In February 2019, Economist, Mike Schüssler, estimated that the South African economy lost approximately one billion rand per load shedding stage per day. These losses had a ripple effect throughout the economy. The Labour market especially was not immune. Unavoidable intermediate shutdowns of businesses and factories resulted in lower output, and in turn, drastically decreased profits. Inevitably, some employers were forced to either change their current working structure or to retrench redundant employees. South Africans may have heaved a collective sigh of relief after load shedding was temporarily suspended. However, it is very probable that load shedding may once again force both employers and employees to adjust to more interruptions. This article will give both employers and employees tips on how to adjust to business in these “unusual” circumstances.
The basic principles
An employment contract is a reciprocal agreement. Accordingly, employers will have an obligation to pay an employee remuneration only when that employee puts his or her product capacity at the disposal of the employer.
During periods of load shedding, the “no work, no pay” principle has created much controversy. However, it is important to note that it is not the actual performance of the employee which has to be remunerated, but the tendering of the employee’s service or productive capacity.
The rule of thumb to remember in these cases rather is: when an employer expects an employee to be present at work at a specific time and date and the employee complies, the employer is obligated to pay the employee for his or her time – regardless of whether the employee was able to perform his or her duties. By this reasoning, there may be times when an employer will be expected to remunerate an employee for work he or she is unable to do during load shedding.
This will undoubtedly put financial strain on businesses. As a result, employers should plan for foreseen, unforeseen and additional challenges which may arise from load shedding to mitigate their losses.
#1 Foreseen challenges: Planned load shedding
Planned load shedding refers to load shedding that occurs at a pre-determined and published time and date. Employers are advised to rely on procedures that apply to interruptions of productions when they can foresee challenges.
In the metal and engineering industries, Clause 7 of the Metal and Engineering Industries Bargaining Council Main Agreement (“the Agreement”) has made provision that employers may reduce working time of employees or implement “short time”. This may only be done “owing to a shortage of work and/or materials and any other justifiable contingencies, including planned load shedding and/or unforeseen contingencies and/or circumstances beyond the control of the employer”.
This option greatly assists employers as employers would otherwise be liable to pay employees for eight hours of service, regardless of whether these employees were able to work for that period (Clause 7(2)(b)(iii) of the Agreement). However, clause 7(2)(b) states further that employers who elect to send employees home during periods of planned load shedding must provide their employees with four hours of work or payment in lieu thereof. On the other hand, employers who believe that work can be resumed on a particular day, must still ensure that regardless of the eventual circumstances , they will either have four hours of work or payment in lieu thereof.
Unfortunately, not all industries have this agreement. Employers in other industries who want to implement similar provisions to regulate how foreseen challenges should be handled, can do so by gaining the consent of employees and interested parties to a similar provision.
#2 Unforeseen challenges: Unplanned load shedding
Unfortunately, most load shedding phases are implemented sporadically. The employer’s choices are, therefore, very limited. They can either opt to send the employees home, provided that the employees shall not receive less than four hours’ work or pay in lieu thereof. Alternatively, employers can expressly instruct employees to return to work when the employer believes that work can be resumed, provided that the employee receives not less than four hours’ work or payment in lieu thereof.
Unplanned load shedding is very disruptive and places an enormous burden on the employer as they cannot effectively plan to mitigate losses. When employers fail to implement short time, they will be liable to pay employees at least four hour’s wages, even though employees cannot work. If they do implement short time and there is no load shedding, they do not have the capacity to produce at optimal levels.
#3 Additional challenges
3.1 Overtime requirements
Operational requirements caused by load shedding may necessitate longer or different working hours. The Basic Conditions of Employment Act clearly states that any work performed after normal hours will be regarded as overtime and subject to overtime rates.
Employers are encouraged to consult with employees regarding changes in working structure i.e. different working hours or shift structures in order to reduce any financial loss.
Employers and employees alike must remain attent to the fact that any changes will have a great impact on all the parties concerned, albeit for personal and/or financial reasons. Everyone has financial pressure and personal responsibilities to consider. In order to avoid any unnecessary tensions, the discussion between the parties should, therefore, promote meaningful engagement. This will minimize the danger of misunderstandings and even collective action.
3.2 Consequent enforcement of disciplinary policies in the midst of chaos
An additional challenge worth mentioning, is that most employers struggle to enforce their disciplinary codes in the midst of the chaos caused by load shedding. Although load shedding creates exceptional circumstances which may lead to late coming of employees, employers must enforce their disciplinary codes. They should, however, do so with caution and due consideration to the surrounding factors which have contributed to employees’ inability to perform as usual.
This does not give employees the right to abuse the situation. According to the common law, an employee has to perform in terms of his or her employment contract. This duty does not cease as a result of exceptional circumstances.
Employees are, therefore, arguably obligated to do what they can to mitigate any negative effects of load shedding for their employer. Planning is an essential tool which can be used by employees to achieve this goal: plan to accommodate increased traffic, plan to complete essential tasks during periods when electricity is available and lastly, plan to finish tasks which does not electricity during load shedding phases.
On the other hand, employers should always remain consistent in the enforcement of their disciplinary codes. When it is announced that there will be load shedding, employers should counsel all employees of their obligation to the employer. Secondly, employers should issue sanctions consistent with their disciplinary codes in cases where employees abuse the situation. Increased time-keeping issues, insolence and other forms of misconduct must not be tolerated as it creates an unacceptable and unsustainable precedent for the future.
Conclusion
Business as usual is not always possible. However, it is the duty of both employers and employees to take active steps to reduce the impact that exceptional circumstances such as load shedding has on their company and their fellow colleagues. Employers should remain flexible and attent to increased difficulties of their employees, but remain consequent in their application of their disciplinary codes. Employees should always remember their common law duty of performance towards their employer, regardless of their circumstances. They should, therefore, plan to mitigate the possible negative effects of load shedding on this duty. Ultimately, everyone’s inputs will have an impact on the economy. A conscientious work ethic in the midst of chaos will go a very long way to ensuring that business will continue – albeit in these unusual circumstances businesses may face.