A huge debate is raging on social media and within various Labour Law Experts having different views regarding whether the forced “Lockdown” implies paid or unpaid wage scenarios for employees. In some instances, clients are advised that they may not force employees to take leave and have to pay them for the duration of the lockdown. This is unfortunately not true.
From what is evident at this stage for us is that the Government have appealed to companies to continue to pay their employees, or assist them financially, but of course, it is an appeal, and there seem to be no obligation to do so. Technically it is not annual leave or sick leave. It is a form of forced closure in which special circumstances would have to prevail. Those companies or industries who had the foresight to reach agreements to implement a type of staggered benefit with their staff or unions at least have some certainty of what would happen. However, it does not preclude others to now seek such agreement or to advise staff of the business consequences of the lockdown.
Those who can afford to pay should continue to pay salaries and wages. However, many small businesses are bound not to recover from this forced closure and as a result, would have to drastically reduce their overheads, the majority normally salaries or wages or completely close their businesses as it would no longer be viable. Sad but True. If possible stagger salaries, eg Week 1 – Full Pay, Week 2 – 70% Payment , Week 3 – 50%, etc. The shortfalls are claimable from the UIF Disaster Fund.
We do know that government have put amended measures in place regarding UIF Benefits for those employees where their companies would not be able to pay wages or render financial support during and post the period of lockdown as it relates to the negative economical impact of COVID-19.
EASY-AID GUIDE FOR CLIENTS TO ACCESS UI FUNDING THROUGH COVID19
The Department of Labour put out this in their statement today (26 March 2020) and I quote
“During the lockdown period, an employee may be requested by the employer to take annual leave from his/her annual leave credits. The BCEA allows employers to determine the time that employees can take their annual leave.
“In as much as employers are within their rights to insist that employees take annual leave during the lockdown, as the Department, we encourage employers not to request employees to utilise their annual leave credits for the lockdown, but to rather utilise the financial assistance that the department has placed at their disposal through the COVID-19 Temporary Employer/Employee Relief Scheme (TERS) in cases where companies cannot afford to pay employees”, said Department of Employment and Labour, Chief Director of Labour Relations Thembinkosi Mkalipi.”
UIF benefits by means of the National Disaster Benefit will, therefore, include Reduced Hours/work time as well as unemployment caused by the pandemic.
We will continue to watch the developments as the situation is fluid and alternatives or additional measures may be promulgated at short notice.