The Labour Court has provided much-needed clarity on ‘no work no pay cases’ during the country’s coronavirus lockdown, says Bradley Workman-Davies, director at Werksmans Attorneys.
This follows the Johannesburg High Court case of Mhlonipheni v Mezepoli Melrose Arch and Others which found that employees were able to tender their services during Level 5 and Level 4 of the National Lockdown, and accordingly that their salaries were owed by their employers during that period.
This resulted in their unpaid salaries being regarded as debts owed by the employers, and the employers’ self-professed inability to pay these amounts leading them to be placed into business rescue, he said.
Workman-Davies said that the judgement was criticised for its arguably incorrect approach that non-essential employees were legally entitled to tender their services during the Level 5 and Level 4 stages of the lockdown.
A review of this judgement was suggested in order to correct this legal misinterpretation, he said.
Labour Court ruling
Workman-Davies said that the Labour Court has recently announced on the issue in the case of Macsteel Service Centres SA Proprietary Limited v NUMSA.
Although the case dealt with an urgent application brought by Macsteel to try and prevent a strike by NUMSA, the judge correctly dealt with the issue of whether employees could tender their services, and therefore be entitled to payment of salary, during these restricted periods of economic activity during Level 5 and Level 4 stages of the lockdown, Workman-Davies said.
“In doing so, the judge found that whereas Macsteel had generously undertaken to pay 100% of salaries in March and April, and then up to 80% of employees’ salaries for May, June and July 2020, with the Unemployment Insurance Fund Temporary Employee Relief Scheme being relied upon to make payment of the balance, it, in fact, had no legal obligation to do so in respect of employees who were not legally able to work.
“The court held correctly, that those employees who ‘rendered no service, albeit to no fault of their own or due to circumstances outside their employer’s control, like the global Covid-19 pandemic or the national state of disaster, are not entitled to remuneration and Macsteel could have implemented the principle of no work no pay’.”
Workman-Davies said this labour court judgement is to be welcomed, in that it confirms that the correct legal approach is that where it was legally impermissible for employees to perform services, the tendering of services by these employees is irrelevant, and the employer is entitled to implement a no work no pay principle, on the basis of the legal impossibility of both parties performing.
“Additionally, a case by case analysis must be adopted, and even (if necessary) assessing employees on an individual basis to assess their specific rights,” he said.
“This Macsteel judgement from the specialist labour court, rather than that of the High Court in Mezepoli, should be relied upon as setting out the correct approach.”