Government measures in key jurisdictions 2nd edition final pages - Flipbook - Page 83
South Africa
2
3
Employment
What financial
support is the
government
providing to
businesses and
to individuals
on employment
issues?
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 has moved from level
5 to level 4 (level 5 being the most stringent, and 1 being the least stringent). The
RSA will move to level 3 with effect from 1 June 2020. The different levels put in place
various restrictions on which industries can operate, either fully or in part, and the
essential and permitted services which can continue to be provided. Employers who
are able to operate, either fully or in part, are expected to comply with stringent health
and safety measures.
•
Absent industry specific provisions to the contrary, employees who are unable to
render services to their employers during the lockdown are not entitled to be paid.
•
In response to the financial consequences for employees and employer alike, the
government has put in place a number of measures aimed at assisting employers,
some of which are industry specific. One such measure is the Covid-19 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 for a period of three months or less due to the Covid-19
pandemic. The minimum benefit payable for each employee is R3,500 per month and
the maximum is approximately R6,638.40 per month.
•
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.
•
There are also benefits which assist employers, by virtue of their status as businesses,
as stated in the above section
•
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
83