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Edition 2020-02 | Business Bytes (IDC Covid-19 Small Industrial Finance Distress Fund)
June 4, 2020

Global Business Solutions | Post COVID-19 LABOUR LAW considerations

By • Johnny Goldberg | CEO | Global Business Solutions

The recent lockdown, which in many cases has been extended in several countries around the world, has proven to pose several challenges from a legal perspective. This has forced us to consider the impact of this on the employer-employee relationship. As organisations are forced to temporarily close down, barring certain exceptions for essential services, it is necessary to consider the variety of options available to keep organisations afloat.

If working from home is practically viable, from a delivery perspective, the employer-employee contractual obligations remain as they are. In other words, if the employee can work from home and there is work to render, he or she continues to do so and the employer is obliged to pay the employee for this work according to the terms and conditions set out in the employment contract. Where employees are not practically able to render services in a work-from-home arrangement – and are therefore unable to fulfil their contractual obligations owing to lockdown – the obligations stemming from the employer-employee relationship are suspended.
As such there would be no obligation on the employer to pay the employees. In addition, the employees would not be required to take unpaid leave as their contracts of employment would be suspended. Put another way the ‘no work no pay principle comes into effect because of the lockdown provisions.

If an employee who is capable of working from home, but refuses the employer’s instruction to do so, he or she is not entitled to any remuneration as the no-work-no-pay principle will be applied. In addition, the employee may also be subject to disciplinary action.

Many organisations have turned to look at the future of their businesses and the survival thereof post this very impactful event. Amongst other things, there have been discussions around the changing conditions of employment. Unless these changes provide for lesser terms than those stipulated in the Basic Conditions of Employment Act (BCEA) or Bargaining Council most issues are capable of change by agreement.

This principle of a unilateral change was confirmed by the Labour Appeal Court (LAC) in NUMSA vs Aveng Steel & another, which was handed down on 13 June 2019 and reported at [2019] 9 BLLR 899 (LAC). It was found that an employer may change the terms and conditions of employment contracts if the survival of the business depends on it.

Employees are perfectly entitled to reject a proposal to reduce their salaries, however, if they decide to do this they might not be able to claim that the employer dismissed them because they reduced the employees’ salaries.

To take this debate further, in the case of Astrapak Manufacturing Holdings vs CEPPWAWU [2013] 12 BLLR 1194 (LAC), the LAC concluded that the employees who had rejected a lower wage offer were not entitled to severance pay.

We are going through an event that has not been experienced in our generation. As a result, there are many challenges facing us as individuals and companies. Some tough but fair decisions need to be made for the long-term sustainability of business and with that employment in South Africa.