Impact of the COVID-19 pandemic on the labour market in South Africa

Impact of the COVID-19 pandemic on the labour market in South Africa

  • Many industries are experiencing mass job cuts, with no prospects of increasing their contribution to the economy or the labour market.
  • Unemployment will rise sharply, and this will impact jobs in both the private and public sectors.
  • Employers may realise that they can run their businesses on a much smaller labour force; and employers are most likely going to avoid re-hire in the future if they can avoid it. And because they may be running on greatly reduced numbers of people and getting by, it may reduce the demand for labour.
  • More companies could adopt the remote working structure of having their employees work from home depending on the productivity and output level during this time.

Advantages going forward

  • Quality over quantity - employees measured on deliverables rather than hours at the office.
  • Pollution reduction due to less traveling for business purposes
  • Employers can reduce costs through rent savings
  • Considerable increase in the logistics sector due to uptake of online shopping
How to invoke this clause

Possible challenges

Possible challenges
  • The unemployment rate will increase.
  • The underprivileged members of society will become even more marginalised.
  • Technology will play an even bigger role and the need for human labour will decrease
  • The retirement age may be lowered for employees who cannot adapt to technology
  • Many companies may opt for webinars as opposed to human contact and it shall have an adverse impact on human interactions and networking
  • Some sectors may suffer immense losses (hospitality, tourism, retail)
  • Certain employees will need to be micromanaged.

How can we help Employers?

  • Assessing your business operations holistically to advise on appropriate cost reduction strategies
  • Identify financial relief sources applicable to your business
  • Application for relief from eg. UIF/TERS or the Solidarity Fund
  • Interpretation of contracts with your service providers to identify where you can cut costs
  • Negotiations with your service providers to reduce costs
  • Lawful way of dealing with non-paying clients
  • Retrenchments and other labour-related advice
  • Restructuring your company
  • Conduct a risk assessment on whether your business is ready to implement 4IR

We have prepared some COVID-19 related templates in Microsoft Word (.docx) format which you can request by clicking on the button below

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010 140 6251

The information shared on this article/blog/vlog should be read and understood within the current legal framework of South Africa. It is meant purely for educational discussion and does not amount to legal advice. For specific legal advice, please consult a legal practitioner prior to application.

Posted in COVID-19.