a national state of disaster

Now what?

On 15 March 2020 the South African President declared a national state of disaster in terms of the Disaster Management Act, 2002. A national state of disaster lapses three months after it has been declared, but can be withdrawn or extended. A number of measures have since been implemented by the South African Government to counteract the impact of the coronavirus (COVID-19), and several regulations, directives and guidelines have consequently been published. Pippa Reyburn (ENSafrica | Corporate Commercial) gives an overview. Government communications have set up a dedicated COVID-19 website and are posting all legislative resources here.

banking and finance

The Financial Sector Conduct Authority ("FSCA") guides financial institutions and retirement funds

The FSCA has issued a circular on the impact of COVID-19 on financial institutions and their customers. The main theme of the circular is that financial institutions should, despite the pandemic, carefully consider their business conduct and continue to treat customers fairly. The circular does not however have the force of law. Jessica Blumenthal and Johan Loubser (ENSafrica | Banking and Finance) explore this here. Separately, in an effort to manage the potential negative impact that COVID-19 is likely to have on retirement funds, the FSCA made two noteworthy announcements. Leigh Sedice and Arabella Bennett (ENSafrica |Banking and Finance) outline the most important points.

business and lifestyle

How is COVID-19 going to affect my business?

Have a look at our high-level guidance for businesses to mitigate/manage the disruptions that may be caused due to the COVID-19 outbreak and the impact of some of the new regulations, directives and guidelines.

Movement during lockdown
Everyone will be confined to their homes unless they are performing essential services, obtaining essential goods or services, collecting social grants or seeking emergency, life-saving or chronic medical attention. You may not attend any gathering (except a funeral attended by no more than 50 people and which may not include a night vigil), move between provinces or move between metropolitan and district areas. If you are performing a permitted activity you will need to do so within the parameters of the restrictions in the lockdown regulations. Altair Richards, Pippa Reyburn and Rakhee Dullabh (ENSafrica | Corporate Commercial) provide the details here.

competition

Various new competition rules for fighting COVID-19 have been published

These include regulations that aim to protect consumers from unlawful pricing behaviour in respect of products and services that are critical to effectively respond to the pandemic, as well as regulations that exempt the healthcare industry and the hotel industry, respectively, from the cartel and vertical restrictive practices prohibitions of the Competition Act, 2008. ENSafrica’s competition/anti-trust team highlights some of the key components of these new regulations here and here. 

consumer protection

If your booking gets cancelled due to COVID-19, you might be able to get a refund

It will depend on the background facts to the cancellation and is largely regulated by the Consumer Protection Act, 2008, the Ts and Cs governing the booking and South African common law. Angela Itzikowitz, Era Gunning (ENSafrica | Banking and Finance) and Suemeya Hanif (ENSafrica | Employment) explain.

contract

Can a party rely on COVID-19 to escape its contractual liabilities?

Maybe. It will depend on the background facts to the contract and the terms of the contract itself. It will also depend on whether the declaration of a national state of disaster will trigger a force majeure clause in the contract or whether the South African common law principles of supervening impossibility of performance apply. Every contract needs to be considered on a case-by-case basis. This article by Jason Valkin (ENSafrica | Corporate Commercial) offers some insight and practical advice on what can be a complex area of our law.

corporate

A pause in corporate governance?

The Disaster Management Regulations prohibit gatherings of more than 100 people (provided that during the 21-day lockdown, absolutely all gatherings save for small funerals are prohibited). This means that any company holding a shareholders meeting in the next three-month period (which period could be terminated earlier or extended) must ensure that the meeting is held 1) by electronic participation (unless the company’s MOI prohibits this) or 2) on a date after the termination of the prohibition on gatherings. Brian Jennings (ENSafrica | Corporate Commercial) shares his insights.

B-BBEE verifications in a world of social distancing
The COVID-19 pandemic is changing the way we live, interact and conduct business. The B-BBEE world in South Africa is no different. Under normal circumstances B-BBEE verification agencies must follow the procedures prescribed by the South African National Accreditation System ("SANAS") in performing B-BBEE verifications. These procedures entail that a verification agency must base its verification on information that has been verified by an on-site visit to the measured entity. In an attempt to address the health challenges presented by the pandemic, and in order to promote social distancing, SANAS has temporarily relaxed these requirements. It will now permit verifications to be completed via a remote process. Sanjay Kassen (ENSafrica | Corporate Commercial) explains.

Extension of time for B-BBEE submissions during lockdown
No submissions, filings, responses, documents and/or other correspondence will be accepted by the B-BBEE Commission during the 21-day lockdown. Parusha Desai Valodia (ENSafrica | Corporate Commercial) explains how this will affect entities that are obliged to register major B-BBEE transactions and/or submit annual B-BBEE compliance reports in that period. Click here to access the full article.

dispute resolution

Litigation and court process amidst lockdown

The Chief Justice of South Africa has said that even in the case of a state of emergency, the Constitution empowers the courts to pronounce on the validity of the declaration of the state of emergency and related matters. Accordingly, the courts have to stay open in case members of the public want to challenge the constitutionality or validity of the measures being implemented by the South African Government. The Chief Justice has also authorised all heads of court in the superior courts and magistrates/lower courts to issue practice directives to enable access to courts in relation to any urgent matter, bail applications, maintenance, domestic violence related matters and cases involving children. Follow this link to read more about the directives that have since been issued in the respective courts – by Michael Gradidge (ENSafrica | Dispute Resolution). Separately, on 26 March 2020, the Minister of Justice and Correctional Services issued directives clarifying the position regarding court processes during lockdown. These directives contain provisions that 1) restrict the number of people allowed in any court, 2) allow for only urgent matters to be heard and 3) implement social distancing protocols. These directives were revised on 31 March 2020. Aslam Moosajee and Vishana Makan (ENSafrica | Dispute Resolution) outline the material amendments that have been brought about by the revised directives.

"Uh, you have Corona!"
If an employee makes an unsubstantiated allegation that a fellow employee has been infected with COVID-19, it may attract dire consequences. It could 1) lead to stigmatisation, 2) be considered an impairment of dignity, privacy and reputation and/or 3) constitute harassment, and may result in disciplinary action being taken by the employer. It may also give rise to a defamation claim. Finally, in terms of the national disaster regulations, anyone who intentionally misrepresents that he/she or someone else is infected with COVID-19 is guilty of an offence. Read the full article by Tumi Modubu (ENSafrica | Dispute Resolution) and Prencess Mohlahlo (ENSafrica | Employment) here.

COVID-19 related litigation on the rise
It is inevitable that the impact of the restrictive measures in the lockdown regulations will lead to legal challenges. A perfect example is the recent case of Ex Parte Karel Willem Van Heerden in Mpumalanga. The court dismissed an application for an order that an individual be temporarily exempted from the traveling restrictions so as to travel from Mpumalanga to Eastern Cape in order to attend his grandfather’s funeral. Expressing extreme sympathy for the applicant, the court said that it could simply not “accede to the relief the applicant seeks because in doing so, I will be authorising the applicant to break the law under judicial decree – that no court can do. In addition, no matter how careful and diligent the applicant will conduct himself, not only the applicant but many others may be exposed to unnecessary risk, even death if I grant the applicant the relief he seeks.” This decision highlighted an anomaly in the version of the lockdown regulations which were considered by the court, namely that a funeral is permitted (subject to certain conditions), but travel to get to the funeral was not permitted. This has subsequently been rectified by amendments to the regulations. Travel to funerals is now permitted subject to certain strict conditions. Pareen Rogers and Hlengiwe Mahlangu (ENSafrica | Employment) provide details here.

employment

A few tips and FAQs for "essential services" employers and employees during lockdown

Employees performing an essential service are allowed to travel to and from work but are required to carry a permit. Here are some tips by ENSafrica’s Dispute Resolution team on what else employees should carry with them, and here are some FAQs on this topic by Edward James (ENSafrica | Forensics) and Lauren Salt (ENSafrica | Employment).

Special COVID-19 leave benefits for employees in self-quarantine
South African law does not currently recognise "quarantine leave". Accordingly, the Department of Labour recently announced special benefits to cater for this issue. These special benefits entail that an employee who contributes to the Unemployment Insurance Fund ("UIF"), and who has agreed with his/her employer to go into self-quarantine for a 14-day period due to COVID-19, will be entitled to claim illness benefits from the UIF. Lauren Salt explains how the leave application process will work. At this point it is still unclear whether these special benefits will continue to be recognised by the UIF when the pandemic has been contained and when its impact on workplaces has been reduced.

Respite for employees in the clothing and textile industries
During lockdown, they have been unable to tender services in the normal course (as they are not providers of permissible "essential services"). This has created great uncertainty regarding whether they will be able to earn wages and sustain themselves and their families in the coming weeks. In what has been hailed as ground-breaking, the trade unions and employers’ organisations that are party to the National Bargaining Council for the Clothing Manufacturing Industry have concluded a collective agreement which clarifies that these employees will continue to get paid during lockdown. Click here for the full article by Pareen Rogers and Devon Jenkins (ENSafrica | Employment).

TERS and the National Disaster Benefit
The Commission for Conciliation, Mediation and Arbitration (“CCMA”) has published a statement that provides much-needed clarity on the options available to employees, employers and CCMA users in the midst of the COVID-19 pandemic. This clarity has subsequently been augmented by the "Covid-19 Temporary Relief Scheme (C19 TERS), 2020" directive by the Minister of Employment and Labour, as well as the updated "Guide for Employers on Reduced Work Time, Illness and Dependants Benefits" released by the Department of Labour. Lauren Salt and Jessie Moore (ENSafrica | Employment) give an overview.

environmental

On 31 March 2020, the Department of Environment, Forestry and Fisheries published directions to reduce the impact of COVID-19. For a summary of these directions, prepared by Lloyd Christie and James Brand (ENSafrica | Natural Resources and Environment), follow this link.

landlord and tenant

The impact of COVID-19 on leases: landlords and tenants in a difficult position

The national state of disaster and lockdown regulations place certain pressures on businesses, particularly tenants who, notwithstanding their business circumstances in the current economic climate, now have to comply with those regulations. As a consequence, landlords will face the possibility of defaulting tenants. On the other hand, the regulations may trigger a force majeure clause in lease agreements which may, in certain circumstances, entitle tenants to suspend performance of their contractual obligations. Click here and here to read the full articles written by Philip Geromont (ENSafrica | Corporate & Commercial) and Andrew Bembridge (ENSafrica | Property and Real Estate), respectively.

mine and occupational health and safety

South African mining industry: are employers obliged to report and investigate incidents of occupationally-acquired COVID-19?

Employers are obliged to report all illnesses (including known cases of COVID-19) to the Principal Inspector of Mines. They might be obliged to conduct an investigation in terms of section 11(5) of the Mine Health and Safety Act, 1996 – it will depend on the circumstances and therefore this needs to be determined on a case-by-case basis. If an employer has any reason to believe that the risk of infection was incidental/necessary to the employee’s type of work (see this earlier article), the employer should conduct an investigation. Willem le Roux, Pieter Colyn and Tyla Foster (ENSafrica | Mine and Occupational Health and Safety) provide further details.

COIDA compensation for employees who contract COVID-19
Compensation is now available for employees who are infected with COVID-19 if 1) the infection occurred in the course of employment and 2) the risk of infection was incidental/necessary to their employment. Here is the full article by Willem le Roux, Pieter Colyn and Celeste Coles (ENSafrica | Mine and Occupational Health and Safety).

sectional title

Are you "locked down" in a communal living space?

The inevitable question that arises is whether, in terms of the lockdown regulations, you are confined to your section (ie, the area of the section depicted on a sectional plan), or whether you are also entitled to use your exclusive use areas and common property. Andrew Bembridge (ENSafrica | Property and Real Estate) explains.

tax

Tax relief plans outlined

National Treasury has released, for public comment, a draft document explaining the South African Government’s proposed tax measures. Draft legislation to give effect to these measures are expected to be released for public comment imminently. Separately, The South African Revenue Service (“SARS”) has announced a VAT exception in respect of all "essential goods", as well as a full rebate of customs duties on importation during the COVID-19 pandemic. Robert Gad and Jo-Paula Roman (ENSafrica | Tax) touch on these and a few other tax relief measures here. Separately, Annelie Giles and Seelan Moonsamy (ENSafrica | Tax) delve into the detail regarding the VAT exemption in particular.

VAT relief extension of the prescribed periods for the exportation of goods
Usually movable goods must be exported by a vendor from South Africa within a prescribed period. If the vendor is unable to do so due to circumstances beyond the vendor’s control, the vendor must, before the expiry of the prescribed period, apply for a VAT ruling requesting that the prescribed period be extended. On 27 March 2020 SARS released a binding general ruling to the effect that the COVID-19 pandemic is a circumstance beyond the vendor’s control, and that the prescribed period is accordingly extended by an additional three months. Here is the full article by Annelie Giles and Seelan Moonsamy.

technology, media, data protection, IT security and business continuity

Fast-tracking digitisation in your business

Due to the COVID-19 outbreak, it has become imperative for organisations to find and implement technological solutions to help ensure that they remain in business. Ridwaan Boda (ENSafrica | Technology, Media and Telecommunications) and Rakhee Dullabh (ENSafrica | Corporate Commercial) set out some important considerations to take into account when procuring technologies to enable digitisation.

Be aware of what you post online!
In terms of the lockdown regulations, spreading fake news about COVID-19 is an offence, punishable by a fine and/or imprisonment, and the South African Government appears to be taking this very seriously. Even if you didn’t create the post, you may still be guilty of the offence if you continued to spread the fake news (eg, if you reposted or forwarded). In addition, all telecommunication service providers (including internet service providers, over the top providers and electronic communication services licensees) are required to remove fake news related to COVID-19 from their platforms immediately after being identified as such. Follow this link to access the full article by Ridwaan Boda and Rakhee Dullabh.

Pandemic mitigation vs privacy
COVID-19’s serious effects on an individual’s health and its contagious nature may be viewed as a "hazard" that requires employers to take steps to prevent and mitigate its effects in the workplace. As such, employers may consider asking employees and other persons (eg, clients and suppliers) questions and request some personal information (including health information about symptoms of the virus) to ascertain whether these persons are at risk of having the virus or being able to transmit it to others. But organisations should never overlook the rights of employees in terms of data protection legislation. Read the full article.

Working remotely and ensuring IT security
With the outbreak of the COVID-19 pandemic, many businesses have requested employees to work from home. To work from home employees will use their own personal devices or company-issued equipment to access the company network remotely or to transmit information through their own personal network. Ridwaan Boda gives a few basic tips to address the inherent information security risks that are posed by these arrangements.

Are ICT services "essential services"?
Unfortunately the lockdown regulations are far from clear and explicit about whether ICT services, including datacentres, fibre optic infrastructure, towers and antennae, qualify as "essential services". Ridwaan Boda explains.

How to lawfully run your business electronically in a COVID-19 era
Ridwaan Boda clarifies what will constitute valid and lawful electronic contracting, signatures and meetings. Access the full article here.

New directions for electronic communications sector published
Their purpose is to ensure the smooth operation of the electronic communications sector during the disaster period to combat the spread of COVID-19 in South Africa. Tracy Cohen and Wilmari Strachan (ENSafrica | Technology, Media and Telecommunications) provide a summary of these directions.