Members of Associations affiliated to the Steel Engineering Industries Federation of Southern Africa (SEIFSA) which are unable to implement the agreed wage increase are encouraged to submit an application for exemption to their Local Regional Bargaining Council on or before 31 July 2018. SEIFSA is aware that the current economic environment may pose severe constraints on certain member companies’ ability to implement the increases, and these members are advised that the industry’s wage exemption procedure continues to apply.
On behalf of its affiliated 21 employer Associations, SEIFSA signed an agreement with all the trade unions on 23 August 2017. This agreement covers the terms and conditions of employment for a three-year period ending on 30 June 2020, called the updated Main Agreement.
It is important to note that the Bargaining Council is obliged to consider all applications for exemption, irrespective of the basis on which they are founded. This effectively means that financial reasons are not the only criteria which must be considered.
SEIFSA anticipates that applications for exemptions will primarily be founded on the grounds of affordability, job retention and/or job creation. However, employers may apply for an exemption on any one or more of the following reasons, but not limited to:
- Increased competitive threats;
- Inability of employer/s to pass on cost increases to final customers;
- Technological changes threatening business survival;
- Inherently high difference between wage rates actually paid and current affordability of market competitive considerations facing an employer;
- Market decline, projections, etc.;
- Loss or potential loss of business;
- Existing/ current unprofitable contracts the consequences of which are only likely to manifest themselves in future/ current (unreported) accounting periods;
- Expansion opportunities (including capital investments) where cheaper labour costs could influence investment decisions; and/ or
- New ventures/ operations which justify retention or creation of job opportunities at reduced wage costs.
Companies wishing to apply for an exemption have until 31 July 2018 to submit their applications.
WAGE EXEMPTION APPLICATION QUESTIONNAIRE
A company wishing to apply for an exemption must complete the questionnaire in its entirety and return all the necessary documentation to the bargaining council.
Businesses wanting to apply must take note of the importance of the council’s requirement that an application must be accompanied by the following important information in order for the application to be considered:
- A fully detailed motivation explaining the difficulties that the company is experiencing, hence the need for the application.
- Audited Financial Statement for the financial year ending 2017/2018. In the case of a closed corporation, a full set of Financial Statements which are to be signed by an Accounting Officer and the latest Management Accounts for the last three months. If the Financial Statements are older than six months, then the Management Accounts for the recent three months are required.
- Formal confirmation that employees were informed of the company’s decision to make an application for exemption.
- Where employees reject the company’s approach, they are to be informed of their right to submit written reasons for objecting to the exemption application, and such reasons should be attached as an annexure to the company’s application.
- The signature of at least two employees who accept being the representatives for the workforce and who will be affected by the application. Representatives of the workforce are to sign the form, contained in the exemption application questionnaire, consenting to the application.
- The signatures of employees accepting that they have been informed of the implications of what the firm is proposing to the Council.
- Where the employees are trade union members, the company should inform the local trade union office of the intention to apply for an exemption and request, in writing, a meeting with the local official to discuss the impact of the exemption on the company and the members of the union.
- Where employees have elected a trade union representative or representatives (shop stewards), these persons should be requested to sign that they were consulted and that they understand the need for applying for the exemption. Where the local trade union official and/or shop stewards have been consulted and where they reject the application, such refusal must be recorded in the application and countersigned by at least two witnesses.
- Where the local trade union official and/or shop stewards and affected employees support the exemption application, this signed agreement should be included with the application.
- It is recommended that all meetings in this regard between management, employees, shop stewards and union officials be minuted and that the minutes of such meetings be submitted with the exemption application.
- The application itself is to be signed by either a director of the firm, member, owner or a senior accountant – neither a bookkeeper nor the human resources manager’s signatures will be acceptable.
- The exemption application will not be considered or processed by the bargaining council unless all the above requirements are met.
- It is not a condition of the exemption that employees accept the proposed wage increase exemption.
- All that is required is that employees and their representatives are fully informed of the company’s intention to apply for exemption and that this consultation process and their response thereto is formally recorded and submitted with the application.
HOW CAN WE HELP YOU
SEIFSA’s Industrial Relations and Legal Services Division staff members are available to assist management in the completion of their wage increase applications. SEIFSA also offers a wide range of training on the Main Agreement, including:
- Introduction to the Main Agreement
- The New Main Agreement
- The Main Agreement vs the Basic Conditions of Employment Act (BCEA)