by Aleshia van der Ploeg LLB. (RAU), Director VDP Legal Consulting (PTY) Ltd
The current worldwide crisis with Covid-19 and the latest announcement by the President regarding the upcoming 21-day lockdown has ALL South Africans in a spin. Everyone has questions regarding the personal impact, the financial impact and especially the legal impact of the impending lockdown.
The below is a brief summary of the legal implications of the Covid-19 lockdown however, this should not be construed as comprehensive legal advice – each case and circumstance shall need to be assessed based on its own merits.
1. FORCE MAJEURE
Force Majeure is an unforeseeable circumstance that interrupts the expected course of events and restrict participants from fulfilling their obligations – such events include Acts of God; fires; epidemics; strikes etc. The current Covid-19 lockdown would be recognised under the definition of Force Majeure.
The general position of our law in respect of Force Majeure is that if a person is prevented from performing due to Force Majeure, he is discharged from liability. However, there are certain conditions that need to be met in this regard.
2. CONTRACTS, AGREEMENTS AND LEASES
Most contracts and agreements contain a clause in respect of Force Majeure and this should be your starting point when determining what your legal rights are.
If your contract does not contain a Force Majeure clause, it is best to consult with a Legal Practitioner to determine what your rights and responsibilities may be. In order to invoke a Force Majeure event, one must look at the specific wording of the clause in the contract.
The impact of invoking Force Majeure in a contract may result in:
Suspension of each parties contractual obligations
Discharge of liability
Possible granting of extensions in regard to fulfilling contractual obligations
The obligation of each party to mitigate their losses
Possible termination of the contract
It is important to note that our law does not excuse performance in all cases of Force Majeure and each case will need to be assessed based on its own merits. We recommend that, where possible, each party continues to fulfil its contractual obligations. In circumstances where parties are unable to fulfil their obligations, we recommend that the parties negotiate in good faith and come to an agreement or arrangement suitable to all parties in order to mitigate the impact of the Force Majeure.
3. EMPLOYERS AND EMPLOYEES
Force Majeure and the impending COVID-19 lockdown will result in many businesses closing their doors for the duration of the lockdown. This will have a lasting financial impact on every business and may affect the ability of the business to pay salaries.
Ultimately, any closure under the COVID-19 lockdown may result in the employer and employee being unable to fulfil their obligations under the contract of employment. An Employer’s leave policy should be consulted in this regard. In certain circumstances the employer will then be able to implement the no-work-no-pay principle. HOWEVER, a sense of humanity should prevail, and where possible Employers should continue to pay their employees.
Where no leave policy is in place:
Employees who fall ill due to COVID-19 and employees who are otherwise ill must provide a medical certificate, and such leave should be granted under sick leave. If the sick leave of the employee is exhausted, the employer should then agree of unpaid leave or annual leave or allow the employee to tap into the next sick leave cycle
We recommend that, where possible, those employees who are in voluntary quarantine or cannot work remotely be placed on special paid leave.
As an alternative, employers can consult with their employees and agree that such leave be taken as annual leave or alternatively as unpaid leave.
Small businesses who are unable to continue paying salaries are encouraged to explore their options in terms of the Unemployment Insurance Fund, the Debt Relief Fund and any other relief offered by the government in this regard.
Under certain circumstances, Companies may consider temporary lay-off of employees before considering retrenching employees due to the operational requirements of the business. The relevant provisions of the Labour Relations Act will need to be taken into account.
**This article is for information purposes only and is not intended to provide legal advice or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein.**
Please email us at aleshia@vdplegal.co.za for legal assistance and advice in this regard.
Aleshia van Der Ploeg LLB (RAU) was admitted as an Attorney of the High Court in South Africa in 2006. She is a member of the Law Society of the Northern provinces. She has 10 years post-qualification experience in corporate, commercial, labour and general law. She practised as an attorney and served as a Director before forming her own consulting firm. www.vdplegal.co.za | Email aleshia@vdplegal.co.za
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