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How Covid-19 can legally affect a company

 

Across the globe, companies are seeking legal advice to clarify the new world order in terms of the Covid-19 coronavirus outbreak and how their organisations may be held either criminally or administratively liable for things that may go wrong as everyone adjusts to new ways of working and living, both for their employees and their customers.

Meeting this need among our client base, CMS SA recently held webinars for our worldwide audience, including those serviced by our South African office.

While a number of similarities across countries arose, there were also a number of marked differences, with legislation in South Africa demonstrating the diligence of the country’s legal system. Some of the countries involved in the discussion included Peru, Colombia, Ukraine, Russia and Monaco.

There are a number of key legal considerations companies across the globe need to be aware of as the world reopens, but we’re heartened by the clarity around risk in our own country.

Risks during and after lockdown

For one, we have a very robust Occupational Health and Safety Act, which companies are compelled to comply with at all times.

As a result of this act, South African organisations as well as their employees can be held criminally liable for any failure to comply with these requirements, irrespective of Covid-19.

Another country that demonstrated similar regulations to South Africa is Monaco, while companies in the Ukraine, Russia, Peru and Colombia cannot be held liable for such offences – only the individuals within those companies can.

South Africa declared a national state of disaster on March 15 and issued regulations in terms of the Disaster Management Act, which includes specific offences by persons, including the following:

  •  Intentionally misrepresenting that they are infected with Covid-19;
  • Publishing any statement through any medium (including social media) with the intention to deceive any other person about Covid-19, the infection status of any person or any measure taken by government to address Covid-19; or
  • Intentionally exposing another to Covid-19.

Potential penalties for businesses

Just as it lays out stringent regulations, the Occupational Health and Safety Act also clearly delineates the repercussions for violation of the act administratively or criminally.

An employer who does or omits to do an act that causes a person to be injured at work and who is found guilty of an offence in terms of the act may be liable to a fine of up to R100 000 or imprisonment of up to two years, or both.

In turn, an individual who is in breach of the act may be liable to a fine of up to R50 000 or imprisonment of up to one year, or both. In addition, a breach of the regulations of the Disaster Management Act can carry a fine or imprisonment of up to six months.

However, for the offence of exposing someone to Covid-19, a person can be prosecuted for either assault, attempted murder or murder.

While other countries also make clear distinctions between fines or imprisonment imposed for criminal versus administrative liability, the biggest deterrent to transgression in Russia revolves around suspension either of a company’s operations for up to 90 days or, in the case of company officers, disqualification from holding certain positions for up to three years.

In the event of a death, this increases to seven years.

Cases so far

At the time of writing, it seems no countries (with the exception of Colombia and the Ukraine) have seen any actual prosecutions of businesses or senior management being involved in breaches of regulations.

There is a case pending in South Africa where a chief executive officer of a mine had been arrested for allegedly instructing mine workers to return to work in contravention of our lockdown regulations. This executive was released on bail, and the case is expected to be heard in August.

Complying with the law and reducing risk

In addition to continuing to comply with Occupational Health and Safety Act regulations, we strongly recommend that all companies familiarise themselves with those contained in the Disaster Management Act.

Most of the guidance contained in the latter relates to social distancing in the workplace.

However, as per the norm being expressed across the globe, the general rule is that, if employees can work from home, they should.

There is, of course, also scope for civil claims should an employee contract Covid-19 while in the workplace.

That person would have recourse in terms of the Compensation for Occupational Injuries and Diseases Act, which means that the employee would not sue the employer but would instead claim in terms of the act from the Compensation Fund.

In other cases – such as between business partners or with other employees – civil claims may arise either through breach of contract, negligence or the like, but each case would be assessed on its own merits.

This article was first published by City Press on the 24 June 2020. 

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