Employers and employees can consult to establish alternatives to keep on continuing their employment relationship. One of these alternatives can be to place employees on short time or reduced working hours. This entails that employees work on specific days and only receive payment for the days they work.
Another option to consider can be lay-offs. Lay-offs entail that employees are required to stay at home for a specific period without receiving their monthly income. This period can differ depending on the nature of the business and if the company forms part of a Bargaining Council or not. In both of the mentioned scenarios, employers can claim for funding from UIF in the form of the temporary employee/employer relief scheme (TERS) and funding is claimed for the hours that employees are not working.
Despite the above, the next step might be to consider a reduction in employees’ salaries. Although not an ideal scenario and as an alternative to retrenchments, employers and employees can agree that salaries are reduced for a certain period. This reduction can be evaluated at a later stage to determine if the reduction in salaries must continue or returned to normal. Comprehensive communication between parties is essential in these scenarios.
However, all of the above must fall within the scope of reasonableness. If an employee refuses to agree to any of the above alternatives without any justifiable or reasonable reason, the concluding step would be to start the retrenchment process. Depending on how reasonable the refusal is, Section 41(4) of the Basic Conditions of Employment Act, Act 75 of 1997 (BCEA) provides, that an employee who unreasonably refuses to accept an employer’s offer as an alternative to being retrenched is not entitled to severance pay.
However, each matter will have to be judged on its own merits and we advise that employers contact their nearest SEESA office to guide them on the correct steps to follow.
About the author:
Stephan le Roux obtained his BCom, LL.B and LL.M degrees from the North-West University Potchefstroom campus. He was admitted as an Attorney of the High Court of South Africa in 2015 and is currently employed as a Senior Legal Advisor at SEESA Labour Head Office in Pretoria.