Dear CEO Members
Last Night, the President, Cyril Ramaphosa announced that South Africa will nationally lockdown for 21 days amid the rapid rising COVID-19 pandemic, starting from midnight on Thursday, 26 March 2020, until midnight on Thursday, 16 April 2020. This extreme, but necessary measure will have a considerable impact on people’s livelihoods, economically, financially and socio-economically. Here are the key aspects:
A. THE LOCKDOWN MEASURES
The nation-wide lockdown will be enacted in terms of the Disaster Management Act and entail the following:
- From midnight on Thursday, 26 March, until midnight on Thursday, 16 April, all South Africans will have to stay at home.
- The categories of people who will be exempted from this lockdown are the following:
- health workers in the public and private sectors, emergency personnel, those in security services – such as the police, traffic officers, military medical personnel, soldiers – and other persons necessary for our response to the pandemic;
- It will also include those involved in the production, distribution and supply of food and basic goods, essential banking services, the maintenance of power, water and telecommunications services, laboratory services, and the provision of medical and hygiene products. A full list of essential personnel will be published.
- Individuals will not be allowed to leave their homes except under strictly controlled circumstances, such as to seek medical care, buy food, medicine and other supplies or collect a social grant.
- Temporary shelters that meet the necessary hygiene standards, will be identified for homeless people. Sites are also being identified for quarantine and self-isolation for people who cannot self-isolate at home.
- All shops and businesses will be closed, except for pharmacies, laboratories, banks, essential financial and payment services, including the JSE, supermarkets, petrol stations and health care providers.
- Companies that are essential to the production and transportation of food, basic goods and medical supplies will remain open.
- Companies whose operations require continuous processes such as furnaces, underground mine operations will be required to make arrangements for care and maintenance to avoid damage to their continuous operations.
- Firms that are able to continue their operations remotely should do so.
- Provision will be made for essential transport services to continue, including transport for essential staff and for patients who need to be managed elsewhere.
- The nation-wide lockdown is necessary to fundamentally disrupt the chain of transmission across society.
The President also directed that the South African National Defence Force be deployed, to support the South African Police Service in ensuring that the measures above are implemented.
B. THE SOLIDARITY FUND
The President also stated that in consultation with social partners, a Solidarity Fund had been set up, where South African businesses, organisations and individuals, and members of the international community, can contribute to. CEO encourages its members that are able to participate herein, to do so. The Fund website: www.solidarityfund.co.za which will be administered by a reputable team of people, drawn from financial institutions, accounting firms and government, in the fight against COVID-19.
C. THE SOCIO-ECONOMIC ASSISTANCE FOR EMPLOYEES AND EMPLOYERS
EMPLOYEES: In alleviating the congestion at payment points, old-age pensions and disability grants will be available for collection from 30 and 31 March 2020, while other categories of grants will be available for collection from 01 April 2020. All channels for access will remain open, including ATMs, retail point of sale devices, Post Offices and cash pay points.
EMPLOYERS: The President also announced a special dispensation for companies that are in distress because of COVID-19. Through this proposal, employees will receive wage payment through the Temporary Employee Relief Scheme (TERS), which will enable companies to pay employees directly during this period and avoid retrenchment. Any employee who falls ill through exposure at their workplace will be paid through the Compensation Fund. Many large companies that are currently closed have accepted their responsibility to pay workers affected.
The President stated that if needs be, the reserves within the UIF system may be utilised to extend support to those workers in Small, Medium Enterprises (SMEs) and other vulnerable firms who are faced with a loss of income and whose companies are unable to provide support. However, such details will only be made available within the next few days.
D. THE TAX & OTHER RELIEFS
Using the tax system, relief will be provided by a tax subsidy of up to R500 per month for the next four months for those private-sector employees earning below R6,500, under the Employment Tax Incentive. This will help over 4 million workers.
The South African Revenue Service will also work towards accelerating the payment of employment tax incentive reimbursements from twice a year, to monthly, to get cash into the hands of compliant employers as soon as possible.
Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn (PAYE) liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months. This intervention is expected to assist over 75 000 small and medium-term enterprises.
Temporary reduction of employer and employee contributions to the Unemployment Insurance Fund (UIF) and employer contributions to the Skill Development Fund, are still contemplated by the Presidency, whereby such an announcement may be made in the coming days.
The Department of Small Business Development has made over R500 million available immediately to assist small and medium enterprises that are in distress through a simplified application process.
Last week, in line with its Constitutional mandate, the South African Reserve Bank cut the repo rate by 100 basis point. This will provide relief to consumers and businesses. The banking system will remain open, the JSE will continue to function, the national payment system will continue to operate, and the Reserve Bank and the commercial banks will ensure that banknotes and coins remain available.
E. THE CONCLUSION
It is clear that the President, government, social partners and business have remained lucid in coming together, making a proper and well-thought-through national lockdown possible, in stamping out the scourge of COVID-19. It is indeed a historical moment, which will forever be remembered, where people of all walks of life pulled together, at all costs, against a common threat. CEO believes that we, as South Africans, will not only survive this turbulent period, but will emerge stronger and more resilient than before. As the President stated, let’s be courageous, patient, and above all, show compassion in this period.
We at CEO will keep our members abreast on any new developments herein. For any enquiries, please contact our office at (012) 880 0294 and/or e-mail us at email@example.com
National Collective Bargaining Co-Ordinator