Outgoing CEO Eskom Andre de Ruyter has recently expressed the view to EWN that the 2023 Loadshedding outlook remains bleak.

South Africans are currently experiencing stage 6 loadshedding. One of the questions that has arisen is what the future holds for businesses that are electricity-dependent and cannot supplement this need with alternatives such as generators or renewable resources. Current levels of loadshedding mean that such businesses may be without electricity for up to 8 hours a day during which employees cannot work.

We have received a number of queries on what this means from the perspective of having to pay employees who are unable to do their work because of blackouts.

A contract of employment is a reciprocal contract in terms of which an employee places his or her services at the disposal of an employer in exchange for an agreed amount of remuneration. An employee’s main obligation is continue to make their services available  to their employer for the duration of the contract of employment.

Reciprocal  to the employee’s obligation to tender services, is an  employer’s obligation to remunerate the employee. Under our common law, an employee is remunerated for making their services available and not for actual work done.

Can employers apply the No Work No Pay Principle?

The Labour Court in Macsteel Service Centres SA (Pty) Ltd v National Union of Metal Workers of South Africa and Others albeit within the context of Covid-19, held the following:

“The reality in law is that the 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 and national state of disaster, are not entitled to remuneration and the Applicant could have implemented the principle of ‘no work no pay’.”

The difference however, between the situation arising now with rolling blackouts and the nationwide Covid-19 lockdown in 2020, is that during the lockdown, employees – with certain exceptions – were unable to physically present themselves for work. The difference now is that under blackouts, employees are in attendance at work, but can only fulfill their duties when there is electricity. Is it the employer or the employee that must carry the cost of this forced unproductivity?

If one is to strictly apply the common law principle, that an employee is only remunerated for making their services available and not for actual work done, then it follows that the No Work No Pay principle does not apply.

So, where an employee tenders their services knowing that there will be blackouts, the discrete question which needs to be answered is whether this meets the test set by the courts as a proper tender of services and whether the No Work No Pay principle ought to be reconsidered for application in these special circumstances?

The Labour Court, in Macsteel, further went on to say:

“These circumstances which employers and employees currently find themselves in are unprecedented, distressing and uncertain. Answers are not to be found in precedents, no map exists to show direction and only time will tell the full extent of the disruption and devastation which the economy and all who play part in it, will suffer.

In my view, the best answers and solutions would be found in applying common sense and seeking common ground to find a solution in a time when problems and challenges overshadow answers and solutions…”

Whether this argument will find favour with the court remains to be seen. In the meantime, as with lockdown, common sense practical solutions must be sought between stakeholders in the best interest of both employees and employers.

Although the idea of reducing wages is a touchy subject, the landmark Constitutional decision of Aveng opened the door to the reduction of wages as an alternative to retrenchment. Herein lies one of the solutions that employers can take up.  Employers would be well-advised to seek proper legal advice before deciding to dock pay due to loadshedding.