Some businesses are under severe strain as a consequence of the severe measures implemented due to the COVID-19 having been declared a national disaster. They are resorting to emergency measures such as short time & temporary lay-off. A fairly recent amendment to the Unemployment Insurance Act of 2001 is likely to bring much needed relief to affected employees.
Two obvious alternatives to retrenchment is for employees to work short time or to be laid off temporarily without pay. How can this be achieved?
Short time and lay-off
Some Bargaining Council Agreements make provision for short time and/or temporary lay-off, and some employment contracts have built-in provisions in this regard. In the absence of such provisions, employers may not impose these measures unilaterally – it will have to be agreed upon. If no agreement is reached, employers may have to follow the retrenchment process as a last resort.
On 18 January 2018 the President assented to several amendments to the Unemployment Insurance Act of 2001, including the insertion of the following provision to section 12 of the Act:
"(1B) A contributor employed in any sector who loses his or her income due to reduced working time, despite being employed, is entitled to benefits if the contributor’s total income falls below the benefit level that the contributor would have received if he or she had become wholly unemployed, subject to that contributor having enough credits.”
It would seem that this caters for precisely the type of situation faced by employees who work short time or are temporarily laid off. Although it does not seem that the amendments were actually promulgated, the relevant forms are available from the Department of Labour and such claims should be processed.
CLICK HERE for access to these forms and other resources.
For assistance with short time or temporary lay-off agreements employers may contact email@example.com.
Jan Truter for www.labourwise.co.za
PS. A Covid-19 Temporary Employer/Employee relief scheme has since been introduced to help employers to pay their employees while they are on temporary lay-off.
Disclaimer: The material above is provided for general information purposes only and does not constitute legal or professional advice. Neither the author nor the publisher accepts responsibility for any loss or damage that may arise from reliance on information contained in this article.