Exemption applications: Requirement of financial information.

MEIBC
EXEMPTION APPLICATIONS
REQUIREMENT OF FINANCIAL INFORMATION

Dear Steel Industry employer
 
As previously communicated, the Minister of Employment and Labour extended the MEIBC Consolidated Main Agreement (the ‘agreement’) to non-parties, with effect from 17 October 2022.

This decision to extend the agreement and the circumstances leading thereto are currently the subject of litigation, instituted by NEASA, in the Labour Court.

Although there are many shortcomings in the exemptions provisions which, among others, form the basis of the aforementioned litigation, the agreement permits employers who cannot afford to pay the wages, or to comply with other conditions of employment, to apply for exemption based on the financial position of the business.

However, when such an application is made, it is a requirement that financial information of the business must be submitted to the relevant regional council of the MEIBC.
 
Although the pro forma exemption forms seem to indicate that audited financial statements should accompany the application, this is not an inflexible requirement.
 
Most SMMEs do not have the financial obligation or means to generate audited financial statements. Therefore, in practice, the latest unaudited financial statements may be submitted in support of the application, which may be accompanied by management statements where such financial statements do not reflect the position of the company for its last financial period. 

Employers are advised to apply for exemption and not to attempt to evade the binding provisions of the agreement, as non-compliance may be severely penalised.

NEASA can assist employers who need to apply for exemption with this process.

Employers who require assistance can email us at  legalhotline@neasa.co.za.