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The various Regional Offices of the RMI have been inundated with inquiries from Members as to whether they can, and should implement discretionary wage increases, pending finalisation of the national wage negotiation sessions, with the view at maintaining positive staff morale and stave-off any possible workplace industrial action as part of a national strike.
The RMI is privy to a legal opinion obtained by MIBCO, addressing this very issue and this Newsflash serves to update Members on the very pertinent risks associated with the implementation of wage increases between 31 August 2016 and the effective date of the new MIBCO wage agreement.
At the core of this potential risk to Members, is the provision included in clause 3(1)(d) of the Main Agreement, which states that “[A]n employer who has granted an increase over and above the prescribed increases during the preceding 12 months may offset those increases against the increases set out below [the new agreement]; provided that no wage increases shall be offset on more than one occasion”. This clause is known as the set-off clause and is designed to protect employers from having to implement two wage increases in a 12-month period.
The agreement that contains this clause however, expired on the 31st of August 2016, which means that Members are not protected by this set-off clause as from the 1st of September 2016 up to the date of implementation of the new Main (Wage) Agreement. Members who therefore elect to grant wage increases to their employees during the period when this clause is not operable, will risk the likelihood of having to grant a further increase, once the new wage agreement is implemented, as set-off may not be possible. The net effect of this is that Members face having to grant a second, compulsory increase during a 12 month period.
Legal opinion obtained specifically records that “[P]arties to the (lapsed) Main Agreement and the non-parties bound by the extended (lapsed) Main Agreement cannot rely on the set of clause after 31 August 2016. … Employers who grant increases subsequent to 31 August 2016 do not have certainty that a similar set-off clause will be included in the new Main Agreement”.
Members do however retain the discretion to grant interim wage increases, but with the express understanding that there is tremendous risk associated with such an action.
The RMI Negotiating Team strongly recommends that Members apprehend the implementation of any discretionary wage increases until such time as when the new wage agreement has been published, promulgated and implemented, in order to avoid any risk of potential double jeopardy.
The inconvenience that the implementation of this recommendation may cause for certain Members, is understandable and regrettable. Members are however permitted to provide their employees with an undertaking, subject to their sole discretion, that any nationally-agreed increases may be back-dated to the date when those increases would have been implemented. Back-dating of any increases will however not be compulsory and any such an undertaking by Members will always remain purely discretionary.
Should you have any queries in this subject regard, please do not hesitate to call your nearest RMI Regional Office for further particulars.