It’s hard to find the words to adequately describe the impact that Covid-19 has had on our lives, as well as its likely impact for the foreseeable future. Workplaces are undergoing their own revolution, as new, novel and unprecedented challenges build.
The well-intended UIF TERS benefits have, by and large, been successful, notwithstanding a glut of administrative glitches flowing from an overburdened Department of Employment and Labour. Workplace health and safety has been catapulted, front and centre, into the headlights of employers, who face a myriad of new challenges. Workplace modelling is also now centre stage. Social distancing works in some workplaces, but less so in others.
Our national client base is diverse, and we have observed how Covid-19 has impacted all sectors, with some experiencing brutal consequences.
Our hospitality industry clients have, perhaps, been hardest hit. Hospitality was the first sector to be badly affected, and will be the last and slowest to recover, especially that segment of the sector with large foreign, international guest exposure. As things stands, many hotels have been closed for almost two months, and may not reopen-open until October 2020. Some European based airlines only expect to reach 80% of pre-Covid capacity by 2023.
Most readers will have had first-hand experience of the devastating impact of Covid-19 on jobs. We have two specific observations on this. Firstly, many of our clients are retrenching due to the severe economic impact Covid-19 is having on the viability of their businesses. A second observation, which few anticipated, is that some employers less prejudiced by Covid-19, are none the less retrenching, as they have come to realise that, as staff are gradually returning to work, they are in fact overstaffed, and can get by without all employees returning.
Most employers elect to offer staff voluntary retrenchment packages, before implementing section 189, or 189A, of the Labour Relations Act. Perhaps, unsurprisingly, our clients who have done so have had a higher number of voluntary retrenchment applications, than would otherwise have been expected. This can largely be attributed to two things. Firstly, as time goes by, households are finding it increasingly difficult to manage their cash-flow, as many are on reduced income. For this reason, they are choosing to ‘cash-in’ on the enhanced severance payments associated with voluntary retrenchments, to stabilise their household cash-flow. Secondly, retrenchment volunteers often apply as they fear subsequent unilateral retrenchment process, with a less attractive severance pay formula.
Retrenchments processes can be initiated, as long as there are adequate measures taken to ensure that the required consultation process can take place.
The CCMA opened its offices yesterday, since closing in late March 2020. Time will tell how they adapt. In fairness, the CCMA has an unenviable task. The significant case backlog, occasioned by the national shutdown, will not be erased quickly.
We represent clients at the CCMA throughout the country. The smaller CCMA offices such as Sabi (Mpumalanga) can probably adapt more quickly than the ever-busy Johannesburg office.
With the move to lockdown level 3 on 1 June 2020, most sectors will reopen. We anticipate numerous challenges. Employers are advised, in addition to ensuring compliance with sanitisation and social distancing measures, to have each returning employee complete, and sign, a return to work Covid-19 preparedeness induction documentation, to confirm that the induction has been completed, and that the employee fully understands their responsibilities in the newly configured workplace.
The Minister of Employment and Labour issued a Covid-19 Direction on Labour Relations today (11 May 2020) in terms of Regulation 4(10) of the National Disaster Regulations. It deals, amongst other things, with operations of trade unions and employer organisations during the level-4 lockdown.
Read the release
On 8 May 2002, the CCMA published an urgent directive confirming how its operations will function from 11 May 2020. This includes how conciliation and arbitration cases will be dealt with.
Read the announcement
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.
Make no mistake, whilst dismissals on grounds of ill health can be fair in our law, as with all cases of dismissal, there are very specific procedures to be followed. What makes these kinds of cases all the more challenging, is that there is no fault on the part of the employee; they are simply, and most unfortunately, the victims of ill health over which they have no control.
Be that is it may, our law deals with precisely these scenarios. When considering the fairness of a dismissal on grounds of ill health, our courts, the CCMA, and Bargaining Councils, must “consider the provisions of Items 10-11 of the Code of Good Practice: Dismissal, which are binding on all commissioners as dictated by the provisions of section 188 (2) of the Labour Relations Act”, as noted in the Labour Court judgment in National Bargaining Council for the Road Freight Logistics Industry v the CCMA 7 2 others Case number 875/15.
When reading items ten and eleven of the Code, you will find an explanation of how employees should be treated in cases of temporary and permanent ill health or injury. They are precisely the steps any one of us would want our employer to follow if we were the employee afflicted with ill health or injury.
For example, “the employer should investigate the extent of the incapacity or the injury”; “the employer should investigate all the possible alternatives short of dismissal”; “the possibility of securing a temporary replacement for the ill or injured employee” and in cases of permanent incapacity “the employer should ascertain the possibility of securing alternative employment, or adapting the duties or wok circumstances of the employee to accommodate the employee’s disability”.
The schedule goes onto say that “Any person determining whether a dismissal arising from ill health or injury is unfair, should consider (1) whether or not, the employee is capable of performing the work; and (2) the extent to which the employee’s work circumstances might be adapted to accommodate disability, or, where this I not possible, the extent to which the employee’s duties might be adapted; and, (3) the availability of any suitable alternative work”.
In our experience of such cases over many years, when the incapacity (ill health or injury) is first identified, the cards are, quite understandably, stacked in favour of the employee. The employer must show reasonable accommodation, investigate the incapacity, and monitor the situation.
As time goes by however, the pendulum swings towards the interests of the employer, which are, after all, also legitimate. It should come as no surprise that ill health can be of both a physical and mental health, nature.
In “ IMATU obo Strydom v Witzenburg Municipality & others (Labour Appeal Court: 2012) 7 BLLR 660, it was noted in the judgment that “My reading of item 10 and 11 gives me the impression that an incapacity enquiry is mainly aimed at assessing whether the employee is capable of performing his or her duties, be it in the position he or she occupied before the enquiry or in any suitable alternative position. I am of the view that the conclusion as to the employee’s capability or otherwise can only be reached once a proper assessment of the employee’s condition has been made. Importantly, if the assessment reveals that the employee is permanently incapacitated, the enquiry does not end there, the employer must then establish whether it cannot adapt the employee’s work circumstances so as to accommodate the incapacity, or adapt the employee’s duties, or provide him with alternative work if same is available.
I must mention that I have no doubt in my mind that permanent incapacity arising from ill-health or injury is recognised as a legitimate reason for terminating an employment relationship and thus an employer is not obliged to retain an employee who is permanently incapacitated if such employee’s working circumstances or duties cannot be adapted. A dismissal would, under such circumstances be fair, provided that it was predicated on a proper investigation into the extent of the incapacity, as well as a consideration of possible alternatives to dismissal”.
Finally, in short, extra special attention should be given to employees injured at work, as evident in item 10(4) of the Schedule, which informs us that “particular consideration should be given to employees who are injured at work, or who are incapacitated by work-related illness. The courts have indicated that the duty on the employer to accommodate the incapacity of the employee is more onerous in these circumstances.