Can Employers Get Exemptions from Bargaining Council Agreements?

Many employers assume that if a bargaining council agreement is commercially difficult, unaffordable or impractical, they can simply choose not to comply.

That is not how it works.

In South Africa, an employer may in some circumstances apply for an exemption from a bargaining council collective agreement, but exemptions are not automatic, not informal and not a substitute for compliance. Whether relief is available depends on the council’s constitution and exemption procedure, and employers who assume they can “opt out” often create even greater exposure.

The Misconception: “If the Agreement Is Too Expensive, We Can Ignore It”

This is one of the most common mistakes employers make.

If a collective agreement has been concluded in a bargaining council and validly applies to the business, the starting point is that the employer is bound by it. The Labour Relations Act provides for bargaining council collective agreements to bind parties and, in some cases, to be extended to non-parties within the council’s registered scope.

That means the real question is usually not whether an employer can ignore the agreement. It is whether the employer can obtain a lawful exemption from particular terms of it.

Yes, Exemptions May Be Possible, But Only Through the Proper Process

The Labour Relations Act requires a bargaining council’s constitution to include an exemption procedure and an independent body to hear and decide appeals against exemption decisions. In practice, many bargaining councils have dedicated exemptions committees and formal application processes.

That is important for employers because it means there is often a route to seek relief, but it must be done through the council’s prescribed mechanism, not by unilateral non-compliance.

What Exemptions Usually Cover

The detail depends on the specific bargaining council, but exemptions often relate to provisions such as:

• wage rates

• benefit fund contributions

• levy obligations

• working time or operational terms under the collective agreement

Councils typically regulate these through their own exemption procedures and application forms, which is why the exact relief available is sector-specific.

Where Employers Get This Wrong

1. Assuming exemption is automatic

Many employers assume that financial difficulty alone entitles them to relief.

Usually, it does not. Bargaining council exemption procedures typically require a formal application, supporting information and consideration by the relevant exemptions committee.

2. Applying too late

Employers often only consider exemption after:

• an audit

• a compliance order

• a claim for arrears

• enforcement action

By then, the problem is no longer only forward-looking. It may already involve historical liability. The Labour Relations Act also provides enforcement mechanisms for bargaining councils, which is why delay can be so costly.

3. Assuming non-members cannot apply

Some employers think that because they never joined the bargaining council, exemption is not relevant to them.

That is often wrong. At least some bargaining council exemption procedures expressly apply both to parties and to non-parties bound by collective agreements extended under section 32 of the Labour Relations Act.

4. Treating the process as informal

Employers sometimes try to resolve the issue through payroll explanations, email correspondence or verbal engagements with council officials.

That is risky. Exemptions are generally dealt with through a defined formal process, often with appeal mechanisms.

The Real Risk: Exemption Is Not a Shield Against Existing Liability

This is where many employers get caught out.

Even if an exemption is available, that does not necessarily mean it will erase existing non-compliance or automatically protect the employer against past exposure. Whether an exemption applies, how long it lasts and what it covers depends on the wording of the exemption and the council’s framework. Case material and sector procedures show that exemption issues can become legally complex, especially where employers assume an old exemption continues to protect them under later agreements.

That is why employers should be very cautious about assuming that “we applied” or “we once had an exemption” solves the problem.

A Practical Example

An employer concludes that bargaining council wage rates and contributions are too costly for its current business model.

Instead of applying formally for exemption, it continues using its own payroll structure and assumes it can sort the issue out later. A council audit then identifies non-compliance and the employer tries to raise financial hardship after enforcement has begun.

At that point, the employer may be dealing not just with a request for future relief, but with arrears, compliance pressure and a weakened position because the correct exemption route was not used early enough. That risk flows from the formal exemption and enforcement structures created under the Labour Relations Act and reflected in council procedures.

What Employers Should Take Away

Employers should approach exemptions on the basis that:

• an exemption may be possible

• it must be pursued through the correct bargaining council process

• the criteria and procedure are council-specific

• delay can increase historical exposure

• non-compliance is not the same thing as exemption

In other words, exemption can be a legal mechanism for relief, but it is not a workaround for ignoring a binding collective agreement.

Final Thoughts

Can employers get exemptions from bargaining council agreements?

Sometimes, yes.

But employers should not confuse the existence of an exemption procedure with a right to opt out. Bargaining council agreements remain binding unless and until proper relief is obtained through the prescribed process, and by the time many employers explore that option, the compliance problem has already become much more serious.

Need Advice on Bargaining Council Exemptions?

Barter McKellar advises employers on bargaining council applicability, exemption applications, compliance disputes and enforcement action.

If your business is considering an exemption or has already received a compliance challenge, early legal advice can make the difference between managed exposure and a much more expensive problem.