Unpacking the impact of lockdown on leave policies

CRS Technologies' Nicol Myburgh says companies are managing the extended lockdown in different ways.

The Covid-19 pandemic and resultant lockdown in South Africa and other countries have seen companies enter uncharted territory, especially when it comes to dealing with employees unable to work during this period of enforced isolation. This is not only putting a significant financial strain on organisations but could also negatively impact employer-employee relationships.

Many businesses have insisted that those employees who cannot work during this period use their annual leave, much to the annoyance of the staff affected. But is this a bad strategy? Annual leave is a mutual agreement between employer and employee and when no agreement is reached, the Basic Conditions of Employment Act (BCEA) allows the employer to unilaterally place the employee on annual leave.

Consider the alternative. When employees are not working, the company is not obliged to pay them. Therefore, being placed on annual leave is a better option than having to take unpaid leave.

Some organisations are even going so far as to grant several forms of special leave to employees. The terms and conditions of this are varied because each employer decides how their special leave will work. However, this shows a willingness to try to help the employee while still ensuring the financial survival of the business during the lockdown.

Alternatives

Companies are managing the extended lockdown in several ways. Those who can are enabling staff to work remotely but most employers are granting a portion of the lockdown days as special paid leave and a portion as annual leave. The special leave is, however, at the discretion of employers.

Unfortunately, some businesses have no choice but to temporarily lay off staff and close the company. It should be noted that the government is providing relief in several forms, including UIF claims for employees suffering the loss of income due to the lockdown via the Temporary Employer-Employee Relief Scheme (TERS) in cases where they cannot afford to pay employees, benefits via SARS, and a few others.

In the case of the UIF claims, for example, several key documents are required, including a Letter of Authority granting employees permission to lodge a claim on behalf of the company, confirmation of bank account details, evidence of their last three months’ salary, a CSV file in the prescribed format and so on. 

Once all the required documents are submitted to the dedicated inbox, an automated calculator will produce the benefit amount due to the employee and the total amount to be transferred to the employer. Finally, a Memorandum of Understanding between all parties must be signed before payment will be made.

Affected companies will only be funded if they have complied with the relevant UIF legislation. Companies which are not compliant must undertake to pay outstanding contributions and bring their declarations up to date within a stipulated timeframe. CRS is on hand to help companies keep their businesses operational by providing the necessary assistance with UIF compensation for employees, or compliance with UIF legislation.

The lockdown will certainly have an impact on leave policies moving forward. The most likely scenario is that people will use up their annual leave entitlement for the year and in some cases their sick leave entitlement for the three-year cycle. This may result in many employees being forced to take unpaid leave when sick or during an annual shutdown. 

However, nothing stops companies from providing employees with additional paid leave or amending leave policies to allow for negative leave balances. Ideally, companies should consider finding a middle ground with employees to continue good relationships with them while ensuring business survival.