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Day Zero and your employees – What an employer needs to know

17 April 2018Jose Jorge & Steven Adams, CDH
Jose Jorge, Director at Cliffe Dekker Hofmeyr.

Jose Jorge, Director at Cliffe Dekker Hofmeyr.

Steven Adams, Senior Associate at Cliffe Dekker Hofmeyr.

Steven Adams, Senior Associate at Cliffe Dekker Hofmeyr.

With Day Zero pushed out to 2019, employers in the Western Cape are still left with one concerning question: “What will happen to my business should the water supply still run dry?”

Depending on their reliance on municipal water, employers could potentially find themselves without the ability to generate revenue in the absence of water. During this time, employers will still be expected to pay staff a salary, creating a potentially untenable situation for certain businesses.

It is imperative that employers in the Western Cape region start early discussions with their employees to find possible solutions that can be implemented should Day Zero actually hit. CDH provides the following possibilities to consider:

To pay or not to pay, that is the question

The duty of an employer to pay remuneration continues as long as the employee tenders his or her services. This is also the case where an employee is prevented from working, due to an unanticipated or unpreventable act such as a natural disaster.

An employer would have to pay its employees that tender work even if it cannot provide them with any work. Fortunately for employers, labour law recognises certain measures that can be taken to minimise this burden. The two most common are short-time and the temporary suspension of payment of remuneration. It is also important to note that these two measures can only be implemented if all parties concerned have agreed to it.

Short-time is a system of work that is used for periods when there is little or no work. The system recognises that paying an employee for periods when he or she is not working places undue strain on the financial position of the employer and the employee.

Employees may either agree to short-time in a contract of employment, or an employer may enter into a collective agreement regulating short-time with a union representing the affected employees.

A temporary suspension of payment of remuneration may be implemented when there is some prospect of the work situation improving in the near future and the employer being able to provide the employee with work. This may be implemented as an alternative to a dismissal.

Where there is no agreement to these alternatives an employer will have to engage with his or her employees, explain the company’s position and attempt to secure an agreement in this regard. If an employer is unable to do so, he or she may have to consider retrenchments.

Can an employer retrench employees as a result of Day Zero?

This is a difficult question. An employer will have to consider whether employees’ inability to work will be for a prolonged period.

There is no way of knowing how long a drought will continue. With the unpredictable effects of global warming, the weather has become increasingly difficult to forecast. The World Wildlife Fund anticipates that if the Western Cape region receives the same rainfall pattern as last year, the drought will continue for six months.

The Labour Relations Act, No. 66 of 1995 allows an employer to retrench employees for ‘operational requirements’. Operational requirements are defined as requirements based on economic, technological, structural or similar needs.

In order to establish that an ‘operational requirements’ dismissal is substantively fair, an employer must determine that genuine operational requirements exist. If the anticipated consequence of the drought is that a business may not be able to continue with its operations - without access to municipal water - this would constitute an operational requirement.

In conclusion, CDH advises employers in the region whose business is heavily reliant on water to consider entering into working arrangements with their employees for the duration of the drought. This will ensure that the employer and the employee are both in agreement regarding available options should Day Zero occur. It will also help provide a sustainable alternative to retrenchments.

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