Over the past two months, South Africa has moved from "lockdown" to level 4 and then level 3. A general summary of the level 3 requirements is available here.
This article focuses specifically on the financial services industry under level 3 with reference to the regulations made under the Disaster Management Act, 2002 on 29 April 2020 (the "New Regulations").
We bring to your attention the recent judgment of De Beer and others v Minister of Cooperative Governance and Traditional Affairs handed down by Judge Davis in the High Court of South Africa (Gauteng Division) on 2 June 2020. Our Commentary on this judgment is available here.
The court held that the New Regulations are unconstitutional and invalid and ordered the minister to amend, review and republish the New Regulations within 14 business days (or such longer time as the court may allow). The court ordered that the New Regulations be suspended pending the process set out for the minister, but that chapter 4 of the New Regulations (being the chapter titled "alert level 3" and dealing with arrangements for level 3, hereafter referred to as the "Level 3 Chapter of the New Regulations")) continue to apply during the period of suspension until amended and republished by the minister.
This judgment may well be appealed. If it is, the order granted by the court will be suspended, pending the outcome of the appeal.
Under the Level 3 Chapter of the New Regulations (as currently stated) all economic activity is permitted, other than the "specific economic exclusions" set out in Table 2 read with regulation 46(1) of the Level 3 Chapter of the New Regulations. This replaces the prior concepts of "essential services" and "permitted services" introduced under lockdown level 4. Financial services do not fall within the specific economic exclusions and the industry may, subject to the conditions discussed below, return to work in level 3.
The Level 3 Chapter of the New Regulations continues to obligate all persons able to work from home, to do so. Accordingly, a financial services business should continue to assess whether it is necessary for employees to work at its business premises or whether they can fulfil their functions remotely.
If it is necessary for employees to work from the business premises, this must be subject to strict health protocols, social distancing rules and the implementation of a phased-in return to the workplace to ensure a "COVID 19-ready workplace" which avoids and reduces risks of infection.
The requirements on employers are summarised generally here. Financial Services businesses should, of course, take heed of these requirements but may, in addition, be required to take cognisance of the Financial Sector Authority and Prudential Authority ("Authorities") joint directive in relation to precautionary measures to be taken by essential financial services ("Joint Directive").
The Joint Directive was issued by the Authorities under the lockdown and in respect of essential services which were delivered under lockdown. It has not been updated or risk adjusted for Level 3, but it has also not been formally withdrawn or cancelled by the Authorities. As such the status of the Joint Directive is unclear. It was not issued by a Cabinet member under the previous lockdown regulations and so is not saved by the saving provision in the New Regulations for previously issued directions. It has not been developed under the New Regulations and is presumably not a sector-specific health protocol contemplated in regulation 46 of the Level 3 Chapter of the New Regulations, specifically developed in consultation with the Department of Health to limit the spread of COVID-19 in the financial services sector.
Notwithstanding the questions around the Joint Directive, financial services business who began operating as essential services under lockdown have spent resources in complying with the Joint Directive and as the Joint Directive has not been withdrawn by the Authorities, it may be prudent to continue to take the requirements of the Joint Directive into account. This would require financial services businesses under level 3 reconciling the requirements of the Joint Directive with the requirement for a work place plan in accordance with Annexure E (which while an annexure to the New Regulations remains applicable, despite the judgment in terms of the Level 3 Chapter of the New Regulations).
The Joint Directive prescribes precautionary measures to ensure a COVID-19 ready workplace and these can be taken into account by a financial services business preparing its work place plan in accordance with the Level 3 Chapter of the New Regulations. The below table compares the provisions of Annexure E's workplace plan against those of the Joint Directive to assist with this analysis.
Important to note is that should any directive be published by the relevant cabinet member responsible for occupational health and safety under regulation 46(4) of the Level 3 Chapter of the New Regulations, this would also need to be taken into account.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
