Amid burnout, return to office plans and myriad incentives to jump ship, many employees are considering leaving their jobs for greener pastures.
Following a year brimming with economic uncertainty and layoffs, many companies are looking to bolster hiring. In fact, 77% of executives plan to hire in the months ahead, according to a recent West Monroe's latest quarterly poll. Amid employee burnout, a tight labor market and deal sweeteners to poach top talent across industries, a speculated Great Resignation is said to be in the works, as employees consider leaving their jobs for greener pastures. So, are employees really quitting at comparatively high rates or has the rumored "turnover tsunami" yet to make landfall?
"Our analysis supports the anticipated extension of the 'Great Resignation.' As pandemic life recedes in the U.S., people are leaving their jobs in search of more flexibility (and more money)," said Workforce Logiq's chief data scientist and talent economist, Christy Petrosso.
"It's leading to a dramatic increase in resignations, and as our benchmark report indicates, a dramatic increase in the percentage of workers now open to exploring other job opportunities or unsolicited recruiting messages," she continued.
With regards to anticipated workforce turnover or lack thereof, David Niu, CEO and founder of TINYpulse, said he's seen "both ends of the spectrum," although the company's latest State of Employee Engagement Report "suggests that people leaders are expecting minimal turnover."
"On the other end, 39% of respondents felt that it is 'more challenging' or 'much more challenging to fill open roles. So there is already a sense of foreboding as well," he said.
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Citing feedback from people leaders in a recent company survey, Niu said the top reasons employees choose to quit include "difficulties with adjusting to remote work, lower motivation, uncertainty about returning to work in person, and lower commitment to the organization."
Based on insights from the company'sENGAGE 5D Profile algorithm that tracks 35 job categories, Petrosso said the top reasons employees are currently "open to leaving their current jobs" are "a lack of career growth and fear that the company is not resilient enough to survive setbacks."
Additionally, she explained that a "lack of business stability, positive environment, or strong leadership" as other top reasons factoring into an employee deciding to leave a company while noting that the specific reasons an employee may decide to leave a company are "really dependent on specific job categories."
"At a more granular level, IT workers point to career growth as the main reason they want to explore other opportunities, while lack of business stability is driving software engineers to be open to a different job," Petrosso said.
Office reentry could factor in
In recent months, a number of companies have started to bring employees back to the in-person office after a year of remote work. But do employees want to return to the office? According to a Blind survey conducted earlier this year, 1 in 3 employees said they would quit if work from home ended. These reentry plans could factor into the decision to quit for some employees teetering on the turnover edge.
"Office reentry plans are directly affecting turnover. Return to work plans with 4 days required in the office were associated with the highest predicted attrition. Lower attrition was predicted for organizations with return to work plans ranging from 1-3 required days in the office," Niu said, citing the company's employee engagement survey data.
Based on these findings, hybrid work "was rated as best for optimizing employee performance, reducing turnover, and it strikes a middle ground in terms of limiting employee emotional exhaustion," according to Niu.
According to LaSalle Network's March Office Re-Entry Index, 34% of respondents who had not started to bring employees back to the office anticipated "conflicts to arise" between the staff and executives related to "return-to-work policies" with the top predicted conflict being employees wanting to continue working remotely.
"Another driver of attrition is return to work plans that do not offer flexibility for employees. There's clear implications for leaders – listen to your employee's needs and meet them halfway. If you don't, don't be surprised when your top talent starts to leave," Niu said.
Vaccinations, variants and volatility
Even employees who are not actively looking for new positions could be potentially swayed to make the leap. After all, employees can readily adjust their LinkedIn profile settings to inform recruiters they could be interested in the right opportunity.
Citing Workforce Logiq's latest flash report, Petrosso said the data "offers evidence that more U.S. professional and knowledge workers are interested in exploring other job opportunities or unsolicited recruiting messages than ever before" and these numbers represent a spike in quarterly volatility of nearly 70%, per Petrosso.
"Our predictive analysis means that we can expect more workers to be receptive to changing jobs and unsolicited recruiting calls over the next 60-90 days – at a minimum," she continued.
Over the last six months, more than 163 million people have been vaccinated against COVID-19 in the U.S., representing nearly half of the total population, according to the CDC's COVID Data Tracker, however, inoculation rates vary markedly from state to state. Petrosso said the company's data science team identified a correlation between employment volatility trends and a state's inoculation rates.
"States with low COVID vaccination rates have the highest increases in levels of employee volatility," she explained.
In the second quarter, Mississippi had the highest volatility increase at 73% and the lowest U.S. state vaccination rate, per Petrosso.
"We're not sure what's causing this trend, but a likely scenario could be that unvaccinated people are less concerned about COVID (i.e., they are less risk-averse) so they could be more open to changing jobs," she said.
So when can employers anticipate the speculated turnover to peak and when can companies expect these resignations to normalize?
"All we can do is follow the data science. And that says we can expect a heightened level of retention uncertainty into the fall," Petrosso said while making note of the emerging Delta variant, uncertainty related to this COVID-19 mutation and potentially future economic volatility across the U.S.
"If vaccination rates fail to keep pace with its spread, experts say the variant could lead to new COVID surges in parts of the country where a substantial proportion of the population remains unvaccinated. The variant could impact recovery in those states with lower vaccination rates, potentially reversing economic growth trends," Petrosso said.
Similarly, Niu emphasized the potential economic impact of the Delta variant but said other factors such as office reentry deadlines, "availability of other desirable jobs" and COVID-19 restrictions will influence peak turnover rates.
"Given the number of factors driving the turnover peak, only time will tell. But if the Delta variant is held at bay, we anticipate the upcoming quarters will determine if this is a turnover tsunami or turnover trickle," Niu said. ---
Capitec CEO, Gerrie Fourie says the bank will be growing its transactional and insurance operations aggressively. Photo: Supplied by Capitec PR
Capitec has announced a big recruitment drive, and wants to fill around 300 positions.
Its CEO, Gerrie Fourie, says SA has as many opportunities as it has challenges.
He says anyone who has a positive attitude towards the country will see room to grow further.
As many people and some businesses are likely questioning the wisdom of ploughing more money into South Africa after the recent unrest, Capitec CEO Gerrie Fourie says he sees ample opportunities.
A perfectly running economy like Switzerland might sound like a dream, but Fourie says it doesn't have the magnitude of opportunities that challenges-ridden SA presents.
"I am a strong believer that if you are positive, you'll look for opportunities, you'll find opportunities. If you are negative, you just see problems," said the Capitec CEO during the PSG Think Big Series discussion on Tuesday.
Capitec launched a big recruitment drive on Tuesday, which will see it fill around 300 positions of mainly "fourth industrial revolution" skills over the next few months. These will include disciplines in business science, artificial intelligence, data engineers and computer analysts.
Fourie said he understood that it could be "quite scary" to be recruiting hundreds of people in the current environment as economies battered by Covid-19 are still trying to recover. But Capitec is "looking to grow and go further", he said.
Fourie said he does not want to underplay SA's challenges, especially the education system that needs an overhaul. But to get around this, Capitec is doing its own training.
"There are big challenges there. But when I look at where we are, we believe there are massive opportunities in South Africa," he said.
Room to disrupt the market
Capitec has around 16.3 million clients, which Fourie says is a 10% market share of SA's retail banking. The banks wants to grow that to around 20% to 25%. In the retail deposit space and insurance, Capitec respectively commands 8% for now and about 6% in credit.
So, Fourie sees "plenty of opportunities" to grow in these areas.
The bank also has big ambitions for its business banking proposition, following its acquisition of Mercantile Bank in 2019.
"We're very excited about Mercantile because, in business banking, there's a big opportunity in the SME market. If you want to unlock the opportunity in Africa, that's the market you focus on," he said.
Mercantile Bank will be transformed into a completely digital Capitec Business Bank. With a bank that's not dependent on its brick-and-mortar infrastructure to grow, it might offer Capitec the opportunity to take its offering internationally, said Fourie.
However, the bank's immediate focus is growing its market share in SA, and any international expansion would be small and measured.
Building an army of innovators
As a young bank, Fourie said Capitec's roadmap looked at where it wants to be in three years during the first two decades of its existence. Now, it's looking at where the bank must be in 2030.
With this long-term focus, it's looking past short-term noises.
The bank has an "innovation team" that scouts the world, looking at how banking and financial services are changing in other markets.
Fourie said the team travelled a lot before Covid-19, doing over 1 000 international trips a year. It not only confined its learnings to financial services but spent time with retail and internet giants like Alibaba and Tencent to understand where opportunities lie in the blurring lines between banks, mobile operators and retailers.
But Capitec also learns a lot from the annual hackathon competitions that it runs with universities to get new innovative digital solutions for real-world problems.
Fourie said there are three to four solutions currently in production that came from this initiative that the bank will probably use.
FNB has announced a range of relief measures for individual and business customers impacted by recent civil unrest in South Africa.
In a statement on Monday (26 July), the bank said individual qualifying customers will be offered relief based on the products they hold with the bank.
This will apply to customers who are in good standing on their accounts held with FNB as of 30 June 2021. The measures will include:
Expediting claims for self-employed and salaried customers who have FNB credit life policies that cover them for retrenchment and inability to earn an income.
FNB Life customers with cashflow constraints will be allowed to pause their policies with FNB Life until the end of October 2021 and recommence with the policy thereafter without any penalties or waiting periods.
Instalment payment break/cashflow relief, during which part or no instalment/repayment is due for at least 3 months, coupled with term extensions (where applicable) to help customers manage their monthly repayments after the 3-month cashflow relief period.
Equity release to unlock cash flow for customers with equity in home loans.
Waiving of Saswitch fees for August and September 2021, with customers incurring the same fee when drawing cash at another bank’s ATM as they would at their own bank.
Waiving of unpaid debit order fees on EFT, NAEDO and DebiCheck transactions for all customers qualifying for the 3-month payment break/cashflow relief, during the relief period.
Waiving of early withdrawals fees until the end of September 2021 for notice and/or fixed savings accounts.
FNB said that business/commercial clients will also be offered relief which includes, but is not limited to:
Offering payment breaks on capital and interest for qualifying clients who have lending products.
FNB Insurance Brokers will be working proactively with Sasria to expedite clients’ claims.
All FNB Speedpoint devices/hardware lost/stolen/damaged will be replaced at no charge for impacted clients.
Waiving of Saswitch fees for August and September 2021.
“As part of these efforts, our immediate interventions are focused on restoring access to essential financial services,” FNB said. “As a result, we have now restored most of our ATMs that were damaged and our plans to deploy the most optimal solutions for impacted full-service branches are at an advanced stage.”
The bank said it has conducted a thorough analysis to provide relief to help as many customers as possible.
“Currently, our analysis shows that there are individual customers who may have been directly or indirectly impacted by the unrest from an income perspective as well as access to essential infrastructure and food security.
“Similarly, business customers in KwaZulu-Natal and Gauteng may be directly or indirectly impacted from a cash flow, revenue, infrastructure, asset and inventory loss perspective, with urgent interventions needed to help them restock and rebuild.”
The president eased lockdown restrictions in an address to the nation on Sunday evening – imposed a month ago in an attempt to curb the spread of the deadly delta variant of the coronavirus.
He also announced the reinstatement of a monthly welfare grant of R350 for the poor until the end of March next year, along with a R400 million state contribution to a humanitarian relief fund.
This is made possible by a slight improvement in revenue collection.
“We are also implementing measures to help businesses to rebuild. The most immediate need is to ensure that those businesses that were damaged or looted are able to rebuild and reopen as quickly as possible,” he said.
The president said that South Africa is one of the few countries in the world to have a state-owned insurance company, SASRIA, which provides cover against incidents of public violence, strikes, riots and unrest.
SASRIA has committed to expedite the payment of all valid claims, and is working together with private insurers, Ramaphosa said, adding that some businesses that were victims of this violence may not have been insured.
“We will not abandon them in their time of need. We are therefore working to extend support to uninsured businesses that were affected by the violence. The government will set aside dedicated funds for this purpose and we will soon announce a mechanism for these businesses to apply for support.”
The president said that the government will reprioritise funding for SMMEs affected by the pandemic through a once-off business survival funding mechanism.
“We are also working with large businesses to determine their contribution to the support of SMMEs, job creation and eradication of hunger and poverty.”
The UIF, he said, will facilitate payments as quickly as possible to support workers who have not received an income.
“Most importantly, the UIF will provide income support to all those employees who have lost jobs as a result of the recent unrest,” the president said. This will ensure that jobs are protected and that workers can continue to earn an income as those businesses take time to rebuild.
“We are expanding the Employment Tax Incentive for a period of four months to include any employee earning below R6,500 and to increase the incentive amount by up to R750 per month.”
This, the president said, will encourage employers to hire and retain employees, especially those in the retail and hospitality sectors that have been worst affected.
“We will also defer payment of PAYE taxes for a period of three months to provide businesses with additional cash flow, with an automatic deferral of 35% of PAYE liabilities for employers with revenue below R100 million.”
The payment of excise taxes by the alcohol sector will also be deferred for a period of three months, to ease the burden on the sector as it recovers, the president said.
“These interventions are designed to extend as much relief as possible to individuals and businesses that are in need of support, without compromising our fiscal sustainability.”
Ramaphosa said that the impact of recent events on the economy has made the implementation of the government’s Economic Reconstruction and Recovery Plan even more important.
Bloomberg reported that South Africa’s economy shrank 7% last year, the most in a century, with unemployment at record highs as businesses closed their doors amid a pandemic that has lasted more than 18 months and counting.
The country’s woes were exacerbated by the recent unrest in KwaZulu-Natal and Gauteng, which lead to violence and looting at the cost of many lives and damage to industry. The South African Property Owners Association estimates a cost of around R50 billion in lost output while placing 150,000 jobs at risk.
As footage of many who took part in these activities is readily available, it raises the question – can an employer discipline and potentially dismiss employees who are shown to have participated?
“Employers have the right to discipline employees for misconduct that occurs at the workplace or during the course and scope of employment,” say legal experts at Cliffe Dekker Hofmeyr.
“Generally, an employer does not have the right to discipline employees for conduct outside of the workplace and outside of working hours.”
However, this is not a blanket prohibition, the legal firm said.
There are instances in which employers may have the right to discipline and potentially dismiss employees who engage in misconduct outside of the workplace and outside of working hours.
“Whether this is permissible in principle will depend on whether the conduct impacts on the employment relationship and whether the employer has a sufficient and legitimate interest in the conduct.
“In relation to the recent activity in KwaZulu-Natal and Gauteng, it is not necessary or expedient for an employer to await the decision of a criminal court before considering disciplinary action.
“In any event, the fact that an employee has a criminal conviction will not justify discipline and dismissal in every instance.”
Where available footage shows employees involved in criminal activities
South Africa’s courts have found that employees can be dismissed for criminal acts committed outside the workplace if it can be shown that the criminal act affects the employer’s business or impacts its reputation, Cliffe Dekker Hofmeyr said.
“If an employer is contemplating disciplining employees for partaking in the recent unrest, the employer will need to consider whether it can establish a link between these activities and the employment relationship.
“This will depend on factors such as the nature of the employer’s business, the seniority of the employee and the level of trust placed in the employee, and whether the employee can be identified as an employee or as being associated with the business.”
The firm added that social media has resulted in an increasing number of cases in which employees are dismissed for acts of misconduct committed outside of the workplace.
“Perhaps the most infamous of these are the ones that involve racist remarks made on social media.
“Where employers have been able to show sufficient linkage between the employee and the employer, the employers have been able to establish a basis to discipline and dismiss.”
Creating a link
If an employer is able to show that even if an employee was not wearing a company-branded uniform while engaged in illegal activities, the employee is well known to customers and is associated with the brand, this may justify taking disciplinary action, Cliffe Dekker Hofmeyr said.
“Similarly, if, for example, an employee who participated is employed as a security guard in a retail store, an employer may be in a position to establish that the employee’s participation in the unrest gives rise to the employer no longer being able to trust the employee.
“While an employer will not be able to establish a right to take disciplinary action and potentially dismiss an employee in every instance, there may well be instances in which, given the relevant circumstances, it is able to do so.”
In this article, I want to shine a light on small business corporations, the qualifying criteria, and how they can benefit from certain tax breaks.
The SME segment is a vital cog in the SA economy and one that is set to grow even further as the country recovers from the pandemic. They make up a fundamental part of our nation, driving innovation, providing unique products and services, and reaching people in ways that larger companies cannot.
However, SMEs and sole proprietors often face obstacles that prevent them from reaching their full potential – with tax one of the most common barriers. Many are also still experiencing great uncertainty due to the pandemic, energy crisis, and limited access to digital technologies.
This year, it is especially important to overcome the challenges of juggling running a business with meeting complex tax expectations, as SARS is tightening the screws regarding compliance, non-payment and penalties.
However, it’s straightforward to remain in compliance and submit on time by working with an accountant and leveraging the right technology. Additionally, there are certain legal breaks available that can play a significant role in simplifying processes and boosting cashflow.
SARS registration and tax breaks
Businesses and self-employed individuals are obliged to register with SARS, file tax returns and pay their taxes on time. However, SARS allows for certain breaks for owner-operated businesses designed to stimulate growth.
For instance, a standard company or close corporation gets taxed at 28% from the first R1 of profit generated in the year of assessment. By contrast, the tax of a small business corporation (SBC) is calculated according to a more tax-effective table as illustrated below. Companies meeting the criteria of an SBC often fail to utilise this tax break, resulting in them paying unnecessary tax.
To determine whether an SME qualifies for these tax benefits, we need to compare it against the qualifying criteria. An SBC is a close corporation, private company (other than a personal services provider) or personal liability company of which:
Natural persons hold the entire shareholding or membership for the entire year of assessment.
The gross income does not exceed R20 million during the assessment year.
None of the members or shareholders, at any time during the year of assessment, held shares in any other company other than listed companies, collective investment schemes, body corporates, share-block companies, specific associations of persons, friendly societies, less than 5% interest in cooperatives, a venture capital company, shares in inactive private companies with assets of less than R5,000 or had taken steps to liquidate, wind-up or deregister.
Not more than 20% of the sum of gross income and capital gains consists of investment income and income from the provision of personal services.
If engaged in the provision of personal services, maintains at least three full-time employees (none of whom may be a shareholder or a connected person in relation to the shareholder) for core operations.
Suppose a company or close corporation meets all the above criteria. In that case, the following tax table will apply with regards to the SBC’s tax liability calculations for the year of assessment:
Financial years ending on any date between 1 April 2021 and 31 March 2022
Calculated accurately, an SBC can save up to R95,711 in taxes annually by utilising this relief system. This addition to cashflow would be a welcome boost for most businesses, especially during turbulent economic periods.
We strongly advocate for tax optimisation through lawful structuring and efficient advice for all our SBC clients. If you’re still unsure whether you qualify for this valuable tax benefit, speak to your accountant.
Use technology to help streamline the process in future
To ensure that your tax season goes as smoothly as possible, be sure to take full advantage of technology.
Using cloud technology can help you massively reduce some of the manual tasks associated with tax and helps you track finances closely throughout the year so that there are no nasty surprises when tax season arrives.
Using platforms like Xero makes it simple to streamline the process – you can use bank feeds to help pull through your business transactions each day, snap receipts and upload expenses instantly and then eFile VAT directly to SARS.
This reduces error-prone spreadsheets and traditional processes and frees you up to focus on running your business.
President Cyril Ramaphosa has announced that a number of South Africa’s lockdown regulations will be relaxed as the country moves to an adjusted level 3 lockdown with immediate effect.
In a national address on Sunday evening, the president said that the country is making progress in its fight against the coronavirus.
The latest figures suggest the country has largely passed the third wave of Covid-19 infections, although there are still some areas of concern, he said.
He said that the last 28 days of restrictions have been effective in reducing cases, with the country averaging around 12,000 new cases each day.
While Gauteng has seen a marked decrease in cases, Ramaphosa said cases had increased in KwaZulu-Natal, the Western Cape and the Eastern Cape.
There has also been a concerning rise of infections in the Northern Cape after a period of relative stability,” Ramaphosa said.
In all of these areas, the president said that the increase in infections was being driven by the Delta-variant of Covid-19.
The National Institute For Communicable Diseases (NICD) reported 9,718 new Covid-19 cases in South Africa, taking the total number of laboratory-confirmed cases to 2,377,823.
This increase represents a 26.6% positivity rate. As per the National Department of Health, a further 287 Covid-19 related deaths have been reported over the past 24 hours, taking total fatalities to 69,775 to date.
As the cases decrease, Ramaphosa said that the country will move to an adjusted lockdown level 3, with restrictions to be eased in the following areas:
The evening curfew will remain in place from 22h00 – 04h00;
Interprovincial travel can resume;
Non-essential establishments, such as restaurants, gyms and fitness centres, can operate but must close by 21h00;
The sale of alcohol from retail outlets for off-site consumption will be permitted between 10h00 and 21h00 from Monday to Thursday. Alcohol sales for on-site consumption will be permitted as per licence conditions up to 20h00;
Gatherings are allowed but are limited to 50 people indoors and 100 outdoors. Only 50 people are allowed to attend funerals;
Schools will be allowed to reopen as of Monday (26 July).
These changes will come into effect as soon as they are gazetted later on Sunday evening. “In other words, they are with immediate effect,” Ramaphosa stated.
In the coming weeks, Ramaphosa said that government will substantially increase the rate of vaccinations.
“We are increasing the number of vaccination sites and improving the vaccination registration system. We will also increase our vaccination capacity on weekends,” he said.
“We will now allow people between the ages of 18 and 34 to be vaccinated from the 1st of September 2021. This will be in addition to the age groups that are currently eligible, which is everyone over 35 years of age.”
The president said that people will be able to present themselves at a vaccination site without an appointment and be registered and vaccinated.
This substantial increase in the rate of vaccination is made possible by improvements in the supply of vaccines, he said.
“Within the next two to three months, we are scheduled to receive around 31 million additional doses from Pfizer and Johnson & Johnson. This supply pipeline means that there will be sufficient vaccine doses available for the rest of the year,” he said.
Unrest and violence
Ramaphosa also undressed the unrest and looting which impacted KZN and Gauteng earlier this month. “To address these two crises, we have to take several actions at once,” he said.
Firstly, we have to contain the spread of the coronavirus and limit its impact on economic activity.
Secondly, we have to accelerate our vaccination programme so that the vast majority of adult South Africans can be vaccinated before the end of the year.
Thirdly, we need to ensure that peace and stability is maintained throughout the country and that there are no further incidents of violence.
Fourthly, in response to both the pandemic and the recent violence, we need to provide support and relief to poor households, in order to alleviate the hardships they are going through and reduce hunger.
Fifthly, we need to help businesses to rebuild. These are businesses affected by looting and destruction of property and those affected by the pandemic and the necessary measures we have taken to contain it.
Finally, we need to accelerate the implementation of our Economic Reconstruction and Recovery Plan to rebuild our economy, create employment and drive inclusive growth.
The kneejerk reaction of many employers would be that these employees can be dismissed as they have committed a crime, says Lauren Salt executive at law firm ENSAfrica.
However, it is not that simple, she said.
“Ordinarily, what an employee does outside of working hours is of no consequence to the employment relationship and dismissing an employee for committing a criminal act while off duty is unlikely to pass the test for substantive fairness.
“Having said that, in a variety of cases, South African courts have held that off-duty misconduct can, in certain circumstances, constitute a valid reason for dismissal.”
This is even more pertinent where the employee’s misconduct constituted a criminal offence, where the employee’s behaviour involved gross dishonesty and corruption, and where the nature of such resulted in the destruction of the relationship of trust between the employee and the employer, Salt said.
“This approach is in line with Item 7(a) of Schedule 8 of the Code of Good Practice: Dismissal, which provides that the contravention of a rule regulating conduct in the workplace, or of relevanceto the workplace, as being capable of being the subject of disciplinary action.”
Salt said that the test for determining “relevance” to the workplace is that:
There must be a link or nexus between the conduct complained of and the employee’s duties, the employer’s business or the workplace;
The employer must have a sufficient and legitimate interest in the conduct or activities of the employee outside working hours or outside the workplace.
“Accordingly, if a nexus and interest exist, an employer will be entitled to take disciplinary action against an employee for their off-duty misconduct.”
South African courts have identified that a nexus between the employee’s off-duty misconduct and the employer’s business exists where the employee’s conduct has a ‘detrimental or intolerable effect on the efficiency, profitability, continuity or good name and reputation of the employer’s business’, Salt said.
There are many conceivable instances where there could be a connection between looting employees and their employer’s business. These include where:
The employee is wearing their work uniform while looting and is therefore identifiable as an employee of the employer;
The employee, absent of their uniform, is identifiable as being associated with the business. This might be particularly true for employees who are considered “the face” of the business – including management, sales staff and staff used in marketing campaigns;
The nature of the offence impacts the employee’s duties or on the operation of the business. For example, the identified employee works in a retail store and as such, is entrusted with the employer’s stock.
“What this means for employers is that the mere fact that an employer has identified employees in the looting footage does not mean that they automatically have a right to discipline or dismiss employees,” said Salt.
“In these emotionally charged times, employers should evaluate each of these situations with a level head, ensuring that a nexus exists between the looting and the employer’s business in every instance that the employer elects to take action.
“This, of course, presumes that there is a business to which employees could return.” --- originally posted on BusinessTech
In an address on Friday evening (16 July), the president said that the events were a deliberate and coordinated attack on South Africa’s constitutional democracy.
“These actions are intended to cripple the economy, cause social instability and severely weaken – or even dislodge – the democratic state. Using the pretext of a political grievance, those behind these acts have sought to provoke a popular insurrection,” he said.
Ramaphosa said that the instigators of the violence sought to exploit the social and economic conditions under which many South Africans live – conditions that have worsened since the onset of the coronavirus pandemic – and to provoke citizens and criminals to engage in opportunistic acts of looting.
“The ensuing chaos is used as a smokescreen to carry out economic sabotage through targeted attacks on trucks, factories, warehouses and other infrastructure necessary for the functioning of our economy and the provision of services to our people.”
“Through social media, through fake news and misinformation, they have sought to inflame racial tensions and violence. Worst of all, they have sought to manipulate the poor and vulnerable for their own benefit.”
Yet, despite the widespread destruction, this attempted insurrection has failed to gain popular support, Ramaphosa said, adding that it also failed due to interventions by security forces, and because South Africans stood up in defence of the country’s hard-won democracy.
Counting the costs
Since the outbreak of the violence, at least 212 people have lost their lives. Of these, 180 have been in KwaZulu-Natal, and 32 in Gauteng, Ramaphosa said.
He added that the South African Police Service is investigating 131 cases of murder and has opened inquest dockets in respect of 81 deaths.
Additional data shows that:
There were over 118 incidents of public violence, arson, looting and other unrest-related instances.
Extensive damage has been caused to 161 malls and shopping centres, 11 warehouses, 8 factories and 161 liquor outlets and distributors. This doesn’t include damage caused to roads and other infrastructure.
The destruction of property and theft of goods has cost businesses, consumers and the country as a whole, billions of rand.
“While we commend the brave actions of our security forces on the ground, we must admit that we did not have the capabilities and plans in place to respond swiftly and decisively,” he said.
“Our police were faced with a difficult situation and exercised commendable restraint to prevent any loss of life or further escalation. However, once additional security personnel were deployed, they were able to quickly restore calm to most areas that were affected.”
Once the crisis has passed, the government will undertake a thorough and critical review of its preparedness and response, Ramaphosa said. However, in the short term, authorities will:
Firstly, stabilise the country;
Secondly, secure essential supplies and infrastructure;
Thirdly, provide relief and support recovery and rebuilding;
Fourthly, encourage the active efforts of citizens in defence of lives, livelihoods and democracy.
Ramaphosa said he has increased the numbers of law enforcement and security personnel on the ground in Gauteng and KwaZulu-Natal.
“The N3 freeway between eThekwini and Gauteng has been re-opened and security forces are in place to keep vital supply routes open,” he said.
“Regulations have been issued in terms of the Competition Act to enable firms involved in the supply of essential goods to share information about the availability and demand for certain goods. This is to help prevent shortages of essential goods and promote the equitable distribution of scarce essential goods across the country.”
While Ramaphosa acknowledged the call for a state of emergency, he said that government would only declare one as last resort.
“We will extinguish the fires that are raging, and stamp out every last ember. We will identify and act against those who lit the flame, and those who spread it and those still attempting to do so.”
“We will find those who instigated this violence. They will be held accountable for their deeds. We will not allow anyone to destabilise our country and get away with it,” he said.
He added that the damage that has been done to vital economic infrastructure will take time to repair.
“It has destroyed businesses and will undoubtedly lead to further job losses. Ultimately, it will deepen poverty and cause even greater hardship for millions of South Africans.”
However, the president said that the government would offer support to households and help businesses to restock and rebuild.
“Provincial Departments of Social Development and SASSA will use their remaining budget in the Social Relief of Distress programme to provide support in the form of food parcels, cash and food vouchers,” he said.
“We are working hard to bring all SASSA offices into operation. Cash pay points are expected to resume services from the 19th of July in all the areas that have been declared safe to operate.”
Some employees have also been unable to reach their places of work as protestors disrupt entries and exits from communities, the firm said.
“Under the Basic Conditions of Employment Act, for as long as an employee tenders their services, even without actual performance, they will have a valid claim for their agreed wages or salary.
“An employment contract is a reciprocal contract with an agreement that an employee will perform work for their employer and the employer will in return remunerate the employee at an agreed rate.
“If the employee is available and legally tenders their services, their employer has a duty to pay them.”
An employee may justifiably refuse to attend an unsafe workplace until it is safe to go to work again. That would still be a valid tendering of services, Cliffe Dekker Hofmeyr said.
“Sections 8(1) and 8(2)(h) of the Occupational Health and Safety Act ‘places a duty’ on employers to provide and maintain, as far as reasonably practicable, a safe working environment and to enforce such measures as may be necessary in the interest of health and safety.
“This would include not subjecting employees to workplaces where the risk of being attacked during civil unrest is imminent. Where possible, the parties may, as an alternative, agree to a remote working arrangement while the unrest persists.”
South African courts have ruled on instances where an employer ceases to trade because of economic hardship, and where it does so as a result of a force majeure event, Cliffe Dekker Hofmeyr said.
It added that economic hardship is not a valid basis to excuse an employer from paying salaries.
“In relation to a supervening impossibility or force majeure, our courts have held that a temporary impossibility neither terminates an obligation nor gives rise to a right to terminate an obligation.
“It merely temporarily suspends the duty to perform the obligation while the impossibility continues.”
The firm cited the case of Mhlonipheni v Mezepoli Melrose Arch and Other where the court stated that the question to be answered was whether it is objectively impossible for a party to perform its obligations arising from a concluded employment agreement.
In the case Unlocked Properties 4 (Pty) Limited v A Commercial Properties CC, the court stated that the test for impossibility is as follows:
“The impossibility must be absolute, or objective as opposed to relative or subjective. Subjective impossibility to receive or to make performance does not terminate the contract or extinguish the obligation. A contract is terminated only by objective impossibility (which always or normally has to be total) subjective impossibility to receive or make performance at most justifies the other party in exercising an election to cancel the contract.“
To circumvent the financial strain of a company having to pay its employees full pay for work not done, at no fault of the employer or the employee, employers and employees may need to conclude a temporary lay-off period in a scenario where the company is struggling to pay its employees due to an unexpected event, Cliffe Dekker Hofmeyr said.
“The agreement can stipulate that the period of this agreement can continue until such a time that the employer is able to pay its employees.
“Where possible, employers should enter into an agreement regarding shorter working hours and less pay. The Basic Conditions of Employment Act prohibits deductions without mutual consent but allows for less pay for fewer hours worked. In addition, employers should invoke annual leave until it is able to resume operations.”
To the extent that an employee’s services will not be needed for the foreseeable future, the employer could initiate a retrenchment process, basing it on operational requirements, in terms of the Labour Relations Act, the firm said. --- originally posted on BusinessTech