Business For SA Guidance Note: Alert Level 3 Regulations
This note serves to outline the present regulatory framework pertaining to Alert level (AL)3 and to highlight the areas of interest and/ or concern for members.
Since adopting a risk-adjusted strategy to COVID-19, the South African government has gradually lifted restrictions on economic activity by promulgating new regulations in terms of the Disaster Management Act, 2002 (the regulations), amending the regulations on 28 May and 25 June 2020 and issuing several sector-specific directions to manage the safe reopening of the economy.
As amended, the Regulations are structured in three broad parts:
(i) general measures governing the national response to the state of disaster in overarching terms;
(ii) a chapter setting out the law applicable under Alert Level (AL) 4; and
(iii) a further chapter dealing with the situation under AL3. (AL5 is not dealt with explicitly, but the list of essential services that was applicable during the initial lockdown period is still appended to the Regulations as Annexure D).
The Minister is empowered to determine which of AL’s 1 to 5 apply at national, provincial, metropolitan or district level or in “hotspots” and the Regulations provide for different AL’s to apply to different areas. Conceivably, therefore, areas with higher levels of infection and less capacity in their health facilities may revert to AL4 or AL5. Thus far, however, there is no indication that this will occur.
Any shift to a different AL in any area is enforceable only after the Minister has published a notice to that effect in the Government Gazette. If that happens, different regulations will be applicable in different geographical areas.
We encourage members to continue to be aware of this possibility and of the possibility that the Regulations will continue to be amended and supplemented from time to time as the situation unfolds.
To read the full guidance note, please go to https://www.businessforsa.org/business-for-sa-amended-level-3-regulations-guidance-note/
SEIFSA Seeking To Extend The Main Agreement To 30 June 2021
According to various health experts and sundry commentators, the current Covid-19 pandemic presents an unprecedented challenge, unmatched since the Spanish Flu and the Great Depression. It has depressed global economies and a material shrinkage in global and domestic trade is expected. Covid-19 has landed on our shores at a time when our economy was already under tremendous strain.
Following more than 13 weeks of lockdown, business finds itself in survival mode and the consequences for the metals and engineering sector are going to be severe for employers and employees alike. Nobody knows for certain what industry will look like in a post-lockdown, Covid-19 reality.
Given the remaining restrictions on movements and gatherings and the fact that the Main Agreement negotiating timetable has been irreversibly affected, the Employer Association federated to SEIFSA are firmly of the view that the Main Agreement in its current form is worth preserving and that negotiations should be postponed to 2021.
A negotiating team representing Employer Associations affiliated to SEIFSA has been involved in talks with all the trade unions, on the postponement of the 2020 negotiations, since alert level 3 of the lockdown. Whilst efforts continue to finalise the details surrounding the proposed extension of the current Main Agreement to 2021, we urge all member companies to continue to observe the current terms and conditions of the Main Agreement, in good faith and in accordance with sound industrial relations practice, during the hiatus period after 30 June 2020.
Discussions on the postponement of negotiations and extension of the current Main Agreement to 30 June 2021 are still ongoing. We will keep you informed on all developments as soon as we are able to do so.
Kaizer M. Nyatsumba
Chief Executive Officer
CONCERNS ABOUT JUNE TERS APPLICATIONS
We advised employers earlier today that the Unemployment Insurance Fund’s Temporary Employer/Employee Relief Scheme (TERS) is now open for applications for June.
However, a number of employer applicants have detected serious security breaches in the system, with some data being accessible by other applicants.
B4SA has asked the UIF Commissioner to take down the site while they repair this error. We also advise employers not to make further applications at this stage.
We will advise when this matter is resolved.
JUNE TERS APPLICATIONS NOW OPEN
This is to advise employers that the Unemployment Insurance Fund’s Temporary Employer/Employee Relief Scheme (TERS) is now open for applications for June, the final month of the scheme.
It appears that the June applications follow the same procedures and have the same requirements as the May applications, including proof of payment to employees and confirmation of banking details. It is recommended that employers ensure that they are using the updated spreadsheet, available for download on the TERS portal, if intending to submit new CSV files for June.
For the relevant website :
Road To M&E Sector’s Post-Covid-19 Recovery To Be Long
JOHANNESBURG, 24 JUNE 2020 – The road to the metals and engineering (M&E) sector’s post-Covid-19 recovery will be long and will require extraordinary and targeted policies to walk the tightrope towards an economic reboot, according to Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Economist Michael Ade.
The COVID-19 outbreak across South Africa and the rest of the world has slashed production and sales forecasts and the overall economic outlook. Shutdown measures implemented by the Government, starting from March 2020, have hugely impacted manufacturing activity in the broader metals and engineering industries, including in steel-using industrial sectors.
Dr Ade said this was in addition to the challenges experienced by the M&E sector over the past few years due to subdued domestic demand, increasing levels of de-industrialisation and persistent trade wars between the United States and several of its main trading partners. He said all of these factors combined had led to continued further deterioration in business sentiment and restricted investment growth throughout 2019, before the onset of the coronavirus pandemic.
“All indications are that the road to an economic revival for the M&E sector after the Covid-19 economic crisis will be long, and extraordinary idiosyncratic and targeted policies will be needed to walk the tightrope,” Dr Ade said.
He said other factores that may further delay the sector’s coming out of the doldrums include low domestic demand, erratic power supply, rising administered prices, exchange rate volatility, generally low productivity levels, capacity under-utilisation, declining net operating surpluses and high import penetration.
“Taking the M&E cluster’s production performance in Q1 2020 into account, our full-year forecast, released in our State of the Metals and Engineering (M&E) Sector Report 2020-2021 in January, has been significantly revised downward from 0.6 percent mild growth to -9.1 percent deceleration due to stagnant local demand, the COVID-19 pandemic, downwardly volatile production numbers and the prevalence of significant sector-specific downside risks,” Dr Ade said.
Commenting on the global economy outlook, Dr Ade said the pandemic highlights an urgent need for health and economic policy action – including global cooperation – to cushion its consequences, protect vulnerable populations and improve countries’ capacity to prevent and cope with similar events in future.
“Once the crisis wanes, it will be necessary to reaffirm credible commitment to sustainable policies and undertake the necessary reforms to support long-term growth and demand prospects,” Dr Ade said.
He said metals prices were anticipated to decline by 16 percent in 2020 due to a slack in demand, before showing a modest increase in 2021. The rebound in metals prices is expected to be driven by a recovery in Chinese demand, which accounts for around 50 percent of the consumption of base metals.
Local economic outlook
Domestically, Dr Ade said although the economy was already performing poorly in recent times, underpinned by two recent technical recessions in 2018 and 2019, the domestic disruptions at the end of Q1 2020 and large parts of Q2 can mainly be attributed to the COVID-19 pandemic.
“The uncertainty created by the virus has compounded low levels of domestic demand for intermediate and finished products, dampened selling prices and worsened levels of business, investor and consumer confidence. Also, the swift fall in global travel as a result of the pandemic has had a particularly severe impact on South Africa’s manufacturing sector’s logistics and supply chains capabilities, also affecting tourism spending on locally manufactured or value-added goods,” Dr Ade said.
He added that it was owing to these factors that SEIFSA has revised downwards its initial expectation of economic output in the M&E macroeconomic framework.
“SEIFSA does not expect a robust rebound in output for the broader manufacturing sector, including its diverse M&E cluster of industries, for the rest of 2020. Although there will be some level of growth largely underpinned by a weaker rand and rebounding exports, it will be weak due to poor production fundamentals, capacity under-utilisation and high volatility in production data from 2014 ,” Dr Ade said.
He said every bad situation presents a small window of hope and that an opportunity now exists for local companies to increase exports to the rest of Africa and mitigate losses from the pandemic.
“Although the African market is down, it is still a market. Local companies should mobilise resources to immediately increase exports share regionally and the new export development course offered by SEIFSA will provide some leverage to beleaguered businesses during these tough times,” he concluded.
Persistent Increase In Unemployment Numbers Will Delay Efforts To Reindustrialise The Economy, Says SEIFSA
Johannesburg, 23 June 2020 - The quarterly labour force survey (QLFS) data, which reflects an increase in the number of unemployed people for Q1 of 2020 before the Coronavirus-induced economic crisis, does not bode well for reindustrialisation efforts, but presents an opportunity to rejig job creation opportunities in line with new job roles, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.
Speaking after the release of the data by Statistics South Africa this morning, SEIFSA Economist Marique Kruger said the results of the QLFS highlight the persistent nature of unemployment in South Africa, which is a stumbling block in Government’s re-industrialisation efforts.
On aggregate, the data show that 38 000 jobs in total were lost on a quarter-on-quarter basis between the first quarter of 2020 and the fourth quarter of 2019, amounting to a 0.2 percent decrease in employment. This is disconcerting as it increases the official unemployment rate to 30.1 percent in the first quarter of 2020, from 29.1 percent.
The data generally highlight a need for a systematic review of all industrial sectors, supported by urgent targeted interventions, in order to address latent factors hindering job creation in each sub-industry. The data also specifically showed that the manufacturing sector (including its heterogenous metals and engineering (M&E) sector), lost 0.8 percent of total employment, which equates to 15 000 jobs. Between the first quarter of 2020 and the fourth quarter of 2019. The number of employed people decreased from 1 720 000 during quarter four 2019 to 1 706 000 during quarter one 2020. On a year-on-year basis, the manufacturing sector lost an alarming 74 000 jobs, representing 4.2 percent.
“The increasing unemployment rate is cause for concern. However, the situation presents a unique opportunity for both policy makers and key business stakeholders to rearrange policies or investment incentives towards creating new job roles ranging from customer service associates to technical staff, who can adapt to the so-called new normal and also work virtually,” Ms Kruger said.
She said this implies that efforts should be aimed at reducing the cost of existing internet connection or creating cheap, dedicated internet links for unemployed citizens, through internet stipends or service providers, thereby boosting their employability. She said such an intervention would be good for the large population of skilled and unemployed university graduates in South Africa as it would boost their ability to look for jobs.
Ms Kruger said the stubbornly high unemployment rate requires for Government to abstain from doing the same things, but strategically to support skills or initiatives that will prepare unemployed citizens with specific skills, rendering them competitive in the job market and ready for new opportunities. Examples of such opportunities include jobs in coding since local companies are increasingly embracing digitisation and automation, as well as jobs in artificial intelligence and data science.
IMPORTANT COVID-19 TERS UPDATE
The UIF confirmed the following with respects to the COVID-19 TERS:
- The Fund is committed to paying benefits for 3 months.
- The Fund will honour the R40 billion committed to by the Department.
- The benefit structure will not change.
- The COVID-19 TERS will not continue beyond the end of June 2020.
- June 2020 applications will be opened from midnight of 23 June 2020.
- A media statement will be issued to communicate the cut-off dates for April, May and June applications.
COVID-19: WHAT TO DO IF AN EMPLOYEE DISPLAYS OR DISCLOSES COVID-19 SYMPTOMS OR TESTS POSITIVE FOR THE VIRUS
As lockdown restrictions ease and more and more employees return to work, the risk of infection and incidence of positive COVID-19 cases in the workplace are likely to rise. Employers should ensure that they know what to do in the event that an employee displays typical COVID-19 symptoms or tests positive for COVID-19.
We provide some practical guidance below, in light of the Occupational Health and Safety Direction published by the Department of Employment and Labour (DEL) as well as the various guidelines published by the Department of Health.
Importantly, unless otherwise specified, the guidelines below apply to ‘workers’, being all individuals who work in an employer’s workplace, including contractors/ employees of contractors and volunteers.
STEP 1: Do not permit the worker who complains of, discloses, or displays typical COVID-19 symptoms to enter the workplace or report for work. If the worker is already at work when s/he presents with symptoms or when it comes to the employer’s attention that the worker has tested positive for the virus, immediately isolate the worker and provide her/him with a surgical mask. Arrange for the worker to be transported (in a manner that does not place other workers or members of the public at risk) either to be self-isolated at home, or to be referred for a medical examination or testing.
STEP 2: Instruct the worker to self-isolate at home for 14 days. If the worker has not yet been tested for the virus, s/he should undergo testing. For mild cases, self-isolation is recommended for a minimum of 14 days after symptom onset; for severe cases, self-isolation is recommended for a minimum of 14 days after clinical stability (e.g. after oxygen support is stopped). Where the worker is an employee, this time off must be treated as paid sick leave. Where an employee’s sick leave entitlement is exhausted, such absence may be unpaid, but the employee may make application for illness benefits from the Unemployment Insurance Fund.
STEP 3: Assess the risk of transmission and disinfect the relevant area/s that the worker has come into contact with, including the worker’s workstation (and determine the need to temporarily close the affected work area/s for decontamination purposes).
STEP 4: Compile a list, with the input of the worker, of all other workers, clients, suppliers and other third parties with whom the worker has come into contact and who may potentially be at risk of transmission. Refer workers who may be at risk for screening.
Where a positive case is confirmed, follow the remaining steps:
STEP 5: Notify the National Department of Health/ National Institute for Communicable Diseases, using the hotline number: 0800 029 999 as well as the DEL. We understand that reporting to the DEL must be done by way of email, directed to the relevant Provincial Chief Inspector (email the Deputy Director General: Ms Aggy Moiloa, Zodwa.mbikwana@labour.gov.za). Provide administrative support to any contact-tracing measures implemented by the Department of Health.
STEP 6: Investigate the cause of infection/ mode of exposure, including any potential control failures (such as disinfection measures, personal protective equipment (PPE), social distancing measures, education/ training, symptom screening measures, etc.) and review the risk assessment to ensure that the necessary controls and PPE requirements are in place and any identified gaps are addressed.
STEP 7: If the worker who has tested positive has come into contact with other workers at the workplace, assess those workers’ exposure to ascertain whether the exposure carries a high or low risk of transmission and instruct them as follows:
- High Risk Exposure: close contact within 1 metre of a COVID-19 confirmed case for more than 15 minutes without PPE (i.e. no face cover/ eye cover) or with failure of PPE and/ or direct contact with respiratory secretions of confirmed COVID-19 case (clinical or laboratory). In such case, the worker must self-quarantine for 14 days and perform daily symptom self-checks.
- Low Risk Exposure: more than 1 metre away from a COVID-19 confirmed case for less than 15 minutes OR within 1 metre but wearing PPE (face cover/ eye cover). Also considered low risk if COVID-19 case was wearing a surgical mask (i.e. there was source control). In such case, the worker may continue to work using a cloth mask and complying with standard precautions and symptoms must be monitored for 14 days from first contact.
STEP 8: Where the worker is an employee and if the employee contracted the virus as a result of occupational exposure, lodge a claim under the Compensation for Occupational Injuries and Diseases Act. The Compensation Fund is currently finalising a Directive to replace the notice published on ‘Occupationally Acquired COVID-19’. Look out for further information on this once the Directive is published.
STEP 9: Communicate details of the incident, incident investigation and remedial measures with appropriate communication lines that exist within management, the health and safety committee and/or the COVID-19 committee, including any organized labour (taking care to respect the confidentiality rights of the affected worker) and implement improved control measures in consultation with such bodies.
STEP 10: Only allow the worker to return to work after completing the 14-day self-isolation period and, if the worker suffered from moderate or severe illness, undergoing a medical evaluation confirming fitness to return to work.
STEP 11: Require the worker to comply strictly with all personal hygiene, social distancing and cough etiquette measures, to wear a surgical mask for 21 days from date of diagnosis and continue to closely monitor the worker’s symptoms upon return to work.
Poor Manufacturing Production Data Bodes Ill For The Economy, Says SEIFSA
Johannesburg, 11 June 2020 - The latest manufacturing production data released by Statistics South Africa this afternoon is consistent with the economy’s poor performance since the beginning of the year and does not bode well for the future, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Economist Marique Kruger said today.
After adjusting for the sectoral weights, the preliminary seasonally-adjusted production data for the M&E cluster of industries indicated that output decreased to -7.2 percent on a year-on-year basis in March 2020, from -4.1 percent in February 2020. The M&E sector’s annual performance was generally in line with that of the broader manufacturing production, which decreased on an annual basis from -2.3 percent in February 2020 to -5.4 percent in March 2020 .
Ms Kruger said the data released by Statistics South Africa made for depressing reading.
Key M&E sub-industries were the largest negative contributors to the poor performance of overall manufacturing production data.
Specifically, the basic iron and steel products sub-component, the basic non-ferrous metal products sub-component and the motor vehicle parts and accessories sub-component registered 8.7 percent, 11.4 percent and 12.9 percent year-on-year decreases in production volumes, contributing -1.8, -1.8 and -1.0 respectively.
“The data does not augur well for businesses, especially considering the tough economic environment and covid-19 economic crisis, a generally weaker exchange rate and volatile input costs which generally reduce business margins,” Ms Kruger said.
She said it was imperative that policy makers gave serious consideration to providing ng incentives which will boost demand for locally manufactured goods in order to improve production levels.
Ms Kruger said it may also be important for the Governmentto reconsider administered prices which have a bearing on logistics costs, such as some of the fuel levies, for struggling businesses. She said such an intervention was likely to boost consumer demand and have positive spill-over implications for both capacity utilisation and local businesses’ production potential.