SALARIES AND CONDITIONS OF SERVICE FOR TRUCK AND BUS DRIVERS

The Minister of Labour and Social Security issued Minimum Wages and Conditions of Employment (Truck and Bus Drivers) Order, 2020 which has prescribed minimum wages and other conditions of service for bus and truck drivers. The employers in the affected industry have raised concerns to the Ministry of Commerce, Trade and Industry that the prescribed minimum wages have significantly increased the cost of labour.

While minimum wages raise pay for the affected employees, this benefit needs to be traded off against the possible costs of imposing such a wage. The most prominent cost in the policy debates over minimum wages relate to the unintended consequence for the low-wage workers themselves: that employers may cut back on hiring, leading to possibly fewer jobs. For example in the case of domestic workers, the minimum wages have led to casualization.

Prior to the 2020 minimum wages regulations for truck and bus drivers, there had been at least three minimum wage general orders (regulations) that covered the transport industry as well. Below is the evolution of wages for drivers:

The wages in the industry increased in nominal terms by nearly 60% within a period of one year 2011 – 2012 and by another 66.6% between 2012 and 2018. Between 2018 and 2020, the minimum wages doubled for truck drivers and increased by nearly 70% for bus drivers. The reported wages are the prescribed minimum wages issued by the Minister of Labour and Social Security and may not be reflective of average wages in the industry.

The new salaries and conditions of service have been a subject of debate and dialogue between Government and employers since their promalgation in 2020. The Business Regulatory Review Agency through its monitoring function has received submissions that the new conditions of service are not sustainable for businesses. The Agency hs therefore, commissioned Regulatory Impact Assessment on these regulations and as part of the process, stakeholder input and views are sought. 

The Agency now invites comments on this matter.