Companies are entitled to enforce the no-work-no-pay principle during lockdown

Employers who are applying the no-work-no-pay principle need to inform their employees about the financial state of the company and its reasoning behind the decision.

Companies have not only had to struggle to keep their doors open after the hard lockdown, but they had to deal with employee expectations.

Many employees expected to be paid even if they were not able to work – by no fault of their own or that of their employers.

An important case before the Labour Court held that companies were not obliged to pay employees for the period they did not and could not work. Employers were entitled to apply the no-work-no-pay principle.

In that case Macsteel brought an urgent application against a planned strike by the National Union of National Union of Metalworkers of South Africa (Numsa) over a wage dispute.

The application was dismissed, but the court made it clear that Macsteel was not obliged to pay workers who were not rendering their services during the hard lockdown in April and May.

However, in a high court case – Mhlonipheni v Mezepoli Melrose Arch and Others – the judge found that the employer was obliged to pay its workers even if they did not work. The company’s inability to pay the workers forced it into business rescue.

It is understandable that not all companies are able to pay its employees during the current crisis. However, it is concerning when they are not assisting employees to apply to the UIF-Covid-19 Temporary Employer/Employee Relief Scheme (TERS).

The scheme has been plagued with delays from the onset. Although the Department of Employment and Labour made efforts to ensure a streamlined online application process, employers continued to experience long delays and severe frustration due to the lack of response to their queries.

We find that employers have become reluctant to become involved in the process, mainly because of a system that has mostly been ineffective.

They took the initiative to apply on behalf of their employees, but because they had no control over the system and the outcomes, they were not able to manage the expectations of their employees that they would be paid timeously.

That is probably the most important reason why employers are shying away from assisting their employees. They have shifted the responsibility to the employees.

Employees who have completed the application forms found there was only a drop-box at the department’s offices, giving them no acknowledgment that their documentation was adequate and that it would be processed.

Employers who are applying the no-work-no-pay principle need to inform their employees about the financial state of the company and its reasoning behind the decision.

The company may be able to keep its doors open by not paying its employees, but it also runs the risk of losing its best talent.

We understand the frustration of employers and employees alike.

However, it is important to continue updating employees from a human resource and payroll perspective. Even if they are disappointed by the UIF delays, at least they stay informed.

By Jethro Malapane, executive committee member of the South African Payroll Association.

 

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