• Employers are considering their options ahead of the lockdown, which will wreak havoc on their cashflow.
  • This could include forcing employees to take leave, and cancelling the traditional shutdown period over December. 
  • Another new option is temporary layoffs, which means that staff will receive UIF payments - but stay on as employees. 
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Your employer will be within in their rights to place you on forced leave during the lockdown period – and for many South Africans, that may end up being the least worse-case scenario.

Employees who won't be allowed to work during the lockdown period of three weeks, which starts on Thursday night, are to a large degree at the mercy of their employers. 

While government has encouraged all businesses to continue to pay their employees, who may be stuck at home and won’t be able to work during this time, many companies can’t afford this and are considering other options. 

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This may include scrapping the traditional shutdown period over December and into January.

“Employers may place their employees on annual leave and exchange this with the shutdown in December, if possible and feasible,” says Gerhard Papenfus, CEO of the National Employers Association of South Africa (NEASA), which represents more than 10 000 members.

Employers are within their rights to insist that you take leave during the lockdown, says Pieter Human, director of the labour advisory service Labourwise. “If an employee has leave available, this could be a struggling company’s first option: to use employees’ leave allocation until it is depleted.”

See also | ATMs will have money: everything we know about the logistics of SA’s Covid-19 shutdown

Employers may consider other options to ease their cashflow during this time, including staggering wage payments, says Papenfus.

A relatively new option will be a temporary layoff, whereby you will still officially be in the employ of a company – but won’t receive a salary, says Human. You will be able to claim money from the Unemployment Insurance Fund (UIF), but it won’t come close to your full salary. 

Government is also in consultation to pay wages of employees working for struggling companies through the Temporary Employee Relief Scheme, which will avoid retrenchments.

On Wednesday, government is expected to announce more about how UIF will help employees who will be badly affected by the lockdown and the coronavirus crisis.

See also | New emergency rules may help malls to cut rent for shops, and stop evictions

The UIF doesn’t have a sterling reputation for paying out money quickly and it is expected to be flooded with huge volumes of claims during this time. On Tuesday minister of labour Thulas Nxesi confirmed that companies may do payouts directly to staff, and then claim it back from the UIF.

President Cyril Ramaphosa announced measures earlier this week that should help ease the strained finances of smaller businesses. This includes that tax-compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn liabilities over the next four months, and a portion of their provisional corporate income tax payments – without penalties or interest over the next six months.

More than 75 000 small and medium-sized businesses are expected to benefit from these interventions.

The South African Revenue Service (Sars) will also pay out employment tax incentive reimbursements every month – instead of twice a year – “to get cash into the hands of compliant employers as soon as possible”, Ramaphosa said.

Ramaphosa added that the temporary reduction of employer and employee contributions to the UIF and employer contributions to the Skills Development Fund are also being considered.

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