“Deadline” for exemption applications

 
Dear NEASA member
 
As previously communicated, the Minister of Labour extended the MEIBC Main Agreement to non-parties with effect from 5 January 2015.
 
Even though NEASA is currently involved in legal processes to have the extension (in respect of the 2014/17 Main Agreement) set aside, it is advisable for employers to apply for exemption from the Main Agreement as soon as possible.
 
In terms of the gazetted agreement the deadline for submitting applications to be exempted from the implementation of the wage increases, is 4 February 2015.
 
The deadline for submitting LEP exemptions remains 31 October 2015. 
 

EXEMPTIONS AND NUMSA'S CAPITULATION TO NEASA'S DEMANDS

The fact that NUMSA has accepted NEASA’s demands may assist employers in applying for exemption. The agreement by NUMSA may be used as a basis for exemption applications, where NUMSA members are involved, as they have already agreed to conditions of employment which are less beneficial than those contained in the Main Agreement.
 

THE BASIS OF AN EXEMPTION APPLICATION

By capitulating to NEASA's demands NUMSA also accepted NEASA’s proposal regarding a new exemptions policy, tabled by NEASA during the negotiations. This policy is enclosed (click here) and employers may utilize every item contained therein as the basis for any exemption. 
 
Employers should also keep in mind that NEASA obtained a consent order in 2012 in terms of which the Council must consider all applications for exemption irrespective of the basis on which it is founded. This effectively means that financial reasons are no longer the only criteria which must be considered. Employers may now apply for an exemption on any one or more of the following reasons (but not limited to it): 

• increased competitive threats;
• inability of employer 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
• new ventures/ operations which justify retention or creation of job opportunities at reduced wage costs.

  
NEASA will assist members in submitting applications and members should contact their regional offices in this regard.
 
We are currently putting processes in place in order to coordinate the submission of all exemption applications through NEASA’s regional offices and further correspondence will follow in this regard.      
NEASA members may contact the HOTLINE should they have any further queries in this regard.

Regards 

Gerhard Papenfus