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banking and finance | 19 Jun 2020
BY Roger Rudolph , Angela Itzikowitz , Aslam Moosajee , Jessica Blumenthal , Johan Loubser AND Metumo Shilongo
ENSight

banking and finance


South Africa: Coronavirus (COVID-19) | financial services during level 3

On 17 June 2020 President Ramaphosa announced that while South Africa remains on level 3 further economic activity will be permitted. This is being referred to as “advanced” level 3.

On the same day the joint directive in relation to precautionary measures to be taken by essential financial services, originally published on 9 April 2020 during level 5 by the Financial Sector Authority and Prudential Authority, was formally withdrawn and replaced with Joint Communication 7 of 2020 (Precautionary measures by financial institutions and payments institutions to limit the spread of the coronavirus disease (COVID-19) pandemic) issued by the Financial Sector Conduct Authority, the Prudential Authority and the National Payment System Department of the South African Reserve Bank (“Authorities”) (“Joint Communication”). The Joint Communication did not withdraw Directive 2 of 2020 issued by the National Payment System Department and this remains applicable to payment institutions.

This article focuses on the return to work requirements to be met by financial services industry under “advanced” level 3 with reference to the regulations made under the Disaster Management Act, 2002 on 29 April 2020 (“New Regulations”), the occupational health and safety directions issued by the Minister of Employment and Labour Regulation in terms of section 46(4) of the New Regulations (“OHS Directive”) and the Joint Communication.

While the New Regulations were declared unconstitutional in the case of De Beer and others v Minister of Cooperative Governance and Traditional Affairs (see commentary on this judgment here), government indicated it will appeal this judgment, the order of the court is suspended, pending the outcome of the appeal.

Under the New Regulations (as currently stated) all economic activity is permitted, other than the “specific economic exclusions” set out in Table 2 read with regulation 46(1) of the New Regulations.  Given the announcement of “advanced” level 3, Table 2 is likely to be amended. 

As financial services do not fall within the current economic exclusions, the financial industry has returned to work under level 3, but is required to comply with several precautionary measures.

What are the precautionary measures a financial services business should consider?

The New Regulations continue to obligate all persons able to work from home, to do so. Accordingly, a financial services business should continue to assess whether it is necessary for employees to work at its business premises or whether they can fulfil their functions remotely.

If it is necessary for employees to work from the business premises, this must be subject to strict health protocols, social distancing rules and the implementation of a phased-in return to the workplace to ensure a “COVID 19-ready workplace” which avoids and reduces risks of infection, in accordance with annexure E to the New Regulations.

Our employment law colleagues have summarised the requirements on employers generally here and financial services businesses should, of course, take heed of these requirements.

In addition regulation 46(4) of the New Regulations obligates all businesses to adhere to the (“OHS Directive”). Our colleagues have summarised the OHS Directive here. The OHS Directive applies, inter alia, to financial services businesses with more than 10 employees. Financial services businesses with less than 10 employees are required to conduct a risk assessment and to comply with simplified obligations set out in section 46 of the OHS Directive.

In addition to the minimum requirements required by the New Regulations and the OHS Directive, financial services businesses must also comply with the Joint Communication.

The Joint Communication reaffirms the responsibility placed on businesses by the New Regulations to ensure that the working environment for staff is safe and in the context of the rendering of financial institutions stresses that, in addition, care must also be taken to protect customers and members of the public who come into contact with financial services workers. The Joint Communication specifies minimum precautions that must be taken by financial institutions in line with this responsibility, but warns that financial institutions must continue to assess their own risks and circumstances and, where necessary, implement stricter requirements.

The Joint Communication requires financial institutions to take precautionary measures to limit contact between members of the public and their employees when financial services are rendered. Wherever possible financial services should be rendered remotely or from the offices of the financial services provider, albeit that in exceptional circumstances financial services may be rendered at the home of a customer subject to adherence with additional precautions.

Financial services businesses may be required to update their work-place plan, developed in accordance with the New Regulations and the OHS Directive, to reflect the additional precautionary measures set out in the Joint Communication.

The Joint Communication requires financial services businesses to, upon request, submit their workplace plan and the identity of their COVID-19 compliance office to the Authorities. For this reason this plan should be updated to take cognisance of the Joint Communication.

Aslam Moosajee
Executive | Dispute Resolution
amoosajee@ENSafrica.com
+27 82 461 5917

Angela Itzikowitz
Executive | Banking and Finance
aitzikowitz@ENSafrica.com
+27 83 680 2077

Johan Loubser
Executive | Banking and Finance
jloubser@ENSafrica.com
+27 83 704 6732

Jessica Blumenthal
Executive | Banking and Finance
jblumenthal@ENSafrica.com
+27 82 788 0352

Roger Rudolph
Executive | Banking and Finance
rrudolph@ENSafrica.com
+27 82 451 0483

Metumo Shilongo
Senior Associate | Banking and Finance
mshilongo@ENSafrica.com
+27 82 560 3101

COVID-19, also known as the Coronavirus, is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) that was declared a pandemic by the World Health Organization on 11 March 2020. The disease has since been reported in over 190 countries.