News in South Africa 17th September:

1. Mandatory vaccination discussion:

Discussions between representatives of business, government, labour and communities will start in a few weeks on how to introduce vaccine mandates for all workers. A framework might be created that will help employers to isolate unvaccinated workers from the workplace, possibly either firing them or submitting them to weekly Covid-19 testing at their own cost.

Mandatory vaccination discussion
Image taken by: cottonbro

Big business is weighing up whether to mandate Covid-19 vaccines for all workers and fire those who refuse to comply, as part of a plan designed to drive up vaccination numbers in SA, curb the rapid spread of the Delta variant and thwart future waves of infections. 

Business for South Africa (B4SA), which is made up of Business Unity SA and the Black Business Council and was formed to respond to the Covid-19 crisis, has, in principle, thrown its weight behind the introduction of vaccine mandates in SA.

B4SA chair Martin Kingston said big business has agreed to start “substantive” discussions about how a framework for vaccine mandates can be created and rolled out in a coordinated manner to target unvaccinated workers. 

The framework might include steps that employers can take to isolate unvaccinated workers from the workplace, possibly firing them, or submitting them to weekly Covid-19 testing, an expense that they would have to pay out of their pocket. The discussions over the framework will involve business, labour, government and community representatives at formal negotiation structures such as the National Economic Development and Labour Council (Nedlac). 

Kingston said B4SA and big business are worried about SA’s low vaccination rate – with less than 20% of the adult population fully vaccinated – adding that there is a need to increase the daily rate of vaccinations “dramatically and urgently” before the onset of the fourth wave of Covid-19 infections, which might hit SA as early as mid-November.

Employers who want to implement mandatory vaccinations at their workplaces should conduct a risk assessment and take the constitutional rights of employees into account.

This is according to Jose Jorge, a director and sector head at Cliffe Dekker Hofmeyr, who was speaking at the company’s annual employment law webinar on Thursday.

In June, labour minister Thulas Nxesi issued a directive regarding vaccination in the workplace. He said employers should find a “reasonable resolution that accommodates all parties where employees refuse to be vaccinated for medical and constitutional grounds”.

“The key principle of these guidelines is that employers and employees should treat each other with mutual respect. A premium is placed on public health imperatives, the constitutional rights of employees and the efficient operation of the employer’s business,” the communication reads.

Jorge said: “We are sitting with a number of our clients who intend to implement mandatory vaccination. As an employer, you have to conduct a risk assessment and decide if you are going to make vaccination mandatory.”

2. SARS focusing on the wealthy:

The South African Revenue Service (SARS) has established a ‘high net worth division’, focusing on South Africa’s wealthiest taxpayers and ensuring they fully comply with the country’s tax laws.

However, a new survey by professional services firm PwC shows that the many of country’s biggest taxpayers believe the unit is unlikely to make much of a dent in closing the country’s tax gap, and that the increased targeting could be the final push for many wealthy taxpayers to instead take their money out of South Africa.

The survey considers corporate taxpayers’ experiences with the South African Revenue Service (SARS) over the last year. A total of 159 companies participated in this year’s survey, with much of the focus on the leadership of SARS under commissioner Edward Kieswetter and whether the revenue collector has improved its services.

Around half the respondents (47%) said that the new high net worth unit would assist in closing the tax gap, while 36% said it wouldn’t. 16% of respondents indicated that they believed that the unit would ‘somewhat’ assist.

The respondents noted that although some high net worth individuals are out to avoid or evade tax, SARS can’t rely on only a small percentage of taxpayers to close the tax gap, PwC said.

“Taxpayers believe that we need to retain the few high net worth individuals we have in South Africa and incentivise them to invest in the country.

“At the same time, SARS must ensure that they are not driving people out of the country. SARS also needs to increase the number of taxpayers at the bottom end.”

The respondents said that SARS should also widen the tax net and assist entrepreneurs – and that basic tax principles should be taught in schools.

3. Focus returns to Zuma’s parole:

Three organisations have launched a court bid to obtain the reasons for former president Jacob Zuma’s release on medical parole and have that decision set aside.

The DA, AfriForum and the Helen Suzman Foundation have filed papers in the High Court in Pretoria to review Zuma’s release.

This after the Correctional Services National Commissioner Arthur Fraser admitted in an interview he released Zuma despite a report advising otherwise.

Fraser has declined to respond to the organisations, while the court is expected to set down a date at the end of next month for the hearing.

Zuma, meanwhile, will hear the verdict in his court bid to have his prison sentence rescinded today.

The Jacob Zuma Foundation is hopeful the Constitutional Court will set aside the former president’s 15-month jail sentence. The foundation has pinned its hopes on the outcome of the rescission application at the Constitutional Court, which is expected to be handed down on Friday.

Zuma’s legal team approached the apex court to have his 15-month prison term for contempt of court rescinded, arguing that the sentence was an infringement on his right to a fair trial.

The long-awaited judgment on Zuma’s rescission application, which was filed in July as a last-minute bid to avert the jailing of the former president, will be handed down on Friday morning.

Among a host of reasons provided by Zuma’s legal team on the application is that he had been jailed without a trial.

Zuma’s lawyers also argued that a litany of international laws were violated.

4. Provident fund changes:

New tax rules on the annuitisation of provident funds and lump-sum payouts made at retirement took effect on March 1, 2021.

Fund members should be aware of additional implications for approved lump-sum disability benefits.

On retirement, members of these funds who were under age 55 on this date (known as T-day) may still take amounts which accrued prior to March 1 2021, plus the fund return, in cash. Members over age 55 on T-day will have access to all amounts in the fund in cash when retiring from that fund. This is referred to as ‘vested benefits’ as opposed to ‘non-vested benefits’ where annuitisation rules apply to amounts above R247 500.

Approved lump-sum disability benefits paid by a pension fund

The approved (provided by the fund) lump-sum disability benefit in a pension fund was previously included as part of the fund benefit. It was normally treated in its totality as an ill-health early retirement benefit from the fund. The cash amount was limited to a maximum of one-third of the benefit, while the balance was used to buy a pension.

Approved lump-sum disability benefits from provident funds

Those under the age of 55 will have the same limitations on their lump-sum disability benefit and how this is treated in terms of annuitisation as applies to pension funds.

  • Members over age 55 on March 1, 2021

The lump-sum disability benefit will be part of the vested benefits in the provident fund of which the member had membership on T-day. This means that the member can receive this payment in cash, after tax.

But if the member transfers to a new fund after T-day, and is then disabled, any lump-sum disability benefit paid out of the new fund will be a non-vested benefit. This means that annuitisation rules will now apply.

  • Lump-sum disability benefits under 55

Only amounts which have accrued before T-day fall into vested benefits. If a member is disabled after T-day, the lump-sum disability benefit payable will not fall into the vested benefits. The payment will be treated as a non-vested benefit. This means that the annuitisation rules, where the total benefit exceeds R247 500, will now apply to the lump-sum disability benefit.

Various stakeholders in the industry introduced and agreed upon reform as it became evident that current regulations were failing the member. Almost 50% of members retire on less than one-third of their final average salary, which renders a large part of people poor and dependent on the state. This is unsustainable and needs to change.

5. Risk of no gifts for Christmas:

Christmas is coming. Probably. Things being what they are, there is a chance – small, but not zero – that it will be cancelled.

There is a somewhat bigger chance that pandemic-induced trouble at ports and factories across the world could affect what makes it onto South African shelves, in a way that makes the 99 days left until Christmas (as of Friday) not very long at all.

So now is an excellent time to get shopping, or to start managing expectations.

South African retailers went through a period of intense worry earlier this year, not least of all when SA ports were closed first by unrest, then by IT trouble, at what is traditionally an early part of the buildup to Black Friday and festive season stock levels. As those local logistical troubles subsided, so did the concerns of the biggest retailers, to a “so far so good” level of stress.

But a combination of factors has left supply chains so precariously balanced that there is a real risk of global shortages in specific lines of toys and consumer electronics, and potential for trouble in large appliances too.

That is leading to forecasts of narrower lines of discounted goods on Black Friday sales and, if not very much more goes wrong, some categories of shelves being empty come November and December.

At that point, consumers may have to adopt the stance some retailers are already adopting: if you can’t get what you want, take the best you can get.

The trouble is all rooted in the pandemic, though the exact way it is expressed differs between the categories of goods affected. 

In some instances, the way the pandemic has changed behaviour has directly caused shortages, such as when a South African company had trouble finding enough spare parts for bicycles after people in the UK took up cycling in droves. 

In other cases, the problem is a little more convoluted, such as when an already looming shortage in computer chips was brought forward by a sudden surge in demand for gear to work from home, then combined with factory closures and competition between sectors to grab what supply could be had.

All information sourced from articles posted by: Daily Maverick, TimesLive, BusinessTech, ENCA, EWN, Moneyweb, and Business Insider.

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