Retrenchment and Termination of Employment contracts during Covid 19 Pandemic

In a webinar presented and hosted by BA ISAGO University on the 14th October 2021, which included a panel of lawyers which are, the Assistant Registrar of the Industrial Court Mr. Bakang Tshipinare, Mrs. Ntandoyakhe Zimbili Mhlanga of Precious and Partners and Ms Pervia Ngwenya, a lawyer and lecturer at BA ISAGO University, on retrenchment and termination of employment contracts during the Covid 19 pandemic, a number of legal issues and analysis of the policies implemented by the government which affected employment relations were discussed.  In 2020, a tripartite agreement was entered into between the Government of Botswana, Business and Trade Unions on employment related issues so as to create an amicable relationship between the parties. During the pandemic in 2020, the government of Botswana had to implement drastic measure which included the limitation of the movement of people. This included a total lock down, followed by curfews. Some business had to close temporarily and business hours were limited. This had an effect on an employer-employee relationship.

Reference should be made to section 16 (1) of the Employment Act 47:01 which states that “Every employer shall provide his employee with work in accordance with the contract of employment …’’ there is however two exceptions to this section which are: were employee has broken his contract of employment and were the contract has become impossible to perform. The Corona Virus was not as a result of any fault by either of the parties. It however affected the ability of one party to perform and thereby affecting the obligation of an employer to pay. 

The Government of Botswana had to intervene in this difficult situation. It implemented the Emergency Powers through Statutory Instrument (S.I) No. 63 of 2020: Regulations 30D and 30E which suspended Part VI of the Trade Disputes Act, and effected some provisions which stipulated that no employment contracts will be terminated as that will be against the law. It also justified the unavoidable non-performance of an employment contract and stated that it was considered just and reasonable for an employee not to perform his or her duties as a result of the effects of the COVID-19.

We commend His Excellency the President Masisi for prioritizing employees and putting measures to try and stabilize business and promote opportunities for economic diversification, while also preserving lives. Credit should also be given to The Ministry of Employment, Labour Productivity and Skills Development for making follow-ups and giving updates to the public. The spirit espoused by His Excellency and the labour tripartite encouraged harmonious industrial relations. Some of the measures put in place included the State compensation schemes like the Covid wage Support Scheme which provided financial support to employees in the travel and tourism sector, business enterprises and other sectors of the economy, who become technically unemployed on a temporary basis due to the impact of the Coronavirus. There were also wage subsidies for businesses registered for tax, regardless of whether they owe tax and wage subsidies for employees.

It is worth mentioning that other jurisdictions especially the OECD countries implemented some measures which included allowing firms to adjust working hours at zero costs thereby reducing job loss, providing financial support to companies and sharing costs with the government. It is important for Botswana to be part of the OECD to allow it to share economic development strategies with other member states. The OECD helps guide countries towards global recognized standards and ambitious reform agendas to unlock greater prosperity and well-being for citizens. It helps in deferent areas like investment and developing policies to stimulate growth.It is also important to look at the measures implementing by our neighboring country South Africa as far as employment issues are concerned during the COVID pandemic. South Africa implemented the following: 

1. The Employment Tax Incentive (ETI)

This is an incentive aimed at reducing youth unemployment by encouraging employers to hire young work seekers. Employers are incentivized to employ young people. This therefore enables the employer to do a cost-sharing arrangement with the government. The government allowed the employer to reduce the amount of PAYE it is required to pay to SARS. This provided an immediate cash benefit to the employer.

2. Unemployment Insurance Fund (UIF)

These are contributions withheld by employers in relation to a monthly remuneration value.  They created a special benefit for employees who have lost their income as a result of the national disaster. The UIF minimized the economic impact of the loss of income due to the COVID-19 pandemic. In Botswana, however, there is no provision for unemployment benefit.  The Unemployment Insurance Bill has been there since 2014. The law only provides for severance benefit, paid by the employer, which is paid on termination of employment relationship. 

The Unemployment Insurance Fund covers for the loss of income due to short term shut down, Illness benefit, where an employee is in quarantine for 14 days due to the COVID-19 pandemic. It also covers death benefit where the contributor passes on due to the corona virus. The surviving spouse, life partner, children of the deceased or the nominated persons receive payment.

It is important for the Government of Botswana to now implement “Economic Recovery and Stimulus Package” aimed at reviving the economy and providing businesses and industries that have been affected by the economic slowdown caused by the Covid -19 pandemic. The government should provide liquidity support to all the productive sectors of the economy and protect employment through prevention and minimization of Covid-19 effects.

By Pervia Ngwenya

Lecturer at BA ISAGO University

Admitted Attorney of the High Court of Botswana