With the woes of power shortages being likely to worsen and persist for the foreseeable future, many questions arise about keeping your business afloat and of course, balancing that with the interests of your business’ employees. Surely the many pressures will force employers to make hard decisions quickly – the aim of this article is to provide some guidance.
Some business owners are likely pondering whether they can avoid paying for work when their business is shut down due to loadshedding – a sort of no-work, no-pay situation. Unfortunately, it’s not as simple as that. In terms of South African law, an employer remains liable to pay the employee for making himself available for the rendering of the service to the business. Whether or not the employee actually works for the time agreed is not the determining question. If the employee cannot perform his or her duties due to circumstances beyond his or her control, the employer must still pay up.
There are some mechanisms and ideas that employers can implement to mitigate the financial losses they stand to suffer in the circumstances:
- You can consider allocating stoppage times as breaks or lunchtimes for the employees, keeping in mind that you will not be able to reduce their pay for periods longer than the statutory limits for lunch and other breaks – as set out in the Basic Conditions of Employment Act. However, it may be useful in saving some money for the business.
- You can engage your employees and agree to flexible work hours, thereby being able to work around the stoppages and getting the full hours, or as close thereto as possible, of productivity from the employees.
- You can implement industry agreed mechanisms such as short-time.
In the Motor Industries Bargaining Council Main Agreement and clause 4 thereof, the regulation of working hours is regulated for the employers and employees in the industry. There are provisions for the implementation of short-time due to certain circumstances beyond the control of the employer, including electricity stoppages. Certain provisions deal with giving notice to employees for such short-time being applied.
The Agreement provides that, where the circumstances are unforeseen or unplanned, an employer may decide to send employees home, provided they shall receive not less than four hours’ work or pay in lieu thereof. It is advisable to read and understand the provisions well.
Hopefully employers will be able to rely on the published schedules for electricity stoppages, but as we have come to know, there will also be unforeseen incidents, which will be more difficult to control. This leaves the employer with an obvious dilemma when Eskom makes sudden changes, because when the power comes on unexpectedly, the employer may not have a sufficient staff completement at the time, already having had to pay them for four hours’ work, for example.
In considering the idea of flexitime as mentioned above – the question arises; how much must the employees be paid if they need to work past their usual or normal work hours to catch up for the stoppage times? The main agreement of MIBCO does provide for certain overtime rates to be paid and, of course, normal working hours differ for various categories of employees.
Generally speaking, it may be possible for the employer and employee to agree in the employment contract that payment or remuneration will be suspended during load shedding, or that payment of overtime in the normal sense will not apply to the adjusted work-schedule to cope with load shedding related stoppages. The difficulty with this is that the employees will have to agree to such terms (or changes to their contracts of employment). If they do not, these changes cannot be implemented unilaterally.
If no agreement can be reached pertaining to changes in shift structures, hours to be worked and the appliable pay, all aimed at relieving the burden employers will face, employers may have no alternative than to follow retrenchment procedures in terms of sections 189 or 189A of the Labour Relations Act, based on particular operational requirements brought about by the energy crisis.
So, what is to be done?
Employers have a perilous journey to embark on when implementing plans to reduce their financial burden because of loadshedding related stoppages. They cannot contravene labour law requirements, since that will create disputes and the time and costs of having to resolve those will only worsen the problem. The first prize will be for employers to negotiate a workable plan with employees. Creativity by the management of employers may also be beneficial, such as using stoppage times for other value-adding activities, such as team building, training, etc. Finally, it is advisable to consult your employers’ organisation or legal advisor timeously and regularly through these trying times that lie ahead, before making changes and having to unscramble it after the fact.
By George Herbst | Director at Barnard
