Short-time work and lay-off can be considered an alternative to retrenchment; this became more prevalent since the Covid-19 pandemic when employers were forced to re-evaluate their business operations, some still recovering three years later, with the added strain of load-shedding. South Africa experienced load-shedding for over two hundred days in 2023 alone, with only one full day of suspended load-shedding.
When considering lay-offs or retrenchments, an employer is required to follow specific procedures; they need to show that there is a genuine need to reduce their workforce due to operational requirements. This could be due to a decline in profitability, restructuring of the business, or similar factors. Employers then need to consult with the affected employees and their representatives. Lay-offs arise when the employer cannot provide work for the employee(s) but believes it is a temporary situation and can only be implemented if the employment contract allows it and by agreement with the affected employees.
In the recent Labour Court case of Aminto Precast and Civil Engineering CC v CCMA and Others 44 ILJ 1491 LC, an employee was employed as a driver of heavy-duty vehicles. The employer, like many other businesses at the time of the pandemic, faced a severe slump, there was no work for the employee during the Covid-19 lockdown period, and as a result, the employee was considered for retrenchment. After consultations with the employee, which he later disputes having taken place, the employer decided that instead of dismissing him for operational requirements, he would be laid off for a short duration. The employee was given a written notice of lay-off effective 12 November 2021, which was to be reviewed in February 2022. The employee felt aggrieved and initially referred an unfair dismissal dispute to the CCMA, which was later changed to an unfair labour practice dispute relating to suspension. The alleged unfair labour practice was arbitrated, with the commissioner concluding that the lay-off of the employee amounted to his suspension. Considering Section 186(2)(b) of the Labour Relations Act (LRA), the employer was ordered to reinstate the employee with back pay. The employer took this award on review.
On review at the Labour Court, it was held that although there are similarities between a suspension and a lay-off in that an employee is without work for a duration of time, a lay-off happens when there is a shortage of work. Suspension occurs even when there is no shortage of work. A lay-off due to a shortage of work cannot amount to unfair suspension in terms of Section 186 (2)(b), which is limited to that of a disciplinary suspension and forms part of a closed list. The Court concluded that the commissioner committed a material error of law by incorporating a lay-off in Section 186(2)(b) of the LRA, which had a distorting effect on the outcome that he reached and secondly that the commissioner was not faced with a dispute concerning an unfair labour practice and as such did not have the necessary jurisdiction to arbitrate the dispute. The arbitration award was set aside.
The Court, however, mentioned that there might be a need for the legislature to expand the meaning of an unfair labour practice to include a lay-off that is not disciplinary in nature and that lay-offs may constitute a unilateral change to terms and conditions of employment, but this would also not fall within the definition of an unfair labour practice. This case, however, failed to mention that when considering disputes relating to unilateral changes to terms and conditions of employment in terms of Section 64(4), one should look at the case of Nhlapo-Mofokeng v Emfuleni Local Municipality and Another (2023) 1 BLLR 63 (LC), which held that Section 64(4) does not establish a substantive right for individual employees aggrieved at unilateral changes to terms and conditions of employment, Section 64(4) can only be used as a remedy for collective disputes.
In finding that the CCMA had no jurisdiction to hear a matter which fell outside the definition of unfair labour practice and considering that an individual will likely not be successful in a dispute for unilateral changes to terms and conditions of employment, this seemingly leaves an individual laid-off employee without remedy. Considering the above, although an individual aggrieved employee may be without remedy when it comes to being laid off, it is essential for employers to go about fairly introducing the lay-off to avoid any disputes; in fact, the Labour Court suggests that an introduction of a provision similar to that of Section 54 of the Canadian Labour Relations Code may be helpful, the provision establishes a distinct duty on employers to give notice and consult in three instances:
- It applies when an employer introduces or intends to introduce a change that affects employment terms, conditions, or security.
- It requires an employer to give an employee and trade union at least 60 days’ notice before implementing the change.
- Once notice is given, an employer and employee and trade union must meet in good faith and endeavour to develop an adjustment plan to mitigate the effects of the change.
Lay-offs may not constitute an unfair labour practice as a lay-off is not the same as a suspension; if it is referred to the CCMA as such, the CCMA will lack the necessary jurisdiction to arbitrate the dispute. It is essential to remember that implementing short-time and lay-off is a reality for many businesses in South Africa and will always be advantageous to both employer and employee as an alternative to retrenchment, provided it is temporary in nature and is done in a procedurally fair and correct manner.
By Shannen Brown
Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)