COVID-19: BUSINESS UNUSUAL: ALERT LEVEL 4

7 weeks into the unprecedented decision to declare a national state of disaster to curb the spread of Covid-19, the frustration of businesses and ordinary people are beginning to set in. Whilst most people welcome the lock down and understand that it is necessary to curb the spread of Covid-19, the move to Alert Level 4 has been frustrating and confusing. Not everyone agrees with the government’s approach and its methodology in determining how to reopen the economy and social life. Whatever the disagreements may be, it would not be controversial to say that the commonly held view is that Covid-19 still represents an imminent danger to everyone and the crisis remains present.

The President has told us that for the foreseeable future, Covid-19 will remain a part of our daily existence. This is also the shared view expressed by the WHO. The prevailing view of the South African government is that the country should “err on the side of caution rather than pay a devastating price for the lapse in judgement”. The risk adjusted strategy adopted by government, reflects this cautious line. This approach, at its core, entails weighing the benefits of reopening the country immediately and fully versus the prejudice and risk that the Covid-19 spread would overwhelm the public and private health systems which could effectively lead to a complete collapse of the health system and to more loss of life resultant from the inability by the health system to cope with the fast increasing numbers of patients.  In short, the view adopted by the President seems to be that the economy can be rebuilt, and businesses will rise again, but the lives lost will forever be lost.

And so, Alert Level 4 permissions and restrictions were introduced. In our previous circular 3 we briefly introduced some of what Alert Level 4 means for employers. Since the introduction of Alert Level 4, three further critical regulations have been published to better define the permissions and restrictions under Alert Level 4.

But firstly, on 13 May 2020, the President addressed the nation on the Alert Level 4 lockdown in what can be described as an attempt to offer comfort and some reassurance on the government’s stance amid an outcry that Alert Level 4 was still too restrictive and some of the regulations seemed non-sensical and irrational.

In respect of the way forward, the President stated:

“We are now preparing for a further easing of the lockdown and a gradual opening of the economy.”

“We will immediately begin a process of consultation with relevant stakeholders on a proposal that by the end of May, most of the country be placed on alert level 3, but that those parts of the country with the highest rates of infection remain on level 4”

In essence, there were two main points to the President’s address.

Firstly, that come end May 2020, those metropolitans, municipalities and districts with a higher infection rate will remain on Alert Level 4 (or escalate to Alert Level 5) and will not be able to exercise the activities permissible under Alert Level 3 (still being consulted on and drafted).

Secondly, and importantly for businesses, government is implementing changes the Alert Level 4 regulations and is expanding the list of permitted business activities.

In line with this assurance by the President and a day before his speech as well as after his speech, regulations were published to ease Alert Level 4 restrictions in some economic sectors.

Whilst many people were critical of the president’s speech, as it offered little information on government’s response going forward, his words were clearly intended to offer some comfort and assurance that government is doing its best in dealing with Covid-19.

REGULATIONS REGARDING THE SALE OF CLOTHING, FOOTWEAR AND BEDDING

When these regulations were published, there was much consternation about which items could be sold and why only those items. For example, some people could not understand why the regulation would list T-shirts as an item which may be sold by retailers, but only if it is used as “undergarments for warmth”, or list crop bottoms for sale provided it is “worn with boots or leggings”.  There were complaints that the regulation was irrational and nonsensical. At first blush, and listening only to the blurbs, it certainly seemed so.

However, the difficulty with these interpretations, making its way around the News and social media, is that it does not necessarily accord with the actual regulations. Firstly, the regulations were the result of consultations with the retail clothing industry and, in particular, the National Clothing Retail Federation representing some of the largest clothing retailers in South Africa. Secondly, the regulations are directed at retailers and not the public. Thirdly, these regulations have to be read with Part E of Table 1 of the Risk Adjusted Strategy Regulations published on 29 April 2020 (RASR), as it is intended to supplement those regulations.  Fourthly, the purpose of this clothing, footwear and bedding regulation is to provide direction on the type of clothing, footwear and bedding which may be sold by retailers during Alert Level 4. In other words, the regulation prescribes what types of clothing, footwear and bedding may be sold by retailers. It does not prescribe how the public must dress.

So, what is the purpose of government indicating in the regulations that certain types of clothing may be sold based on how it is displayed and promoted for sale? The reason for the inclusion of these words, we would suggest, seems to be nothing more than descriptive. The attempt seems to be to describe the type or styles of clothing, from the many types and styles available, based on how it is generally worn.

So, a retailer may sell “short sleeved knit tops, where promoted and displayed as worn under cardigans and knitwear” and it may sell “short sleeved t-shirts, where promoted and displayed as under garments for warmth”; and it may also sell “shirts, either short- or long-sleeved, where displayed and promoted to be worn under jackets coats and/or knitwear”.

There is nothing in the regulations that remotely suggests how the public, once these items are purchased, are required to wear it.

Of course, the regulations, as some people rightly point out, do not include all the types of clothing, footwear or bedding that people would want to purchase. However, in line with the cautious approach adopted by government, the rationale for this limited list of items seems to be— buy what you need, not what you want.

More information can be found on the department’s website: http://www.thedtic.gov.za/covid-19/

REGULATIONS REGARDING THE SALE OF CARS AND EMERGENCY AUTOMOBILE REPAIRS

Finally, some level of car sales and repairs may be performed. However, this is limited to the following activities:

• Trade in new and used cars;
• Wholesale trade of new and used cars by OEMs and importers;
• Export and import of all category of cars through national ports of entry, under strict guidelines; and
• Trade-in purchases, car lease scheme returns and wholesale trading of used cars.

These regulations are intended to supplement and must be read with Part H.6 and Part L of Table 1 of the Risk Adjusted Strategy Regulations.

Car Show Rooms and Delivery

Car dealerships will not be able to open at full capacity and this will be staggered in three phases.

Phase 1 which commenced on 12 May 2020, will allow 30% staff capacity and a limited number of customers. Viewing at the show room and test drives are only allowed by appointment.  This means that dealerships and used car outlets must ensure that the premises are Covid-19 ready for both staff and customers, prior to opening. It also means that Covid-19 readiness steps must also be in place to ensure that vehicles (interior and exterior) are continuously sanitised. Most sales must be online, including car auctions, or remote sales (prior viewing permitted under strict Covid-19 readiness measures). The dealerships and used car outlets are also required to arrange for delivery to the customer’s home and to fully sanitise the vehicle before delivery.

Phase 2 permits 60% staff capacity. However, there is no indication when phase 2 will start. Customers will not need to make appoints to visit the show room, but they will have to make appointments to test drive any vehicle. Only a limited number of customers will be allowed at the premises. On-site collection of vehicles will be permitted in addition to home deliveries. Online and remote sales will continue as per phase 1. As with phase 1, Covid-19 readiness steps remain paramount for show rooms and vehicles.

Phase 3 is intended to commence on 8 June 2020, until Alert Level 4 is lifted.  Dealerships and used car outlets can operation at 100% capacity. There is no limit on the number of customers at the premises. On-site collection of vehicles is still permitted in addition to home deliveries. In addition to online auctions that are permitted under phases 1 and 2, customers will be allowed to attend auction houses for bidding, but social distancing rules remain applicable. As with phases 1 and 2, Covid-19 readiness steps remain paramount.

Covid-19 Readiness for Dealerships and Used Car Outlets

The Covid-19 readiness, health and safety requirements must be implemented, including but not limited to:

• Sanitisation procedures at all sites will be strictly applied to ensure that all work surfaces, equipment and cars on the floor are disinfected before the dealership is opened, and regularly cleaned during the working period;
• maintaining social distancing protocols at all times;
• ensuring that all staff and customers wear a cloth face mask or a home-made item that covers the nose and mouth and not allowing any customer access to a dealership, used car outlet or auction without a face mask;
• not allowing an employee who is sick or who has COVID-19 symptoms to work;
• mandatory screening of all employees when they arrive for work on a daily basis;
• mandatory signing of a register by all visitors and customers to all sites; and
• not permitting children access to dealerships and used car outlets under Alert Level 4.

The regulations prescribe the above as some of the measures to take. However, depending on the dealership or used car outlet, other measures should also be considered. For more information of Covid-19 readiness go to: http://www.health.gov.za/index.php/outbreaks/145-corona-virus-outbreak/465-corona-virus-outbreak

Support and Enablement Services for Vehicle Sales

Certain support services will be open for vehicle sales. These are:

• Car testing centres;
• Homologation services from the National Regulator for Compulsory Specifications [NRCS];
• Weigh bridges;
• Logistics for the wholesale distribution of cars across South Africa, subject to the following:
  • movement of cars under own power to be permitted from Port of arrival to an approved storage facility, provided vehicles moved do not exceed batches of 10 at a time;
  • new cars to be driven between dealerships within the same province where a car is required for sale only; and
  • movement of cars to be permitted to service outlets required to complete the repair of the car where unable to perform the work at the dealership, but excluding the fitment of accessories.

These operations will also need to be Covid-19 ready, both for staff and customers.

Emergency Repairs

Vehicle repairs are allowed only if it is emergency repairs and it is:

• repairs on essential services cars, or on the cars of persons performing essential services;
• repairs required to restore a car’s safety and roadworthiness to good running condition; and
• routine servicing of cars that is due or overdue in terms of the manufacturer’s recommended service intervals.

Repairs that are not regarded as emergency repairs, are the following:

• cosmetic repairs, such as minor scratches and dents or cosmetic enhancements;
• voluntary or routine servicing that is not overdue in terms of manufacturer’s service intervals; and
• warranty campaigns of a cosmetic nature unless warranty is due to expire within 30 days of the intended repair date.

All emergency repairs are by appointment only, unless there are exceptional and emergency circumstances for the workshop to accept unsolicited walk-in customers. What constitutes exceptional and emergency circumstances is not defined in the regulations, and, in our view, this would have to be determined at the discretion of the person in charge of the premises on a case by case basis.

In addition, no members of the public will be permitted in the workshop. Vehicle owners must repair their vehicles within their municipal boundaries, unless there are extraordinary circumstances why they cannot do so.

Aftersales car servicing and parts sales are also allowed to operate to support regular services and maintenance of cars under Alert Level 4 and to avoid or minimize any mechanical breakdown that might result in permanent damage, given continued car usage and mileage increases during the extended lockdown by ensuring the provision of the necessary parts. As these aftersales premises are open to the public, the premises must be Covid-19 ready. This applies specifically, but not only, to the following:

• Auto electricians;
• tyre fitment, windscreen replacement centres;
• bond stores and parts distribution centres;
• motor body repairers; and
• any other related business that can attend to the mentioned repairs.

Workforce levels for aftersales businesses are also phased in from 30% to 60% to 100% as per the requirements for car dealerships.  The only exception is bond stores and parts distribution centres, which will phase in starting at 50% capacity. Phases 2 and 3 workforce capacity increases is, unfortunately, unclear for bond stores and parts distribution centres in the regulations. Based on the wording of the regulation, it seems to suggest that phase 2 will be 60% and thereafter 100%.

More information can be found on the department’s website: http://www.thedtic.gov.za/covid-19/

REGULATIONS IN ORDER TO ASSIST MICRO AND SMALL BUSINESSES TRADING IN PERMITTED SERVICES

These directions are applicable to micro and small businesses trading in permitted services. The permitted businesses to which these regulations apply are the following:

• small scale bakeries and confectioneries;
• small scale hardware stores;
• informal restaurants and shisanyamas for home deliveries only;
• trades, herein referred to as artisanry businesses, necessary for rendering emergency repair work, including plumbers, electricians, locksmiths, glaziers, roof repair work, tow trucks, vehicle recovery and automobile repairs (motor mechanics), including small-scale vehicle services centres/workshops, small -scale motor body repair shops, and fitment centres;
• Sole traders within the clothing and textiles and confectionery business; and
• Cooperatives operating under permitted businesses in line with the Regulations.

In terms of these regulations, all informal and formal small businesses must:

• Ensure the workplace is Covid-19 ready and implement the OHS measures, as required by the Department of Employment and Labour;
• Not allow any person onto the premises if they are not wearing a cloth face mask or similar item to cover their face and nose; and
• Ensure that it provides to all customer facing employees a cloth face mask or similar item to cover their face and nose. The regulation does not state who pays the cost for the cloth face mask or similar item. However, the Covid-19 ready OHS regulations does state that the employer must provide employees with at least 2 cloth face masks free of charge.

Employers are also encouraged, but not required, to provide transport for employees to and from their homes.

All small business must have a business licence or trading permit and if they do not have one, they must obtain a temporary permit or licence. In addition, small businesses must have a permit to perform essential or permitted activities.

More information can be found on the department’s website: http://www.dsbd.gov.za/wp-content/uploads/2020/05/43306_12-5_SmallBusinessDev.pdf

REGULATIONS REGARDING E-COMMERCE SALES

Finally, online shopping has been expanded and businesses may sell anything other than alcohol related products and tobacco related products. The regulations also contain three types of protocols, i.e. for e-commerce retailers, for courier companies/delivery services and for customers.

Some key points for e-commerce retailers include:

• E-commerce facilities must be Covid-19 ready;
• E-commerce retailers must give prominence to those goods which are manufactured in the Republic of South Africa;
• Retailers must provide for as many payment options as possible for consumers, that are based on reducing risks of transmission, and enabling poorer consumers to access delivery services;
• When packaging goods, retailers must provide written guidelines for customers on how to safely disinfect their goods before use;
• There must be adequate social distancing protocols in place for collections by courier or delivery service from the warehouse or depot; and
• All goods must be sanitised before leaving the warehouse or depot.

Some key points for courier companies/delivery services include:

• Facilities must be Covid-19 ready;
• Courier and delivery personnel must have their own hand sanitiser and disinfectant wipes;
• Cloth face masks must be worn when delivering packages;
• Social distancing protocols must always be followed ; and
• Courier and delivery service personnel may not enter the home of a customer if such customer and any other residents within the immediate vicinity are not wearing cloth face mask or similar item.

Some key points for customers include:

• Wear a cloth face mask or similar item when receiving delivery;
• Maintain social distancing protocols; and
• Disinfect goods/packages.

More information can be found on the department’s website: http://www.thedtic.gov.za/covid-19/

In our forthcoming article we will be addressing the requirements of a Covid-19 ready workplace.

As with many countries, this is South Africa’s first experience since the Spanish Flu in dealing with such a pandemic. As the President stated, government did many things wrong in learning how to manage this pandemic, but we must not forget that government and South Africa as a whole also got many more things right.

Undoubtedly, the lockdown has dealt a serious blow to the South African economy and hopefully as we move forward into June 2020, the easing of restrictions to Alert Level 3 will allow more businesses to open and more employees to return to work.

For now, we remain on Alert Level 4. Consultations with stakeholders on advancing to level 3 has already begun. The phased re-opening of the country means that employers will continue to rely on government and private assistance to retain staff and remain operational for the foreseeable future. These extraordinary circumstances have already begun reshaping the world of work and requires employers to do “business unusual” in the manner in which employers adapt to these changes and find ways and means to survive.

For more information on Covid-19 visit: https://sacoronavirus.co.za/

 

THE CONTENTS OF THIS ARTICLE ARE FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE. FOR LEGAL ADVICE PLEASE CONTACT OUR OFFICES.