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Forced Leave, Retrenchments and Dismissals – Lockdown Labour Questions Answered

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  7. Forced Leave, Retrenchments and Dismissals – Lockdown Labour Questions Answered

Published Date: August 2, 2020

What are the rules and regulations regarding dismissals during the lockdown?

Employers are not precluded from dismissing employees during the national lockdown, provided that such dismissals are implemented in terms of the LRA. In this regard, the LRA provides that a dismissal must be for a fair reason (misconduct, incapacity or operational requirements and effected in accordance with a fair procedure). A guideline on what is a fair procedure is set out in the relevant code of good practice issued in the LRA and is often incorporated in the employer’s disciplinary code and procedure.

How does retrenchment work during this period? Is anyone allowed to get retrenched?          

Employers are not precluded from retrenching employees during the national lockdown, provided the employer has a valid operational reason to implement retrenchments and follows the procedures set out in section 189 of the LRA.

The LRA defines operational requirements on the economic, technological, structural, or similar needs of the employer. An employer must be able to justify a business rational based on the employer’s operation requirements prior to implementing a retrenchment.

In summary, the LRA sates that as soon as an employer contemplates retrenchments, the employer must consult with the affected employees or their trade unions. Importantly, the employer must issue the potentially affected employees or their trade unions with a written statutory notice informing the employees of their potential retrenchment, the reason thereof, the alternatives that the employer considered and why these alternatives were rejected, selection criteria, severance pay, timing of the retrenchments etc. This notice also forms the basis of the mandatory joint consensus-seeking consultation process. If at the end of the consultation process retrenchments cannot be avoided, the employer must issue the employee with a notice of termination of employment and pay the retrenched employees their salary until the date of dismissal, their accrued leave pay, notice period and severance pay (i.e. a minimum of 1 weeks’ pay for every completed year of service).

What if you are told you must work from the workplace, but the workplace is not compliant with the health protocols?

On 4 June 2020, the Minister of Employment and Labour issued a consolidated directive in terms of health and safety in the workplace, replacing the directive issued on 29 April 2020. In terms of the new directive, an employee may refuse to perform any work if circumstances with reasonable justification arise or appears to that employee or to a health and safety representative to pose an imminent and serious risk of exposure to COVID 19.

Prior to withholding any labour, the employee must notify the employer of the risk and of their refusal to work.  If the employer is of the view that the risk and the refusal to work is reasonably justifiable, the employer must remedy the allegedly unsafe working environment.

The directive also provides certain protections to employees who utilise the right to report the unsafe working environment to the employer and thereafter refuse to work. These protections include the following:

  • No employer may make any deduction from an employee’s remuneration, require or permit an employee to make any payment to the employer or any other person, in respect of anything which the employer is obliged to provide or to do in terms of this Direction;
  • No person may threaten to take any action against a person because that person has exercised, or intends to exercise, the right to refuse to work;
  • No employee may be dismissed, disciplined, prejudiced, or harassed for refusing to perform any work.

If there is a dispute as to whether this provision has been contravened or not the employee may refer a dispute to the CCMA or an accredited bargaining council.

These provisions of the directive may be open to abuse by unscrupulous employees and/or trade unions, and unless employers can prove that employees are acting in bad faith, the employer cannot take any action against the employee.

Can an employee be dismissed for not being at the workplace when required to do so?

Yes. However, this depends on the employee’s reason for not attending the workplace and on the employer’s disciplinary code and procedure.

If the employee has a valid reason for being absent from work (i.e. he is sick, contracted Covid 19, has a reasonable justification that the workplace is unsafe, or any other valid reason recognised in law) they must notify the employer of the reason and, if requested, provide the relevant proof to confirm the reason for being absent from work.

However, if the employee has no valid reason for being absent from work, and subject to specific facts around the employee’s absenteeism, the employer may institute disciplinary action against the employee for insubordination, failure to obey a reasonable and lawful instruction, breaching the employers policies and/or for staying absent without a valid reason. However, the employer must follow a fair procedure when instituting disciplinary action against the employee (i.e. the employee must be informed of the misconduct and the employee must be given an opportunity to be heard).

In what situation does an employer have to force employees to take leave and how does this work?

Generally, the employer may determine the timing of annual leave. Employment contracts often entitle employers to determine the timing of annual leave and therefore employers can compel employees to take annual leave during the lockdown or during the employer’s annual shutdown period.

 How does this affect your annual leave?

If the employee has not accumulated enough paid annual leave, the employer and employee may enter into an agreement to allow employees to take negative leave. The agreement should also make provision for instances where an employee leaves the employer’s employ prior to accumulating enough annual leave to cover the negative accumulated leave.

According to the TERS directive issued by the Minister of Employment and Labour on 8 April 2020, employers who have compelled their employees to take annual leave during the lockdown period may claim the leave payment from the TERS benefit and then credit the employee concerned with the proportionate entitlement to the paid annual leave.vc_row_inner css”.vc_custom_1600160218060{margin-bottom: 10px !important;padding-top: 15px !important;padding-right: 15px !important;padding-bottom: 15px !important;padding-left: 15px !important;background-color: #ededed !important;border-radius: 5px !important;}”vc_column_inner width”2/3″vc_column_textNeed assistance with labour related matters? Speak to an attorney by submitting an enquiry online./vc_column_innervc_column_inner width””vc_btn title”View Labour Services & Enquire” style”flat” color”theme_style_1″ size”sm” align”center” button_block”true” link”|title:Employment%20and%20Labour%20Law||”/vc_column_inner/vc_row_innervc_column_text

If an employee is diagnosed with COVID-19, how does leave and pay work during this period? Is the employer obliged to pay for any health bills?

If the employee’s transmission was in the course and scope of carrying out his employment, the employee’s leave will be covered in terms of COIDA.

If an employee’s transmission was outside of the course and scope of his/her employment, the employee is entitled to utilise his/her sick leave entitlement in terms of section 22 of the BCEA. However, if the employee is diagnosed with COVID – 19 and the employee is quarantined they will firstly be entitled to the leave under the UIF illness benefit first.

The employer is not obliged by law to pay the employees medical expenses, unless agreed to between the parties.

Government assistance: who can apply?

The Minister of Employment & Labour encouraged employers to pay their employees during the lockdown period.

Importantly, the Regulations create a special unemployment insurance benefit known as the ‘Temporary Employee / Employer Relief Scheme’ (“TERS”) to compensate qualifying employees who may have lost income due to Covid-19, for example, due to the complete or partial closure of their employers’ businesses because of the lockdown.

The Regulations also permit an employer to claim the payment of annual leave on behalf of its employees, in circumstances where an employer compelled its employees to take annual leave.

 An employer is eligible to apply for this benefit if:

  • the employer is registered with the UIF;
  • the employee(s), on whose behalf they claim the benefit, may have lost their income due to Covid-19;
  • the employer closes its operations as a direct result of the Covid-19 pandemic (for 3 (three) months or a lesser period); and
  • the employer complies with the TERS benefit application procedure.

The Regulation has been extended to 15 August 2020. It is unclear whether the period will be extended past 15 August 2020. We will have to wait to be updated by the Minister of Employment and Labour on this aspect.

 Salary cuts: is there any way an employee can dispute this?

It is critical to emphasize that the employee’s consent is required to change their working hours and/or remuneration. If the employee consents to the change then they will not have any claim, subject to any agreement in this regard. Employers who unilaterally implement short working hours, and/or reduced remuneration, run the risk of breaching an employee’s contract of employment or working conditions. This could possibly encourage strike action (which can be utilised as a form of recourse, provided the relevant procedures are followed) or have them face the risk of defending a fair labour practice dispute at the CCMA arising from the unilateral change to the terms and conditions of employment.

In 2018 there was a new UIF benefit introduced. In terms of this benefit “A contributor employed in any sector who loses his or her income due to reduced working time, despite being employed, is entitled to benefits if the contributor’s total income falls below the benefit level that the contributor would have received if he or she had become wholly unemployed, subject to that contributor having enough credits.

Accordingly, employees who agree to short time and accordingly agree to a reduction in their salary, proportionate to the reduced working hours, can claim the difference in the salary from the UIF. The benefit will be calculated in terms of the income replacement rate sliding scale of 38% (for high earners) up to 60 % (for low earners) as provided in the Unemployment Insurance Act, subject to the maximum threshold as determined from time to time.

Can you claim the loss or agreed reduction in salary at any point in the future? Do companies owe you that lost salary?

If an employee agreed to a reduction in salary, the employee would not have a claim in relation to the reduced amount, subject to the terms of the agreement.

In circumstances where:

  • An employee has tendered their services;
  • The employee is not precluded in terms of the law to tender their services;
  • The employer rejects the services of an employee who is not precluded from tendering their service; and
  • The employer has not paid such an employee his salary;

Only then may the employee enforce their rights by laying a complaint at the Department of Labour or referring a dispute to the CCMA or an Accredited Bargaining Council.

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