Yip, these are historical times. As things stand, the lockdown will be uplifted from 1 May 2020, maybe. As has been the case in our sector of labour relations consulting to employers across the country, and indeed many others, the hitherto lesser known benefits of working remotely, have been revealed to our own consultancy, and our clients alike. But more of that in future articles.
For now, the world of work has, like the rest of society worldwide, received a body blow of the like we have never seen before, and are hopefully unlikely to see again any time soon. The Covid-19 pandemic has already pole-axed thousands of jobs, and is likely to continue to do so, in our estimation, until at least the second quarter of 2021.
During the lockdown, our firm’s interaction with clients has, in the main, been dominated by the UIF TERS benefit application process, and retrenchments, not to mention putting the final touches to the launch of our first online training workshop “Managing discipline & dismissal at the workplace” (watch this space …).
But what can we expect the labour relations environment to look like during the first hundred days after the national lockdown? We think that the hot topics in that first hundred days are already quite apparent.
First and foremost is the health and safety of staff. Employers have a duty and statutory obligation to protect staff in the face of Covid-19. This will require a thorough audit of all health and safety practices, procedures and personal protective equipment.
Next, the CCMA and Bargaining Councils, together with the labour courts, have a massive backlog to deal with. Our guestimate is that the CCMA alone will have a backlog of approximately 20 000 cases, of which approximately 16 000 will be unfair dismissal cases. Tag that onto an already burdensome 850, or so, cases being referred to the CCMA daily across the country, and you can immediately begin to fathom the challenge ahead. Of course, there will be far fewer misconduct, and even incapacity, related dismissals, and therefore related disputes, referred during the lockdown period, but the raft of retrenchments during the lockdown period may more than compensate for the lesser number of misconduct and incapacity disputes during the same period. Time will tell. Regardless, the cases set-down for the lockdown period will also add to the backlog. The CCMA will no doubt be aware of this and already planning its contingencies.
Perhaps the most dominant feature of the labour relations environment during the first hundred days post-lockdown, will be inevitable widespread retrenchments and short-time. There will no doubt have been a number of employers who have retrenched, or started retrenchment consultations, during the lockdown, relying on section 189, or 189A of the Labour Relations Act. We have advised our clients not to do so however, in the understanding that when all is said and done, and regardless of the availability of rock-star technology enabling virtual face-to-face communication, many employees don’t have access to such technology, and besides, whether we like it or not, there are question marks over the ethics of retrenching employees remotely. Some employers, on the other hand, may have been faced with no other option, given their financial plight. None the less, we have encouraged our clients not to be the test case on this issue.
That said, the upliftment of the lockdown will present employers with the opportunity to initiate section 189 and 189A Labour Relations Act processes. The socio-economic impact of doing so is obvious. Yet many employers will literally have no other option, if they wish to keep their doors open. Let’s not forget, many companies won’t be reopening. A huge number that do, in some sectors more than others, will be retrenching, and/or placing staff on short-time. Employer labour consultancies like ours have already been briefed by clients on the commencement of statutory retrenchment procedures the very second the lockdown is uplifted.
Finally, expect turmoil in the public sector with the tightening of Treasury’s belt, especially in light of the impact of Covid-19 of the fiscus.
There you have it, our take on the labour relations landscape in the first hundred days after lockdown.
The Covid-19 developments have taken our breath away.
My personal Covid-19 period memory bank takes me back to a flight back to South Africa from Frankfurt in mid-January 2020, when most of us were pretty oblivious to the impending drama that was about to unfold. I’d missed my flight and had to spend twenty-four hours at Frankfurt airport before catching a flight home the following evening. Up to this day, I ponder the level of risk I was unknowingly exposed to at the airport, for a relatively prolonged period of time.
On 15 March 2020, the President declared Covid-19 a national disaster in terms of the National Disaster Act (57 of 2002). Later that day, a Sunday, a client of ours sent me a WhatsApp message, asking us for advice on how to deal with a national “mandatory shutdown” of the retail industry. This is a national retailer, operating across the globe. To be honest, this surprised me – “mandatory shutdown”? This was reflected in my reply to him – “No indication of retail closures, if so, will be a combination of annual leave and negotiated unpaid closures”. At the time, the prospect of a national lockdown was, apparently, highly improbable.
Within a mere eight days of receiving that client WhatsApp message, the President announced a twenty-one-day national lockdown, commencing at midnight on Thursday, 26 March 2020, a bold and decisive measure to limit the spread of Covid-19.
On 26 March 2020, the Minister of Employment Gazetted the Directive relating to the establishment of the Covid-19 Temporary Employee/Employer Relief Scheme (“TERS”). By now, ‘TERS’ has become a colloquialism which was largely unheard of, a mere two weeks ago. Yet it is set to be the difference between food on the table and starvation, for thousands of South Africans over the coming weeks.
Quite simply, TERS is a scheme to fund income short-falls during the national lockdown, to be paid from the National Disaster Fund. Time will tell how efficient this well-intended scheme will work. Predictably, our firm has been inundated with enquiries and request for assistance in the TERS application process from employers across the country.
Since then, to date, South Africa’s Covid-19 infection and death rates, whilst alarming in their own right, have not mirrored the awful infection and death rates experienced elsewhere. We have also experienced the real economy in apparent free-fall, and this has bludgeoned jobs. In the USA, for example, approximately 10 million applications for unemployment benefits were received in the last two weeks of March 2020 alone.
South Africa, and the rest of the world, has followed suit, with some predicting that our already outrageously high unemployment rate will climb at least another ten percent, or higher, within weeks.
To be honest, as a labour relations consultancy firm, at any one time, we are typically partnering clients in the implementation of retrenchments. This should come as no surprise if one stops and thinks about the parlous state of our economy in recent years.
The impact of Covid-19 has, however, pretty much overnight, impacted job security on a massive scale, not experience in our lifetime, or perhaps at any time in history. Many employers are clamouring to retrench staff any which way possible. Some industries have clearly been more affected than others.
The hospitality industry has fallen off a cliff. Hotels, bars and restaurants have closed. Many won’t reopen. Most of our hotel clients have closed down for three months, irrespective of whether, or not, the lockdown period lasts that long. They realise that hotel bookings are not going to be normalised for many months to come, regardless of how long the lockdown continues, or how long it takes for Covid-19 infections and deaths to be brought under control. Most anticipate a long, and slow, resumption in hotel and guest confidence levels, crucial to enable the hospitality industry to get out of the red.
Employers are in a conundrum in deciding how to navigate the unchartered waters of needing to reduce all costs, especially payroll, when in lockdown mode. It will take a very brave employer indeed, to attempt to commence a retrenchment procedure, as provided for in the Labour Relations Act; the national lockdown prevents an employer from complying with the letter and spirit of consultation required in the Act.
That is why many employers have decided to offer staff voluntary retrenchment during the lockdown. In most other circumstances, most employees would not consider the prospect of voluntary retrenchment enticing, and yet in the current circumstances, many employees are indeed applying for voluntary retrenchment to access funds to see them through the next few months. Employees applying for voluntary retrenchment understand that they would otherwise qualify for UIF TERS benefits, but only up to a maximum of 60% of their salary, if they are lower paid workers.
The world of work is going to be a wild ride for quite some time to come.