Rights of the Employer in the face of the Coronavirus – by Danie Pretorius

Introduction

Most of the popular literature that has been disseminated in regard to employment law during the outbreak of the Coronavirus, has looked at it from an employee perspective. Instead, we will focus here on the unique challenges that employers may face during the deepening pandemic.

Compulsory or voluntary isolation

In the event that someone contracts the virus (the Affected Employee) the question arises whether those who worked in the immediate vicinity of the Affected Employee would need to be isolated.   We are of the view that in terms of the Occupational Health and Safety Act (OHS Act), an employer would be required to take such steps as may be necessary to ensure the safety of its employees. In such circumstances, the responsible approach would be to let the employees who were in the immediate vicinity of the Affected Employee stay at home and self-isolate.

Obviously, if the employees who are required to self-isolate can continue working from home, then no issue should arise. In circumstances, however, where it is impractical for them to continue working from home, the time they spent at home should be dealt with on the following basis:

  • They should take sick leave;
    • If their sick leave entitlement is exhausted, they should take non-statutory ordinary leave;
    • Lastly, if such ordinary leave is exhausted, they should be given the election to dip into there statutory leave, before unpaid leave is imposed.

Regulations have been promulgated which would entitle employees who have been forced to take sick leave as a result of the virus, to claim from the Unemployment Insurance Fund.  This would obviously only be applicable where the sick leave is unpaid.

In instances, however, where the employer requests employees to stay at home for fear of someone who has contracted the virus infecting the workforce, but with no proof that that may be the case, such imposed isolation would have to be on the basis of paid leave which would be over and above the employees’ ordinary and usual vacation leave.

Government imposed Lockdowns

As a responsible corporate citizen, one should comply with all policy and statutory directives, Acts and Regulations, as imposed by the Government of the Republic of South Africa.

Should it become necessary, and Government imposes a partial or complete lockdown, then those employees affected by it will not be able to attend work.

Should they, in the absolute discretion of the employer, be able to work from home, then this approach can be implemented with no impact on the employee’s remuneration.  It would obviously be on the basis of the employer’s operational requirements.

Should employees impacted by a lockdown not be operationally required to work from home or be unable to work from home, and not be able to tender their services, then the principle of “no work no pay” shall apply.

However, and if at all possible, a responsible employer should let employees exhaust their leave entitlements before applying the principle of “no work no pay”.  In terms of Section 20(10) of the Basic Conditions of Employment Act, Act 75 of 1997, an employer is entitled to impose when an employee should take leave.

Downscaling of operations, short time and lay-offs

Should this pandemic deepen to the extent that an employer can no longer afford to keep its workforce occupied and paid, as a result of a lack of requests for its services or offerings, the legal position is quite complicated.

It is no defence for an employer to suggest that he has no work for an employee who has arrived at his place of work and is willing to work.  Even if there is no work for such employee(s), the obligation to pay the employee(s) will remain on the employer. All that is required of the employee(s) to be entitled to payment of his salary would be to tender his services.

This principle of law is overcome in various jurisdictions by legislation which in extraordinary circumstances (such as this) would entitle the employer to have his workforce work short time or even to lay them off for periods until the crisis abates.

In the law of general application in South Africa, no provision is made for short time or layoffs. In some of the bargaining council main agreements applicable in certain industries, the possibility of short time and layoffs are addressed and regularised.

As a matter of general proposition, both options of short time and layoffs should obviously be treated as a matter of last resort, and given that it is not principles of general application in terms of the law of general application, it would only be able to be utilised as an alternative to retrenchment.

One of the primary topics to be dealt with in retrenchment consultations relates to appropriate measures to avoid dismissals. In such consultations, the employer is also obliged to provide information relating to the alternatives that the employer considered before proposing the dismissals.

Retrenchments should be embarked upon as a last resort, and therefore short time and layoffs are appropriate alternatives to retrenchment in circumstances where in due course normality should be achieved once the pandemic is over.

In the unique circumstances prevailing currently, it is contended that should employees reject these alternatives to retrenchment, and elect to rather be retrenched, they would not qualify for severance pay given that the employee(s) had been offered a reasonable alternative to retrenchment.

Approach

The only difficulty in utilising short time and layoffs as alternatives to retrenchment is the fact that ordinarily a retrenchment process would have to be embarked upon in terms of either sections 189 or 189A of the LRA.

With the pandemic deepening by the day, the time periods applicable to ordinary and/or large-scale retrenchments may be such that the business would run out of funds to keep paying its workforce long before the process is exhausted and this would be counter-productive.

It is therefore suggested that when either short time or layoffs are contemplated, the workforce be consulted, and that either of these options be put to them in the context of ensuring the sustainability and survival of the business.  It should be pointed out to them that should these options not be agreed to, and should the workforce insist upon a formal retrenchment process being embarked upon, that in all probability the business would run out of funds, and would have to be placed either in business rescue, or liquidation. In either of those events, job losses would be the order of the day, and when payment of severance benefits will occur, would be uncertain.

The approach adopted herein is controversial, but due to the lack of a legislative framework to deal with an extraordinary disaster as has befallen this country, it appears to be the only workable solution for employers.