Some relief for the textile industry
Updated: Sep 8, 2020
Author: Yuri Tangur – Candidate Attorney
* Article supervised by Hedda Schensema – Director
As the national lockdown heaves on, the textile industry faces increased financial challenges as a result of the coronavirus pandemic. For example, Edcon has reportedly informed its suppliers that it is not able to pay them, which is likely to have serious knock-on effects, because it only has enough liquidity to cover employee salaries. Laudably that will be their focus during this period while they consider their options which may include business rescue.
There is some relief for the textile industry. The covid-19 lockdown collective agreement (concluded in the National Bargaining Council for the Clothing Manufacturing Industry) is now binding on all employers and employees in the industry from 27 March 2020 till 28 February 2022.
The goal is to address the income needs of qualifying employees during the lockdown period. Employees will receive full pay, in weekly amounts, for six weeks from the start of the lockdown subject to normal statutory deductions. The amounts would be paid as follows:
Week 1: deferred wages payable by the employer for work completed by employees during the first week preceding the lockdown.
Week 2: deferred wages payable by the employer for work completed by employees during the week of the lockdown. The balance of the funds will come from the UIF if the lockdown occurred before a full week's work was performed.
Week 3 and 5: the employer will pay a full week’s wages.
Week 4 and 6: the funds received from the UIF will pay a full week’s wages.
Should the lockdown continue for a period greater than six weeks, the parties have endeavoured to explore means of income support for employees. The 2020 round of substantive negotiations have been postponed and any agreement eventually reached would be backdated to 1 September 2020. Disputes about the interpretation and/or application of the agreement would be resolved by expedited arbitration.*
*Using its current panel of conciliation and arbitrators unless the disputing parties decide differently. The disputing parties may also decide on a different method of dispute resolution.
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