Lockdown day 11 6 April 2020 - Lockdown day 11 7 April 2020 - Global Business Solutions
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Lockdown day 11
6 April 2020
Lockdown day 11
7 April 2020
2
3
Focus areas
Organisational New General
Statistics Q&A
responses developments information
4
Key statistics
5
Globally (7 April 2020)
6
https://coronastats.net/
South Africa (7 April 2020)
https://coronastats.net/
Economic-labour impact
Workforce
Context Business strategy management &
planning 8
What statistics and trends reveal?
The lockdown period and the The business impact from a
Businesses will be well advised to
recovery period is likely to be workforce perspective must be
design a “to-be” business model in
longer than expected and must be determined through a process of
the “new-normal” context so that
planned for accordingly. The induction and estimation based on
there is certainty as to what the
following slides showing the global key quantitative and qualitative
desired position is in 2021
and local situation bear this out. factors
9
The authentic leader – an agent of change
React Respond Transition Transform
The
The
The new
technical The cliff The come-back
normal
recession
Respond to immediate sustainability “To-be”
needs by optimizing “lock-down” status Transition towards - new policies, new terms of employment, new blended workforce business
Two Q’s
and starting/ continuing with operational models, new SLA’s, new skills sets, new technology
model
requirements restructuring
Design-thinkingReality sets in
12Reality sets in
13Now Woolworths
14And more to follow…
15What is the envisaged impact on your business? Variables.
❑ Sector
❑ Cash management and revenue forecasting
❑ Supply chain
❑ Remote work propensity
❑ Funding options
❑ Investor sentiment
❑ Staff demographic
❑ Workforce model (flexibility)
❑ Current terms of employment and remuneration
❑ Skills sets
❑ Technology
16Timeframe approach and managing expectations
buckets and merit-based responses
Timeframes envisaged – planning buckets Return to pre-covid-19 economic GDP | Unemployment impact Business revenue (& Fatalities
levels (12 months) cash flow impact)
High road 0% - 10% High road
27 March to 16 (20 to 59 yrs|60+)
11% - 20%
April 2020
-8% -5% 0,3% | 3,5%
21% - 30%
16 April to end of 31% - 40%
lockdown 2 or 30 Middle road Middle road
41% - 50% (20 to 59 yrs|60+)
May 2020 (earlier of)
-13% -9% 51% - 60% 1% | 8%
Yes, if lockdown is no more 61% - 70%
Above to than 5 weeks and there is
January 2021 progressive recovery Low road Low road
71% - 80%
(20 to 59 yrs|60+)
81% - 90%
Yes, if lockdown is for 3 months -20% -14%
January to and there is progressive
1,3% | 12,5%
90% - 100%
June 2021 recovery (June 2021) or slow
recovery (Dec 2021)
The new normal People % and
ROHCPhase 2: 17 April to 17 May 2020 Phase 3: 18 May to 18 June 2020 & beyond
High level
response trends
Measures Melt (soften) Smelt (refine and reduce) Refine and prepare - “new normal”
Government • UIF: TERS COVID-19 • As alongside • As alongside
• UIF: illness/Occ-acquired COVID-19/quarantine • CCMA – TERS (when available after lock-down) • CCMA – TERS (when available after lock-down)
• SARS: various tax relief and retirement fund contr. • Tap into additional concessions • Tap into additional concessions
• Business Support Initiatives • Prepare for life without the concessions as well
• Essential services optimisation when modelling the business and workforce
• Work from home optimisation
• NWNP baseline (both essential and non-essential)
Employment policies • Moratorium on recruitment • Exhaust all annual leave where possible (cash- • Re-set cost-accretive policies and introduce
and employment • Focused training and education only personal depending) streamlined best practice
contracts mastery, advocacy and technology (remote) • Suspend all costs related to human resources • Use learnings from the lock-down to introduce a
• Invoke annual leave rights (exhaust) except for those still working new normal workforce model
• Workforce segmentation • Fully implement workforce segmentation • Drive an appropriate mix between full-time, part-
(1) Jobs generating full ROI and paid at 100% (1) Jobs generating full ROI and paid at 100% time, FTC, TES, outsourced and human cloud
(2) Jobs generating partial ROI and paid (2) Jobs generating partial ROI and paid blended model
proportionally proportionally
(3) Jobs generating NO ROI and NWNP (3) Jobs generating NO ROI and NWNP
• Start looking at implementing above 3 scenarios • Consider remuneration cut-backs even for
• No increases and bonuses those working
• Possible deferred schemes
Labour law • Beneficial work arrangements (no overtime, • Basically implement a “suspension of • Re-set labour law agreements and arrangements to
compressed work weeks, leave in lieu for overtime employment” for workforce categories 1 and 1 comply with law in the most optimal way possible
etc) • NWNP broadly applied • Drive an appropriate mix between full-time, part-
• Plan for a s189A as appropriate • Start calculating impact of COVID-19 on age, time, FTC, TES, outsourced and human cloud
gender and identify s189A cost of blended model
retrenchments (cash requirements) • Start the full s189A
Other • Cut contractors and FTC’s • Re-set all appropriate policies and procedures Stakeholder engagement for sustainability and closeReview regularly Review regularly
Other
General pay cut for all (consistent)
Withhold retirement funding as per regulation requirements
No-work-no-pay/ unpaid leave
Pro-rate remuneration for less than full time worked
Tap into other UIF/COIDA claims (illness, occup-acquired COVID)
Apply for C19-TERS UIF claims
Annual leave optimization/advance additional annual leave
Fund full or part remuneration for limited period
Rationalise contractors and FTC employees
Employees required to work
Employees not required to work lesser hours
Employees required to work
Consider s189A notice to start process (unable to work remotely or just ❑ -20%
normal hours
before returning to post lock-down no business need (no ROI) ❑ -40%
❑ -60%
when concessions re NWNP expire ❑ -80%
and full remuneration costs kick in
again Workforce segmentation
COVID-19 impact starts 19Review regularly Review regularly
Other
General pay cut for all (consistent)
Withhold retirement funding as per regulation requirements
No-work-no-pay/ unpaid leave
Pro-rate remuneration for less than full time worked
Tap into other UIF/COIDA claims (illness, occup-acquired COVID)
Apply for C19-TERS UIF claims
Annual leave optimization/advance additional annual leave
Fund full or part remuneration for limited period
Rationalise contractors and FTC employees
Employees required to work
Employees not required to work lesser hours
Employees required to work
Consider s189A notice to start process (unable to work remotely or just ❑ -20%
normal hours
before returning to post lock-down no business need (no ROI) ❑ -40%
❑ -60%
when concessions re NWNP expire ❑ -80%
and full remuneration costs kick in
again Workforce segmentation
COVID-19 impact starts 20Important considerations ❑ For the period of the lockdown most employment terms are “suspended” and hence the baseline is that of no-work-no-pay ❑ During this period there is no legal requirement for consultation or negotiation and the employer needs to take justifiable steps to ensure a sustainable business and to try and mitigate prejudice on employees as a key part of this (hence, all the options listed in the previous slide and other options that have not been listed) are available and each business should determine the appropriate response on its own merits ❑ The employer must remember that at a point in time the lockdown will be lifted and then the contractual employment conditions are re-instated which means that any “concessions” to employers during the lockdown are revoked and employees return to their usual remuneration and benefits ❑ It is therefore essential that employers act authentically and fairly as relations need to resume post the lock-down ❑ Hence, given that most businesses will not exit the COVID-19 pandemic in the same form as they entered into it, the employer will be well-advised to design the new- normal and pursue s189 as best possible to mitigate further prejudice when the process of recovery begins by having a protracted consultation process from scratch.
Transition Measures Melt (soften) Smelt (refine and reduce) Refine and prepare - “new normal”
Transition
Measures Melt (soften) Smelt (refine and reduce) Refine and prepare - “new normal”
Human cloud
Temporary Direct employment:
Employment permanent; part-time;
Service (TES) FTC; casual (payroll)
Outsourced:
Procurement – invoice independent
for output contracting
Payroll – pay for input Automation;
and carries a 30% cost robotics; related
plusTransition
Measures Melt (soften) Smelt (refine and reduce) Refine and prepare - “new normal”
FRL Basic salary
Annual leave Sick leave
min (5,88%) (3,84%) (1,2%)
Statutory (15%)
UIF SDL COIDA
Benefits (15%)
(1%) (1%) (e.g.2%)
TCC
13th RA Other
(8,33%) (e.g.6%) (?)
Then consider other..Wage arbitrage
Potential Policy, Practice And Labour Relations Responses To Corona Virus Impact To Manage Risk And Drive Sustainability
Sick leave extension by paying 25% Family responsibility leave (BCEA)
High Appropriate EAP measures
less and extending sick leave by 25%
flexibility Nerve center, monitoring (enhanced)
Secondments and and evaluation Communication strategy and
transfers Freeze training platform
initiatives, unless online Travel
Regulated Unpaid
leave
Staggered lunch
(s14 BCEA) Fast twitch Moratorium on
recruitment
restrictions
Employment
practices and
flexibility
Averaging of hours
Take annual leave
(s12 BCEA)
FTC pay for hours worked only (for flex or
absenteeism requirements s9A BCEA) or
Suspend casual employees (-24 hours pm)
labour laws to of work (s12 BCEA) Compressed
appropriate labour
be leveraged working week (s11)
relations matters
for flexibility Overtime saving (s10 BCEA)
and reserve rights
Restructuring or (e.g. non-
lay-off (s189 LRA) dismissible
Occupationally
offences or
incapacity
Outsourcing (s197
LRA)
Low
Slow twitch matters)
directed
flexibility
Collective Individual agreement – addendum Consultation or as part of a procedure such as Employer
agreement to employment contract incapacity or operational requirements discretion
Levels of employee engagement required
Employment Statutory
26
practices optionsDesign-thinking, designing the “new norm” ❑ Start on a clean slate How might we: ❑ Agnostic to current or past • Design the workforce model ❑ Client and human-centric • Introduce processes ❑ Not problem to solution • Contract more effectively ❑ Multiple stakeholders • Manage cash ❑ First connect and then task • Harness technology
New developments
2829
30
31
32
33
35
C-19 TERS Benefit - information
36C-19 TERS Benefit - information
37General
3839
40
Remember the COVID-19 finance relief application
41QUICK GUIDE TO
BUSINESS RELIEF MEASURES
COVID-19 TOOLKIT SERIES
42Background In addition to the Temporary Employer-Employee Relief Scheme (TERS), National Disaster Fund (Covid-19) and Unemployment Insurance Fund benefits (National Disaster Benefit and other UIF benefits) which we cover in separate booklets in this series, there are some other key support measures for business who have been impacted by the coronavirus pandemic. These include: • SMME SA: The Department of Small Business Development made R 500 million available to distressed SMEs • IDC: The Industrial Development Corporation together with the Department of Trade, Industry and Competition has committed R3Billion to a range of funding products in support of business to address vulnerable firms and for companies critical to fight the virus and its economic impact • Solidarity Response Fund: This Fund was set up to help deal with the fallout of the coronavirus and measures to slow its spread. Individuals and businesses are invited to contribute to this fund • Tourism Relief Funding: The Department of Tourism has made an additional R200 million available to assist SMEs in the tourism and hospitality sector who are under particular stress due to the lockdown and travel restrictions • Banking sector: The Department of Trade and Industry has passed new regulations in the banking sector providing for exemptions which will assist small businesses, consumers and firms in distress • Possible temporary reductions: Possible temporary reductions of employer and employee contributions to the Unemployment Insurance Fund and possible temporary reduction of employer contributions to the Skill Development Fund may be implemented • Tax subsidy: A new tax subsidy of up to R500 per month for the next four months for employees earning below R 6 500 per month • Employment tax incentive: SARS to accelerate the employment tax incentive reimbursement from twice per year to monthly • PAYE & Provisional corporate income tax: Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their PAYE liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months
COVID-19 LOCKDOWN: ACCESSING BUSINESS SUPPORT INITIATIVES
SMME SA
The Department of Small Business Development
made R500million available to distressed SMEs. For more information, visit
Small and medium-sized businesses that require help http://www.smmesa.gov.za/
during the coronavirus crisis can apply for assistance on
their website.
Debt Relief Fund Business Growth/Resilience Facility
All small, micro and medium enterprises (SMMEs) may apply for relief on
Specifically created to enable continued participation of SMMEs in supply
existing debts and payments.
value-chains – particularly those small businesses which manufacture
In order to be eligible, all applicants will be required to show an impact, or locally or supply items which are in demand due to the pandemic.
potential impact, of the virus on their business.
This facility will offer working capital, stock, bridging finance, order finance
This facility will also assist entities to acquire raw material, pay labour and
and equipment finance, and the amount provided will be based on the
operational costs.
funding needs of the business
All these interventions will be structured to match the patterns of the
SMME’s cash flows, as well as the extent of the impact suffered.COVID-19 LOCKDOWN: ACCESSING BUSINESS SUPPORT INITIATIVES
IDC
The Industrial Development Corporation, together with
For more information, visit
the Department of Trade, Industry and Competition
has committed at least R3Billion to a range of funding www.idc.co.za
products in support of business to address vulnerable firms
and for companies critical to fight the virus and its Email: callcentre@idc.co.za
economic impact. This facility will be available to South Call: 011 269 3888 / 0860-693-888.
African owned businesses.
Please refer to next slide for more info
COVID-19 Essential Supplies Working Capital Support Sector Specific Interventions
❑ Specifically earmarked to assist suppliers of ❑ Ensuring food security by prioritizing
❑ Support for the manufacturing of essential
identified critical goods that are affected by the support to Agriculture and food value chains
medical products
outbreak of COVID-19 ❑ Tourism sector support for working capital
❑ R500 million for trade finance to import ❑ The funding will be shared with Small Enterprise
❑ Bridging finance to support supply chain
Finance Agency (sefa) and National
essential medical products interruptions
Empowerment Fund (NEF): IDC will receive
R300million and sefa and NEF R200million each.
❑ Working capital to ensure energy security by
❑ The focus is on short term interventions supporting suppliers of primary energy
❑ Funds to be used to fund businesses that fall
❑ In order for IDC to react timeously a fast- within the mandate of the institutions and ❑ Working capital and Bridging Finance to
tracked process to consider applications for support prioritised products that are required to SMEs that provide components to car-
funding will be utilised curtail the impact of the virus. makersCOVID-19 LOCKDOWN: ACCESSING BUSINESS SUPPORT INITIATIVES
Small Enterprise Finance Agency National Empowerment Fund Dti Financial Schemes
The below support will be offered to SMME’s The National Empowerment Fund (NEF) is ❑ The Department of Trade, Industry and
and administered by (SEFA) in reaction to the managing a R200m COIVD-19 Intervention Fund Competition (dtic), in partnership with the
COVID-19 pandemic through: on behalf of the Department of Trade and NEF, has invited black businesses to apply
Industry (dti) for funding.
❑ Business Growth Facility
❑ SMME Relief Finance and; ❑ Funds will be available to black empowered ❑ There are about 17 different schemes
❑ Restructuring of SEFA-funded SMME’s business that provide confirmation of valid and available under this funding, for more
verifiable orders. information click links below:
❑ The minimum loan amount will be R 500 000
Click links below for more information: and the maximum is R 10 000 000. This will be
❑ Application Process:
structured as follows:
❑ Debt Relief finance scheme http://www.thedti.gov.za/financial_assistanc
https://www.fasa.co.za/corona/SMME-Debt- • 60 Months repayment term
• 12 months payment holiday (0% interest e/financial_assistance.jsp
Relief-Scheme.pdf
during this period)
• Repayment over the remaining period at a fixed ❑ Enquiries / Contact Information:
❑ SEFA Application form rate of 2,5%
https://www.fasa.co.za/corona/COVID-19- http://www.thedti.gov.za/news2020/Incenti
Finance-Relief-Application-BR1.pdf • For further details on funding criteria click the ve_contact_info.pdf
link below:
• https://www.investcapetown.com/nef-to-
manage-r200-mil-covid-19-intervation-fund-
with-the-dti/COVID-19 LOCKDOWN: ACCESSING BUSINESS SUPPORT INITIATIVES
Solidarity Response Fund
Set up to help deal with the fallout of the coronavirus, and
measures to slow its spread.
For more information, visit
Government has made an initial R150 million available as
seed funding and has invited individuals and businesses to
contribute to this fund.
www.solidarityfund.co.za
Johann Rupert, Nicky Oppenheimer and Patrice Motsepe have
donated R1billion each into this newly established Solidarity
Fund. Naspers have also committed support.
Please refer to next slide for more info
Aimed as Rapid Response Vehicle Administration and Governance
To alleviate the suffering and distress caused by the virus to our country, this Organized business is assisting with the initial formation of the Fund and
fund is aimed to mobilise the support of business and civil society in support thereafter the Board which is being appointed will take full responsibility
of government’s efforts in response to COVID-19. for the fund and its activities.
It will primarily fund four key initiatives:
The Chairperson of the Fund is Ms Gloria Serobe and the Vice Chairperson
❑ Prevent: preventative and supporting measures to “flatten the curve” by
lowering infection rates is Mr Adrian Enthoven.
❑ Detect: detect and understand the magnitude of the infection problem
❑ Care: assist with the management of those people in hospital or medical The Fund will be independently administered and transparently governed
care through an independent board to ensure that the funds are effectively and
❑ Support: support those people whose lives are disrupted by COVID-19. efficiently used to combat COVID-19COVID-19 LOCKDOWN: ACCESSING BUSINESS SUPPORT INITIATIVES
For more information, visit
https://opp-gen.com/saft
South African Future Trust (SAFT) – (Oppenheimer)
This is to allow SMME’s who are suffering from short term cash flow
constraints to continue being operational whilst retaining their employees. Other Fund Donations
It will primarily fund these key initiatives:
• Johann Rupert’s R1 billion donation will also be distributed as loans via
❑ Money paid out directly as interest-free loans to employees of business the small company funder Business Partners. Details are still expected.
with a turnover of less than R 25 million a year. Employers and not
employees will be liable at paying the money back. • Patrice Motsepe’s R1 billion donation via the Motsepe Foundation and
his associated companies. Motsepe’s donation will be used to help buy
❑ The expected typical loan amount per employee will be around R 750/ and distribute water and healthcare products across the country.
week, for a period of 15 weeks.
• Naspers R 1,5 billion donation will be used to buy medical supplies for
❑ Once the need for a short term financing facility has passed, funds will be
South Africa and donate R 500 million to the Solidarity Response Fund.
used to support initiatives with a focus on creating employment.
❑ Currently the money is available to clients of Absa, FNB, Nedbank and
Standard Bank. Business will be able to apply directly with their banks
More information will be provided once available
from Friday, 03 April. For more details: https://opp-gen.com/saftCOVID-19 LOCKDOWN: ACCESSING BUSINESS SUPPORT INITIATIVES
Tourism Relief
The Department of Tourism has made an additional
R200million available to assist SMEs in the tourism and For more information, visit
hospitality sector who are under particular stress due to
the new travel restrictions. www.tourism.gov.za
SME Funding Categories Qualifying Criteria
Applicants from the following categories would be eligible to apply: ❑ Registered business (CIPC)
❑ Turnover must not exceed R2.5 million per year
❑ Hotels, resort properties and B&Bs.
❑ Valid tax clearance certificate
❑ Restaurants, conference venues, professional catering businesses,
❑ Guaranteed employment for staff for a period of 3 months
and tourist attractions.
❑ Proof of minimum wage compliance
❑ Tour operators, travel agents, tourist guides, car rental companies,
❑ Proof of UIF registration for employees
and coach operators.
❑ Existing tourism-specific establishment
The relief will be distributed to ensure that all provinces benefit ❑ In existence for at least one business financial year
At least 70% of beneficiaries will be Black owned ❑ Prove that the relief is required as a result of the impact of COVID-19
At least 50% of beneficiaries will be women owned
❑ Statements of financial position
At least 30% of beneficiaries will be youth owned
At least 4% of beneficiaries will be owned by people with disabilities ❑ Indicate the intended use of the resourcesCOVID-19 LOCKDOWN: ACCESSING BUSINESS SUPPORT INITIATIVES
Tax System Relief
Businesses in distress will also be assisted via the tax For more information, visit
system – initiatives include a new tax subsidy accelerated
payment of the Employment Tax Incentive, delayed tax www.sars.gov.za
liabilities for PAYE & Provisional Corporate Income Tax and
possible temporary reductions of UIF contributions and
skills development levies
Please refer to next slide for more info
SARS UIF and Skills Development Levies
❑ Tax subsidy: A new tax subsidy of up to R500 per month for the More detail to follow but there may be temporary reductions of:
next four months for employees earning below R 6 500 per month.
❑ employer and employee contributions to the Unemployment
❑ Employment tax incentive: SARS to accelerate employment tax Insurance Fund and
incentive reimbursement from twice per year to monthly.
❑ employer contributions to the Skill Development Fund.
❑ PAYE & Provisional corporate income tax: Tax compliant businesses
with a turnover of less than R50 million will be allowed to delay ❑ We are still waiting on National Treasury to provide more
20% of their PAYE liabilities over the next four months and a portion information on both of the above developments.
of their provisional corporate income tax payments without
penalties or interest over the next six months.COVID-19 LOCKDOWN: ACCESSING BUSINESS SUPPORT INITIATIVES
Employment Tax Incentives Delay in Payment of Provisional Tax
• Currently provisional taxpayer (companies or individuals who earn
• Government will extend existing Employment Tax Incentives (ETI)
income other than their salary must make two payments a year.
programme aimed at young workers, to workers of all ages. It will
hike the amount of money companies can claim.
• Provisional taxpayers will only have to pay 15% of the estimated total
tax liability for the first provisional tax payment.
• Currently for every worker under the age of 30 who earns less than
R6 500 employers can claim back R 1000 a month in the first year
• The second provisional tax payment will be based on 65% of the
of employment and R500 in the second year of employment from
estimated total tax liability.
SARS.
• The outstanding amount must be paid 30 September 2021 (or after six
• Now companies will be able to claim R1500 in the first year and
months after a company’s financial year end) to avoid interest charges.
R1000 in the second year for employees younger than 30.
• Example: Companies financial year ends 28 February & estimates that
• Companies will get R500 for all workers up to the age of 65 who
it will have to pay R 800 000 in tax for the year. It’s first payment due
earn less than R6500 a month. For young workers who have
(31 August 2020) will be R 120 000 (15% of R 800 000).
already been covered by the ETI for two years, employers will get
R500 for each of them.
• In the past, it would have had to pay 50% of R 400 000 . Then by 28 Feb
it would then pay R 400 000 for the year it paid R 620 000 (65% of the
• http://www.treasury.gov.za/comm_media/press/2020/20200329%
total amount). The remaining balance of R 280 000 needs to paid by 30
20Explanatory%20Notes%20on%20COVID%2019%20Tax%20measu
September 2021
res%20-%2029%20March%202020.pdfBE – DO - HAVE
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