, “so there’s only so much an employer can do”.

Though it is too early to call, PPC could become a model for constructive labour relations, as Cashbuild was in the early 1990s.

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