In the dynamic landscape of South African labour law, short-time work emerges as a strategic tool for employers and employees to navigate economic ebbs and flows. This comprehensive exploration aims to dissect short-time work’s legal intricacies and practical dimensions, providing invaluable insights for effective implementation.
A short-time arrangement occurs when an employee and an employer agree that the employee will work fewer hours per week than usual and will only be paid for the hours actually worked. Employers can use this approach to reduce costs instead of resorting to retrenchments. When properly implemented, this strategy can support employers experiencing financial challenges.
What is “Short-time” work?
At its core, short-time work entails a temporary reduction in employee working hours and corresponding compensation. Certain conditions must be met to qualify: the reduction must be temporary, the employment contract must remain intact, and there must be a clear expectation of returning to full-time status.
This approach is invaluable for employers seeking to manage limited tasks during downturns without retrenching. If employees decline short-time work, operational requirements may necessitate dismissal, provided proper procedures are followed. The structure is designed to seamlessly adjust to decreased demand, with a swift return to regular duties as demand rebounds.
Contractual obligations
An employment contract represents an agreement between two parties, and one party cannot unilaterally alter its terms without the other party’s agreement. Likewise, implementing short-time work represents a change in the employment terms and conditions, which cannot be imposed without mutual consent.
Implementing short-time work effectively necessitates obtaining employee consent and engaging in prior consultations to assess its impact on working hours and pay. If employees belong to a union, the employers must arrange for prior consultations with the union representatives before implementing short-time work. Provisions for short-time work can be integrated into employment contracts through specific clauses, collective agreements, or aligning with customary practices, provided employees are informed and agree to the short–time work.
Furthermore, employers may place employees on short time if it is contained in their employment contracts, some collective agreements already contain built-in short-time clauses, or if it is a custom and practice of the company to do so and employees are aware of this.
Where an agreement has been reached regarding short-time work, the employee must recognise that all other contractual obligations and rights outlined in the employment contract remain applicable.
CCMA definition
As mentioned earlier, short-time work is when an employee’s regular working hours are temporarily decreased due to a reduced demand for services. The CCMA has defined the concept in that it is “a temporary reduction in the number of ordinary hours of work owing to reasons including slackness of trade, shortage of raw material, vagaries of weather, breakdown of plant machinery or buildings that are unfit for use or is in danger of becoming fit for use”.
Case Study
In the case of Independent Commercial Hospitality and Allied Workers Union and others v CCMA and others (2015), LC, the employer, faced with financial difficulties, opted to implement short-time work. However, the affected employees contested this change, arguing that they had not consented to it, and were subsequently dismissed.
The court ruled that in such circumstances, the employer had the choice of initiating a lockout or conducting retrenchment procedures, offering short-time work as an alternative. Additionally, the employer would have been within their rights to dismiss employees if there were valid operational reasons justifying such action.
However, in this instance, the employer failed to explore these options and instead unilaterally imposed short-time work. The court determined that instructing employees to work under a new shift system was unreasonable and amounted to a unilateral alteration of employment terms. Consequently, the employee’s refusal to accept this change was not insubordination. This case is a significant example illustrating the risks associated with unilaterally implementing short-time work.
Legal considerations and fair practices
While inherently temporary, short-time work does not have a fixed duration, varying from a day to several months. Still, the timing should be reasonable and justifiable, and both parties must agree. Certain bargaining councils have stipulations regulating short-time and duration, and employers must ensure compliance in this regard.
The selection of employees for short-time work mirrors criteria used in Section 189 dismissals, ensuring fairness and non-discrimination per Section 6 of the Employment Equity Act.
Employees who feel that their employment conditions have been changed can refer a case to the CCMA or relevant bargaining council for conciliation. The employee may then give the employer a 48-hour ultimatum to comply with the demand that it not implement the changes, or where these have been implemented, to restore the terms and conditions of employment as they were before the changes were made. If the employer fails to comply, the employee can give notice of strike action. The employee may also apply to the Labour Court for an interdict. Where one individual is affected, he or she may apply to the Labour Court for relief. This matter falls under an unfair labour practice dispute and must be referred to the CCMA or council within 90 days of the act or omission.
Short-time work is a flexible tool within labour law, providing resilience amidst economic uncertainty. Adhering to legal obligations fosters equitable implementation, benefiting all parties involved. Transparent communication and mutual respect facilitate a smooth transition, showcasing how integrating legal frameworks and collaborative efforts offers a balanced response to changing circumstances.
To find out more about short-time work, please visit our website or contact one of our legal experts.
