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How to oppose your company’s exemption application?

4 March 2014, Posted in NUMSA Bulletin

All bargaining council agreements are required to have a clause which spells out how individual companies can apply for exemption to the bargaining council from complying with certain clauses in the agreements e.g wages, leave enhancement pay etc.

In the engineering main agreement, this clause is Clause 23. It says that the employer must consult workers, get their agreement and their signature. If workers do not agree with the employer, workers can submit their own written document to the bargaining councils with the employer’s application. They must detail why they do not support the employer’s application.

If the regional office rules in favour of one party but the other party is not satisfied, the dissatisfied party (ie the employer or the workers) can take the issue on appeal to the Independent Exemptions Appeal Board (IEAB). Motor agreement has a similar clause.

In this Bulletin we include an edited version of a document that Numsa submitted on behalf of workers at a workplace on the East Rand to the Gauteng regional office (GRO) of the bargaining council. They argued that the employer should not be granted a wage exemption and gave detailed reasons why. We have deleted the name of the company because the case is now on appeal.

Don’t exempt our company
NUMSA obo members at Company XXXXX submit that the GRO should reject and order Company XXXXX (employer) to pay all NUMSA members who are currently working for the company the annual increase as per the provisions of the Main Agreement – 7% & 8%

The GRO in rejecting the application should take into account the following facts:

Previous exemptions
This is not the first time that this employer has applied for an exemption. In 2009-2010 they applied for a 0% (the increase agreed in MEIBC negotiations was 8.8%). The Independent Exemption Appeal Board (IEAB) reversed that exemption and granted the employer only a 4% exemption. The fact of the matter is that this employer has in a 5 year period paid the annual increase only once.

Current inflation
The current inflation climate does not allow any loss of income. Our members at this company have suffered a loss of financial income if one will take into account 8%. These losses are the result of wage exemptions that were granted to the company.

The employer’s claim that he can’t afford to pay increases to our members as a result of the current inflation is misplaced as the company has given the office and other staff (salaried) employees a huge increase of 6%. When this is converted into rands and cents, this will amount to about R1500 total cost to the employer per employee. This on its own nullifies the employer’s claim. Further to that even in 2009-2011 these employees were given an increase.

Excessive overtime
Our members have been forced to work overtime. In some departments excessive overtime is worked weekly with some workers working up to an extra 30-40 hours weekly.

When the employer gave notice to workers that he was to apply for a wage exemption as a result of financial losses, the employees decided to stop working overtime as this was very costly to the employer.

Then the employer ran to the Labour Court and brought an urgent application to interdict our (Numsa) members from boycotting work overtime work.

This (overtime) is raised here for only one purpose which is to indicate to you that this employer is not prepared to give our members the increase on their normal pay (rate) but rather pay them at overtime rates; this is exploitation at its highest.

Labour brokers and independent contractors
This employer is utilizing the services of six labour brokers and employs close to 120 workers through them. A labour broker employee is more expensive than a direct employee of the employer.

In addition the labour brokers that are utilized by this employer have never applied for a wage exemption and as the union we have never received or hear any complaints from those labour broker employees of underpayment or exemption application from any of the labour brokers which are utilized by this employer, which means that these workers are being paid the extra increase.

The employer has never taken any measures to try and save monies that are unnecessarily spent. If the labour broker had been done away with or drastically reduced that would have helped the company to save monies and those monies could have been used to pay the increase to our members.

Financial status of the company
We dispute the company’s finances as per their Annexure D because the labour expenditure does not include monies spent for the above labour brokers and or contractors. The number of employees of the labour brokers and or contractors is significant as they are close to 120.

This will amount to thousands or rands in terms of wages/salaries for these employees. The company has deliberately misled the GRO by omitting this fundamental point. If the company had included this information the GRO would have a different view of the company’s financial situation as this factor amounts to hundreds of thousands of rands per annum.

The other factor is that this company has changed hands. The new owners would not have invested in an empty shell. The new owner has confidence in this company.

Short time and order book
The short time worked was not as a result of a low order book but it was an issue of electricity supply. The clients did not penalize the company for not meeting the deadline as this was beyond the company’s control. In terms of the order book we are told by our members that it is full and that is why the employer went to Court for an urgent interdict to force employees (Numsa members) to work excessive overtime. The company would have not taken that route if they didn’t have orders at hand.

Conclusion
Numsa on behalf of its members are vehemently opposed to the company’s application to be granted the wage exemption on the basis of all the above stated reasons and facts. Over and above, the company has made profit and or savings as a result of exemptions granted between 2009 and 2011.

There are many other things that the company can stop like production & performance bonuses; car allowances, bonuses that are paid to Senior Plant Managers. They must also cut entertainment expenditure in order for them to be able to save money and be able to pay our members their increase. It is a fact that this company does not have good reasons to deserve to be granted any wage exemption.