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CAN RETRENCHEES WAIVE THEIR RIGHTS TO SEVERANCE PAY?
This is a difficult question. I think I would tend to agree with Michael unless an employer could invoke the contractual claim of “impossibility of performance”. Or in terms of a suspensive condition in the retrenchment agreement that the employer will pay the severance when in a financial position to do so adding that the employer agrees to full disclosure of its financial position monthly.However, a practical way to address the issue of severance where the employer simply does not have the money, is to enter into a mutual termination agreement (along the lines of Patrick’s suggestion) with the employee (so that the employee can claim ordinary unemployment insurance benefits) on terms that as soon as the employer is financially able to do so, the employer will re-employ the employee on the same terms and conditions without loss of service. On this basis, the termination would not amount to a dismissal as defined in the LRA because the termination would be by agreement.
Ingrid Lewin
Perhaps it is the use of the word “power” and “require” that may be causing confusion. As I understand Section 20 (10), if there is no agreement (and I agree with Cameron that, first and foremost, an attempt should be made to get agreement), then the employer can decide, ie has the final say, as to when leave should be taken and section 20(10) enables the employer to do this. I understand the Covid-19 regulation, when it uses the word “require”, to mean that, in the circumstances of Covid and the restrictions placed on employees working at the employer’s premises, the employer, having tried to reach consensus and getting agreement, can then exercise his/her discretion and “require” the employee to use their annual leave if they have to stay at home (without working) due to Covid. Obviously if they are working from home, they must be paid their full salary unless there is agreement to the contrary (see Macsteel Service Centres SA (Pty) Ltd vs. National Union of Metal Workers of South Africa and others (2020) 8 BLLR 772 (LC)).
INGRID LEWIN – FORCED TAKING OF LEAVE
The directive regarding the Covid 19 TERS scheme sets out the following as its purpose:
“2.1 To make provision for the –
(a) Payment of benefits to workers who have lost income or have been required to take annual leave in terms of section 20 (10) of the BCEA due to the Covid 19 pandemic.”
In the early stages, I recall a statement of the Department of Employment and Labour urging employers not to force employees to use their annual leave but rather to apply for TERS benefits. From this, and the purpose of the fund as described in the directive (above), I have understood that employers can require their employees to take paid annual leave and can claim for a reimbursement of some of the money from the TERS fund which has now been extended to 15 March 2021.
In UASA obo Members v Impala Platinum Limited (JS409/18) [2020] ZALCJHB 116 (21 January 2020) the employer compelled employees who did not participate in a five month strike to take accrued and future annual leave and then deducted remuneration equal to the non-statutory days to which they were entitled in terms of their contract of employment. The Labour Court determined that Section 20(10)(b) of the BCEA gives an employer a discretion to determine the time when employees take annual leave under the Act, when this hasn’t been agreed, but the BCEA does not give the employer that same discretion in respect of additional leave granted over and above the statutory minimum entitlement.In my view the CCMA was right according to Karan t/a Karan Beef Feedlot v Randall [2012] 11 BLLR 1093 (LAC), where the Labour Appeal Court held that where there is a normal or agreed retirement age and the employee has reached that age, the employer enjoys protection from that date and is entitled to terminate the employee’s contract on the grounds of age at any time thereafter.
INGRID LEWIN
I agree with Michael. The real reason for the dismissal was for operational requirements and not due to their age as that horse bolted when they were kept on after the agreed or normal retirement age. Thus, if the operational requirements procedure was not followed they would, at the very least, have a claim for a procedurally unfair dismissal.
INGRID LEWINIn the case of Macsteel Service Centres SA (Pty) Ltd v National Union of Metal Workers of South Africa and Others (J483/20) [2020] ZALCJHB 129 (3 June 2020) the court decided that any variation to an employee’s salary, irrespective of whether it is increased or decreased, amounts to a change in terms and conditions of employment and cannot be effected unilaterally. It dealt specifically with a reduction of salaries of employees who were working full time during Covid and whose employers reduced their salaries due to loss of business. This makes it clear that the courts will not tolerate such unilateral reductions.
Ingrid Lewin
Section 61 of the Disaster Management Act (under which the various relief schemes have been establiushed) provides an indemnity. I quote it below:
Section 61 of the Disaster Management Act (under which the various relief schemes have been establiushed) provides an indemnity. I quote it below:
61. The Minister, the National Centre, a provincial or municipal disaster management centre, an employee seconded or designated for the purpose of the National Centre or a provincial or municipal disaster management centre, a representative of the National Centre or a provincial or municipal disaster management centre, or any other person exercising a power or performing a duty in terms of this Act, is not liable for anything done in good faith in terms of, or in furthering the objects of, this Act.
So, if one wishes to sue one would have to prove that the failure to provide the relief in terms of the Act was due to bad faith rather than incompetence.
Ingrid Lewin
What I recommend to employers as a guideline is to bear in mind how much time they took to investigate and prepare for the hearing and then to allow the employee an equivalent amount of time. However, I strongly agree with Michael, that, ideally, it should be by agreement. This has a several advantages. Not only will it add weight to a chairperson’s decision to proceed if the employee and / or his / her representative fails to attend, but it will also enhance the employee’s perception that the hearing was fair. The more the employee is part of the decision regarding the logistics (the date, time, place and, wherever possible, the identity of the chairperson), the less likely a claim of procedural unfairness will succeed. If this is written into a disciplinary code, however, the final say should be given to the employer as an employee may refuse to agree in order to delay the inevitable. Including shop stewards in this decision will also help to improve industrial relations.
