Vinpro is deeply dissatisfied by the national minimum wage increase announced by Government on 8 February 2022. This after the wine industry organisation strongly advocated for a special sector-specific dispensation, which included a proposed zero percent adjustment to the national minimum wage for the wine subsector, with the provision that the wage could equalise again once the wine industry has achieved economic recovery.

“We believe that an exception is justified for the wine sector due to the fact that it has been disproportionately affected by the Covid-19 lockdown, while agriculture in general has been classified as essential service and not affected to the same extent by the relevant lockdown restrictions,” says Vinpro MD Rico Basson.

“Agri-employees (farms, wine cellars and throughout the value-chain) will always be our most valuable asset. As one of the most labour-intensive sub-sectors in agriculture with labour costs amounting to 41% of total farm input costs, further increases in the national minimum wage at this stage will have an adverse effect on employment in the sector.”

In all its engagements with Government over the past few months, Vinpro has emphasised the many challenges facing industry, including a wine surplus, decline in wine prices and delayed payments, extreme increases in input costs and continued disruptions at the Port of Cape Town, to name a few.

Notwithstanding Vinpro’s requisitions, Government announced that the national minimum wage will increase from R21.69 to R23.19 per hour on 1 March 2022, which represents a 6.9% increase.

“In light of the current challenges facing the wine industry, we now more than ever need stability, policy certainty and support from Government. Vinpro and our industry partners will therefore continue to work tirelessly to address the challenges at the port, glass shortages, illicit trade, harm reduction, and the suggested electricity increase. We are also in discussions with Treasury and has requested a zero increase in excise duties,” Basson says.

APPLICATION FOR DISPENSATION

Although Government did not grant a blanket dispensation for the wine industry, Section 15 of the National Minimum Wage Act provides an exemption process for employers. The exemption process is specifically created for employers who can prove that they cannot afford to pay the national minimum wage to workers.

Herewith further information, courtesy of Agri SA:

An application must be lodged through the National Minimum Wage Online System – https://nmw.labour.gov.za/ by following procedures as prompted by the system and by providing the following information as required by the system:

For businesses:

• Statement of financial performance (Income statement – 3 years – current year predictions and 2 previous years)
• Statement of financial position (Balance sheet)

For private households:

• Statement of financial performance (Income statement – 1 year)

Exemptions only provides employers with a decrease of 10% (as a maximum) in the national minimum wage. i.e. R23.19 to R20.87.

For more information, please find a high level summary from Agri SA.

Submit queries to Lebogang Sethusha at lebogang@agrisa.co.za.