Businesses Continuity in the Face of COVID-19
On 16 March 2020, in the wake of President Cyril Ramaphosa’s address regarding the Coronavirus outbreak, the Johannesburg Stock Exchange fell below 38,784 points – the lowest that it’s been in almost 7 years. Internationally, the stock markets resembled the weeks of the 2008 financial crisis. With no foreseeable end to the spread of the virus and, in fact, increasing numbers of positive cases, businesses, especially small and medium enterprises, must take appropriate measures to mitigate any harm which may come to their businesses, employees and bottom lines.
Contracts – can a contract be cancelled as a result of Coronavirus
Contracts can be cancelled as a result of a Force Majeure event (“FM”) however, it must be established whether the current outbreak constitute a FM.
Force Majeure translates literally from French as “superior force” and describes uncontrollable events or “acts of God” that are not the fault of any party and that make it difficult or impossible to carry out normal business. A force majeure clause is often inserted into a contract to absolve parties from liability in the event that a party or the parties cannot fulfill the terms of a contract (or if attempting to do so will result in loss or damage of goods) for reasons which are beyond their control.
In order to establish whether the Corona Virus constitutes a FM Event, certain factors need to be considered such as whether the contract between the parties contains a FM clause and if so, whether the precise terms of such clause determines a pandemic such as Coronavirus to be a FM event. Typically, a party will have to show that: (1) an FM event has occurred and that it is beyond its control; (2) it has prevented, hindered or delayed its performance of the contract; and (3) it has taken all reasonable steps to avoid or mitigate the event or its consequences.
FM clauses typically contain very clear notice provisions that need to be followed in order to trigger an FM Event and as a result, one must ensure that correct and timeous notice is given in compliance with the contract. Accordingly, a FM Event does not necessarily mean the end of the contract but may provide for the suspension of performance for a period of time, rather than conferring an immediate entitlement to terminate.
The cancellation of a big income-generating contract, however, may be daunting for business owners and thus, the right legal experts are needed to assist in times like these. Teaming up with a firm such as Andre Pienaar and Associates is essential to get sound legal advice from commercial contract experts in order to not only manage the contract but also any consequences which may flow from the cancellation of a contract.
Employers’ duty to their employees
The Occupational Health and Safety Act places a statutory obligation on employers to provide and maintain, as far as is reasonably practical, a working environment that is safe and without risk to the health of its employees. This obligation can result in legal consequences for a company if no suitable and strictly-enforced policy is implemented to specifically deal with the Coronavirus. In fact, a company could even be at risk of being found vicariously liable in the event that one of its employees who is a carrier of the virus interacts with a customer/client in the ordinary course of their employment and the company is found to have been negligent in detecting and/or curbing the spread of the Coronavirus in the workplace.
Accordingly, companies must consult with industry experts, such as Andre Pienaar and Associates, to develop internal policies to ensure that their employees’ health and safety is, as far as possible, not compromised by this pandemic and that the company is adequately indemnified against any potential liability which may arise relating to the Coronavirus within its organisation. Andre Pienaar and Associates are experts in labour law and corporate compliance and are developing policies and practices for clients to implement in order to mitigate the harm of Coronavirus.
Social distancing and the workplace
South Africans have been urged to practice social distancing, which includes prohibiting gatherings of over 100 people. While major cities worldwide are completely shutting down schools and business in an attempt to slow the spread of the virus, South Africa has not implemented such measures (yet) but businesses themselves may find it necessary to temporarily close their doors and work remotely.
However, and depending on the nature of your business this may pose difficulties in terms of communication, administration and logistics, especially if the power grid continues to experience load-shedding. The Department of Employment and Labour has recommended that a task team be established by companies who choose to work remotely for answering workers’ concerns and internet-based communications provider, Zinia ISP (Pty) Ltd is fully prepared to assist in this regard with custom-prepared packages to suit all business as well as set up the following products:
Providing employees with an internet line almost immediately: the Zinia LTE device provides affordable, high-speed internet over the mobile network for employees who do not have internet at home and can be set up within a few hours;
Setup of a virtual phone extension in a matter of days: Instead of reimbursing employees for calls which are difficult to trace, Zinia offers a virtual extension which is managed by a mobile app, separate to any current PBX which may be in place. Quick deployment of virtual mobile app extensions. These link to a PBX brain separate to your current PBX. This can be integrated later should you wish. Users call at VOIP rates with full PBX functionality, but most importantly the TMS allows you to control and measure calls made and received.
Remote security and productivity monitoring of employees: Security and control is critical. Zinia provides applications to securely manage what employees use the internet for and enforce company policies. Zinia also provides ways in which to measure and report on employee productivity based on employees’ use of Microsoft applications as well as means to measure trends and ensure performance isn’t affected by remote work.
Companies must adapt to the effects of COVID-19 in a collaborative and proactive manner. Both Zinia and Andre Pienaar and Associates are fully equipped and suited to assist companies to seamlessly continue with their business operations, even in such difficult times.
For legal assistance and advise with respect to the consequences of COVID on the workplace, please feel free to contact Andre Pienaar of Andre Pienaar and Associates at andre.pienaar@apaa.co.za and for assistance with remote work, please contact Zinia’s Work From Home Team on wfh@zinia.co.za.
