South Africa: Covid-19: CCMA warns of jobs bloodbath – My Comments
JOHANNESBURG – The Commission for Conciliation Mediation & Arbitration (CCMA) has warned that the coronavirus national lockdown could lead to a jobs bloodbath in the next six months.
The dispute resolution body said on Tuesday that it was anticipating small scale or large scale retrenchment referrals owing to the prospect of business closure or simply for financial reasons due to the affordability of labour and lack of production during the lockdown period.
“There is a possibility that we may witness an increase in large-scale retrenchment processes three to six months down the line as businesses resume operations and assess the viability of resuming trading,” said the CCMA in a statement.
The CCMA also said that it was also highly likely that there would be non-payment and or reduction of wages, forced or unpaid leave.
It expected the non-payment of salaries and forced leave to come into effect from April 1.
The CCMA was anticipating referrals due to non-payment of wages although the funds released through the Unemployment Insurance Fund would cushion the blow for employees.
“However, this has been offset by the government’s assistance plan through the Unemployment Insurance Fund (UIF) which allows companies to seek assistance through the Covid19TERs process in respect of their wage bills and also caters for an illness benefit during these turbulent times,” said the CCMA.
President Cyril Ramaphosa last week announced the extension of the 21-day national lockdown, which started on midnight on March 26, by a further two weeks to slow down the spread of the pandemic and to save lives.
Ramophosa also said in an effort to curb job losses, the UIF had set aside R40 billion to help employees who were unable to work during the lockdown.
Ramaphosa announced that already R356 million had been paid out by the UIF.
Meanwhile, Business Leadership South Africa chief executive, Busi Mavuso, said in her weekly letter published on Tuesday that the labour law made it difficult to reduce workers’ salaries and called for the government to relax the process of amending workers’ terms of employment during the lockdown period.
“In normal conditions that is entirely as it should be; a contract of employment is between two persons and must be respected. But in these conditions, it is a heavy burden on companies that tips many of them into bankruptcy. Employers should always seek voluntary agreement from employees in the first instance, but where that cannot be obtained, companies should be able to impose reductions if it means they can avoid bankruptcy as a result,” said Mavuso.
She said the process should be made simple and cheap for companies to do, cheaper at least than the alternative of declaring bankruptcy.
“A letter to the Department of Labour with signed confirmation from an auditor that the company’s cash flows cannot meet payroll demands should suffice. This can be made feasible through regulations in terms of the Disaster Management Act and can be lifted as soon as the state of disaster is lifted,” she said, adding that this was a matter that organised labour should be willing to work through with the business.
“Ultimately, it is about saving jobs and improving our prospect of a quick recovery after the crisis,” Mavuso said.