Neels van Rooyen
On the whole, this issue will arise only at the end of April 2020, except for weekly paid employees and those whose pay date falls in the middle of April. Most monthly paid employees would have been paid for March, unless the business was already suffering and earned no or little revenue during the preceding month, unrelated to the lockdown but possibly caused by the effects of the worldwide pandemic.
Employers will, therefore, be faced with the challenge of finding money to pay their employees at the end of a period during which the business earned no revenue, or far less than would ordinarily have been the case. This means that the problem can be deferred for a while, except for weekly paid employees, but it is nonetheless an issue that should be tackled now.
Essential staff at essential businesses should continue working and will be paid as usual.
Non-essential businesses that can continue operating and whose staff can work remotely, must pay those employees as usual.
If any of these employees must take sick leave, because of the coronavirus or any other reasons, they will be entitled to paid sick leave.
The real issue arises with employees in non-essential businesses who cannot work remotely. Employers have no legal obligation to pay employees who aren’t rendering the services for which they are employed. These employees aren’t staying at home at the employer’s instruction or request, in which case the employer would ordinarily still be liable to pay employees.
To deal with this issue, and to assist employees, those employers who can afford to pay employees regardless, may still do so, employers can require employees to take accrued annual leave (and some might be willing to allow employees to get into leave debit) or some kind of special paid leave. In the ordinary course sick leave won’t apply.
The Unemployment Insurance Fund (UIF) may be able to provide employers with assistance should employers be unable to pay employees during the lockdown. The proposed benefit is an amount of R3 500 per employee per month during the period a business might be closed. Guidelines have been issued but the practicalities of the process must still be finalised and one can imagine that the UIF will be inundated with applications, as it already is with claims form the unemployed prior to the lockdown. Having regard to the standard procedure of claims to UIF, it may take a month or two for any payments to be processed so it might not be an instant solution to the challenges employers may face.
After the lockdown ends and the situation is supposed to return to normal, many employers may face financial difficulty arising from the lack of revenue during the lockdown period. These employers could contemplate retrenching staff, introducing short time or temporary layoffs to deal with the economic consequences of the lockdown. The latter measure would be intended as a temporary reprieve to allow the business to get back on its feet, whereas retrenchments may well be permanent even if the business is restored.
Neels van Rooyen
Labour Law Consultant
Hayes Incorporated