Q&A – 30 March 2020
Over the past 3 weeks, we have received dozens of questions from employers and employees on the fate of employment due to the Coronavirus pandemic.
Below are the most frequently asked questions on reduced pay, termination, retrenchment and unpaid leave.
Do Tanzanian labour laws expressly address employer-employee relationship during pandemics like the Coronavirus?
There is no specific labour laws or provisions that addresses the pandemics like Coronavirus but there are provisions in the Employment and Labour Relations Act and the Employment and Labour Relations (Code of Good Practice) Rules, 2007 (Rules) that may be invoked to address common employment and labour related issues that commonly arise during the state of emergencies like the Coronavirus emergency.
What is unpaid leave? Is it addressed by the labour laws of Tanzania? Who initiates it?
Unpaid leave means leave taken by the employee without being paid wages when the employee is on leave. There is no express provisions in the ELRA and its regulations made under it that addresses unpaid leave. The law expressly addresses sick leave, annual leave, paternity leave and maternity leave.
Since unpaid leave goes to the essential term of employment contract which is remuneration, it is normally initiated by the employee but it should obtain the consent of the employer. The employer may also initiate it as an alternative to retrenchment where there are compelling forces for retrenchment.
In a pandemic state like now, when some of the businesses have totally shut down, whilst some are running under capacity and others making losses for lack of customers, can the employer reduce the salaries or force employees to take leave without pay or terminate or retrench them?
Section 15(4) of the ELRA prohibits unilateral change of terms of employment including the reduction of wage without consultation with the employees or their trade union. So even in a state like the situation of the Coronavirus we are in now, if the employer cannot afford to pay salaries or other contractual or statutory allowances because of the loss of business or profit caused by the Coronavirus pandemic, the employer must consult the employees or their trade union in order to get their consent to reduce their wages.
However where the employer’s business is totally lost due to the Coronavirus pandemic and the employer is unable to pay even the reduced salary, the employer may decide to terminate the employees from employment. Loss of employer’s business for whatever reason including the Coronavirus pandemic amounts to automatic termination of employment contract in terms of rule 5(1) of the Rules. Automatic termination does not require undergoing retrenchment procedures.
Where the company is running under its capacity and does not make profit to afford paying the running costs including the salaries, the employer may think of retrenchment as a means of reducing the business loss suffered due to the Coronavirus crisis. One of the legally recognised reasons for retrenchment is the economic needs of the employer to mitigate the financial difficulties he/she is facing. The urgency of the Coronavirus pandemic is not an excuse for the employer not to follow the procedure for retrenchment.
In case the business is only temporarily shut down for lack of customers or to keep the employees safe and the employer is unable to pay the remunerations, the employer may ask the employees to take unpaid leave as a measure of avoiding retrenchment. Section 38(1)(c)(ii) of the ELRA and rule 23(3)(6) of the Rules require the employers to exhaust all available alternatives before they resort to retrenchment caused by economic difficulties or other reasons. Before the employers resort to retrenchment due to economic crisis caused by the Coronavirus pandemic, they have to consult their employees and the trade unions to persuade the employees to take unpaid leave as an alternative way of avoiding retrenchment. Retrenchment should only be resorted to when the employees have refused the proposals of the employer to take unpaid leave or reduced salary. Hence options of reduced salary or unpaid leaves are open to employers.
Another alternative to retrenchment as touched upon above may be a reduction in salary. The employer may ask the employees to take reduced salary during the time when the business is temporarily shut down or the business is going down due to the Coronavirus pandemic.
If the crisis persists for a long time and the employer totally loses the business for lack of customers and becomes unable to pay even the reduced salary, the employment will be deemed to have automatically come to the end in terms of rule 5(1) of the Rules. For that matter the employer may serve the employees with termination notices and pay the terminal benefits.
I have worked for this highly profitable company for over 30 years. Can I force my employer to keep me employed during Coronavirus crisis?
Unfortunately not. If the company cannot afford to keep you at this time, you will either be retrenched, terminated, paid a reduced salary or forced to take unpaid leave.
Can an employer force an employee s/he suspects to be coronavirus positive to remain at home or self-isolate to avoid the possibility of infecting other employees at the work place?
Employer has the duty to make the work place safe and can force an employee he suspects to be Coronavirus positive to self-isolate or remain at home or go to the hospital for medical check-up in order to avoid infecting other employees at the work place.
My children are back home and I need to stay at home to look after them. Does the law allow me to get leave during this time?
The answer is no. There is no leave to look after children. But an employee may approach the employer and ask for unpaid leave or the employee may take their annual leave in advance, both remaining discretion at of the employer.
What do you recommend an employer should do?
These are tough times. Considering that unemployment is high, as a good corporate citizen we would recommend you consider allowing employees to take their paid leaves, and if the crisis does not end by then, to either look at reduced pay followed by unpaid leave. Termination and/or retrenchment should be considered as a last resort.
