How does the Covid-19 lockdown effect your employees’ salaries?
The global outbreak of Covid-19 has steered the world’s economy into unchartered territory. The President’s lockdown-announcement last night confronts the South African economy directly with this stark reality.
‘No work, no pay’
This is the legal principle which will apply throughout the lockdown. Although some employers may be in a financial position to deviate from this principle, they must do so taking into consideration the long-term sustainability of their businesses.
What if the lockdown is in excess of three weeks?
Although there is currently no indication that this will be the case, companies making a decision in respect payment of employees must calculate an extended lockdown period into the equation.
Business must reserve its capabilities in order to remain sustainable for a protracted period – the fight against the spread of Covid-19 and the long-term survival of business may turn out to be a
“WAR OF ATTRITION” In the absence of the appropriate government gazettes detailing UIF and other potential forms of aid to business, and by implication their employees, business should not make any salary commitments to their employees.
NEASA will immediately communicate all relevant developments with appropriate advice throughout.
For any assistance call the NEASA Hotline on 086 016 3272 or send an email to legalhotline@neasa.co.za