Your Labour Law Questions Answered

1. What this FAQ sheet is about & How we will update it

ASATA’s general counsel, Elizabeth de Stadler, did an interview with Fatima van Toorn from FvT HR Consulting. If you would like to listen to the webinar again or if you missed it, you can now access the full webinar by clicking on the links below:

In this document, we will keep track of the most recent developments on the employment front.

In this FAQ we will answer the most frequent questions we are getting regarding labour law. But, please be careful: Your specific context might dictate a different approach and you should seek advice if you are uncertain.

2. A guide to your first decisions and your options

You should immediately classify your workforce in the following categories:

  1. Staff who are critical to your business and who can work remotely
  2. Staff who can work reduced hours and can work remotely.
  3. Staff whose services are not needed right now (whether they could work remotely or not).
  4. Staff who cannot work remotely.

You can take different approaches to these different categories of employees. This will help you to keep your business open without wasting too much of what precious cash you have left.

1 Staff who are critical to your business and who can work remotely. For them it is business as usual. They do their work per their job specification or any new responsibilities you have given them.
2 Staff who can work reduced hours and can work remotely. You can put these employees on short time.
3 Staff whose services are not needed right now (whether they could work remotely or not). You can do a temporary lay off.
4 Staff who cannot work remotely. You can do a temporary lay off.

Of course, given the uncertainty of the duration crisis and the strain that businesses are under, permanent retrenchment may come into play. If you do not believe that your business will recover in time, you can start the retrenchment process at the same time as short time and temporary lay offs.

3. Why is retrenchment not a good idea during the government lockdown?

When you retrench, you have to pay any accrued annual leave, notice periods and severance (one week for every completed year of service). And you cannot arrange for payment plans. So it won’t solve your cashflow problems.

Retrenchment processes take a lot of time – and you have to continue paying your employees while you do it.  So it won’t solve your immediate problems. Here are the time periods:

  • Section 189A of the Labour Relations Act apply to large scale retrenchments. You will have to consult for at least 60 days, unless your employees waive their rights – which they might not do.
  • If you employ less than 50 people, there isn’t a specific timeline, but you have to make sure that it is procedurally fair, otherwise you may have to reinstate your employees. You should not give them less than 2 weeks to consult regarding your intention to retrench.

Also keep in mind that for 12 months after retrenchment, employers are legally obliged to reach out to employees who have been made redundant in the event that suitable positions become available and reasonably accommodate them. So, you might have to rehire the same people you retrench now.

4. Should you at least start the retrenchment process during the lockdown?

This depends on how much cash you have on hand and how long you think it will take before bookings pick up again. You need to calculate something called your cash burn rate to figure out how much time you can trade for.

If you don’t think things are going to pick up before you run out of cash, you should consider starting the retrenchment process now. You can do this while you place people on short time or you do temporary layoffs. Remember that you must have meaningful consultation, and this might be difficult during the lock-down.

The retrenchment process is technical and if you get it wrong you can be forced to reinstate employees. If you want to go this route you should get the advice of a labour law specialist.

5. What is short time?

You can ask your employees to work for less hours or less days per week than they would normally. This means that you will also pay them less.

They will be able to claim from the UIF for the difference between what they used to earn and what they will earn now. The UIF formula  of 38-60% of the UIF cap of R14 872 will be applied, and the Employees’ period of contributions to the UIF fund as well as the previous times they claimed from the fund will also be taken into account to determine what they will earn now.

6. What is a temporary lay-off?

When employees do not work at all for a certain period. This period can be days, weeks or months depending on the circumstances.

In such circumstances, the employees would not be paid, but would still be the company’s employees.

They will be able to claim from the UIF during a temporary lay-off. The UIF formula  of 38-60% of the UIF cap of R14 872 will be applied, and the Employees’ period of contribution to the UIF fund as well as the previous times they claimed from the fund will also be taken into account to determine what they will earn.

If your business shuts down and all employees are placed on temporary lay-off, you can also apply for the National Disaster Benefit. Read more about that below.

7. What is the process I must follow to put someone on short time or to do a temporary lay off?

You can’t just unilaterally change your employees’ conditions of employment, so you are going to have to consult, but it is not as onerous as the retrenchment period.

Here are the steps you have to take:

  1. Issue staff with the “notice of intention to introduce short time/temporary lay-off” document you will find here During lock-down it will be considered reasonable to cut the consultation process short as the employer does not have a choice.
  2. During the consultation period, give employees the opportunity to propose alternative solutions. You never know what they will come up with.

    NB Employees do not have to agree to this. As long as you can show that you have consulted with them and that this option is a reasonable alternative to retrenchments.
  3. Once you have consulted with your employees, issue them with a “notice of short time/temporary lay-off” document which you will find here

8. When can employees claim for UIF?

8.1. Reduced work time benefits

Employees can claim from the UIF if:

  • the business shuts down for a while (everybody is on a temporary lay-off),
  • they are on a temporary lay-off,
  • they are on short time.

8.2. Illness benefits

If an employee has been quarantined for 14 days for COVID-19 they can also claim from the UIF.

A Confirmation Letter from both the employer and employee must be submitted together with the application as proof that both the employer and employee have agreed to the 14 days “special leave”. 

In this instance the letters will stand in place of the medical certifi­cate as the beneficiary would have self – quarantined without prior consultation with a medical practitioner. Benefits will be paid based on these letters.

Should an employee be quarantined for more than 14 days, a medical certificate from a medical practitioner must be submitted together with the Continuation Form UI3.

In addition, the normal illness benefits also still apply. This benefit kicks in when an employee has no sick leave left and has been booked of for more than 7 days.

8.3. Death benefits

When someone passes away, their spouse, life partner, children or other ‘nominated persons’ can claim from the UIF.

8.4. How much will they get?

Employees will be able to claim UIF for the difference between their normal pay and that earned during short time and during temporary lay-offs.  The UIF formula of 38-60% of the UIF cap of R14 872 will be applied, and the Employees’ period of contribution to the UIF fund as well as the previous times they claimed from the fund will also be taken into account to determine what they will earn. 

8.5. How do you claim from the UIF?

Reduced work time (this will include temp lay offs)   • UI19 and UI2.7 (completed by Employer)
• UI 2.1
• UI 2.8 (bank form completed by the bank)
• A letter from the Employer confirming Reduced Work Time is due to the Corona Virus
• Copy of ID document.
Illness benefits   • UI19 and UI2.7 (completed by Employer)
• UI2.2 (a portion of which is completed by the Doctor)
• UI 2.8 (bank form completed by the bank)
• Copy of ID document.
Death benefits   • UI19 and UI 53 (completed by the Employer)
• UI 2.5 or UI2.6
• Death Certificate ID of deceased and applicant
• UI 2.8 (bank form completed by the bank)
• Copy of ID document.

The forms can be downloaded here.

9. What is the national Disaster benefit?

The employer may decide to close their entire business for a period and send employees home. If the employer cannot pay his employees for this period, the employer can apply for the “National Disaster Benefit” from the UIF.

This benefit will be at a flat rate equal to the minimum wage (R3 500) per employee per month for the duration of the shutdown or a maximum period of three months, whichever period is the shortest.

Please note that there is currently some uncertainty around how this will be implemented.

10. What if an employee gets infected at work?

When an employee is infected, because they came to work, they may claim from the Compensation Fund in terms of the Compensation for Occupational Injuries and Diseases Act. We are in the process of preparing a summary of this benefit. Here is the link to the Government Notice which extended these benefits to COVID-19 cases.

Please note that all employers must be registered with the Compensation Commissioner and pay an annual assessment fee.

11. How do we approach leave during the lockdown period?

Each organisation will have different leave policies suited to their particular needs. In this section, we attempt to answer some of your questions relating to leave.

11.1 When do employees qualify for paid sick leave for COVID-19?

If an employee has tested positive for COVID-19 (confirmed by a medical doctor) or if they have symptoms and get booked off by a doctor, normal sick leave applies. The employee will be required to produce a medical certifcate from their doctor confirming the employee tested positive for the COVID-19 virus or is too sick to work.

If employees have run out of sick leave, they will be able to claim UIF illness benefits if they have been sick for more than 7 days.. Note that they cannot claim the UIF illness benefit if they still have sick leave.

11.2. What if an employee is not sick, but placed under quarantine?

The employee will qualify for the new illness benefit under the UIF, or they can take annual leave. If the employee takes annual leave, they cannot claim from the UIF illness benefit. They will not automatically qualify for sick leave.

11.3 Can you force employees to take annual leave during the lock down?

If employees cannot work remotely you can ask them to take their annual leave.
Although it is not technically illegal to require them to take annual leave, it is discouraged. You should rather give them the choice of ether taking annual leave or to do a temporary lay-off. Some employees may prefer a temporary lay-off now and keep their annual leave for a planned holiday.
If it is not financially viable for you to continue to pay employees while they are on annual leave, you should rather consider a temporary lay-off. Or even encourage them to only take a few days leave and the rest of the days will then be a temporary lay-off

11.4 Why you should not force people to take unpaid leave?

Because then they cannot claim UIF.

Please access our FAQ for more information here.

The impact of COVID-19 on the travel industry is unprecedented and unpredictable. The nature of the content that is being shared on the ASATA coronavirus microsite is therefore constantly changing. Please check the date of the post to ascertain its recency.
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