BRENTWOOD

2020-04-29

Now that we are back at work – Level 4: Layoff and Short time.

In the first part of the lockdown employers were talking about how to pay salaries and look after employees.  Six weeks later and a looming Level 4 lockdown the focus is shifted to the survival of the business.

Many of our clients are talking about layoffs, short time, and retrenchments.

Layoff: 
Employees do not work at all for a period of time, and are also not paid.  They remain employees of the company, but don $B!G (Bt work and do not get paid. (UIF can be claimed)

Short time:
Reducing the number of days/hours per week, with a corresponding reduction on pay. For instance: working a 3-day week is a 40% reduction in pay. (UIF can be claimed)

Both lay-off and short time can be considered as measures to avoid retrenchment, before the decision to consider retrenchments is made.

The process:

Work out exactly what is needed for the company to run optimally within the limitations of level 4, and then categorise the functions and employees as:

- Employees who are critical to the business and who can work remotely. For them it is business, and pay, as usual.

- Employees who can work reduced hours and can work remotely. Short-time, with proportionally less pay.

- Employees whose services are needed, but for a lesser period of time.  Short-time, with proportionally less pay.

- Employees whose services are not necessary at all. Temporary lay-off, with no pay.

There are different approaches you can take in each of the categories.  The operational requirements may mean that each category can change, as the operational needs of the company changes.  While there is flexibility in the management of post-Level 5 lockdown approaches, there is specific procedure which must be followed.

Out of these measures, retrenchment, and all its procedures, could take place.  It is possible to commence retrenchment consultation while short time and lay-off are active.

Equal treatment for all employees:
No, not necessarily.  It all boils down to your operational requirements.  You can have one department or function on complete lay-off, another on 1-day a week, and another working full time.  Equal treatment comes in when employees doing the same function are treated unequally, or there is no objective operational reason for an employee to be laid off or placed on short-time.  These different operational changes are best justified within the inherent, and objective, requirements of the job and company.

Spread the work as much as possible – if there are multiple employees with the same skills – allow them all an opportunity for some work, and thereby receive some pay. 

The procedure:
Several Main Agreements provide for lay-off and short time, and those procedures would need to be followed.  Contact Brentwood for specific details.

The Basic Conditions of Employment Act does not provide for lay-off or short time, and it falls into the category of a change to terms and conditions of employment.

Because the introduction of lay-off or short time is, in effect, an alteration to the contract of employment, there needs to be agreement to go onto lay-off or short time. There must, therefore, be consultation with employees, and ideally a written agreement. Should agreement not happen, the alternatives are retrenchment or a lock out, the latter being a very extreme approach.

Consultation will have to take place, and employees need to be told of the intention to go onto short-time or lay-off and given an opportunity to consult on the matter.  Once consultation is exhausted, the employer can take the chance and implement.

We are finding very little opposition to the concepts of short time and lay-off, under the circumstances.  As the real effects of lockdown worsen, the quick agreements we are seeing will probably fade.

How do you consult with nobody at work?

Any means possible: email, fax, WhatsApp … you must be able to show that consultation took place and that responses to the consultation were considered and replied to.  Unionised employees and union representatives must be invited to consult too.  The consultation is not just an inconvenient process – it is a genuine consideration of alternatives to the lay-off or short time, and the manner in which it will be carried out.

If the provision of lay-off or short-time is in the signed contract of employment, the process is simpler, but consultation still takes place.

Time limit:
There is none – the lay-off and short time, and variations of both, have no maximum or minimum time limit – it is based on the justifiable operational requirements of the company.

How short is short time?

It can reduce to as little as an hour a week – any less than that is lay-off.  If short time is going to be that extreme, a closer look at the operational needs of the employer will have to be taken, and new approaches taken.

When to retrench?

Lay-off and short time is not necessarily a precursor to retrenchment. It obviously can be, but there is no point at which retrenchment is compulsory, or that employees can demand retrenchment.

Any changes, such as these, should not be taken lightly, and process must be followed.  Brentwood can obviously help.