Money Desk
Restaurant agreement raises closure and job-loss fears
Fedhasa warns that a new collective bargaining agreement extending to all South African restaurants could force small businesses to close and cut jobs.
Labour Minister Nomakhosazana Meth gazetted an extension of a collective bargaining agreement on 16 October 2026, making it applicable to all employers in South Africa’s restaurant industry, including those that did not sign it. The agreement takes effect on 26 October 2026.
“Vulnerable workers need to be protected from these systematic exploitative practices, and this extension will go a long way towards achieving that,” Fawu spokesperson Dominique Martin said.
Fedhasa Warns of Job Losses
Fedhasa estimates the agreement’s employment-related obligations could increase restaurant payroll costs by 9%. Brett Tungay, Fedhasa national chair, said the added costs could threaten jobs and the viability of restaurants.
“What we are concerned about is the increases in costs; how many workers will be laid off and how many businesses are going to close,” Tungay said.
“This will cause a lot of heartache in our country, where we already have a huge unemployment problem,” he said.
“The restaurant sector is a major employer, and it has the ability to be a great employer. But not if it is squeezed out of business,” Tungay said.
He said the benefits of the agreement would not outweigh the potential losses across the sector. “It will benefit a few workers in a few establishments, but will cause more unemployment and business closures.”
New Wages and Allowance
Minimum hourly wages prescribed by the agreement range from R30.23 to R57.23, with chefs entitled to R57.23 per hour and managers to R40.46 per hour. The agreement does not assign a specific occupation to the R30.23 rate in the available wage figures.
| Obligation | Prescribed amount |
|---|---|
| Minimum hourly wage range | R30.23 to R57.23 per hour |
| Chefs | R57.23 per hour |
| Managers | R40.46 per hour |
| Uniform cleaning allowance | R17.50 per week |
| Bargaining council levy | R16 per employee per month |
| Establishment levy | R25 per establishment per month |
| Minimum annual bonus | Two weeks’ salary |
Employees required to wear uniforms must receive a cleaning allowance of R17.50 each week. That payment is separate from the prescribed hourly wage.
A minimum annual bonus equivalent to two weeks’ salary is also required under the agreement. The obligation sets the bonus according to each affected employee’s salary rather than as a single fixed payment.
Employers must also pay bargaining council levies comprising R16 for every employee each month and R25 for each establishment per month. An establishment’s monthly levy obligation will therefore include both the fixed R25 charge and the R16 charge for each employee.
