Government measures in key jurisdictions 5th edition - Flipbook - Page 121
SouthAfrica
Employment
•
What financial
support is the
government
providing
to businesses
and to individuals
on employment
•
•
•
•
Insolvency
Has the
government
made any
changes to
insolvency
legislation?
The national lockdown imposed by the government of the RSA with effect from 27 March
2020, has 5 levels. With effect from 1 May 2020, the RSA moved from level 5 to level 4 and
with effect of 1 June 2020 from level 4 to level 3 and with effect of 18 August 2020 from
level 3 to level 2, with effect of 21 September 2020 from level 2 to level 1 and with effect of
28 December 2020 from level 1 to an adjusted level 3 and since 1 March 2021 South Africa
has once again moved down to level 1 (level 5 being the most stringent, and 1 being the
least stringent). The different levels put in place various restrictions on which industries can
operate, either fully or in part. This is presently done by allowing most business to operate.
Employers who are able to operate, either fully or in part, are expected to comply with
stringent health and safety measures. Presently the majority businesses and services are
allowed to operate.
In the absence of industry specific provisions to the contrary, employees who are unable to
render services to their employers because of the lockdown provisions are not entitled to be
paid.
The government has put in place a number of measures aimed at assisting employers and
employees, some of which are industry specific. Some of these measures are now coming
to an end, in conjunction with the easing of the lockdown. One such measure is the Covid19 Temporary Employer – Employee Scheme (Covid-19 TERS), which provides for the
payment of benefits to employees employed by employers who have had their operations,
either partially or entirely, closed due to the lockdown. The benefit also extends to
employees with comorbidities and to those over 60 years of age who cannot be reasonably
accommodated at work. The minimum benefit payable for each qualifying employee is
R3,500 per month and the maximum is R6,638.40 per month. This benefit was available for
March 2020, April 2020, May 2020, June 2020, July 2020, August 2020, September 2020
and part of October 2020.
Du to a subsequent extension of the national lockdown, two additional payment periods
have been endorsed by organised labour and business (NEDLAC). The first being from 16
October 2020 – 31 December 2020 and the second from 1 January 2021 – 15 March 2021. The
right to claim for this period has, however, not yet been made law.
Additional measures available for employees include sick leave benefits, illness benefits,
reduced work time benefits (where the business is operating but on, for instance, short-time)
and particular compensation where employees contract Covid-19. Furthermore, employees
who have had to self-isolate or quarantine can claim an income replacement benefit.
•
There have been no changes to the legislation governing insolvencies in RSA, however,
the Companies and Intellectual Properties Commission (“CIPC”) has issued various
notices under the Companies Act No. 71 of 2008 (“Companies Act”) in respect of the
procedure relating to companies who are, or will be, in business rescue as a result of
financial distress.
•
In notice 17 of 2020, the CIPC undertook not to invoke its powers under section 22 of
the Companies Act (to issue compliance notices to business trading recklessly) in
respect of companies that are trading in temporarily insolvent circumstances as a
direct result of the Covid-19 pandemic. This notice will lapse within 60 days of
the declaration that the national disaster has been lifted.
•
The CIPC also temporarily ceased operating at full capacity as a result of the lockdown
and as such no processing of documents or filings could take place from 24 March 2020
to 30 April 2020. In terms of section 129 of the Companies Act, a company’s board
resolution to place itself into business rescue only comes into effect when the relevant
resolution placing the company in business rescue and supporting documents are filed
with the CIPC. The CIPC accordingly provided for a dies non period for these dates during
which no business would be penalised for its inability to file resolutions and supporting
documentation to commence business rescue.
Government measures in key jurisdictions
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