Restaurants, fast food outlets and caterers across South Africa are facing a crisis similar to the one that caused concern five years ago. Effective 26 October 2026, minimum wages and other conditions of employment in the industry changed significantly. This follows the Minister of Employment and Labour’s extension of the Bargaining Council for the Fast Food, Restaurant, Catering and Allied Trades (BCFFRCAT) Main Collective Agreement to establishments nationwide, except for Johannesburg, Pretoria and surrounding regions.

Businesses that did not participate in negotiating the agreement are required to comply with its terms. In effect, the agreement now sets legally binding minimum standards for the industry.

 

Who is covered – and who is excluded?

The extension applies to fast-food, restaurant and catering establishments across South Africa, subject to certain exclusions.

The agreement does not apply to employers and employees covered by collective agreements in the bargaining councils for the Johannesburg and Pretoria regions.

It also excludes:

• Activities ancillary or incidental to the casino and hotel industries, provided they are carried on, managed and operated solely by the hotel or casino
• Catering activities owned, managed or operated by sports or recreational clubs, on their premises and for the benefit of their members or patrons
• Businesses conducted by filling or service stations
• Food and beverage outlets that form part of a supermarket and are operated from the premises of the supermarket

Does this sound familiar?

In January 2021, the Minister made a similar extension. FEDHASA (the Federated Hospitality Association of South Africa) obtained an interdict preventing the Bargaining Council from requiring non-parties to comply with the agreement. FEDHASA then applied to review decisions made by the Minister and the Registrar. The State eventually abandoned its opposition to FEDHASA’s case which meant that the extension of the agreement failed to materialise.

And here we go again

Although the State (the Minister and the Registrar) capitulated at the time, the Minister has now extended the latest collective agreement to non-parties, with effect from 26 October 2026.

This time, the parties to the agreement appear to have taken a different approach. After the Registrar determined that the parties to the Bargaining Council were ‘sufficiently representative’ within its registered scope, the Minister concluded that failing to extend the agreement could undermine collective bargaining at sectoral level.

It is unclear how the Registrar and the Minister reached these conclusions. FEDHASA has again approached the Labour Court to challenge their decisions. The central question, once more, is whether the Registrar and the Minister properly applied their minds.

To help employers understand the potential impact, we have set out some of the agreement’s key provisions below.

Wages

The lowest prescribed hourly wage, R32.95, is 9% higher the national minimum wage of R30.23. The agreement also sets different minimum wages for different employee categories. The highest prescribed minimum is R57.65 for a chef, manager or sous-chef.

Small employers – those with 10 or fewer employees – may pay 10% less than the prescribed rates, provided they do not pay less than the national minimum wage.

Other costs

In addition to higher wages, employers are required to pay:

• Council expenses levy: R7.00 per month per employee, plus a R7.00 deduction from each employee’s wages
• Dispute-resolution levy: R5.00 per month per employee, plus a R5.00 deduction from each employee’s wages
• General levy: R30.00 per month per establishment
• Funeral benefit: R12.50 per month per employee, plus a R12.50 deduction from each employee’s wages
• Provident fund: 5% of each employee’s monthly wages, plus a 5% deduction from the employee’s wages
• Uniform allowance: R110.00 per month for each employee required to wash their own uniform
• Annual bonus: One week’s wages each December for employees with at least 12 consecutive months’ service, and two weeks’ wages for employees with at least 24 consecutive months’ service

Administration

In addition to registering with the Council, employers must submit monthly returns setting out the amounts contributed by the employer and employees. Separate monthly returns must also be submitted to the administrators of the funeral benefit and provident fund.

Other changes to employment conditions

Most other basic conditions of employment, such as working hours and leave, are broadly similar to those in Sectoral Determination 14: Hospitality Industry (SD14). However, the agreement contains some unique provisions, including rules for commission earners and “special function casual employees”.

It also sets out specific arrangements for night work and transport late at night. These provisions replace existing arrangements between employers and employees.

Some history

As discussed in our 2021 article, the idea of a new collective agreement applying nationwide appears to have originated in the Johannesburg region. The BCFFRCAT Main Collective Agreement is clearly modelled on the Main Collective Agreement for the Bargaining Council for the Restaurant, Catering and Allied Trades, which applies in Johannesburg and surrounding areas.

The parties to the new agreement are largely the same, many of its provisions are identical, and the funeral and provident funds – and the contributions to them – are also the same.

After the previous attempt to extend the agreement failed in 2021, the parties have now, five years later, persuaded the Minister to extend it using a different approach. Again, their claim to sufficient representivity across the country is questionable, particularly considering that Johannesburg and Pretoria regions are excluded.

The good, the bad and the ugly

When a business is thriving, it may be difficult to argue against higher wages or contributions to a provident fund. But should employers and employees be compelled to contribute to a funeral fund? And should employers have to pay an annual bonus regardless of the performance of the business or the employee?

Apart from restricting employees’ right to strike over matters covered by the agreement, few of its provisions appear to benefit employers.

It is understandable that the nine trade unions party to the agreement would want to extend their influence beyond the Johannesburg region. What is less clear is whether the two employers’ associations were properly mandated by members outside the Johannesburg region to sign the agreement. What sensible employer would support its extension?

The restaurant, fast food and catering industry offers a vibrant environment for entrepreneurs, from ice cream vendors and fast-food trailers to upmarket restaurants. Yet small employers in the industry now face centrally regulated terms negotiated by larger players, without their participation. Entrepreneurs tend to be particularly cost sensitive and averse to red tape. There is good reason to question whether extending the agreement benefits the industry as a whole.

Exemptions

Employers seeking exemption from the prescribed wages or other provisions must first register with the Council. The wording of the agreement suggests that an exemption may cover only some provisions. Even if an exemption is granted, the employer may remain bound by the other provisions, many of which are onerous and restrictive.

What about Sectoral Determination 14: Hospitality Industry (SD14)?

Until now, employment terms and conditions in the fast-food, restaurant and catering trades have generally been governed by SD14. The main exceptions have been the Johannesburg and Pretoria regions, where separate bargaining council agreements apply.

Following the latest extension, SD14 will no longer apply to covered establishments, except those specifically excluded from the agreement.

What should employers do?

Affected employers must register with the Bargaining Council by 25 November 2026 (i.e. within 30 days of falling within its registered scope, which is within 30 days of the agreement’s implementation date of 26 October 2026).

FEDHASA is challenging the extension again, and an application for an interdict is imminent.

Given the significant impact of the extension of the agreement, affected employers would be well advised not do anything until after the outcome of the interdict.

We will keep subscribers informed of developments.

Jan Truter for www.labourwise.co.za