Covid 19 (coronavirus) – Employers obligations during the national lockdown

The President of the Republic of South Africa, Cyril Ramaphosa, declared a 21-day national lockdown effective from midnight on Thursday, 26 March 2020 to Thursday, 16 April 2020 to curb the spread of the Covid 19 (Corona) Virus. But what does this mean for employers and are its’ ordinary obligations to its employees affected by the implementation of the national lockdown?

For valid reasons, many employers are uncertain and/or confused about its legal duties and obligations owed towards its employees for the duration of the national lockdown. Some of the concerns that employers are grappling with include whether employers:

1. remain required, by law, to remunerate its employees despite the Commander-In-Chief’s orders to remain at home? In other words, are employees entitled to be paid whilst at home observing the national lockdown?
2. are entitled to force its employees to utilise paid annual leave credits for the duration of the national lockdown effective from 26 March 2020 to 16 April 2020?

Global markets have suffered as a result of the pandemic and it is with no doubt that the South African economy is negatively impacted as a result thereof, leaving our already vulnerable economy in question. Many questions the impact that it will have on various industries including employers and employees, who bear the brunt of the pandemic and are being forced to survive during exceptionally difficult times, which is further exacerbated by the financial crisis.

To answer the aforementioned questions, one would ordinarily turn to the Basic Conditions of Employment Act, 1997 (No. 75 of 1997) (“BCEA”) as the key piece of legislation governing the employer-employee relationship in the Republic of South Africa.

AN EMPLOYER’S OBLIGATION TO REMUNERATE ITS EMPLOYEES:

In terms of the BCEA “wage” is defined as: “the amount of money paid or payable to an employee in respect of ordinary hours of work or if they are shorter, the hours an employee ordinarily works in a day or week”.

The BCEA defines “remuneration” as:

“any payment in money or in kind, or both in money and in kind, made or owing to any person in return for that person working for any other person”.

Section 35(1) of the BCEA states that an employee’s wage is calculated by reference to the number of hours the employee ordinarily works. Accordingly, an employee’s remuneration (i.e. wage or salary) is calculated and due and payable by an employer to its employee based on the number of hours worked by the respective employee.

To this end, an employee’s remuneration is commensurate to the number of hours he/she worked. Should the employee not worked, he/she would not have a valid claim to be remunerated. Accordingly, employees do not have any entitlement to be remunerated if they are not working during the national lockdown.

Despite the provisions of the BCEA, the Department of Employment and Labour has urged all employers to remunerate its employees as per normal during the national lockdown. Should this not be possible, employers may approach the Unemployment Insurance Fund for assistance to cover any shortfall due to employees.

EMPLOYEES FORCED LEAVE ENTITLEMENT:

Insofar as forced leave is concerned, one must consider section 20(10)(b) of the BCEA, which states that “Annual leave must be taken:

in accordance with an agreement between the employer and employee; or

if there is no agreement in terms of paragraph (a) at a time determined by the employer in accordance with this section.”

In instances where there is no agreement as to when paid annual leave shall be taken by an employee, the employer is entitled to make a decision as to when its employees must take paid leave. As such, an employer is entitled to determine that all employees must make use of their paid annual leave during the national lockdown period. If an employee has exhausted his/her paid annual leave, then the employee in any event will be on unpaid leave.

Nevertheless, the leave Directive issued by the Department of Employment and Labour clarified that during national lockdown period, an employee may be requested by his or her employer to utilize their annual leave credits and further that the BCEA lawfully allows employers to determine the time that employees can take their annual leave.

In conclusion, the national lockdown declared by the President in terms of the National Disaster Act, 2002 does not have the effect of superseding, suspending or overriding the BCEA. Consequently, employees are not entitled, by law, to be paid during the national lockdown period if they are not working and, furthermore, an employer may unilaterally place its employees on paid leave if there is paid leave available to the respective employees. However, the Department of Employment and Labour has pleaded with all employers to consider continuing paying its employees their respective normal remuneration (to the extent possible) during the national lockdown or to apply for the necessary aid made available by its temporary employer/employee relief scheme.

PREPARED BY:

RAFFIQUE MOTALA
(SENIOR ASSOCIATE)
ADRIAANS ATTORNEYS
(021) 801 5240 / 082 310 0676
r.motala@adriaansattorneys.com

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. (E&OE)