Exemption from minimum wage not the answer

A lack of criteria for being granted exemption from paying the new minimum wage has left farmers with little hope of finding a solution to the wage crisis.

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“Even if farmers can prove that they are running at a loss they are still not assured of exemption from paying the minimum wage,” said Dr Theo de Jager, deputy president of Agri SA.

De Jager said a Moeketsi tomato farmer had to lay off 1 000 workers last year because he was running at a R3 million loss, but still was not granted exemption. “If he could not get exemption, what chance do other farmers have?”

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The Department of Labour (DoL) has reported that over 900 farmers across the country have applied for exemption from paying the minimum wage of R105 per day. This will affect the jobs of about 75 000 farm workers.

But De Jager said that this figure was questionable as he knew of far more farmers who had applied. “What’s more worrying are those that are not applying for exemption, but rather just laying off workers. For them exemption is not a solution to the problem, but rather reducing the workforce.”
He questioned the suggestion by DoL that farmers should apply for exemption if they could not afford R105 per day, as it made a mockery of the minimum wage. “What is the point of legislating a minimum wage if you can legally get around it?”

De Jager said that the forestry sector was one of the hardest hit as their wage bill had increased 59% while they only received a 2% increase in the price they received for their wood. “The wage increase is in addition to electricity and diesel increases. Wood from Swaziland is cheaper because they have not had to face all the cost increases of local farmers.

“The tobacco industry’s sums don’t add up and at least 80% of farmers in the Boland region will either have to get exemption or leave the industry,” De Jager said.

The DoL has offered farmers some reprieve until their exemption applications have been finalised. Provisional approval has been granted to farmers to pay what has been agreed to during the consultation process with the workers, provided that the agreed amount was more than R75,31 per day. This would have been the new wage as from 1 March in terms of the reviewed sectoral determination.

Regarding applications from farmers to employ foreign workers, the DoL said that this will be taken into account when reviewing farmers’ applications to get exemption to ensure that local labour was not replaced by foreign labour.

De Jager explained that the applications to employ foreign labour were not to get around paying the minimum wage. But rather to supplement local labour which was not sufficient during harvest. “Farmers are laying off permanent workers whose jobs can be replaced by machines. But seasonal workers are needed to do the harvesting and there just aren’t enough South Africans to help.

“Furthermore it is an issue of productivity. One Zimbabwean can do the job of six South Africans and the former’s administrative skills are so much better. Zimbabwe has at least managed to get their education right.”

The DoL said that they were planning to engage with farmers applying for foreign labour to discuss the possibility of absorbing workers from those farmers intending to retrench.

Meanwhile Annette Steyn, DA spokesperson on agriculture, bemoaned that agricultural minister Tina Joemat-Pettersson had not come up with a plan to mitigate job losses. “Given that the contribution of agriculture to national GDP declined from 2,5% to 1,9% between 2008 and 2011, urgent measures need to be taken to ensure the continued viability of the sector and encourage the growth necessary to preserve jobs. Failure to do so will jeopardise the livelihoods of countless families.”