How Do Face Masks Work?

How do Face Masks Work

At the start of the pandemic, there were mixed messages on whether or not the public should be wearing face masks. This left many wondering if face masks work and why they should bother wearing one. The good news is, they do help protect us! While the guidelines for COVID-19 may be rapidly developing, and confusing us all, we can look to other well-established healthcare guidelines to understand how face masks protect us from becoming infected and infecting others. So, what exactly do these masks do?

1. They keep your respiratory droplets from spreading to others!

The CDC outlines three transmission-based precautions to help stop the spread of various pathogens: contact, droplet, and airborne. A pathogen is an agent that causes a disease, and different pathogens use different methods to spread. Surgical masks are a key protective measure in droplet precautions and airborne precautions. Surgical masks are routinely used in healthcare settings to prevent the spread of infections such as influenza, pneumonia, and meningitis. In what the CDC terms “source control”, they outline that the infected individual should wear a mask to help prevent transmission.

Many viruses and bacteria, such as the ones previously listed, are spread through respiratory droplets. These respiratory droplets are generated when a person is coughing, sneezing, or talking. That’s right, even just by talking! If you are infected, the pathogen can travel through your respiratory droplets and be transmitted to people around you, or they can contaminate surfaces. So, in the context of the COVID-19 pandemic, you may be an unaware vector of the disease and wearing a mask helps you keep your droplets to yourself when interacting with others.

2. They protect you from infected individuals!

In regards to the same CDC transmission-based precautions, specific personal protective equipment can be used to decrease your chances of contracting various pathogens. When viruses and bacteria spread by respiratory droplets, those droplets infect you by travelling into your mouth, nose, and eyes. Wearing a mask properly helps block infectious particles from finding a home in your mouth and nose. COVID-19, in most cases, is believed to be spread by respiratory droplets. Thus, wearing a mask can help reduce your risk of contracting the disease.

Now that we know how face masks protect us, it is important to note that different masks can offer different levels of protection. The American Society of Testing and Materials (ASTM) is an international standards organization that develops technical standards for many different fields-including healthcare. They put face masks through a series of five tests to determine what standards they meet. These tests are: Bacterial filtration, particle filtration, synthetic blood splatter, flammability, and breathability. Based on specific criteria, the masks are sorted into one of three levels after they are tested. Level 1 offers the lowest level of protection, while level 3 offers the highest. Patriot Medical Devices offers masks that have been tested and proven to function at the ASTM 3 standard. Patriot masks offer the highest level of protection against particles and fluids, while also being comfortable to wear!

References

Transmission Based Precautions.
https://www.cdc.gov/infectioncontrol/basics/transmission-based-precautions.html

Modes of transmission of virus causing COVID-19: implications for IPC precaution recommendations.
https://www.who.int/news-room/commentaries/detail/modes-of-transmission-of-virus-causing-covid-19-implications-for-ipc-precaution-recommendations


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The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise. Source: This article originally appeared on Patriot Medical Devices

Return-to-Workplace Guide (COVID-19)

As the lockdown in South Africa is eased and businesses start to re-open, ensuring the health and safety of employees and members of the public will be of paramount importance in every organization’s return-to-workplace plan. The Minister of Employment and Labour signed a Direction in terms of section 10(8) of the National Disaster Regulations that provides for measures employers are required to adhere to at this time. Together with the Direction, the Department published a Summary as well as a COVID-19 Walk Through Risk Assessment to guide additional workforce preserving strategies.

The hazards posed by COVID-19 are clearly identifiable, and employers must take steps to eliminate or minimize the risk of infection and the spread of the disease.

The Direction recognizes that there are sector-specific measures that will need to be taken into account, and provision is accordingly made for sector guidelines to supplement the Direction.

The Direction does not apply to workplaces (a) excluded from the Occupational Health and Safety Act (OHSA); (b) in which medical or healthcare services are performed (but excluding retail pharmacies); and (c) in respect of which a direction is issued by another Minister in terms of the National Disaster Regulations. It does apply to employers and workers in respect of the manufacturing, supply or provision of essential goods or essential services as defined in the Regulations, and any workplace permitted to commence or continue operations before or after the expiry of the Regulations. The Direction remains in force for as long as the declaration of the national disaster remains in force.

For purposes of the Direction, ‘worker’ refers to the employees of the employer and any other person who works at the workplace. In terms of the Direction, every worker is obliged to comply with the measures introduced by the employer as required by the Direction.

Bowmans has compiled a Return-to-Workplace guide outlining the measures that employers with more than 10 employees must implement. Click here to see the document.

Employers with less than 10 employees must:

  • arrange the workplace to ensure that employees are at least 1.5 meters apart, or if not practicable, place physical barriers between them to prevent the possible transmission of the virus;
  • ensure that employees with COVID-19 like symptoms are not permitted to work;
  • immediately contact the hotline: 0800 02 9999 for instruction and direct the employee with COVID-19 symptoms to act in accordance with these instructions;
  • provide cloth masks, or require employees to wear some form of cloth covering their mouths and noses while at work;
  • provide employees with hand sanitizers, soap and clean water to wash their hands, and disinfectants to sanitize their workstations;
  • ensure that employees wash their hands with soap and water and sanitize their hands, while at work; and
  • ensure that workstations are regularly disinfected.

A contravention of the Direction places the employer at risk of enforcement proceedings under OHSA, and the offences and penalties set out in section 38 of OHSA will apply. Labour inspectors are tasked with the monitoring of compliance with this Direction and may attend at workplaces for this purpose.


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The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise. Source (adapted from: bowmanslaw.com

COVID-19: Business Survival Checklist

Since the COVID-19 outbreak, and more recently, the National Lockdown, the challenges faced by businesses are changing rapidly. Business, employers and employees throughout South Africa, are being forced to adapt to new ways of operating. At estome we have prepared this short checklist to help you navigate these volatile, challenging and unprecedented times. This checklist is adapted from standard crisis management guidelines for company stability and productivity during events that interrupt normal business operations and provides a set of guidelines best suited for the current situation.

1. Stay Informed

2. Plan and strategize

  • This includes addressing any immediate challenges faced by your workforce, customers and other stakeholders due to COVID-19
  • Revisit your financial planning. Your plan should address short term cash management issues and broader resiliency issues during virus-related shutdowns and economic knock-on effects
  • Various banks have announced that they will offer flexibility to their customers, and they may be able to provide payment-holidays or emergency working capital facilities. Talk to them about your needs and plans.
  • Create detailed conditional and contingency plans for when normal operations resume. This should be to return the business to scale quickly as the COVID-19 situation evolves and knock-on effects become clearer. Be clear about how regulatory and competitive environments in your industry may shift.

3. Help and Train Staff

Some companies have already adopted a work from home policy, whilst others, don’t have anything for their staff to do during the lockdown.

  • Take steps to help employees get access to resources they need to be productive including tutorials on the use of new technologies.
  • Rather than let this tome go to waste, sign your staff up for courses that will help them, and in turn your business when we resume normal operations. Several resources offer short courses, webinars and podcasts on various subjects. If you are on a tight budget, you can find some free, yet high-quality resources online.
  • Institute remote training for employees on all new skills needed and for any new systems and tasks required.

4. Communicate.

  • Observe and be attentive to staff that are crucial to keeping your business operating. Keep lines of communication open and unfiltered with them Be clear about expectations, and resources available to them.
  • Keep communication open to all staff, to answer questions and keep them informed. Something as simple as a WhatsApp group can achieve this, or you can have someone maintain a help desk or a designates staff communication portal.
  • The business world is changing fast, so as part of adaption, consider pushing authority down as much as possible, to enable faster decision making. Also be available to step in to fix things in real-time, as needed.
  • This is also an opportunity to get in touch with your clients, build better relationships with them and help them through this time of crisis. Helping now could mean having a loyal client in the times to come. Besides just being good business practice, this will also benefit your business.

5. Find opportunities

  • Consumer behaviour is changing and is certain to continue changing as we get the COVID-19 epidemic under control. Considering that consumers will be experimenting more than ever with new solutions and offerings, look at how your company can leverage this. include it in your research and planning.
  • Kantar.com suggests that omnichannel, online channels and delivery made significant inroads during the quarantine period in China. The loss of traffic put additional pressure on struggling brick-and-mortar retailers. But online versus offline is not the only factor involved. Safety has become more important, if not of primary importance. Consumers want outlets that can assure safety and health. Going forward, downscale outlets offering brands of ambiguous sourcing will be viewed with misgiving, which could hurt discounters and even Amazon, with accompanying pressure on brands to measure up to new demands for safety and cleanliness.
  • Don’t be too quick to jump to layoffs. Strong, motivated talent will be needed to meet the challenges ahead effectively, and the recovery will arrive swiftly when control of the pandemic turns the corner.
  • D2C. As consumers look to avoid public situations that expose them to health risks, direct-to-consumer platforms will become more popular. In a related vein, physical malls are likely to suffer as online malls become more sophisticated and experiential.

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The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

More than half of South Africa’s labour force is affected by skills mismatch

More than half of South Africa’s labour force is affected by skills mismatch

A report published by global management consultancy Boston Consulting Group (BCG), WorldSkills Russia and energy company Rosatom has identified new ways for governments and employers to address the growing skills crisis and boost economies.

The report, Mission Talent– Mass Uniqueness: A Global Challenge for One Billion Workers, has been presented at the World Skills Conference 2019 in Kazan, as concerns increase around the world about how to address the dramatic shift in employment caused by new technologies and business models, as well as rapid and continuing urbanization.

The skills mismatch already impacts over half of employers. By 2030, 1.4 billion workers will not have the right skills for their jobs.

A third of all existing professions are expected to change by 2035 with the expansion of IT, AI and robots.

According to a recent IMF study, because of the increasing gap between the skills of the current global workforce and the skills businesses need to adapt to technological and market changes, 6% of the world’s GDP, or $5 trillion, is lost every year.

The research assessed the conditions affecting the skills mismatch in around 30 countries including the US, India, Russia and South Africa. Employment systems that were more “human-centric” were found to show both lower levels of skills mismatch and higher productivity.

For example, the US which has a highly human-centric system, has a skills mismatch that impacts less than a third of the workforce and one of the highest levels of productivity of the countries assessed.

Meanwhile South Africa, which was classified as a labour workforce exporter, had a skills mismatch of over 50% and the lowest productivity.

The report found that adopting a more human-centric approach to human capital development could accelerate GDP growth in a given country by between 0.5% and 2%.

The recommended approaches to delivering this address three priorities: workforce capabilities, motivation and access to training.

To improve the workforce capabilities, the authors of the study recommended development of educational and training programmes in co-operation with employers, and to improve the training of teachers and personalized teaching aids. To address employee motivation, the best strategic solutions are promoting the benefits of personal development and installing a system of incentives.

The researchers also found the best solutions to encourage access to opportunities were the development of domestic demand, increasing the talent available locally, and maintaining adequate supply and demand balance in the labour market.


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Originally appeared on businesstech.co.za on 01-09-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

What South African employees should have on their sick notes

What South African employees should have on their sick notes

South African businesses are increasingly dealing with absenteeism due to prolonged sick leave.

According to Petrus Khumalo of SchoemanLaw, this helped by the fact that many employers are under the impression that they have to accept a medical certificate without questioning its authenticity.

“However, when hours are lost as a result of absenteeism from work, it can be financially crippling for a company who is obligated to remunerate Employees while simultaneously not making any revenue during those days of absence,” he said.

“In accordance with the Basic Conditions of Employment Act (BCEA), an employee who works five days a week is entitled to 30 days of paid sick leave in a 36-month cycle.”

If an employee exhausts his/her sick leave days prior to the expiration of the cycle, any sick leave taken will be unpaid sick leave, he said.

“In most frequent cases, there seems to be a pattern by Employees of taking sick leave on a Monday or Friday.

“The employer is entitled to ask the doctor to draft an affidavit as a sworn document that says ‘I saw this person and this person has a medical condition’.

“The courts have gone even further and said if the employer doubts the affidavit, the doctor has to present him/ herself to explain the information.”

Khumalo said that this duty also stretches to Traditional Healers which are consulted by employees when they have taken sick leave.

There only catch is that the Traditional Healer has to be a registered member of the Medical Council, he said.


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Originally appeared on businesstech.co.za on 01-09-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

Employee claims against an Employer in business rescue in the Labour Court

Employee claims against an Employer in business rescue in the Labour Court

The Labour Court, in the case of Marais and Others v Shiva Uranium (Pty) Ltd (In Business Rescue) and Others (J3049/18) [2018] ZALCJHB 346; (2019) 40 ILJ 177 (LC); [2019] 5 BLLR 472 (LC) (5 October 2018), recently ruled on whether employees are entitled to approach the Labour Court to enforce a claim against their employer placed under business rescue.

The employer, Shiva Uranium (Pty) Ltd., is part of a larger group of companies.  Following a scandal involving the main shareholder, four of the major banks pulled out from any dealings with the businesses.  The only bank that was still willing to deal with the businesses was the Bank of Baroda.  In February of 2018, the Bank of Baroda gave notice to the Registrar of Banks that they will be leaving South Africa.  The effect of this was that the employer could not continue operating their business and the board of directors resolved to place the business in business rescue.

The employees of Shiva Uranium (Pty) Ltd. approached the Labour Court as a matter of urgency, looking to institute their claims against the employer.  The employees requested the Labour Court to order the employer to pay all outstanding remuneration and employment benefit contributions due and payable to the employees, for the months of July and August 2018.  The Business Rescue Practitioners (hereinafter referred to as “the practitioners”) conceded to the outstanding remuneration.  It was explained to the employees, via text messages, that the practitioners are attempting to secure financial assistance that would enable them to pay the outstanding remuneration.

The practitioners opposed the employees’ claims, arguing that in terms of the Companies Act 71 of 2008 as amended (hereinafter referred to as “the Act”), no legal proceedings and/or claims may be commenced or proceeded with against a company in business rescue, in any forum.  They further argued that the only way for any claimant to institute legal claims against a company in business rescue is if the practitioners give written consent thereto or if the High Court grants the employees leave to do so. Subsequently, the practitioners argued that the Labour Court does not have jurisdiction to entertain these employees’ claims as the Act specifically states that only the High Court has the jurisdiction to grant the employees leave to institute their claims against their employer in business rescue.  The employees, in turn, argued that the Labour Court does, in fact, have the jurisdiction to entertain their claims against the employer.

The Labour Court in this matter referred to the recent decision of the Supreme Court of Appeal (hereinafter referred to as “the SCA”) in Chetty t/a Nationwide Electrical v Hart and Another NNO [2015 (6) SA 424 (SCA) paras 26-29] where the SCA ruled that not even arbitration proceedings may be instituted against a company in business rescue. The Labour Court in this matter accepted this ruling as the essence of business rescue proceedings is to afford a financially distressed company the opportunity to rehabilitate itself in terms of a business rescue plan that will keep the business afloat while also balancing the rights of all relevant stakeholders, among others the employees.

The Labour Court also found that in terms of the Act, when it comes to matters relating to business rescue proceedings, only the High Court has jurisdiction to entertain claims against companies in business rescue. Subsequently, the Labour Court, in this matter rejected the employees’ argument that the Labour Court has the jurisdiction to entertain their claims.

The significance of this Case to employers who finds themselves in business rescue proceedings is that no employee may institute any legal proceedings against the Employer unless the High Court grants the employee leave to do so.

Article by: Carine van Blerk – Dispute Resolution Official – Cape Town


Basic Guide to Retrenchment

Related Article:
Basic Guide to Retrenchment


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Originally appeared on ceosa.org.za on 30-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

No pain, no gain for SA economy

No pain, no gain for SA economy

Some pain is unavoidable in stabilising the fiscus, but politically palatable options do exist that might just do enough to appease the ratings agencies and financial markets

Despite SA’s fiscal crisis — and the fact that the country has very little to show for the loose fiscal policy run over the past decade — there is a lobby (mainly on the Left) that thinks the best way to resolve SA’s growth and fiscal challenges is to inject further fiscal stimulus into the economy.

This view has been well and truly punctured by a new academic study. It finds that if the government fails to take evasive action and SA’s growth rate, interest rates and the primary budget balance all remain at their recent averages, the debt ratio will hit 100% by the end of the next decade.

However, if wage-bill growth is curtailed, state spending is cut, and state-owned enterprises (SOEs) are restructured in a partial one-off debt takeover event, it should be possible to stabilise the debt burden at 67% of GDP over the next three years. This might be enough to keep financial markets and ratings agencies onside.

This is the message contained in a new briefing paper by two leading academic economists, presented to the Reserve Bank and the National Treasury, on the most politically palatable way to prevent SA from sliding into a debt trap.

Caption

Prof Philippe Burger of the University of the Free State, who worked on the paper with Stellenbosch University emeritus professor Estian Calitz, is hoping to present the findings directly to President Cyril Ramaphosa at his next economics roundtable.

Burger and Calitz show that the root cause of SA’s debt explosion over the past decade has been an increase in government expenditure on all the wrong things.

Instead of investing mainly in infrastructure and productive assets that would increase SA’s long-term growth prospects, almost two-thirds (63%) of the hike in government expenditure over the past decade went on the wage bill, according to International Monetary Fund (IMF) estimates. A further 23% went on debt-servicing costs, while 15% went on social grants (see graph).

Burger and Calitz show that if SA continues this accommodative policy stance (running a primary deficit of 1.5% of GDP), the economy will need to grow at 6.8% just to stabilise the debt ratio — which is a very unlikely scenario.

If no attempt is made to rein in the primary deficit, real GDP growth remains at its long-term average of 1.5% and real interest rates remain at about 4%, then SA’s debt ratio will hit 100% by 2031.

The IMF’s senior resident representative in SA, Montfort Mlachila, addressed the same issue at a recent Bureau for Economic Research (BER) conference in Sandton, warning that there is limited fiscal space to provide an additional boost to growth.

He pointed out that fiscal policy in SA had been accommodative since the global financial crisis: budget deficits remained at about 4% of GDP, while debt levels more than doubled. But things have reached the point where debt-servicing costs are increasingly crowding out socially desirable spending, and the public debt trajectory is becoming “uncomfortable”.

Burger and Calitz show what it would take to keep the debt ratio from worsening beyond the psychological threshold of 60% of GDP, which is roughly where it is expected to be at the end of 2019/2020, following the recent Eskom bailout.

“The message has to get home that we have run out of road down which to kick the can,” says Burger in explaining why they drew the line at 60%. “In addition, in the academic debate, some argue that once you exceed 60% the debt ratio starts to [affect] the interest rate level.”

They say the most politically palatable way to stabilise the debt ratio at 60%, assuming real GDP growth recovers to 2%, would be for the government to reach a deal with the unions to limit the growth in the nominal wage bill over the next three years to half of expected nominal GDP growth.

This would allow for the salary bill to rise in nominal terms, but job cuts would be required if workers demanded that their salaries keep pace with inflation.

If the government could curb the wage bill to this extent, it would carry half the required fiscal adjustment. The rest would have to be borne by cutting the government’s goods and services budget by about 1.5% of GDP (roughly R80bn) over the next three years.

This would allow for the goods and services budget to keep growing in nominal terms — but it is a big ask, given that the fiscal consolidation of the past five years has cut only about R70bn from spending.

Burger believes the government can save much by ending corrupt contracts. “In fact, the more corrupt contracts they cut back, the less pressure they will need to put on the salary bill,” he says.

If, however, SA were to spare the goods and services budget, it would have to freeze the wage bill for the next three years and grow the economy at 6.5% to stabilise the debt ratio — neither of which is remotely feasible.

Capital spending should not be cut, because this would just reduce SA’s long-term growth prospects further, say Burger and Calitz. Neither should social grants be cut, because of the important role they play in alleviating poverty and inequality.

And there is very limited room to raise taxes, as SA is already highly taxed for an emerging market. Indeed, SA’s total revenue-to-GDP ratio is higher than 20 other emerging markets and five developed economies: the US, Switzerland, South Korea, Australia and Israel.

In short, there are no new funds available, and no room to institute new taxes, such as a social security tax, to fund new policies like National Health Insurance. Instead, the government may well have to cut back existing programmes.

The message has to get home that we have run out of road down which to kick the can

– Philippe Burger

But dealing with the wage bill and current expenditure is only half the problem. The government must also wrest back control over its SOE portfolio.

The report suggests the government deploy the good bank/bad bank model that was used to good effect during the global financial crisis, especially in the US.

Using such a model, SOE assets and liabilities would be separated into new, “good” SOEs holding assets, with the old, “bad” SOEs holding debt. The government would sell equity stakes in good SOEs to private investors and recapitalise their remaining assets using government capital and new SOE loan debt. Some of the loan debt could be turned into equity once the new, good SOE started performing.

“The funds raised by selling off stakes in the new, good SOEs would in essence mean that they use these funds to buy out the assets from the old, bad SOEs, which, in turn, use the funds to extinguish the old, bad SOE debt,” explain the authors.

But given that total SOE debt, including Eskom’s, is just over R1-trillion (about 22% of GDP), it is unlikely that more than half of this could be extinguished through selling equity stakes. If the government takes the remaining R500bn onto its own balance sheet, the gross debt-to-GDP ratio would increase from 57% to 67%.

“This might be acceptable to financial markets and ratings agencies if they understood it as part of a restructuring package that limits the impact on the fiscus to that of a one-off debt takeover event,” the authors say.

However, they stress that this exercise will have to be matched by the restructuring of SOEs’ operational models to return them to profitability.

In cases such as Eskom, this means that cost-cutting, including retrenchments, will be unavoidable.

The government is committed to ensuring fiscal sustainability, says Busani Ngcaweni, the head of policy & research services in the presidency.

Speaking at the BER conference, he said this would be achieved by stabilising the debt ratio in 2024/2025 by running a sufficiently large primary budget surplus. In addition, the government would reduce the public sector wage bill and current transfers while protecting spending on infrastructure.

It would also “cut frills and fat, and review unviable programmes and agencies” while taking concrete steps to reduce the state’s contingent liabilities by fixing SOEs, he said.

The first evidence of this approach is in the technical guidelines recently issued by the Treasury to all government departments. Though the final directive is still subject to political sign-off, departments must prepare plans to cut their budgets by 5%, 6% and 7% over the next three years.

Departments have also been told that no additional resources will be forthcoming, so if more funding is needed for a programme, the equivalent cuts must be made elsewhere.

So, it seems that the presidency and the Treasury have embraced the best fiscal advice and are not falling for populist tax-and-spend solutions.

Now, if the government can just properly embrace the private sector in the financing, construction and management of public infrastructure and some services, such as power generation, the economy might be able to recover along with the fiscus.


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Originally appeared on businesslive.co.za on 29-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise. Feature image credit: Picture: 123RF/

SA needs a radical policy shift to save the economy

SA needs a radical policy shift to save the economy

There is no way an economy that does not manufacture goods massively will be able to create jobs, and land reform is crucial.

South Africa is facing serious socioeconomic challenges with the population growth rate now standing at 58.78% and the unemployment rate at 29.7%.

BusinessTech of July 29 carried an article entitled “Foreign investors are ditching South African assets at a record pace”. It went further and said “overseas investors have sold a net $4.8 billion (about R73 billion) of South African equities and bonds in 2019”.

“Outflows, particularly from fixed income securities, have accelerated since the start of June as ratings companies and banks turned more bearish about South Africa’s fiscal outlook…”

The implication of all this is that there is no new money circulating in the economy as international investors are selling off local bonds and equities.

The resultant effect of this economic calamity is that the rand will continue to weaken against the dollar, the country will have a higher current account deficit and imports are likely to be expensive as the rand depreciates.

Furthermore, the rand will weaken as the prospects of more interest rate cuts are in the offing now that the inflation rate edged up to 4.3% from 4.1% in May 2019. Economists are predicting that inflation will average 4.4% in 2019 and 5.1% in 2020.

Sadly, these dark economic clouds continue to gather, despite the fact that President Cyril Ramaphosa convened a presidential investment summit in October 2018.

According to the Cabinet minutes of quarter four of 2018, the summit attracted R300 billion in investment and pledges. Projects to the value of R187 billion are already in the implementation phase and some, worth R26 billion, are in the pre-implementation phase, the Cabinet minutes further stated.

During the State of the Nation Address (Sona) in February 2019, Ramaphosa asked provincial governments to identify investable projects and ensure that they build investment books for each of the nine provinces.

We also saw the launch of the Youth Employment Service (YES) as a response to the problem of youth unemployment.

Despite all of these noble initiatives, the economy is still in ICU.

What is it that Ramaphosa must do to resuscitate this ailing economy?

The first step is to put in place a new economic policy (NEP) and put aside the outdated new development plan (NDP) with unrealistic economic targets. It is evidently clear that the South African economy will not be able reach the economic growth rate target of 5% by 2030 as projected in the NDP under the current economic climate.

The NEP will have, among other things, to integrate the scattered Master Plans that Ramaphosa talked about during the Sona. The NEP should direct public investment in the following sectors of the economy: infrastructure, manufacturing, agriculture, energy, skills and innovation.

Infrastructure investment has the potential to trigger economic growth across all sectors of the economy and 2010 Fifa Soccer World Cup legacy is a living testimony.

Accordingly, National Treasury will have to make budget available for national infrastructure programmes.

The manufacturing sector has been on the decline due to trade liberalisation, hence the country is facing economic growth challenges. The sector has also not been able to create new industries and, instead, many industries closed down.

This is the reason why government policy interventions like the black industrialists programme registered very little success. There is no way an economy that does not manufacture goods massively will be able to create jobs.

Agriculture and manufacturing lifted the South African economy out of a recession in quarter three of 2018. The slow pace of land reform and agricultural transformation are slowing growth in the sector.

It is within this context that radical policy shift should be introduced in the agricultural sector and chief among those is the setting up of a Land Reform Fund and Agency as proposed by the high-level panel on land reform and agriculture.

Stabilisation of the energy supply is key in economic growth and without skills and innovation it will be extremely difficult to set the South African economy on an irrevocable growth path.


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Originally appeared on citizen.co.za on 27-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise. About the Author: Zamikhaya Maseti is a political economy analyst based in Centurion. Feature image credit: GETTY / AFP / File / MARK WILSON

Agreement of full and final settlement, the end of the Road?

Agreement of full and final settlement, the end of the Road?

When parties enter into a full and final settlement agreement in order to terminate the employment relationship, most employers are of the opinion that the matter has been settled and that the employee has waived his/her right to refer the matter to the CCMA.

However, in the recent Labour Court award of Cook4Life CC v CCMA and Others (2013) 34 ILJ 2018 (LC) it was held that “where an employee claims that he was induced by duress to have entered into the agreement the CCMA was empowered to pronounce on the agreement as part of its jurisdiction to determine the existence of a dismissal.”

Section 192 of The Labour Relation Act 66 of 1995 (LRA) provides that in any proceedings concerning an alleged unfair dismissal, an employee must establish the existence of the dismissal. Once this has been established, the onus is then on the employer to prove that the dismissal was fair.

For an employee to prove that a dismissal exists, he/she will have to prove on a balance of probabilities that he was induced by duress to sign the settlement agreement. Duress can come in different shapes and forms.

Experian SA (Pty) Ltd v Haynes and Another [2013] 34 ILJ 529 (GSJ) confirmed that the party intending to rely on duress, had to allege and prove that there was a threat of considerable evil. To such an extent as to induce a reasonable fear of imminent or inevitable evil and that the threat or intimidation was unlawful and contra bone mores (contrary to public policy or moral turpitude) and the moral pressure used must have caused damage. In Gbenga-Olawatoye v Reckitt Benckiser SA and Another [2016] 5 BLLR 425 (LAC) it was found that in order to obtain an order setting aside a contract on the ground of duress, actual violence or reasonable fear must be shown.

However, in Medscheme Holdings (Pty) Ltd & Another v Bhamjee [2005] (5) SA 339 (SCA) the courts also recognised that in appropriate cases economic pressure or a threat of economic harm could constitute duress, but that hard bargaining does not equate to duress, nor does an imbalance in bargaining power.

Therefore, it is important that when parties enter into negotiations and upon signing a settlement agreement that employees are explained the contents of the settlement agreement. The mere inclusion of a ‘no duress’ clause may not be sufficient. Furthermore, that there are witnesses present who can testify that the parties entered into the agreement out of their own free will and that there was no element of duress visible.

Article by: Aletta Eksteen – Dispute Resolution Official – Cape Town


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Originally appeared on ceosa.org.za on 23-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

Inequality: SA’s vanishing middle class

Inequality SA’s vanishing middle class

Everyone knows inequality in SA is crippling. But what new research shows is that the wealthiest South Africans are doing just fine – the middle class and the poor are the ones taking a beating

It is widely accepted that SA’s persistently high levels of inequality are not only unsustainable, they also curb the country’s growth potential.

Yet despite well-targeted government policies, inequality has remained sky-high. Over the past decade, progress to reverse inequality has, it would seem, effectively stalled.

Now the latest academic research shows that one of the chief reasons for the persistence of high inequality in SA is that top income earners have flourished while everyone else has struggled. The researchers have, for the first time, used SA Revenue Service (Sars) income tax data, which is better able to measure the income of high earners.

University of Cape Town (UCT) economics professor Martin Wittenberg estimates that not only has earnings inequality widened since apartheid, but that the Gini co-efficient inequality rating (for earnings), when measured by the tax data, could be higher than previously thought, at 0.599 not 0.567.

“Such high levels of inequality threaten the social fabric, increase the risks of political and economic upheaval and prevent the majority from living up to their full potential. All of these are likely to harm the country’s long-term developmental prospects,” says Prof Murray Leibbrandt, who heads the Southern Africa Labour & Development Research Unit (Saldru) at UCT.

Leibbrandt and researchers Vimal Ranchhod and Pippa Green have co-authored a new SA-TIED working paper, “Taking Stock of SA Income Inequality“, which summarises the latest research in the field produced by Saldru researchers as part of a large UN University World Institute for Development Economics Research (UNU-WIDER) project investigating inequality in Brazil, India, China, Mexico and SA.

SA-TIED is a collaboration between UNU-WIDER, the National Treasury and other governmental and research organisations in SA.

Leibbrandt says the Sars data has been critical in understanding income inequality in SA, particularly since the growth of top incomes was previously an underexplored area. Besides the tax data, the latest papers use new empirical methods to generate new insights about what is really driving inequality in the country.

A key finding by Stellenbosch University professor of economics Ingrid Woolard and UCT researcher Ihsaan Bassier is that the biggest driver of inequality since 2012 has been educational attainment — especially tertiary education. These gains, they found, have accrued disproportionately to the top earners.

Such high levels of inequality threaten the social fabric, increase the risks of … upheaval and prevent the majority from living up to their full potential

– Murray Leibbrandt

They confirm Wittenberg’s finding that earnings at the top end rose much faster than for other groups — faster even than SA’s national income growth, which means that top earners are receiving an ever greater “share of the pie”.

Between 2003 and 2015/2016, the real incomes of SA’s top 1% of income earners almost doubled. By contrast, the incomes of 95% of the population stagnated, or for those at the bottom showed only slight growth, in their case mainly because of social grants. In fact, nearly 60% of the population earned no taxable income at all during this period.

“This has put upward pressure on SA’s inequality levels, which partly explains why inequality has remained so persistent,” the researchers explain.

In addition, the top percentile, which starts at a taxable income of R800,000 a year, has a much higher wealth-to-income ratio than the rest of the population. Income from sources other than salaries increases rapidly in the top two percentiles, allowing these people to accrue wealth faster and do better in periods of low economic growth, when wage growth typically slows overall.

In short, the wealthiest groups are able to draw on a far broader array of income sources and assets (physical, financial and human), and this has enabled them to flourish even as economic growth has slowed.

In another paper, Arden Finn and Leibbrandt show that wage earners stuck in the middle of the earnings spectrum, which has not moved since the end of apartheid, are predominantly African, male and in their 30s. They work in a mix of occupations including those involving craft and services, and in clerical posts.

While the average age of the median band hasn’t changed markedly, it has risen in the top half — which suggests that younger people are finding it harder to move into higher-paying jobs. The fact that it has not changed much in the bottom half either indicates that young people are finding it difficult to enter the labour force at all.

Equally alarming is some of the most recent work on social mobility.

A fascinating new paper, “Snakes and ladders and loaded dice — poverty dynamics and inequality in SA, 2008-2017“, by Saldru researchers Rocco Zizzamia and Leibbrandt with Simone Schotte, a research associate at UNU-WIDER in Helsinki, shows that when looked at over time, poverty in SA is more pervasive than previously thought.

The researchers distinguish five major socioeconomic classes in SA: the chronically poor, the transient poor, the vulnerable middle class, the stable middle class, and the elite. They conclude that the stable part of the middle class is much smaller than previously thought, at only 21% of the population. This is because a large portion of society has, for the past decade, been engaged in a game of “snakes and ladders”, slipping in and out of poverty in response to positive and negative shocks.

According to Stats SA, 55% of the SA population lived in poverty in 2015.

However, this snapshot of data is confined to a point in time. It understates the extent of the poverty problem, as the researchers estimate that while about 49% of the population live in chronic, persistent poverty, another 11.4% can be classified as “transient poor”, and a further 19% constitute the “vulnerable middle class”.

Both the latter groups are at risk of falling back into poverty at one time or another, when they lose a job or a family member. And though finding a job is important for lifting people out of poverty, it is not sufficient, say researchers.

Those with unstable jobs, without contracts or union protection, are more vulnerable to falling back into poverty than those with permanent, formal employment.

In the stable middle class, two-thirds of household heads have a matric or higher qualification and three-quarters are employed, typically in the formal sector. They also earn, on average, twice as much from their jobs as households in the vulnerable middle class do (roughly R13,127 a month compared with R5,366 a month).

The elite class is almost three-quarters white and predominantly urban based, and earn about R38,223 a month on average from the labour market. They also get a significant amount of their income from capital investments. Their expenditure level is, as you’d expect, much higher than that of the stable middle class at R25,659 a month, compared with R4,536 a month on average per capita.

Chronic poverty is associated with poor education (less than a matric), larger households, female-headed households (which also tend to be single-parent households), unemployment, geographic location and race.

“The legacies of apartheid, which forced many African people to live in poverty-stricken rural homelands far from economic opportunities, are still deeply felt,” say the researchers.

WHAT IT MEANS
Access to economic opportunities, markets and services that are currently at present unavailable in impoverished areas should be improved

For instance, they found that across four or five waves of data, nearly 83% of the rural poor remained so between 2008 and 2017. The urban African population is, however, more affected by transient poverty, with many more moving in and out of poverty over the same period.

“The other striking feature of poverty is its female and youthful face,” the study says. Nearly 72% of those in female-headed households remained in poverty across four or five waves, compared with only 29% of those in male-headed households.

Race is another persistent legacy. Though the sample of white people was relatively small (just 274 individuals), 93% remained consistently non-poor between 2008 and 2017. By contrast, about 63% of Africans were poor most of the time, with only about 9% remaining non-poor the entire time.

On the other hand, there has been a significant shift in the racial composition of both the middle class and the elite. The African component of the middle class grew from 47% to 64% between 2008 and 2017, and that of the elite class from 14% to 22%. Despite this, Africans are still underrepresented in the middle class, while white people are overrepresented, compared with their share in the overall population.

The policy implications are clear: closing the skills gap and increasing the quantity and quality of jobs is the government’s central challenge, the goal being to lift larger parts of the population into the middle class and to prevent them sliding back into poverty.

The job prospects of the transient poor and vulnerable middle class could be improved by strengthening support for small enterprises, while providing insurance mechanisms could help buffer them against earnings shocks.

But for the large chunk of the population in persistent poverty, social grants and basic social services are indispensable. However, as these grants are too small to allow this group to break out of poverty, the focus should be on improving access to economic opportunities, markets and services that are currently unavailable in impoverished areas.

The efficiency of social spending must be raised to make existing government budgets go further.


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Originally appeared on businesslive.co.za on 22-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise. Feature image credit: Kya Sands: Earnings inequality has widened since apartheid. Picture: Getty Images/Per-Anders Pettersson

Having a side hustle is now mainstream in SA

Having a side hustle is now mainstream in SA

As many as one-in-four working South Africans are operating some kind of side hustle – earning extra income beyond their formal employment – according to recent online research done by the Henley Business School of Africa.

We’ve known about this phenomenon at Gumtree ever since the site started in 2006. We’ve seen constant growth in the past decade in posts by people promoting their part-time businesses and services.

We even coined a term for the thousands of South Africans who have launched successful side hustles online – we call them Gumtrepreneurs. That word is now listed on urbandictionary.com and it reflects the new economic reality that entrepreneurship is not a big and inaccessible concept. 

Free online posting means that almost anybody can have a crack at turning their skills or passions into extra income because they can test the market and reach a far broader base of potential customers without major start-up costs.

Different types of side hustles

Trading goods or ‘flipping’ items at a profit is very popular. Lamla Gqolodashe bought a second-hand wardrobe for R500 in Port Elizabeth and sold it for R1,000 on the same day and has been trading ever since. Ndumiso Masuku makes essential bucks by buying and selling gaming consoles in Durban. Nompilo Nzimande, a single mother and sole breadwinner for a family of six, buys goods which she refurbishes and sells to community members in the KwaNdengezi Township, all via her mobile phone.

Others invest in their crafting skills making soft toys, furniture or children’s clothing. Cooking is also a route to go – expertly baked cakes made to order or ‘secret recipe’ jams can usually find a market. While others use their talents in handiwork, clothing repairs and tailoring, fixing cars or, especially, troubleshooting technology for smartphone or computer owners in the neighbourhood.

Tutoring students is a big growth category in side hustling and it is an increasingly important avenue for retirees in desperate need of a top-up for their pension provisions.

In many cases, side hustles have turned into ‘front-and-centre hustles’ or full-time businesses. It’s worth remembering, that legendary global brands like Apple, Under Armour, Instagram and the popular game ‘Cards Against Humanity’ all started out as side-hustles. 

While those kinds of riches are obviously unrealistic dreams for most, what is not unrealistic is that, in these tough times, we can all use our skills and the online space to make some ‘rainy day money’ or to fund a sunny holiday.


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Originally appeared on bizcommunity.com on 13-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise. Author: Estelle Nagel, a marketing manager at Gumtree South Africa. Feature image credit: Source: pixabay.com

Senzo Tsabedze back on track for jobs breakthrough

Senzo Tsabedze back on track for jobs breakthrough

Senzo Tsabedze feels vindicated. After facing corruption allegations and being exonerated, the CEO says he is ready to make further inroads into the lucrative fleet management sector.

Tsabedze was awarded a R1.2bn contract by the City of Joburg in November 2018. However, early in 2019 the metro instituted a forensic investigation following media reports about possible political influence in the awarding of his tender. The city later cleared Tsabedze of any wrongdoing.

The saga has left a bitter taste in Tsabedze’s mouth. “I’m an honest businessman,” he says. “It’s sad that in SA every black businessman who gets awarded a significant contract is seen as [possibly] corrupt. Is it because we are considered to be not capable?”

The municipality awarded the contract to Afrirent through a regulation 32 process, which allows arms of the government to appoint a supplier that is providing services to another state institution without following a competitive tender process.

The contract, for 30 months, means Afrirent will supply the city with 2,732 vehicles for use by municipal departments, including the metro’s police department, City Power and Johannesburg Water.

Tsabedze says the contract was previously awarded to Avis Fleet Services. When the city extended that agreement by two years, “no-one complained”.

“But when it was awarded to us, people said we have no capacity. They asked: ‘Who is Afrirent?’”

Tsabedze says the company has contracts with more than 30 municipalities across the country and had a R1bn credit facility. When that became known, he says, people’s tone changed, and the accusations of corruption began. He says the forensic investigation took him out of business for six months, as no-one wanted to have dealings with the company.

Now that he has been cleared of any wrongdoing, Tsabedze says he is more determined than ever to disrupt the fleet management services sector, which he argues has been the exclusive preserve of white-owned firms.

Afrirent’s turnover is R400m a year. Tsabedze, from Mpumalanga, says the company has a shareholding in six car dealerships, which is where it sources its fleet from. It installs its own tracking and monitoring software.

The businessman also has plans to diversify his firm so that it does not rely only on government tenders. To this end, it is investing in property development, and its first hotel is set to open in Sandton in 18 months.

“Construction has already started. We have also identified a few sites for development in Cape Town and Durban and are negotiating with landowners and developers there,” he says.

Tsabedze points to President Cyril Ramaphosa’s reference to employment in his state of the nation address when he said the tourism industry was the second-biggest employer after mining. The Sandton hotel will provide up to 70 people with permanent work, says Tsabedze, whose inspiration to succeed in business comes from his modest background.

“I come from a poor background. I’ve always wanted to better my life and the lives of my family and employees.

“It would be a disaster if I were to fail, because I represent not only my family but also hundreds of other people who rely on my employees’ income.”

Tsabedze says his wish is to be treated equally and fairly by the media and the banks. “SA banks seem to take a stance when allegations are levelled against you.

“But if they are going to withdraw their facilities because of allegations made against me in the media, they must be consistent and do the same against companies like Steinhoff.”


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Originally appeared on businesslive.co.za on 08-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.
Authour: LUYOLO MKENTANE. Feature image credit: Senzo Tsabedze. Picture: SUPPLIED

All employees have a right to privacy, but is that privacy limited?

All employees have a right to privacy, but is that privacy limited?

All employees have a right to privacy, but does it end there?  In the recent Labour Court decision of NUMSA and Another v Rafe N. O. and Others (JR1022/12) [2016] ZALCHJB 512, the question of whether an employer had the right to examine an employee’s cellphone, was permissible, secondly the employees’ refusal to have his or her cellphone examined constituted an offence that warranted dismissal. Consolidated Employers Organisation frequently receives questions pertaining to this issue and whether there is any risk that the employer may face at the CCMA or Bargaining Council. Employers now have more guidance on this sensitive issue that has been clarified by the Labour Court in the above-mentioned case.

The facts of the case are that the employee took photographs of the company’s production line, shift machines and letter trays. Upon discovery, the employer requested that the employee delete the photographs pertaining to the company’s confidential business operations. The employer asked the employee to confirm that the photographs were deleted, as he felt it was crucial to keep business operations confidential to prevent any conflict of interest. When the employer asked the applicant to confirm deletion of the photographs, the employee refused to adhere to the instruction. The employer at that point requested the applicant to hand over his phone to check if the photographs had been deleted.  Was the employer allowed to make such requests and was this in violation of the applicant’s right to privacy?

The employee then once again refused to hand over the phone and argued that this violates his right to privacy as he had personal data on his phone. The employer stated that they work in a very competitive environment. Thus all business production needed to be kept private. After this, the applicant was placed in a hearing for failure to delete the photographs and for refusing to hand over his phone for inspection, he was subsequently dismissed.

The applicant challenged his dismissal at the CCMA in which the Commissioner decided that the employers’ request to delete the photographs and to hand over the applicant’s phone was reasonable. The Commissioner ruled that the charge against the applicant warranted a dismissal, therefore making the dismissal substantively and procedurally fair.

The employee then took the arbitration award on review to the Labour Court. The Labour Court held that although the employee has a right to privacy, that does not necessarily give him a right to use his personal phone as a camera to capture confidential company information. The review was dismissed on the basis that it was not unreasonable to protect company production and confidential data and that the conduct attempted to break the trust relationship between the employer and the employee.

Should an employer face a similar issue at the CCMA, it is vital to understand that employees have a right to privacy, but there are certain limitations to that privacy. An employer has every right to safeguard their assets and keep company data confidential.

Article by: Niksha Nilchand – Legal Assistant – Durban


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Originally appeared on ceosa.org.za on 02-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

SA’s rising unemployment shows labour model inadequate

SA's rising unemployment shows labour model inadequate

JOHANNESBURG – South Africa’s rising unemployment rate is evidence that the country’s current labour model is inadequate to stem the shedding of jobs, a labour expect said on Thursday.

Unemployment rose to 29 percent of the labour force in the second quarter of 2019 from 27.6 percent in the first, the highest since a quarterly labour force survey was introduced in 2008, Statistics South Africa said earlier this week.

The data points to the overt failure of the country’s current labour market scheme, making it necessary to revisit internal policies and take inspiration from the successes of other countries, director of the employment practice at Cliffe Dekker Hofmeyr Hugo Pienaar said.

He said it was important to understand what role the business and labour could play in creating jobs and stimulating an ailing economy.

“It would be a futile exercise for either labour or business to blame each other for the rise in South Africa’s unemployment rate,” said Pienaar.

“A more productive approach would be for all parties to find a middle ground where there is no exploitation of labour, on the one hand, and no alienation of investment on the other.”

A useful example was Ireland, where government, business and labour formed a social accord during the 1990s which yielded positive results for job creation. Lessons would also be learned from Germany where the government imposed labour market reforms between 2003 and 2004 to quell rising unemployment.

But Pienaar warned it would be a mistake to simply replicate international labour markets or trends in South Africa as each country had its own unique labour market climate and challenges.

“It is, however, useful that (government, business and labour) are mindful of the workings of the international labour markets. They must accept that current practices and policies are not achieving the desired results,” he said.

World trends had shown that the growth in the creation of employment did not necessarily lie in the formal sector, making it important to have employment-friendly legislation in place, Pienaar said, urging the government to also address the lawlessness of strikes.

“This is a particularly fundamental challenge for business. It would not be unreasonable to expect the government to ensure that the police enforces the law without employers having to incur huge expenses in approaching courts for strike interdicts,” he said.

“It has become a sad reality that employers settle wage negotiations because of violence, rather than on pure economic principles.”

 He urged businesses to help minimise retrenchments by providing for multi skilling and mechanisms for productivity bargaining. Another consideration would be wage freezes for executives and even pay cuts and bonus reduction for top earners.

On the labour front, Pienaar stressed the need to democratise the workplace by introducing ballots before employees embarked on strikes. 

“I suggest that the parties enter into some form of social accord, which will be based on the lessons learned from other countries,” he said. “It is crucial for there to be mutual trust and integrity between all parties for the proposed model to be successful in South Africa.”

Earlier on Thursday, labour union Solidarity said the official unemployment rate of 29 percent, although alarming, still painted a rosier picture than the reality.

Stats SA data showed that joblessness was even higher at 38.5 percent in the second quarter when using the expanded definition which includes people discouraged from actively looking for work.

Morné Malan, a senior researcher at the Solidarity Research Institute, said while the use of the narrow definition of unemployment was common practice around the world and recommended by the International Labour Organisation, it was inaccurate for South Africa.

“South Africa has an exceptionally large gap between the narrow definition of the unemployment rate and the expanded definition (and) we have a particularly low labour absorption rate (42.4 percent),” Malan said.

“A 2013 study at the University of KwaZulu-Natal indicates that so-called discouraged jobseekers, who are not counted as unemployed in the official rate, are in no way less likely to be employed than so-called active jobseekers,” he added.

Solidarity said a 38.5 percent unemployment rate demanded even greater action from government to tackle the challenges of structural unemployment.

“The government is causing the problem with counter-productive policies such as minimum wage, strict labour legislation, intensified enforcement of black economic empowerment, and many more,” he said.


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Originally appeared on iol.co.za on 01-08-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise. About the Author: African News Agency (ANA) Reporter. Feature image credit: Photo: File.

A quandary for employers: the unilateral changes to terms and conditions of employment

A quandary for employers: the unilateral changes to terms and conditions of employment

Business owners and managers, who comprise the ‘employer’ component of any workplace are often in the best position to make decisions to suit the profitability of the enterprise concerned. Employers may want to change business operations regularly to ensure growth and sustainability. In practice, organisational change goes against the grain of the terms and conditions of employment.

This article aims to explore the concept of “unilateral change to terms and conditions of employment” and will show that the recourse for employees and employers are less than clear.

Consider, for example, an employer who deems it operationally necessary to introduce a new night shift that will require existing employees to avail themselves accordingly. Whereas in the past employees only worked a dayshift for many years. In response to change, employers are generally met with fierce resistance. What is an employer left to do?

If an employer proceeds to unilaterally change the terms and conditions of employment, employees may undertake strike action in order to address their resistance to change. Employees who choose to strike, are protected by section 64 of the Labour Relations Act 66 of 1995. The Labour Relations Act makes the dismissal of employees who strike against the unilateral change to terms and conditions of employment automatically unfair. The Labour Court may impose a compensation order of twenty-four (24) months pay in respect of an automatically unfair dismissal.

An employer may also lock out employees who refuse to accept the change. However, an employer may not dismiss employees for their refusal to accept the unilateral change. This has been construed by the courts to be an automatically unfair dismissal.

If an employer can demonstrate that the proposed unilateral change to terms and conditions of employment are necessary to the operational requirements of a business, then the employer may embark on a retrenchment exercise in terms of section 189 of the Labour Relations Act, provided that all the criteria implicit in section 189 are satisfied.

If employees are aggrieved by their retrenchments and depending on the size of the concern, the employees may have recourse at the CCMA, bargaining councils or the Labour Court. Lastly, if employees accept the proposed changes, but refuse to comply, this is treated as misconduct, which may lead to a dismissal. Dismissals are normally challenged at the CCMA or bargaining councils.

As is evident, changing the terms and conditions of employment contracts are fraught with complexities. The consistent idea of avoiding these difficulties is to engage thoroughly, through consultation with the affected employees. Employers must beware, that if unilateral changes to the terms and conditions of employment are not approached with caution, this may have a crippling effect on business and potential risk in terms of a strike, or cases in the CCMA or Labour Court.

Article by: Shakti Jainarain – Senior Dispute Resolution Official – Durban



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Originally appeared on ceosa.org.za on 19-07-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

Essential Services: A Restriction on an Employees’ constitutional right to Strike

Essential Services: A Restriction on an Employees’ constitutional right to Strike

Section 23(2)(c) of the Constitution of the Republic of South Africa, 108 of 1996 (the Constitution) gives all workers in South Africa a right to go on strike, this right is further entrenched in section 64 of the Labour Relations Act, 66 of 1995 (the LRA) as amended. The question that arises now is, is the right to strike absolute and therefore, cannot be limited? The answer is no, in fact, all rights contained in the Bill of Rights may be limited.

Section 36 of the constitution (the limitation clause) states that the rights contained in the Bill of Rights may be limited by law of general application if it is reasonable and justifiable in an open and democratic society. Therefore, a workers’ constitutional right to go on strike is not absolute and may be limited in certain instances.

One of these instances is the Labour Relations Act, 66 of 1995 (the LRA) as amended. Section 65(1)(d)(i) states that no person may take part in a strike if that person is engaged in an essential service.

Section 213 of the LRA defines ‘essential services’ as ‘a service, the interruption of which endangers the life, personal safety or health of the whole or any part of the population’.

Therefore, employees working in a sector that is deemed an essential service may not go on strike or engage in any strike action.

However, who determines which service is an essential service?

Section 70-74 of the LRA has established a forum known as the Essential Services Committee (the ESC) who have been tasked with determining, inter alia, whether the whole or part of a service is an essential service, after conducting an investigation into whether or not such a designation should be made. In terms of section 73, any party (employer or employee) may refer a dispute to the ESC for determination.

So now that an essential services employee is not allowed to strike, what recourses do they have?

Section 72 provides that the parties may negotiate and enter into a minimum service agreement which can regulate the minimum level of service to be provided by workers in an essential service, only if this agreement is concluded can employees engage in strike action.

If there is no minimum service agreement in place, section 74 of the LRA provides a dispute resolution mechanism for employees who are not allowed to strike. In terms of this section, an employee may refer a dispute (such as wages) to the relevant Bargaining Council or the CCMA for resolution.

Therefore, we can conclude that an employees’ right to strike may be limited in certain instances.

Article by: Cathryn GungadeenDispute Resolution Official – Durban



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Originally appeared on ceosa.org.za on 11-07-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

An employee’s entitlement to Severance pay

An employee’s entitlement to Severance pay

The question of whether an employee is entitled to severance pay usually arises once a retrenchment has been concluded and there is a dispute referred to the CCMA or a Bargaining Council. An arbitrator dealing with this dispute may only decide whether the employee is entitled to the severance pay, which is a statutory entitlement.

Employers must comply with section 41 of the Basic Conditions of Employment Act (hereinafter referred to as the BCEA).  Section 41(2) of the BCEA states the following:

“An employer must pay an employee who is dismissed for reasons based on operational requirements or whose contract of employment terminates or is terminated in terms of section 38 of the Insolvency Act, severance pay equal to at least one weeks remuneration for each completed continuous year of service to the employer as calculated in terms of section 35.”

Should the employer be a member of a Bargaining Council, then certain Main Agreements to the Council will stipulate the severance package payable.

If during the retrenchment consultation process parties agree to a severance package that is more favourable than the minimum referred to above, this agreement will supersede the statutory minimum.

There are various limitations on the right to severance pay, which include but are not limited to the following:

  1. Where an employee has a significant break in service (more than 12 months), that employee will not be entitled to severance pay for the years preceding the break in service;
  2. An employee working on a fixed term contract shorter than 24 months will not be entitled to severance pay. However, the employer will be liable to pay the employee one week’s wage for each continuous year of service when the contract exceeds 24 months;
  3. An employee is not entitled to severance pay for the period that he/she worked as an independent contractor for the employer;
  4. Employees are only entitled to severance pay if they are dismissed due to operational requirements. Dismissals related to misconduct or poor work performance etc. will not qualify for severance pay;
  5. When an employee unreasonably refuses alternative employment with the retrenching employer or any other employer, that employee is not entitled severance pay;
  6. If there is a transfer of business in terms of section 197 of the Labour Relations Act and the employees are taken on as a going concern. Therefore, the employees’ continuity of service will not be interrupted, and these employees cannot claim severance pay;
  7. Employees who reach the age of retirement are not entitled to severance pay if they are requested to retire at that age. Nor are they entitled to severance pay should they be allowed to work beyond their retirement age.

An employer, therefore, bears the onus of proving that one of the aforementioned limitations exists to be absolved of the liability to pay an employee severance pay.

Article by: Jamie Moodley – Dispute Resolution Official – Durban



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Originally appeared on ceosa.org.za on 27-06-2019. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

Sick Leave And Valid Medical Certificates

Sick Leave And Valid Medical Certificates

Socio-economic circumstances in South Africa deny the greater population access to private medical practitioners. The result is that people are reliant on clinics for medical attention where the employee is provided with a medical certificate which is, more often than not, signed by the clinic nurse. This poses an exceedingly frequent question amongst employers i.e. what constitutes a valid medical certificate for purposes of sick leave?

In terms of section 23(1) of the Basic Conditions of Employment Act, an employer may grant paid sick leave where an employee has been absent for more than two (2) consecutive days or on more than two occasions in an eight (8) week period if the employee produces a medical certificate stating that the employee was unable to work for the duration of the employee’s absence on account of sickness or injury.


Subsequently, it is an inherent requirement that the medical practitioner indicates the following on the medical certificate:
1)    That the employee was unable to perform his/her duties as a result of sickness or injury; and
2)    That his diagnosis is based on his professional opinion.


Section 23(2) of the Basic Conditions of Employment Act further states that a valid medical certificate must:
1)    Be issued and signed by a medical practitioner; or
2)    any  other person who is certified to diagnose and treat patients; and
3)    who is registered with a professional council established by an Act of Parliament.


Therefore, it is necessary to establish whether the person who issued the medical certificate is either a medical practitioner in terms of the Act, a person certified to diagnose and treat patients, or a person registered with a professional council. The aforementioned requirement at this stage is still extremely vague to most employers. To clarify the issue, one has to look as to who the Act describes as a medical practitioner.
A medical practitioner, under the definitions of the Basic Conditions of Employment Act, means a person entitled to practise as a medical practitioner in terms of section 17 of the Medical, Dental and Supplementary Health Services Act 1974 (Act No. 56 1974), better known as the Health Professions Act.


The following medical practitioners may issue medical certificates under the Act:
1)    A doctor in possession of an MBChB degree who is registered with the Health Professions Council of South Africa;
2)    A dentist who is registered with the Health Professions Council of South Africa;
3)    A psychologist in possession of a master’s degree in research, counselling or clinical psychology who is registered with the Health Professions Council of South Africa;
4)    Any other medical practitioner registered with the Health Professions Council of South Africa.
It is clear from the aforementioned that a doctor, a dentist and a psychologist qualify as a medical practitioner in terms of legislation, however, the door is left wide open for any other medical practitioners who are registered with the Health Professions Council of South Africa.


Section 17(2) of the Health Professions Act provides that any person desirable to register as a medical practitioner in terms of the Act shall apply to the registrar of the council.  Section 17(3) of the Health Professions Act grants the registrar authority, upon receipt of the applicant’s qualifications and other documents, to issue the applicant a registration certificate authorising the applicant to practice the profession in which he/she applied for, if the registrar is satisfied that the applicant has satisfied the requirements.
Employers often find employees who have been absent for a certain period, who upon their return provide a note from the clinic, which merely states that the employee visited the clinic on a specific day.  As mentioned earlier, employers are unsure as to whether these certificates are valid for purposes of sick leave.


In summary, the first step to assess the validity of the medical certificate is to establish whether the person who issued or signed the certificate is a medical practitioner or not. As discussed above, such a person would be a doctor, a dentist or a psychologist. If the certificate was issued by a person other than the aforementioned, it is imperative that the certificate indicates that the person is indeed registered as a medical practitioner in terms of the Health Professions Act. The medical certificate should also indicate such a person’s practice number.
The second step to verify the validity of the medical certificate is to establish whether the certificate indicates that the employee was unable to perform his/her duties as a result of the sickness or injury.  The diagnosis of the medical practitioner should, as mentioned earlier, be based on his professional opinion and not on the information provided by the patient/employee.
Medical certificates that comply with the abovementioned requirements will only then be deemed valid and employers may then grant paid sick leave as contemplated in section 22 of the Basic Conditions of Employment Act.

Article by: Jaundré Kruger – Regional manager of CEO in the Free State
J A KRUGER, LLB (UFS), COMPLETED HIS ARTICLES AT SYMINGTON & DE KOK ATTORNEYS IN BLOEMFONTEIN, ADMITTED ATTORNEY OF THE HIGH COURT OF SOUTH AFRICA, SIX YEARS EXPERIENCE IN THE FIELD OF LABOUR LAW.


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Originally appeared on ceosa.org.za on 08-07-2015. The views expressed herein are those of the author and do not necessarily reflect those of estome. estome accepts no responsibility for the accuracy, completeness or fairness of the article, nor does the information contained herein constitute advice, legal or otherwise.

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