No Man’s Land

Since the advent of the National Lockdown to prevent the spread of the Covid-19 Virus and now regular Loadshedding, many employers have resorted to placing their employees on a temporary layoff to alleviate the deleterious economic effects of both of these events on their businesses.

A temporary layoff is a situation where the employee’s remuneration and entitlement to statutory or contractual benefits of employment are suspended pending a final decision by the employer as to whether it is necessary to retrench the employee/s.  The effect of the aforementioned is that the employment relationship remains in place except that the employee’s entitlement to benefits of employment including remuneration, is suspended.

Where the temporary layoff is for a defined period, this is straightforward as at the end of the stipulated period, the employer usually has 3 (three) options:  restore the employee’s remuneration and benefits,  retrench the employee/s concerned by utilizing the mechanisms provided in Section 189 or Section 189 A of the Labour Relations Act 66 of 1995 (LRA) alternatively,  extend the period of the temporary layoff.

It is the third option which is problematic especially where the temporary layoff is extended and endures for a lengthy period.

Employees who are subject to a lingering temporary layoff and who have not been unable to secure alternative employment during the period of the layoff, are understandably bound to become disenchanted and seek ways of challenging their layoff in an attempt to get closure on their situation.

The question which then arises is what remedy is available to employees on a temporary layoff which subsists indefinitely?

Recently employees have approached the Commission for Conciliation Mediation and Arbitration under the Unfair Labour Practice Provisions of Section 184 (2) (b) of the LRA which reads thus:

“The unfair suspension of an employee  or any other unfair disciplinary action short of dismissal in respect of an employee.”

Whilst some CCMA Commissioners yielded to the temptation to treat temporary layoffs under certain circumstances as an unfair suspension, the Labour Court sitting as a  Review Court, has in various Judgments put a stop to this and held that a temporary layoff of an employee/s as a result of the employer’s operational requirements, does not amount to an unfair suspension and declined to extend the provisions of Section 186 (2) (b) of the LRA to a temporary layoff.

In the recent decision of Aminto Pre-Cast & Civil Engineering CC v Commission for Conciliation Mediation and Arbitration & Others the Labour Court unambiguously held that a Temporary Lay Off based on operational requirements, cannot be equated to an unfair suspension and further held that suspension as contemplated in Section 186 (2) (b) of the LRA is limited to a suspension in a disciplinary context.

The effect of the abovementioned Judgment is that those employees subject to a temporary layoff, which endures for a long period of time, find themselves without a remedy short of claiming that as a result of the continuing layoff they have in reality been dismissed for operational reasons.

It remains to be seen how the Labour Court/Labour Appeal Court will view a claim by an employee/s where they claim that as a result of the length of the temporary layoff, they have in reality become dismissed on the basis of the employer’s operational requirements.  This may be a difficult claim to prove and will require an investigation of the facts particular to each dispute, not to mention that such a claim would need to proceed adjudicated through the trial process, which is not a speedy remedy.

The time may be ripe for the Lawmakers to amend the provisions of Section 186(2)(b) to include unfair temporary lockouts but this will require careful consideration in order to balance the rights of employees to fair labour practices with the employer’s rights to be economically active, however, in the interim the legal position is that employees in a temporary layoff cannot claim that they have been suspended as contemplated in Section 186 (2) (b) of the LRA.

Article by David Short, Director
Ephraim Lehutso, Associate Designate
Fairbridges Wertheim Becker Attorneys