Employers must brace for more uncertainty and disputes

Employment lawyers have been extremely busy since the President declared a national State of Disaster on 15 March 2020, advising employers (and employees) on how to navigate the uncharted territory brought about by the Covid-19 pandemic. A few days later employers shifted into panic mode when a national lockdown was declared on 23 March 2020, without any real indication from the Minister of Employment and Labour as to how employers were supposed to deal with a government-imposed shutdown of businesses for at least 21 days.

Written By of Cowan-Harper-Madikizela Attorneys

In the days following the announcement, it became clear that the most pressing issue facing employers was how to situate this once-in-a-lifetime event within the parameters of the raft of employment legislation, without falling foul of any of them. Employees, on the other hand, were concerned about how they would get by if they could not work (even if they wanted to), and looked to their employers for reassurance, assistance and a plan.

The responses by employers have been varied, depending on several factors such as their financial position and the nature of their operations. Where it was possible, employers instructed their employees to work from home. This option was however not open to factory and warehouse workers, cleaners, estate agents and other employees whose workstations are inextricably bound to their workplace or the need to travel for work. For these employees, many employers considered the option of placing them on annual leave, to the extent possible, before resorting to more drastic measures such as unpaid leave. Employers explored the option of annual leave for the reason that it would ensure that employees were paid during the lockdown, which was relatively short in nature. Their decision would have been bolstered by the provisions of section 20(10) of the Basic Conditions of Employment, which permit employers to place employees on annual leave at a time determined by them if no agreement can be reached.

On 26 March 2020, the day before the lockdown commenced, the Department issued a directive confirming that employers were entitled to require employees to take annual leave during the national lockdown in accordance with the provisions of the BCEA. Five days later, on 31 March 2020, the Minister told the nation that while the Department understood that employers were permitted to compel employees to take annual leave ‘as they deem fit’, some employers were seeking to ‘shift the burden of the lockdown onto the workers’ by requiring them to take annual leave as the first line of response to the lockdown. He also seemed to confuse the concepts of annual and unpaid leave and has even been accused of spreading fake news.

It is important to recognise that neither the Department nor the Minister has at any stage indicated that any of our existing employment laws have been suspended or that they would operate differently for the lockdown period. Notably, the Government has not, either through its statements or the regulations issued in terms of the Disaster Management Act, authorised the implementation of a forced lay-off for employers. The reality of the situation is that implementing a lay-off, in many instances, will require an amendment to employees’ existing terms and conditions of employment. This cannot happen on the whim of an employer. In the absence of agreement being reached with employees on a lay-off, employers should consider implementing such changes through a process in terms of section 189 of the Labour Relations Act. The Minister has yet to even mention this option.

It is unclear why the Minister believes that it is preferable for employees to be placed on unpaid leave rather than paid annual leave, particularly in circumstances where the BCEA permits employers to do this. It is also unclear why placing employees on paid annual leave would, in the present circumstances, ‘shift the burden’ onto employees or why employers should have to carry the burden on their own. The Minister’s statements have been confusing, and he seems to have placed all of his eggs in the basket of benefits available from the UIF, including the recently upgraded TERS. Unfortunately, if recent reports are anything to go by, the UIF is entirely dysfunctional and this will have a severely negative impact on using the options suggested by the Minister. Employers and employees have also indicated that the benefits are insufficient to be sustainable, even if they are only intended for a short period.

The lockdown milieu, characterised by almost daily updates from our Ministers and regular changes to the regulations, has caused some confusion amongst employers. This is to be expected. We are, after all, in the midst of an international health crisis that requires swift and drastic measures to contain it. The failure by other governments around the world to implement appropriate measures timeously has resulted in many, many deaths and served only to exacerbate the spread of the disease and may lead to a further extension of our own lockdown.

Even so, employers should be cognizant of the difficult road ahead for them. For it to be of any effect, the lockdown may yet be extended for a further period of time. If it is not, it will still not simply be business as usual. Certain restrictions will have to remain in place for many months to come as part of the attempt to ‘flatten the curve’ and these will in most cases have devastating effects on businesses and, in turn, their employees.

Employers will in the coming months need to decide on whether to grant annual increases, 13th cheques, bonuses and other benefits. Collective agreements may need to be revisited if they are no longer financially viable for the employer and where no compromise can be agreed they may be cancelled altogether. Promotions and the filling of vacancies will be placed on hold indefinitely, while employers contemplate the restructuring of their businesses. These are just some of the alternatives which will need to be considered before an employer decides to retrench employees, failing which the Labour Court may in due course find the retrenchments to be unfair.

In dealing with these difficulties, employers are likely to meet resistance from Unions, employees and civic organisations such as the Casual Worker’s Advice Office. Any processes embarked upon by employers will be watched carefully and their decisions will have to be taken with due regard to our employment laws, the difficult circumstances facing employees and the economy as a whole.

The lockdown measures which have temporarily stemmed the ceaseless tide of CCMA, bargaining council and Labour Court litigation have given employers some breathing space. However, to paraphrase our Minister of Health, this is the calm before the storm and employers would be wise to take the necessary steps to mitigate future disputes, where it is possible to do so. Employers should already be contemplating contingency plans for an extended lockdown. Looking further ahead, comprehensive return to work programmes must also be prepared and circulated to employees, bearing in mind an employer’s statutory obligation to provide a safe working environment. Some employers have for the first time explored the possibility of working-from-home arrangements during the lockdown and will need to re-evaluate their operational dynamics and modernise their processes if this system could be retained.

We are only at the early stages of the pandemic and the immediate future remains mostly unclear. Employers must do what they can to deal with the situation as pragmatically and with as little risk as possible while ensuring their long-term viability. The LRA and other statutes, such as the Companies Act, have the necessary tools and should be utilised where necessary, remembering that a consultative and humane approach should be the guiding principles throughout this period.

Neil Coetzer

Neil Coetzer
Head of Employment

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