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WHO PAYS SALARIES DURING 21-DAY LOCK-DOWN?

In Article Archive, Article Archive - Home, Article Archive - Teazer, Labour News, Labour News Teazer by Jan Truter29 Comments

NOTE: Due to the rapid developments surrounding Covid-19, the information provided in this article may be outdated. For the latest developments see our most recent article.

In a drastic measure to curb the spread of COVID-19, the SA Government has declared a lock-down as from midnight on Thursday 26 March 2020 until midnight on Thursday 16 April 2020. This will be enacted in terms of the Disaster Management Act. During this period all employees, with the exception of a few categories, will have to stay at home. Who pays their salaries? What happens after the 21-day lock-down?

UIF options

In our newsletter a few days ago, we referred to various UIF options available to employees who work short time or are on temporary lay-off without pay - see https://www.labourwise.co.za/labour-news-teazer/uif-options-in-coronavirus-context

While the UIF options still apply in principle, the 14-day agreed quarantine period under the recently introduced UIF provisions, is essentially superseded during the 21-day lock-down. For more information on the UIF Claim process click here.

We have serious doubts about the ability of the UIF to cope with processing the flood of claims in the short term.

There also are several new points for employers to consider.

Forced lay-off

Short time: Before the announcement of the 21-day lock-down, employers would have first considered short time as an alternative to retrenchment. As from midnight on Thursday, short time is not an option unless the business operates in one of the designated industries that are allowed to operate or when staff can work remotely from home.

Annual leave: An alternative option is to grant employees such paid annual leave as is available to them.

Lay-off: Thereafter, the most reasonable remaining option would be the temporary lay-off of staff. Even here the situation has changed. Where an employer would, up until now, have had to negotiate and reach agreement on the terms of a lay-off, this is no longer the case.

Neither the employer nor or the employee has control over the situation. The employee will not be permitted to tender his or her services. The employer should therefore be relieved of its contractual obligation to pay remuneration during the lock-down period. But is it advisable to simply inform employees that they are laid off without pay?

Other measures to assist

While employers are encouraged to assist their employees financially, there is no obligation to do so. Most smaller employers are unable to do so. There are of course certain UIF options available (link above).

In his address to the nation, the President stated that –

“We are in consultation on a proposal for a special dispensation for companies that are in distress because of COVID-19. Through this proposal employees will receive wage payment through the Temporary Employee Relief Scheme, which will enable companies to pay employees directly during this period and avoid retrenchment.”

No further details have been provided yet.

The President further stated that –

“In the event that it becomes necessary, we will utilise the reserves within the UIF system to extend support to those workers in SMEs and other vulnerable firms who are faced with loss of income and whose companies are unable to provide support. Details of these will be made available within the next few days.”

We will publish the details mentioned once they are available.

Although nothing is certain, employers and employees should in the meantime try their best to plan ahead.

What happens after the lock-down?

Employers are encouraged to look beyond the 21-day lock down period, with the view of retaining the skills and good labour relations with their employees if business was to resume at a later stage, albeit at a smaller scale. It almost certainly won’t be business as usual.

Considering that work is unlikely to resume as normal after the 21-day lock-down period, there is likely to be a need for an extended lay-off, beyond the lock-down, for at least some employees. Now is the best time to plan and agree on this upfront. Where possible, some assistance may be offered by employers.

If you are not already a subscriber and are interested in receiving more information click here

Jan Truter for www.labourwise.co.za

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.

Comments

  1. Good day I’m permanent but get paid by the hour so I get paid during this lockdown

    1. Author

      You are only entitled to be paid your normal wage if you are able to tender your services, i.e. if you are providing an essential service that is exempted from the lock-down provisions.

  2. hi we went on short on 17 March and was told they will let us know when to come back to work, now its lockdown and the company still cant tell when we are due back. what happens in a case like this. Must we get paid.

    1. Author

      Our newsletter of 1 April explains the options (Keep an eye on updates, as things may change)

  3. I have a hairsalon which are suffering because of the lockdown situation. Can you please assist how and by whom my employees need to be paid at the end of April

    1. Author

      Our newsletter of 1 April explains the options (Keep an eye on updates, as things may change)

  4. Hi,
    where can i find the Sliding scale payout, i need to understand the calculation i cannot find this anywhere the proper breakdown please, and the difference between TERS and normal Temp layoff

    1. Author

      The same sliding scale applies to both systems. Covid-19 TERS guarantees a higher minimum, though.

  5. I have heard that the UIF fund for the COVID-19 has a provision for temporary lay-offs, up to R 17,500, how does the calculation work on a salary

    1. Author

      It works on a sliding scale. See our newsletter of 1 April for an explanation.

  6. What about a person that works for himself and have just from time to time workers and don’t pay UIF

  7. My employer refuse to pay us for march month cause there’s nothing we can do in the period of the lock down

    1. Author

      See our newsletter of 1 April for an explanations of ow it works

    1. Author

      It is not impossible to retrench during the shut-down period, but it may be a problem to consult properly.

  8. What is going to happen for employers who said they are not going to pay their employees during lock-down period

  9. Why government don’t compensate the companies, so they can pay salaries and wages during the lock down of 21 days. Employees they pay tax a very month, now they stay at home without pay. We heard about UIF, but its a short notice. We are crying government failed us. Employees depends on
    salaries/wages for living, lock-down whithout pay its mass to us. Employer told us today(25/03/2020) that no work no pay.

    1. Author

      There are UIF options available. There is also the likelihood of a Temporary Employee Relief Scheme coming into effect shortly.

  10. my company wants us to take unpaid leave can they forched us to do so.

  11. What happens if business is in exempted bracket of business sector, and able to continue manufacturing. But employees refuse to come to work. Citing transport and fear as reasons.

    1. Author

      If they don’t come to work, they would not be entitled to pay. However, as far as transport is concerned, the new regulations published today (25 March) under the Disaster Management Act, provide that where an employee does not have transport to and form work, the employer must provide such transport.

  12. I have a question,is my employer allowed to make us to take leave for the 21 days lockdown

    1. Author

      No employee may be forced to take leave. However, until such time as there is some scheme to assist employees to receive pay to tide them over the 21-day lock-down period (there is talk about a Temporary Employee Relief Scheme), putting in annual leave that may be available can at least bring about some financial relief.

  13. what happen if you are part of a business that receive funds more than 2.5 mil a year and tells there employees no work no pay how should we go about this.

    1. Author

      Employees would be able to claim from the UIF. At this stage there does not seem to be an obligation on employers to pay employees during the lock-down. However, the problem is that UIF claims are likely to take long time to process. It seems that a Temporary Employee Relief Scheme will come into effect shortly. This scheme may enable employers to pay employees and then claim the money from the UIF.

  14. Well presented Mr Truter, great work, well researched information shared.

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