NO electricity, NO work, NO pay?
How can employers limit load shedding’s labour cost implications, lawfully?
Employers should ensure that they do not fall foul of labour laws and our common law by adopting a no work, no pay policy during power outages. If the employer expects employees to render their services as per their employment contract such employer must make it possible for the employee to render their services.
It is common knowledge that load shedding whether planned or unplanned makes it impossible for employers to adhere to their responsibility towards their employees. However, it should be noted that although the employer cannot make the rendering of services possible the duty of the employer to remunerate the employee for availing themselves to render their services, does not fall away. Renumeration may not simply be suspended unliterary.
Load shedding thus does not only have an impact on production, but it holds labour cost implications for employers. In order to make up for lost production the employees might have to work after normal working hours resulting in overtime which by law will be payable to the employee. In an effort to reduce the financial losses incurred by the employer during load shedding the employer may elect to adopt short time measures for planned load shedding. Planned load shedding occurs at a predetermined and publicised date and time. The employer is obliged to inform the employees when short time payment will be implemented, and the employees must agree to it. This proves to hold great difficulties especially because planned load shedding does not always occur according to the publicised and predetermined date and time. It at times does not occur at all and shifts stages. The employer must remunerate the employee for the minimum prescribed hours set out in the Basic Conditions of Employment Act for short time, regardless of whether the employees worked less or more hours.
Employers and employees must agree to any changes brought to working hours, shift structures and shift purposes. Employers often elect to use the power outage time for meetings and training etc. Employers and employees may also elect to suspend payment during power outages. It should be noted that an employer may not unilaterally bring about any amendments as it will amount to unfair labour practices. Putting load shedding policies in place can also be deemed unfair since employees have little choice but to abide by it especially if the employment contract requires adherence to existing and future company policies. Should the parties fail to agree to any amendments intended to mitigate the effects of load shedding the employer might have to resort to retrenchment procedures.
In order to curb the negative cost implications of load shedding, avoid drastic measures such as retrenchment and ensure a mutually beneficial outcome/solution for employers and employees, employers are urged to put load shedding production interruption procedures in place. Employers are advised to contact labour law experts to draft industry specific load shedding production interruption agreements and set out procedures relating to planned and unplanned power outages.
Author: Simoné Traut (LLB), Legal Advisor at The Labour Law Company.