This archive report was first published on 12 May 2020.
On May 12, 2020, the COVID-19 pandemic was taking its toll on the economy and livelihoods, with businesses in hospitality, tours and travel, imports and exports being hit hardest.
Employers were sending memos to staff, informing them of immediate unpaid leave, causing panic among employees. While there is no law prohibiting an employer from changing the terms of engagement, there is a process that must be followed to ensure fairness and transparency.
According to labor laws, employees are entitled to proceed on paid leave that has accrued over time. If the business is slow, the employer should allow staff to take their earned leave, which is already budgeted for and does not incur additional costs.
This approach benefits both parties: employees return refreshed and ready to recoup lost income, while the employer reaffirms its commitment to valuing employees as their biggest asset.
However, if the situation does not improve, and there is no option to consider pay cuts, unpaid leave may be applied. In such cases, employers should communicate the reasons for this drastic action in writing and provide clarity on the duration of the leave.
Employees should be aware that any leave without a salary exceeding a month is unfair. Employers should instead consider rotating employees on unpaid leave on a weekly basis or declaring positions abolished and paying severance pay.
It is also essential for employees to seek clarification on the status of other benefits, such as medical insurance, and to understand their options to avoid inconvenience.
