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Covid-19 and the Employment Act 17 April 2020

COVID-19 Alert

By Chilombo Malama

COVID-19: Zambian employment – what to do

Zambia is unfortunately no stranger to the COVID-19 pandemic, and is slowly being subjected to measures aimed at curbing the spread of the virus. These measures are impacting the working atmosphere, as a curb to the spread of the virus is hinged on people isolating themselves, which includes self-isolation within, and away from, the workplace. Based on this, this note has identified some of the legal implications of COVID-19 measures in the employment sector and what options Zambian employers may legally implement in light of the Employment Code Act No. 3 of 2019 of the laws of Zambia (the EA).

What happens if employees must stay away from the workplace?

If employees must physically stay away from the workplace, employers should consider having their staff work from home if the type of work carried out by the employee allows for this and where technological measures can be put in place to facilitate this. However, if the employee is unable to carry out their work tasks from their home, but are still required to stay away from the workplace, then the employer should consider the following alternatives:

Annual leave

Employees who must stay away from the workplace, or employees who may have come into contact with persons that are affected by the coronavirus may be granted annual leave for purposes of self-isolation. Under section 36 of the EA, employees have a minimum of 24 annual leave days, which is paid. Consequently, where the employees are put on annual leave they will have to be paid during this period. Similarly, other benefits under contract, and law, continue to accrue.

Forced leave

Section 48 of the EA recognises that an employer may send an employee on what is referred to as “forced leave.” The section makes provision for the Minister of Labour by statutory instrument (SI) to prescribe the circumstances under which an employee is required to be sent on forced leave. However, such SI has not been passed and therefore there are no restrictions in respect of circumstances.

In such a case, the employer is by law obligated to pay the employee the basic pay during the period of forced leave. It should be noted that “basic pay” is defined under the EA as the standard rate of pay before additional payments such as allowances and bonuses.

Consequently, during this period, employers can pay their employees less than the normal “full pay” payable to employees, as full pay is defined to include basic pay, allowances, and cash equivalent of allowances, excluding bonuses.

What happens if an employer is unable to financially sustain the workforce during this period?

Unfortunately, an inevitable consequence of coronavirus is that some employers will be unable to sustain their business, and therefore be unable to pay their employees their salaries. If this happens employers may consider:

1. Redundancy

During this time, or even thereafter, if an employer is unable to sustain their business, they may be forced to cut costs by reducing their workforce. In this case, employers may unfortunately have to declare part of their workforce redundant and thereby terminate some of their employees’ contracts. Redundancy, however, must be effected in accordance with the provisions of the EA. A redundancy notice must be given to employees, and a consultative process must be conducted on the measures to be taken to minimise: (i) the termination, and (ii) the adverse effects on the employees.

It is important to note that from a financial perspective, redundancy comes with its own costs, as employers are legally mandated to pay their employees what is defined as a “severance pay” under section 54 of the EA, and a “redundancy payment” under section 55 of the EA. Whilst the EA provides that this package must be paid not later than the last day of duty of the employee, section 56 of the EA allows employers, who are unable to pay the employees at that time due to financial incapacity, to apply to the Labour Commission for an exemption from paying the redundancy payment as a lumpsum, or on or before the date of expiry of the redundancy notice.

Where, within nine months of the redundancy having been effected, the circumstances leading to the redundancy changes and an employer wishes to fill the vacancy caused by that redundancy, the employer must offer the contract of employment to the same employee that was previously declared redundant before considering any other applicant.

2. Unpaid leave

As redundancy is an extreme measure, employers who still wish to maintain their workforce, but are currently unable to pay the employees at the full rate, could consider agreeing with the employees that they be sent on unpaid leave. The EA does not contain provisions that govern unpaid leave, and consequently the manner of effecting the unpaid leave would be a matter of company policy, and/or subject to the agreement of the employer and employees.

3. Reducing the employees’ salaries

Another way in which employers may consider financially sustaining their businesses during this time, is reducing their wage bill by cutting down employees’ salaries. The EA however requires that the employees give their consent to this.

4. Voluntary separation

Voluntary separation is another avenue that employers could consider to reduce their financial exposure. This can happen where, by way of mutual agreement, employers and employees agree to terminate the employment contract. The terms and manner of voluntary separation are not contained in the EA, and consequently the parties can agree the manner in which it can be effected.

What happens if an employee gets coronavirus or needs to tend to a sick relative with the virus?

1. Sick leave

If an employee contracts the virus, that employee would utilise their sick leave as provided under the EA. Employees on short term contracts (12 months or less) have a total of 52 sick leave days, with the first 26 days at full pay, and the next 26 days at half pay. Employees on long term contracts (12 months or more, or a specific task contract like a contract tied to a project) have a total of six months’ leave days, with the first three months at full pay, and the next three months at half pay. Employees who do not recover after six months from the illness can be discharged from employment on medical grounds.

2. Family responsibility leave

Employees who have clocked up to at least six months in employment, are entitled to up to:

  • seven paid leave days to enable the employees to nurse a sick spouse, child or dependant; and
  • three paid leave days to cover responsibilities related to the care, health or education of the employee’s child, spouse or dependant.

Employers have an obligation to maintain the health and safety of their employees under the Occupational Health and Safety Act No. 36 of 2010 of the laws of Zambia. In this time therefore, employers must ensure that (i) employees are provided with adequate information on coronavirus and how to stay safe; and (ii) in light of the virus, employers come up with measures that will maintain the health and safety of the employees within the workplace.

The information in this notice is for general use and should not be relied on without seeking legal advice.

If you have any questions, require further information or any assistance in coming up with a sustainable business solution during this time, please contact the authors.