Alternatives to retrenchment during the nationwide lockdown

There are a number of alternatives to retrenchments, which are suitable to both employees and employers. However, employers are cautioned to ensure that they are procedurally and substantively fair and are proposed as such, under a consensus seeking process, in terms of the Labour Relations Act.

Written by Robin Gerhold, Partner, Gerhold and van Wyk Attorneys and Conveyancers, for LexisNexis South Africa.

[Durban, 22 April 2020]

On 9 April 2019, President Cyril Ramaphosa announced a two-week extension of the nationwide lockdown. This comes as a blow to businesses which were already struggling to survive during the initial three-week lockdown.  

Some businesses see the current lockdown as being a short-term difficulty, which, despite having a massive impact on operations, can be overcome. They are therefore opting to make decisions which preserve their workforce, rather than losing skilled and experienced members of staff.            

As the below options are presented as alternatives to retrenchments, it is suggested that they be proposed as such, under a consensus seeking process, in terms of the Labour Relations Act. Employers are cautioned to ensure that any actions implemented are procedurally and substantively fair.

Remote Working and Flexible Working Arrangements            
Whilst some tasks require an employee to be physically present at the premises of the employer, many are capable of being performed remotely. Many employers have required employees to work from home, when possible to do so. This has proven advantageous to employers and employees, as the business of the employer continues to operate.    

Lay-Offs
A lay-off is a temporary suspension of the work of an employee. Employers may consider lay-offs in the event that they wish to suspend the functions of an employee for a period of time. The option to lay-off may be provided in an employee’s employment agreement or bargaining council agreements, alternatively the parties may agree to same under a consensus seeking process. Implementing such an alternative allows the employer temporary relief, as it will not be required to remunerate the employees during a period of lay-off, whilst the employee may become entitled to receive benefits from the Unemployment Insurance Fund.      

Future Re-Employment
In certain circumstances, retrenchment is unavoidable. The employer may, when implementing a retrenchment, agree with the employee that should a suitable vacancy arise in the future, the employee will be invited to apply for such a position. Such an agreement leaves the employer with a possibility of re-employing skilled and experienced staff at a later stage.   Employees may be entitled to claim UIF benefits following retrenchment.

Utilisation of Annual Leave
Unless written agreement to the contrary exists, an employer is entitled to determine the time at which annual leave may be taken by an employee. The parties may also agree, through a consensus seeking process, that the employee takes annual leave during the period of lockdown. Such an alternative allows an employee to utilise annual leave, rather than face the prospects of not being remunerated during a period of lay-off.

Other Alternatives        
Employers and Employees may, through a consensus seeking process, create other alternatives to retrenchments, which are suitable to both parties, however employers are cautioned to ensure alternatives are fair.