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Loadshedding Implications

While some in Government would like us to believe that Eskom’s inability to supply a continuous electricity service does not represent a crisis for South Africa, most of us in business would beg to differ. The costs of load shedding are incalculable. Even when planned, load shedding is extremely disruptive – everything stops when the lights go out!

The worst time is of course from 14:00 to 16:00. Many staff in companies assume that it is just not worth starting something at 16:00 when they are due to go off at 16:30, so they request to go home early or they simply waste the whole afternoon. All of this costs business, especially small businesses who do not have back-up generators.

Some tips for employers:

  • Meet with your staff and outline the impact of lost time on the business.
  • Ensure that they understand that the lost time WILL have an economic impact on the business and WILL ultimately affect their salary increases, bonuses and job security.
  • If it is possible, negotiate a flexitime arrangement so that lost time can be worked in.
  • Arrange staff meetings and training during load shedding (provided of course that electronic equipment is not required during the training).
  • Ensure that security arrangements cater for load shedding. Criminal elements are quick to take advantage of situations.

The below article is well researched and written and should be read by every manager.

For more information on B&A’s Human Resource and Labour relations training and consulting services contact your local B&A office at Durban (031-3094627), Johannesburg 0861-474722, Cape Town 021-5270044.

BRUNO BRUNIQUEL

DIRECTOR

BRUNIQUEL & ASSOCIATES (PTY) LIMITED

Employment Relations & Training Consultants

Loadshedding Implications for Business & Labour Relations.

The recent announcement of the implementation of load shedding throughout the country may have severe implications for business and labour relations.

INTRODUCTION

Employers and employees should know their rights and duties during these periods of interrupted power supply. Employers need to ensure that they comply with labour law requirements while at the same time, implementing measures to reduce the negative impact that load shedding has on their businesses.

EMPLOYER AND EMPLOYEE OBLIGATIONS

Many employers are under the impression that when employees are unable to work due to load shedding the ‘no work, no pay’ principle applies. This is not the case. Our common and labour laws are clear – if the employer expects the employees to be at work at a specific time and on a specific day and the employees comply with these requirements, the employer is obliged to pay them for that time. This is regardless of whether the employees were able to perform their duties or not.

The employment contract is a reciprocal agreement in terms of which an employer’s obligation to pay an employee is subject to the employee doing the work or putting his/her product capacity at the disposal of the employer. The duty to pay and the corresponding right to remuneration do not arise from the actual performance of the work, but from the tendering of service or productive capacity. Therefore, where an employee offers to do the work and the employer does not want the employee to work or cannot provide the employee with work (due to load shedding or any other reason), the employer is still obliged to pay the employee his/her wages or salaries. An employer is therefore obliged to perform even when an employee is unable to perform due to circumstances beyond the control of the employer.

In an effort to reduce the losses associated with this cessation of work during load shedding, some employers may wish to treat these stoppages as meal intervals. The problem with this approach is not only that the break in supply of electricity may last several hours but also that, in terms of section 14 of the Basic Conditions of Employment Act 75 of 1997 (“BCEA”), an employer must pay employees for any lunch break in excess of 75 minutes, unless the employee lives on the premises.

A better strategy available to some employers is to rely on agreed procedures that apply to interruptions of production, such as in the metal and engineering industries. The Metal and Engineering Industries Bargaining Council Main Agreement (“the Agreement”) differentiates between planned and unplanned load shedding. Unplanned load shedding is, for example, where Eskom cannot with complete certainty inform the public of exactly when load shedding will be implemented (what Eskom does rather, is inform us of the likelihood of when load shedding may be implemented). Planned load shedding is load shedding that occurs at a pre-determined and publicised time and date.

In terms of section 7 of the Agreement, an employer may implement “short time” (i.e. reduced working time) “owing to a shortage of work and/or materials and any other justifiable contingencies, including planned load shedding and/or unforeseen contingencies and/or circumstances beyond the control of the employer.”

Where the circumstances are unforeseen or unplanned (such as unplanned load shedding) the employer may:

  1. Elect to send the employees home, provided they shall receive not less than four hours’ work or pay in lieu thereof; or
  2. Expressly instruct employees sent home to return, where the employer believes work can be resumed, provided the employees shall receive not less than four hours’ work or pay in lieu thereof.

Notably, the Agreement provides that “[w]here the employer does not implement short time in response to a planned or foreseen load shedding and the employees report for work but are sent home by the employer, they will be entitled to 8 hours payment in respect of such day.”

Unfortunately, most load shedding is unplanned with Eskom only announcing its implementation a few hours before it commences or changing it from Stage 1 to Stage 2 at some point during the load shedding period. This may be hugely disruptive for employers and especially onerous on employers in the large metal and engineering industry who are subject to the Agreement. An employer may implement short time, expecting load shedding to commence on a specific day and if the load shedding does not go ahead, the employer is left with minimal staff capacity. Furthermore, if load shedding is implemented unexpectedly or its level increases, this leaves the employer with little choice but to send employees home, paying them at least four hour’s wages even though they may not have worked at all.

Unfortunately, not all industries have an equivalent of the Agreement. For those employers who do not fall within the scope of the Agreement the choices are not easy.

Another question that arises during load shedding periods is: how much must employees be paid if they need to work past their normal work hours to make up for the hours lost during the day? According to the BCEA, any work performed after normal hours to catch up production will be regarded as overtime and will be subject to additional, overtime pay. However, employers and employees can agree to changes in working hours or shift structures in order to reduce the financial losses caused by load shedding.

It is not compulsory in terms of the BCEA to work overtime; nevertheless, circumstances (such as operational requirements caused by load shedding) may warrant extension of working hours. An employer may require employees to start work later than usual and finish later than usual. But, an employer may not unilaterally implement new working hours. In most cases employees must agree to such changes.

It may be possible for the employer and employee to agree in the employment contract that payment or remuneration will be suspended during load shedding. The difficulty with this is that the employees will have to agree to such terms (or changes to their contracts of employment). If they do not, these changes cannot be implemented unilaterally.

If employees do not agree to changes in working hours, shift structures, pay or any similar measure designed to relieve the burden on employers during load shedding, the employer may be forced to implement retrenchment procedures in terms of sections 189 or 189A of the Labour Relations Act 66 of 1995 (as amended) (“LRA”). The employer would have to follow certain steps and show that due to operational requirements brought about by load shedding (being the technological, structural or similar needs of an employer), the employer needs to retrench a given number of employees.

CONDUCT ISSUES ARISING FROM LOAD SHEDDING

Another problem for employers during load shedding periods is dealing with what might otherwise be considered to be misconduct by their employees, such as late coming. Employers should be cautious and understand that exceptional circumstances exist during load shedding. So, for instance, late coming due to load shedding should be managed and employee’s counselled on how to work around the impact of load shedding on travel, traffic and daily life. On the other hand, employees are also under an obligation to take the appropriate steps to reduce the potential problems that arise during load shedding periods such as increased travelling time or less time available during normal working hours to complete tasks.

CONCLUSION

It is clear that load shedding will be with us for some time to come. Employers must be cautious not to contravene labour law requirements during these periods in an effort to reduce the consequences of load shedding. It is advisable that employers negotiate a plan to minimise its effect with employees. For example, where load shedding is planned for the beginning or end of a shift, the times of the shifts could be amended to ensure there is no loss of work time. Employers may also have to be flexible – perhaps using the load shedding times for training or staff meetings. It is important that employers and employees be understanding of the serious implications load shedding has on both sides of the employment relationship and engage in meaningful consultation to ensure the least disruptive outcome is achieved.

Written by Jacques van Wyk, Director; Michiel Heyns, Senior Associate, Werksmans Attorneys

http://polity.org.za/article/load-shedding-and-employment-law-2015-05-08