GAIL BLACHER
As a labour-law advocate, how do you respond when an employee calls to say, “My company says that we won’t be receiving our salaries for the lockdown period”? Or even more frightening, “We’re required to work from home over the lockdown period, but won’t be paid, and have been told to be grateful that [the company] isn’t retrenching.”
One has to have an understanding of the impact of the situation on the employer, who is ill-equipped to address this scenario, as well as the frightening predicament of the employee.
There are a number of options and opportunities in these and other scenarios.
The issue of paying employees their salary during lockdown has both legal and moral aspects. In terms of the legal principles, the government has declared a national lockdown due to an unexpected and unforeseeable occurrence, thus certain employees can’t tender their services. So, in terms of the legal principle of “supervening the impossibility of performance”, the employer isn’t bound to pay the employee if they aren’t working at all.
It’s a different scenario if the employee is able to continue on a “work-from-home” basis, as then the employee is still able to perform.
The employer can, however, look at options other than not paying the employee at all – especially in terms of the moral obligation to alleviate the financial hardship of the employee – such as a reduction in salary.
I have, however, had a number of people phone me, bemoaning, “What do I say when my staff refuse to accept a 30% pay cut for the next few months?”
The employer could, after an honest and open discussion with the employee about the financial scenario, suggest a reduction in salary for a time period, and secure agreement on this or the possibility of using this layoff as paid annual statutory leave.
It’s always best to negotiate these changes with your employees, if at all possible, to avoid any later dispute relating to unilateral changes to the terms and conditions of the employment contract.
If the employer has had to close all or part of the operation for a three-month period or less, he or she has an obligation to apply for Temporary Employers Relief Scheme (TERS) benefits on behalf of employees. This will certainly assist with the pressure on employers to pay their staff.
This obligation falls on the employer in order to discourage high numbers of people (employees) going in person to apply at the department of labour. The application should be made before the end of the lockdown period.
The question that’s no doubt in many people’s minds is whether the TERS COVID-19 claim is the same as claiming from the Unemployment Insurance Fund (UIF).
The TERS claim is used when the employer has implemented temporary layoffs due to the lockdown, not paid salaries, partial payment, or forced annual leave. UIF benefits occur in circumstances of retrenchment, and where the employer has closed their operations permanently, resulting in loss of employment.
As a result of the global pandemic, businesses may find that they require a longer-term solution, and are either closing their doors or can’t afford as many employees, or are using technology instead of employees. I have frequently encountered employers who simply advise their employees that “you no longer have a job”.
Retrenchment is in effect a no-fault dismissal, but employers are required to follow a highly prescriptive procedure as set out in our Labour Relations Act. Failure to comply with this procedure will, without doubt, lead to the CCMA (the Commission for Conciliation, Mediation and Arbitration) or Labour Courts.
Employers are required to follow a consultative approach with their employees, and consider all alternatives before finalising retrenchment.
In cases of retrenchment as a result of operational disruptions caused by the virus, our courts will want to see what employers did at the time of the spread of the virus to mitigate against the risk of retrenchment.
Retrenchment can also be an expensive option in certain instances, with the employee being entitled to a severance package of one week in every year of employment.
Yet another issue that has been raised during lockdown concerns the “work-from-home” scenario, with employers complaining that employees “do nothing while they are on lockdown, they don’t communicate with the office, and don’t respond to calls or messages”.
The guidelines on this are that the employer should ensure that the employee has all the tools required to work from home, and should advise the employee that the same work ethic and disciplinary codes, procedures, and policies will apply as if the employee is in the workplace.
While this may answer some of your immediate questions, it must be understood that the law and issues relating to COVID-19 are in a state of flux and new issues are developing. After the virus, there will be legal consequences resulting from the effect of the COVID-19 for years to come.
- Gail Blacher is an advocate of the high court of South Africa specialising in labour law, and runs a company called RIGHTSATWORK advising on employment-related issues.
