Avoid job losses by thinking creatively

2010-03-15 00:00

TO date, South Africa has shed well over a million jobs as a result of the economic downturn. KwaZulu-Natal (KZN) has been especially badly hit by the unemployment crisis. KZN lost 222 000 jobs over the course of last year. The figure is certainly even higher now.

Estimates suggest that up to 90% of the job losses are attributable to the economic crisis we are enduring. Some of these job losses might have been prevented, or mitigated, through creative and resourceful thinking. What options are there for employers who are struggling to keep their ship afloat, yet do not want to force loyal employees onto the wasteland of unemployment? It is possible, by agreement with the staff, to reduce the hours worked by them in accordance with the reduced demand for their services. The employees would take home less money, but the plan would save their jobs. This is known as working short time. It is important to remember that an employer cannot force short time on anyone. It has to be agreed upon. However, if the employee refuses to co-operate, the employer may have to retrench him or her to survive or to remain sufficiently profitable. Another possible way for an employer to reduce the wage bill without letting staff go would be to agree with the staff that their benefits would be frozen for a time. Staff would continue to be paid as usual, but the company would suspend the payment of, for example, pension or provident contributions. Again, this cannot be done without the employees’ consent. Statutory deductions (like unemployment insurance) cannot be stopped.

An employer could also agree with permanent staff that they would take on work done by contract workers, casual workers, or even work that has been outsourced to a labour broker. The employer would save money from the termination of these contracts in order to protect full-time staff.

Yet another option would be for the employer to make use of the Training Layoff Scheme which was launched by the government late last year. Although the scheme has been widely criticised, it may still be an option worth considering. The scheme is currently being reviewed with a view to expanding it, and simplifying the procedures attached to it.

In terms of the Training Layoff Scheme, employees are temporarily suspended from work in order to undergo training provided through the Sector Education and Training Authorities (Setas). The training is aimed at equipping the employees with skills that will ultimately benefit the employer. The period of suspension is limited to three months, during which the employer is obliged to continue making contributions to some of the employees’ social benefit schemes (like disability and death benefit cover, pension/provident fund contributions and unemployment insurance fund contributions). The parties can negotiate around the continuation of other social-benefit schemes like medical aid or housing benefits. The employee will not receive his or her salary, but will be paid an allowance of 50% of his or her ordinary wages, up to a maximum of R6 239. For further information, you can contact the Commission for Conciliation, Mediation and Arbitration (CCMA) who is administering much of the process at 033 345 9249, or at KZN@ccma.org.za Trained commissioners will be able to assist you in devising alternatives to retrenchment.


• Nicci Whitear-Nel is a senior lecturer in the law faculty at UKZN.

THE Pietermaritzburg campus law faculty of the University of KwaZulu-Natal is celebrating its centenary this year. As part of these celebrations, legal academics from the Pietermaritzburg campus will be publishing a series of articles on current legal developments, and other interesting topics in The Witness. The series will run over the course of a year, and the articles will appear fortnightly. The intention of the series is to provide useful and stimulating information to Witness readers, and also to provide a link between the law faculty and the broader community. The topics to be dealt with are wide ranging and will cover the spectrum from constitutional law to employment law and criminal law, and beyond. There will also be comment on developments in the legal profession, the criminal justice system and within the Department of Justice itself.

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