Post COVID-19 labour law considerations June 2020

By JONATHAN GOLDBERG AND GRANT WILKINSON, Published in COVID-19 Employment

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

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Employees who can work from home

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 renders the work required, the employer is obliged to pay the employee according to the terms and conditions set out in the employment contract.

Where employees are not practically able to render services in a workfrom-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 'nowork-no-pay' principle comes into effect because of the lockdown provisions.

Employees who refuse to work from home

If an employee 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.

Changes to conditions of employment

Many organisations are considering the future of their businesses. Among 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 [2019] 9 BLLR 899 (LAC), which was handed down on 13 June 2019. It was found that an employer may change the terms and conditions of employment contracts if the survival of the business depends on it.

The LAC put it as follows:

"[68] Hence, the essential inquiry under section 187(1)(c) of the LRA is whether the reason for the dismissal is the refusal to accept the proposed changes to employment. The test for determining the true reason is that laid down in SA Chemical Workers Union v Afrox Ltd. The court must determine factual causation by asking whether the dismissal would have occurred if the employees had not refused the demand. If the answer is yes then the dismissal is not automatically unfair. If the answer is no, as in this case, that does not immediately render the dismissal automatically unfair; the next issue is one of legal causation, namely whether such refusal was the main, dominant, proximate or most likely cause of the dismissal."

When employees are faced with a reduction in salary

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.

To take this debate further, in the case of Astrapak Manufacturing Holdings v 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.

Although it is difficult to demarcate precisely when the offer can be refused by an employee without the danger of s41(4) of the BCEA being invoked against him or her, in my view, once an employee is faced with a wage decrease it cannot be said that he or she should not have the choice of refusing the offer and seeking employment elsewhere notwithstanding the extremely difficult conditions which pertain to employment in general within the South African economy".

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

Goldberg is CEO and Wilkinson an Executive of Global Business Solutions.