The cash wages for the A1-A3 grades have been adjusted by 24% and for the B1-B5 grades by 18%. The lowest paid employees will now be getting a daily minimum wage of MK1178 (US$1.64 at exchange rate on 1 August 2016). Comparatively, the government prescribed daily minimum wage is still only MK688 (US$0.96).
The new CBA is effective from 1st August 2016 for two years, however the parties have agreed to meet in July 2017 to assess if the economic situation will warrant further wage adjustments. There is also a provision for further review of the wages under extraordinary economic circumstances.
The establishment of Collective Bargaining is a key milestone on the Malawi Tea 2020 journey towards a living wage but the achievement of this target is still dependent on all actors in the value chain playing their part in order to secure further wage increases above the rate of inflation.