This article is a general overview and should not be used or relied on as legal advice. No liability will be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Consultation with an Attorney on your specific scenario and circumstances is essential. Errors and omissions excepted (E&OE)
As we’ve been grappling with the impact of Covid-19, many South African business owners and their employees have been startled by the 21- day lock-down imposed on all non-essential operations. It is indeed uncertain times that many are facing and should be dealt with reasonably.
Most SMME’s rely on their day to day operations in order to execute their necessary expenses, a large percentage of which is salaries paid to their employees. Whilst employers are encouraged to pay their employees during the 21- day lockdown, many companies are unable to afford this. Evidently there is a contractual relationship between both employers and employees, however no clear indication in law exists as to employer’s contractual obligation under the current circumstances. South Africa has never during the current dispensation had to implement labour legislation during a period of National Disaster. As a result, we grapple with more questions than answers in an attempt to be guided by Government and reasonable application of common law.
Some Of The Options Available To Employers Over This Period:
Accommodating employees in allowing satellite service from home during the lockdown period. The employer will need to amend company policy and rules to ensure efficient delivery of service by employees during working hours. The employer will be liable to remunerate the employee as normal if such agreement and services are carried out.
Negotiation with employees to substitute possible unpaid period, during lock-down with annual leave.
Negotiation with employees to substitute possible unpaid period, during lock-down with government incentives below.
Negotiation with employees to reach agreement on any other reasonable, and practicable manner for both employer and employee for recovery of hours remunerated but not worked.
Government schemes available
1. National Disaster benefit
Mention has been made by Minister of Labour, that a National Disaster benefit will be administered via the Unemployment Insurance Fund infrastructure. Indication of minimum wage remuneration for employees registered with the UIF has been alluded to, however it is still unclear as to process for application to receive this benefit.
2. Grace period for payment of corporate income tax
The President stated on the 23rd March 2020 that tax compliant businesses with a turnover of less that R50 million, will be allowed to delay their corporate income tax without penalties or interest over the next 6 months and their PAYE liabilities by 20%, over the next 4 months. He mentioned further that The South African Revenue Services will also do their part by paying out employment tax incentive reimbursements monthly as opposed to twice a year, in an effort to assist compliant employers. However, no further information or detail has come to light since and will probably be addressed by the South African Revenue Services in the days to come.
Given the current pandemic labour laws may well be amended temporarily via emergency legislation by government as we navigate unchartered waters.
While there appears to be general consensus that negotiation between employers and employees, employers must take heed that any agreement to the detriment of an employee below the minimum thresholds in labour legislation will be disregarded if tested before a Court or Forum. Updates on this topic will be rendered as further clarity and proclamation prevail.
Carina Naidoo (LLB) Candidate Attorney at Buckus Attorneys.
– This information was made available by Buckus Attorneys
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