Incapacitated by the Lockdown – Exploring the possibility of temporary legal incapacity
The National Lockdown imposed by Government in terms of the Disaster Management Act has prompted considerable debate about its effects on the treatment and payment of employees during this period. The Regulations and Directives issued in terms of the Act have been silent on the issue, while statements by the Department of Employment & Labour, in particular, have served only to confuse things further.
A number of legal solutions have been bandied about, such as ‘no work, no pay’, unpaid leave, lay-off and forced annual leave. The long and the short of it, however, is that all of these measures have as their intention the non-payment of employees during the lockdown for reasons outside of the control of the employer. Contracts of employment, generally speaking, do not have so-called force majeure clauses and, consequently, the common law concept of supervening impossibility of performance has been invoked as the legal basis upon which to withhold the payment of remuneration during the lockdown.
The employment relationship by its very nature is a reciprocal relationship consisting of rights and obligations. An employee is under an obligation to work and the employer is under a corresponding obligation to remunerate the employee for their services. At common law, if an employee does not render their services, the employer is entitled to refuse payment. This trite concept is commonly known as the ‘no-work, no pay’ principle.
The matter is, of course, complicated by the fact that during the lockdown employees are not intentionally refusing to tender their services, as would be in the case of an employee absconding or engaging in a strike. Indeed, employees have been prohibited by the lockdown Regulations from leaving their homes and any employees (except the lucky few designated as essential services personnel) who attended work would have been arrested on the spot.
Can this supervening impossibility of performance be situated within the parameters of our employment laws, regulated as they are by fairness and equity? In our view, the inability of employees to tender their services during the lockdown is, in essence, nothing more than a form of temporary legal incapacity. This concept is relatively new to our law, but no less relevant.
Traditionally, the concept of ‘incapacity’ was dealt with on the narrow basis set out in item 10 of the Code of Good Practice: Dismissal i.e. that it only applied to cases of ill-health or injury. In Samcor Chrome Ltd (Tubatse Ferrochrome) v Metal & Engineering Industries Bargaining Council & Others (2010) 31 ILJ 1828 (LAC) the Labour Appeal Court rejected this narrow interpretation and found that incapacity is not limited to instances relating to ill-health or injury, but that other forms of incapacity also existed. In this case, the employee’s dismissal stemmed from his lengthy incarceration and consequent inability to do his job.
The Labour Court followed the LAC’s lead in Armaments Corporation of SA(SOC) Ltd v CCMA (2016) 37 ILJ 1127 (LC) where an employee was dismissed for his inability to obtain a security clearance from the intelligence division of the SA National Defence Force in accordance with the provisions of the Defence Act 42 of 2002. The Labour Court found that in the circumstances the employee’s dismissal was based on incapacity as he was legally prohibited from performing his duties. On appeal the Labour Appeal Court, in Solidarity & another v Armaments Corporation of SA (SOC) Ltd & others (2019) 40 ILJ 535 (LAC), confirmed that an employee’s inability to fulfil their contractual obligations due to a supervening impossibility of performance occasioned by legal impediments constitutes a form of incapacity.
Accepting that the lockdown Regulations impose a form of legal incapacity, the enquiry should turn to how an employee can be accommodated in view of the incapacity. The consideration of alternatives is the first port of call, particularly in view of the fact that the lockdown is temporary in nature and will be lifted at some stage in the future. Those alternatives may include working from home, where this is possible. Where it is not, employers could consider unpaid leave which would have the effect of a ‘no-work, no-pay’ arrangement, suspending the payment of employees’ remuneration for the duration of the lockdown.
The recent case of Manyetsa v New Kleinfontein Gold Mine (2018) 39 ILJ 415 (LC) seems to support the above position. In that case, the Labour Court was faced with a situation where a pregnant employee was placed on unpaid extended maternity leave in response to health and safety concerns at the employer’s premises. The decision to place the employee on unpaid leave was motivated by the unavailability of alternative positions for the employee or any other suitable alternatives. The Court found that while there appeared to be a lacuna in the provisions of the Basic Conditions of Employment Act 75 of 1997, as amended, an employer was obliged to consider any alternatives which may be reasonable or appropriate, including unpaid leave.
The decision by employers to place employees on unpaid leave is likely to be tested in due course in the Labour Court. The terms in which those claims are cast and defended will be critical and should be carefully considered. The position may yet become more complicated as the lockdown is lifted slowly and in phases, but this remains to be seen. Employers should nevertheless continue to explore options on how best to assist their employees and, where possible, continue paying them, albeit at a reduced rate.