CAN EMPLOYERS LEGALLY REDUCE THE PAY OF EMPLOYEES WORKING FULL TIME?
Some businesses that are suffering losses due to reduced purchases of products or services resulting from the Covid 19 lockdown are unilaterally cutting the pay of staff members who are working full time. That is, these pay cuts are implemented neither as a result of bilateral agreements with staff nor as an agreed means of avoiding retrenchments arrived at via consultations under the auspices of section 189 of the LRA. Are employers entitled to make such unilateral pay cuts where the employees are working full time?
In the case of Macsteel Service Centres SA (Pty) Ltd v National Union of Metal Workers of South Africa and Others (J483/20)  ZALCJHB 129 (3 June 2020) the court decided that any variation to an employee’s salary, irrespective of whether it is increased or decreased, amounts to a change in terms and conditions of employment and cannot be effected unilaterally. It dealt specifically with a reduction of salaries of employees who were working full time during Covid and whose employers reduced their salaries due to loss of business. This makes it clear that the courts will not tolerate such unilateral reductions.