Chemical Industry Pharmaceutical Sector Agreement extended to non-parties: What’s new?
The Department of Employment and Labour has published a notice extending the NBCCI Pharmaceutical Sector Substantive Agreement 2026/2027 to non-parties in the pharmaceutical sector. Employers and employees who are not members of the employer organisation or the signatory unions are now brought under the agreement’s terms, with effect from 25 May 2026 until 30 June 2027.
The agreement implements a set of minimum standards and council-enforcement mechanisms across the sector, which are important for compliance planning, payroll configuration, and exemption strategy.
The agreement’s scope is framed around the manufacture, fabrication, processing and distribution (excluding wholesaling) of pharmaceuticals and related products, including biological products and diagnostics, and operations incidental to these activities. The agreement also introduces a clearer “bargaining unit” concept tied to the earnings threshold, by defining the bargaining unit as employees earning less than the current threshold alongside employees already recognised in bargaining units at plant level.
What the 2025/2027 agreement says (high-level)
Pay: a two-step increase per year
For bargaining unit employees, the agreement provides an across-the-board (ATB) increase of 5.5% on 1 July in each year, plus a further 0.5% ATB increase on 1 January in each year (January increases apply on the already-adjusted wage).
The minimum salary at the start of this agreement is recorded as R11,398.80, and it increases by the same ATB adjustments on the stipulated dates.
Working time and core benefits
The agreement caps ordinary hours at 40 hours per week, recognises existing plant-level averaging arrangements, and provides for standard sector-wide minimums for annual leave, sick leave (including additional days for hospitalisation once BCEA entitlement is exhausted), study leave, and compassionate leave – while preserving more favourable plant-level arrangements.
A guaranteed annual bonus remains in place at 4.33 times the basic weekly wage (or a 13th cheque for monthly-paid employees), with pro-rata rules and plant-level provisions continuing where they cover additional aspects.
Parental and family-related leave
Maternity leave is set at up to six months, with at least 75% of normal basic pay for the first four months. Additional provisions deal with miscarriage in the third trimester or stillbirth, including a special maternity leave period and linkage to medically certified incapacity.
Paternity leave is set as a minimum of 10 days per occasion, with an administrative requirement to produce proof of registration of birth reflecting paternity within 10 days after returning to work (failing which paid leave is forfeited).
Medical aid and retirement funding
A significant sectoral floor is introduced for medical aid: employers must contribute not less than 50% of the total required medical aid contribution for employees who are members of medical aid schemes.
On retirement funding, fund membership becomes a condition of employment for employees hired after the signing of the agreement, while employees already in service who elected not to join a fund are not compelled to do so.
Enforcement, levies and default penalties
Unlike a simple “wages memorandum”, this agreement contains detailed council machinery: appointment of agents with inspection and questioning powers, levy provisions, and a 3.5% penalty for dishonoured non-cash levy payments, plus legal-cost recovery provisions for levy enforcement.
Exemptions: more structured, with appeals and SMME phasing-in
The agreement includes a comprehensive Exemptions Policy and Procedure, including mandatory pre-application consultation, disclosure obligations, timelines, and an Independent Appeals Committee. It also introduces an SMME-oriented approach that allows for exemptions (including phased-in compliance) up to three years, subject to criteria and evidence of financial constraints.
What changes from the previous (2023/2025) agreement?
A different wage profile: lower annual headline, but now split across the year
The 2023/2025 agreement provided 7% ATB on 1 July 2023 and 7% ATB on 1 July 2024. The 2025/2027 agreement shifts to 5.5% on 1 July plus 0.5% on 1 January in each year. This structure matters operationally: payroll and budgeting must account for mid-year increases, not only annual July adjustments.
Minimum wage: materially higher starting point
The prior agreement recorded a minimum wage of R9,956.15 (to be increased by the ATB). The new agreement records a minimum salary of R11,398.80 before applying the ATB adjustments. The shift is both a quantum change and a compliance baseline for non-parties now drawn into the agreement.
Maternity pay improves substantially
Under the 2023/2025 summary terms, maternity leave pay for the first four months was 45% of normal basic salary. The new agreement raises this to a minimum of 75% of normal basic pay for the first four months. This is one of the clearest “benefit enhancements” in the 2025/2027 cycle.
Paternity leave doubles, with updated admin rules
Previously, the minimum standard recorded was 5 days paternity leave, with proof required within 5 days after return to work. The new agreement sets 10 days, and adjusts the proof period to 10 days, alongside explicit offsetting against plant-level/BCEA family responsibility frameworks.
Medical aid moves from “plant-level issue” to a sectoral minimum contribution
The earlier agreement treated medical aid subsidy as a plant-level issue for negotiation. The new agreement introduces a sector-wide minimum: employers must contribute at least 50% for employees who are members of medical aid schemes. For many employers, this is a compliance-sensitive shift because it creates a floor where previously the sector agreement deferred to plant-level arrangements.
A more expansive sector agreement (and more enforceable “infrastructure”)
The 2023/2025 agreement was comparatively compact and framed as a two-year settlement plus an exemption procedure and a set of summarised “status quo” conditions. By contrast, the 2025/2027 agreement is a full substantive instrument with chapters on leave, allowances, retrenchment principles, enforcement agents, levies and penalties, and a much more developed exemption/appeal architecture.
Childcare leave framing changes
The 2023/2025 terms recorded a maximum of three days paid childcare leave per leave cycle (with qualifying conditions). The new agreement does not repeat that standalone entitlement in the same way; instead, it regulates child-care-related leave via offsetting against BCEA Family Responsibility Leave where plant-level agreements exist. That shift may be neutral where plant arrangements are favourable, but for minimum-standards analysis it changes the way the entitlement is expressed.
What non-parties should do now
For non-party employers newly bound by the agreement, the immediate priorities are: align wage rates and increase triggers (July and January), check minimum salary compliance, assess parental leave pay practices against the new 75% maternity floor and 10-day paternity standard, and review medical aid contributions against the 50% minimum.
Finally, employers that cannot comply should note that the exemption system now contains specific timelines, including a rule that non-parties must apply for exemption no later than 10 days from the Government Gazette in which the agreement is extended to non-parties – making early triage essential.
View the NBCCI Extension to non-parties of the Pharmaceutical Sector Collective Agreement Here
