SA needs a solid plan for disasters

We all agree that we are facing a global health catastrophe – a disaster of its own kind.

At the time of writing, numbers of those infected and dying of Covid-19 coronavirus were rising globally.

Numerous articles recently have suggested what employers should do in the wake of this pandemic.

But what about the legal questions relating to the nationwide lockdown and its impact on jobs?

Are there any legal consequences in the South African context?

The very foundation of the employment relationship is about the rendering of services by an employee and payment in return for those services by an employer.

Generally speaking, the current health crisis has caused some employees to stop rendering services to their employers.

Therefore, the question is whether those employers are obliged to pay employees who are not rendering services to them.

The answer is simply that the employment relationship becomes suspended due to vis major (superior force).

As a result, the suspension has dire financial consequences for both the employer and the employee, who will not be receiving an income as a result of the lockdown.

However, what is expected, although not as a result of any legal obligations, is that employers who can afford to continue paying their employees during the lockdown should allow those workers to take annual leave, which they are statutorily entitled to.

But those employers who cannot afford this could approach financial institutions for financial assistance on favourable terms.

With the lockdown extended it could result in the employees exhausting their leave days.

Those workers should be allowed to further invoke their other benefits – such as compassionate, sick or annual leave.

If the employees have exhausted all the leave days they are entitled to, the employer may have to allow them to take negative leave.

Simply put, the employer would be advancing workers the leave days not yet due to them.

Employment laws review

Our laws were not designed for situations such as the current pandemic. Under the Disaster Management Act, government issued a directive – the Coronavirus Covid-19 Temporary Employee/Employer Relief Scheme.

While the scheme has immense potential to reduce the adverse consequences of Covid-19, I am not convinced that it can address the crisis fully.

The Basic Conditions of Employment Act stipulates that an employee is entitled to take 15 working days of leave per annum (or 21 ordinary days). And an employer is obliged to pay the employee for those leave days.

It is, therefore, high time that this legislation either be amended or enacted to compel employers to deduct two leave days – from the 15 due to an employee annually – so as to put them into what is termed a leave bank.

Alternatively, the employer should be required by statute to deduct money from the employee’s salary – in the same way that is done for medical aid or the Unemployment Insurance Fund.

That money should then go towards a dedicated disaster management fund that can act as a reserve fund to offset the financial implications of any disaster that may arise.

Notwithstanding the above, it is likely that there may be those employers who may not survive the adverse effects of Covid-19, or any other disaster for that matter.

Some employers may be forced to lay off their employees as a result of this pandemic.

Therefore, the question that arises is: How should an employer manoeuvre the provisions of the Labour Relations Act, which deals with dismissals based on operational requirements?

This is a pertinent question since the employer must engage in consultations with the relevant parties – for example, trade unions or employees likely to be affected by the dismissals – when they contemplate dismissing one or more employees based on poor operational conditions.

The law further provides that a 60-day consultation period must elapse before an employer can issue a notice to terminate employment.

This 60-day consultation requirement may be too cumbersome for employers who are unable to afford those employees who return to work after the lockdown.

Consequently, I propose a review to create a dispensation that will accommodate a more flexible process caused by a direct result of a disaster.

Equally so, collective bargaining agreements entered into by the employers and employees’ organisations and trade unions should also be reviewed in light of this crisis.

Government’s disaster risk insurance

At governmental level, it’s high time it established a disaster risk financing and insurance fund, which is currently not catered for in the laws.

In a paper titled Disaster Risk Financing and Insurance: Issues and Results, Daniel Clarke and his colleagues stated: “Through financial protection against disaster risks, countries receive timely and targeted assistance, thereby reducing the economic and human costs associated with disasters.

In the aftermath of a disaster, a sluggish reconstruction process may lead to significant economic costs as the provision of public services is interrupted and business opportunities are lost.

“Delays in relief can unleash epidemics that worsen the immediate cost of destruction. This interruption may have effects on poverty levels, as those that are vulnerable are pushed into poverty. It may also create irreversibility in child schooling and health.

“Evidence shows that immediate assistance following disasters is crucial in reducing the economic and human costs of disasters. Financial protection against disasters can assist countries in reducing their dependence on post-disaster budget reallocation and emergency calls for donor assistance.”

Way forward

It is clear that, at a national level, we need disaster risk financing and insurance.

That is not to suggest that this financing and insurance arrangement will ameliorate all the issues, but rather alleviate a lot of the adverse effects associated with the occurrence of a disaster.

July is a director at Werksmans Attorneys and the views in this article do not represent those of his employer

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