Many Employers, despite the sudden economic downturn due to the COVID-19 pandemic, do not wish to retrench their Employees due to various reasons, inclusive but not limited to; Employees working for the Employer for years if not decades, loyal and hardworking Employees and Employees who have families to financially support as well as other financial responsibilities which can only be attended to by the income derived from the Employer. For those Employers who are not desirous of considering retrenching their loyal and long-standing Employees, there are various alternatives to consider in order to avoid a retrenchment, the most utilized option being short time work.
What is Short Time Work?
According to the Commission for Conciliation, Mediation and Arbitration (“the CCMA”), “short time work means a temporary reduction in the number of ordinary hours of work owing to reasons including slackness of trade, shortage of raw material, vagaries of weather, breakdown of plant machinery or buildings that are unfit for use or is in danger of becoming fit for use”. In the circumstances of the COVID-19 pandemic short time work could be implemented as per some of the aforementioned definitions. An Employee is categorized as being on short time work if the following terms and conditions to apply:
- Short time work is imposed as a temporary measure for a temporary period where there is only limited amount of work for an Employee to do for their Employer. This is evident in the mass drop in customers in the hospitality, restaurant, tourism, retail and other industries which have as a result of the COVID-19 pandemic been hit hard from a financial standpoint and cannot afford to pay their full staff complement their full time salaries as per the norm prior to COVID-19. Accordingly, the Employee will be working far less hours in a day, or week or month for the Employer;
- Short time work is an alternative to retrenchment, providing the Employee with the opportunity to still earn an income during the period the COVID-19 pandemic exists;
- The Employee understands that he or she is still an Employee of the Employer and all the normal contractual obligations and rights of the contract of employment between the Employer and Employee still apply, save for the implementation of short time work which has been agreed upon.
How is Short Time Work distributed amongst Employees?
Due to less work being available during this time, for example hotels having less bookings and restaurants not being able to serve alcohol after a certain time, the Employer does not need its full Employee complement. Accordingly, short time work means that the little work that remains can be equitably shared amongst Employees.
Can Short Time Work be unilaterally imposed on Employees?
Unless short time work is provided for in an Employee’s contract of employment or a collective agreement in that industry, short time work cannot be unilaterally imposed on Employees by the Employer due to the fact that imposing short time work unilaterally entails a change to working hours and reduction in remuneration i.e. a unilateral change to the terms and conditions of employment, which if proved, could amount to an unlawful breach of the employment contract by the Employer. To avoid retrenchment as well as a claim by the Employee for a change to his or her terms and conditions of employment, the Employee and Employer need to agree to the implementation of short time work. Short time work cannot be implemented without the consent of the Employee.
In the same manner that consultations must take place with Employees if the Employer is considering retrenchment, Employers must consult with Employees regarding imposing short time work. Employees must note and be mindful of the fact that short time work is an alternative to retrenchment. At the very least during this crisis period, an Employee could earn income rather than be retrenched.
For those Employees who have not been working long periods for their Employers, short time work should be considered as they would not have accumulated enough severance pay at the basic minimum of one week’s remuneration for every continuous year worked as per the Basic Conditions of Employment Act 75 of 1997 (“the BCEA”) in order to have a nest egg for this crisis period. Accordingly, it is in the interests of the Employee to agree to short time work as finding alternative gainful employment during the period of the COVID-19 pandemic is doubtful.
What happens if an Employee refuses to agree to short time work?
If the Employer has a justifiable reason for implementing short time work, which COVID-19 would be in this instance then Employees may run the risk of dismissal for operational reasons i.e. retrenchment. The correct procedure for dismissal for operational requirements would apply to short time work. If the Employer unilaterally imposes short time work without consulting its Employees, its Employees may then seek an interdict against the Employer and adjudicate the matter in the Labour Court. Due to unilateral changes to terms and conditions being a dispute of interest, the CCMA cannot arbitrate the matter. Further if several Employees are affected by the Employer unilaterally imposing short time work upon them, they may strike if the correct procedures as it relates to strikes are followed.
What is the method of selecting which Employees will be placed on short time work?
When selecting Employees for short time work, an Employer should apply the same standard of selection criteria used when contemplating dismissal for operational requirements in terms section 189 of the Labour Relations Act 66 of 1995 (“the LRA”). For example, the last in first out rule (LIFO) is often applied in retrenchments and the same method can be applied for identifying which Employees should be placed on short time work. It must be noted however, that this is not the only method that can be applied in these circumstances.
The implementation of short time work is a win-win alternative to retrenchment during this period if the Employer has not shut its doors completely. Until our Government clarifies the situation in respect of a complete shutdown of restaurants, retail, hotels, etc. then short time work is still an option for both the Employee and Employer.
Contact us should you require any guidance in implementing the short time work process lawfully. We are equipped to assist you with the required notices and guidance in respect of the consultation and joint consensus seeking exercise as it relates to the short time working process. For more information please register as a user on our Self -Service Portal and download your pack today.