Legal update City of Johannesburg outdoor advertising Landlords’ rights and obligations under COVID-19 Novel coronavirus: A practical guide for employers

City of Johannesburg outdoor advertising

In June 2017, the City of Johannesburg published its draft Outdoor Advertising By-Law for comment. Comments were due on 7 July 2017

The By-Law makes reference to all types of outdoor advertising, whether a sign (for sale/lease) or logo, freestanding or attached to any wall or structure, etc.

As a property owner, the City Council has a duty to exploit its assets for the benefit of the community. The charging of rent for the display of advertisements on road reserve has long been a substantial source of income for the City Council. Its conflict lies in the dual regulatory role it’s fulfilling.

● SAPOA submitted comments and concluded by stating that the City Council is, in terms of the current regulatory system, already conflicted in that it is player and referee in the outdoor advertising sign industry, an intolerable situation we object to. ● The city is the owner of vast tracts of road reserve, which is an ideal place for the display of advertisements. In this regard, the City Council is a direct competitor with private property owners on that same road. In terms of the current regulatory system, the City Council is the decision-maker in the approval of advertising sings. ● As a property owner, the City Council has a duty to exploit its assets for the benefit of the community. The charging of rent for the display of advertisements on road reserve has long been a substantial source of income for the City Council. Its conflict lies in the dual regulatory role it’s fulfilling. ● The introduction of this draft By-Law is the ideal opportunity to consider that the city must divest itself of one of the two regulatory functions. ● The most suitable function to divest itself of is, of course, the approval process. There is nothing contained in any of the constitutional provisions that prohibits the City Council from appointing an independent body that will adjudicate the applications for the approval of advertising signs. This body should be represented by all role-players in the industry, including private property owners, billboard companies and the City Council. Such a system will be objective and fair, and will avoid the clear conflict of interest the City Council is currently vested with.

On 20 March 2018, the City adopted and approved the Outdoor Advertising ByLaw. It stated that the By-Law would be promulgated on 31 May 2018.

SAPOA brought an urgent application against the City of Johannesburg. The parties reached an agreement to suspend the enforcement of the newly promulgated 2018 Outdoor Advertising By-Law until a court case challenging various aspects of the By-Law had been heard by the Gauteng Local Division. The agreement was made an order of court. The By-Law was also suspended until the judgment was handed down in the application before the court.

In the application before the court, it was contended that: ● The City of Johannesburg failed to implement and follow proper public participation processes, as it ignored important comments and objections raised by various industry members. ● Certain provisions of the By-Law are unconstitutional, as they infringe certain rights contained in the Bill of Rights enshrined in the Constitution. ● The city failed to obtain approval from the Minister of Trade and Industry,

as required by the National Building Regulations, prior to promulgation of the By-Law.

The legal challenge is based on, among others, the following: ● The promulgation of the By-Law will immediately and retrospectively criminalise private property owners with unapproved advertising signs on their property. This will happen without the property owners having the opportunity of arranging their affairs to try to comply with the new By-Law. It should also be considered that the same sanction does not hit the city itself who also, by its own admission, has hundreds of unapproved billboards on its properties. ● The City, as a commercial role-player in the outdoor advertising arena, is conflicted between its regulatory function and its commercial interests. Therefore the regulatory control should be divested to an impartial decisionmaking body, and not to an official. ● The enforcement measures, which are severe, can be imposed arbitrarily by the officials who are playing the role of investigative, prosecutorial, adjudicative, and sheriff’s functionaries. ● The city can levy additional taxes for outdoor advertising. ● The city can levy a special rate for outdoor advertising signs. ● Furthermore, the inclusion of the National Building Regulations Act of 1977 in the By-Law will require, in terms of Section 28(9) of the said Act, that the Minister of Trade and Industry must approve this By-Law, and the absence of such an approval will render the By-Law void.

On 18 February 2020, SAPOA was successful and obtained the orders as per its request in the main application, resulting in the 2018 Outdoor Advertising By-Law being declared unconstitutional.

Protection of Personal Information Act (POPI Act) Section 32 of the Constitution of the Republic of South Africa Act (Act No. 108 of 1996) stipulates that everyone has the right of access to any information held by the state or any other person, provided the information is required for the exercise or protection of any rights. The Act further stipulates that the national legislation must be enacted to give effect to this right.

PAIA gives effect to the constitutional right of access to information held by any public or private body that is required for the exercise or protection of any rights. The Act details the procedures to be followed when making a request for information held either by a public or private body.

Personal information as defined in the Protection of Personal Information Act No. 4 of 2013 (POPI Act) is used in day-to-day employment processes such as recruitment, contracts, employment equity, medical aid/provident funds, disciplinary action, performance management, benefits and remuneration, training, SETA records, and other employment-related requirements. On 14 December 2018, the regulations to the POPI Act were published in the Government Gazette. Until early this year, only Section 1, part A of Chapter 5, Section 112 and Section 113 of the Act were in effect.

The Information Regulator has asked President Cyril Ramaphosa to declare that the remaining provisions of the POPI Act commence on 1 April 2020.

If the president were to act on the Information Regulator’s request, the remaining provisions in the POPI Act regulating the processing of personal information will become effective on 31 March 2021. (We will be given a period of 12 months’ grace – unless extended by the Minister – to comply with the POPI Act.) Non-compliance with the POPI Act may result in significant civil and criminal sanctions; hence it is important that all businesses ensure compliance with the Act prior to its commencement.

If the president were to act on the Information Regulator’s request, the remaining provisions in the POPI Act regulating the processing of personal information will become effective on 31 March 2021. (We will be given a period of 12 months’ grace – unless extended by the Minister – to comply with the POPI Act.) Non-compliance may result in significant civil and criminal sanctions; hence it is important that all businesses ensure compliance with the Act prior to its commencement.

Landlords’ rights and obligations under COVID-19

The remission of rent (if any) will also only be available to the extent that the premises could not be used for the purposes let. Therefore, if the government were to close down business for three days, a remission will only be granted for those three days.

1. We refer to the above pertinent issue in light of the recent directives and regulations issued by the South African government due to the outbreak of COVID-19. 2. Prior to dealing with the specifics of lease agreements, let’s first deal with some general principles, which we’ll then apply to lease agreements and the wider context. 3. First, as a general principle of the law of contracts, whenever there is a case of supervening impossibility, a party to a contract who is negatively impacted as a result of that impossibility may be excused from performing in terms of that contract. Generally, when there is a vis major (a superior power or force that cannot be resisted or controlled), a party will be excused from performing in terms of an agreement. Furthermore, casus fortuitus, which is an incidence of vis major, is an exceptional or extraordinary occurrence that was not reasonably foreseeable 1 . It has been held 2 that plague is an incidence of casus fortuitus. In our view, the present COVID-19 outbreak is analogous, and the resultant government bans constitute vis major. 4. Where a tenant wishes to rely on vis major or casus fortuitus to be excused from having to perform in terms of an agreement, that tenant bears the onus to prove that it did not have beneficial occupation of the leased premises for the duration of the non-payment period 3 , and furthermore has to prove that the occurrence was unforeseen, uncontrollable and the direct cause of the inability to perform. If the circumstances ought to have been foreseeable, in the specific circumstances of the specific tenant, no remission of rent will be granted 4 . 5. It goes without saying that the tenant’s failure to have beneficial occupation of a leased premises must be the direct and immediate result of the casus fortuitus 5 . Therefore, a tenant will only be entitled to claim a loss of beneficial occupation of a leased premises due to casus fortuitus if the outbreak of disease itself led to the closure of business. As an example, it has been held that a tenant who conducted a stationery business was not allowed a rent remission where war had caused a drop in trade, but that it would have been so entitled if war had prevented the customers from dealing with the tenant 6 . 6. The remission of rent (if any) will also only be available to the extent that the premises could not be used for the purposes let. Therefore, if the government were to close down business for three days, a remission will only be granted for those three days. 7. It is of course trite that the parties may agree in their lease that the rent should be paid without any remission whatsoever. Such terms are usually found in modern leases, where it is held that rent is to be paid without deduction or set-off whatsoever. It has been held 7 that the prohibition against set-off only applies to deductions that were reasonably foreseeable when the agreement was concluded. Similarly, it has been held in various cases that contractual terms contrary to public policy would not be enforced. As a simple example, it is against public policy to contract with a person to kill another person, and such a contract will not be enforced on this basis.

1. 2. 3. 4. 5. 6. 7. See Spolander v Ward 1940 CPD 24 Stockham & De Jong v Kaplansky & Co (1901) 18 SC 156; and also Joe v Mahomet (1901) 11 CTR 816 New Heriot GM Co v Union Government (Minister of SAR&H) 1916 AD 415 Frenkel v Ohlsson’s Cape Breweries 1909 TS 957 Johannesburg Consolidated Investment Co v Mendelssohn & Bruce 1903 TH 286 Again Johannesburg Consolidated Investment Co v Mendelssohn & Bruce United Mines of Bultfontein v De Beers Consolidated Mines (1900) 17 SC 419

8. These general principles relating to vis major and casus fortuitus would generally apply to all the applicable lease provisions in your leases: continuous trading, payment of rent without deduction or set-off, trading hours, and the observance of laws. 9. Government issued the present regulations and directives in terms of the Disaster Management Act, 57 of 2002 (“the Act”). The Act provides, in Section 60, that failure to adhere to a request by the disaster centres renders the person guilty of an offence, and liable to a fine and/or imprisonment. These regulations and bans should therefore not be taken lightly. The act furthermore makes it clear 8 that government, whether in the national, provincial or local spheres, may issue directions and make regulations on a wide array of issues once a national state of disaster has been declared, which includes, inter alia, the control and occupancy of premises and the regulation of the movement of persons and goods. 10. To therefore attempt to act against these disaster directions regulations would be tantamount to acting contrary to public policy. 11. In a similar vein, in our view, to attempt to enforce payment of rent on the basis that same is to be paid without deduction or set-off whatsoever, would probably be against public policy, and a strong argument could probably be made out as to why a tenant should be excused from making payment of rent for the period during which it was deprived of beneficial occupation. 12. To summarise therefore, in our view, the position is as follows: 12.1. At this stage, no tenant ought to be excused from trading from leased premises or making payment of rentals and other charges, as normal trading has not yet been prohibited in terms of the disaster regulations; 12.2. Insofar as a tenant suffers from reduction in business due to the present disaster regulations, such reduction does not entitle the tenant to a remission of rent; 12.3. If government were to prohibit trading, tenants so affected will have to be excused from trading, in order to comply with the applicable legislation. Such allowance will of course only apply for the period as decreed by government, and not any longer; 12.4. In the absence of a prohibition against set-off in the lease (which will normally be very rare), a tenant ought to be entitled to a rent remission for the period that it is unable to trade, as set out in paragraph 12.3 above; 12.5. If, during the period of prohibition, a tenant still is able to use the premises in some way, the rent remission as aforesaid will be reduced accordingly; 12.6. If the lease prohibits set-off (as will be the usual case), the landlord will be entitled to insist on full payment of the rent. A strong argument will probably be made out by the tenant as to why enforcement of this clause will be against public policy, and why it should therefore be excused from making payment of rent; 12.7. None of these considerations will apply to utility charges – a tenant will remain liable for utilities which it actually consumed. 13. Finally, we address the issue of bonds that may have to be paid by the landlord on the building. As the loan that was secured by the bond is not dependant on trade being conducted from the premises, and as the monies loaned by the financial institution concerned remain available to the landlord, none of the above contentions will normally apply to bond payments. Inability to pay a bond will not necessarily be a direct result of a government prohibition of trading. Such inability to make payment may be a result of tenants’ failure to pay their rent. Accordingly, a landlord will be hard-pressed to argue that it ought to be excused from making payment in terms of a loan agreement. We trust that you find the above in order. Should you wish to discuss any aspect hereof, please do not hesitate to contact us. Marlon Shevelew talks to listeners on John Maytham’s drive time show about tenants’ and retail landlords’ rights.

Government Gazette Staatskoerant REPUBLIC OF SOUTH AFRICA REPUBLIEK VAN SUID AFRIKA

Regulation Gazette

No. 10177

Vol. 657 18 March Maart 2020 Regulasiekoerant

No. 43107

N.B. The Government Printing Works will not be held responsible for the quality of “Hard Copies” or “Electronic Files” submitted for publication purposes AIDS HELPLINE: 0800-0123-22 Prevention is the cure 9 771682 584003 ISSN 1682-5843 43107

Government legislation issued with regards to COVID - 19

Novel coronavirus: A practical guide for employers

On 11 March 2020, the World Health Organisation (“the WHO”) officially declared that the spread of the novel coronavirus had reached the level of a pandemic. The virus is crossing international boundaries and affecting a large number of people worldwide. Coronavirus is a very serious illness and is potentially lethal.

Introduction 1. On 11 March 2020, the World Health Organisation (“the WHO”) officially declared that the spread of the novel coronavirus had reached the level

of a pandemic. The virus is crossing international boundaries and

affecting a large number of people worldwide. Coronavirus is a very serious illness and is potentially lethal. In respect of the workplace, immediate steps must be taken in order to attempt to diminish its impact. 2. The WHO statement was followed by the declaration of a State of Disaster in South Africa in a widely viewed television address by President Ramaphosa on 15 March 2020. Drastic measures were announced, including the closure of schools, the banning of public events exceeding one hundred people, the prohibiting of international travellers from certain countries from entering South Africa, and the closing of multiple ports of entry. NEDLAC is also holding emergency meetings to discuss the measures that employers should be taking, and ways to mitigate the damage that could be suffered. 3. It is apparent from the WHO’s declaration and the steps taken both here and abroad that a multifaceted and unified approach is necessary in order to attempt to limit the spread of the virus (total containment now being impossible). This requires cooperation and coordination between the state, the Department of Health, the private sector, the medical fraternity, businesses, schools, individuals and so on. In relation to employers specifically, we have been inundated with requests from our clients for advice on the legal obligations and implications of the spread of the novel coronavirus. 4. From a solely legal perspective, employers are subject to both a common law and a statutory duty in terms of the Occupational Health and Safety Act to provide a safe, healthy working environment for all their employees. This includes taking appropriate steps to prevent the spread of the novel coronavirus and the involvement of medical practitioners, welfare departments, operational health and safety representatives and committees in that regard.

Symptoms and transmission 5. In order to develop a plan to mitigate the effects of the novel coronavirus, it is necessary to begin by understanding its symptoms and how it spreads. 6. The symptoms of the novel coronavirus (COVID-19) typically include a fever, a cough (in particular a dry cough) and/or shortness of breath, although it is possible that the symptoms can present like a normal cold or flu. These symptoms can escalate to pneumonia and other serious medical conditions, and ultimately death. (It has been reported that up to 3% of persons who are infected may die.) Elderly persons and persons with pre-existing medical conditions, especially respiratory conditions, are particularly at risk. 7. The symptoms appear between two and 14 days after exposure and, in certain cases, asymptomatic transmission is possible (i.e. a person may be contagious before he/she shows any symptoms of the virus).

8. The virus spreads through close contact between persons. This may occur as a result of respiratory droplets produced when sneezing or coughing. It is also spread through the contamination of surface areas. It has been reported that such contamination may last for as long as three days. 9. The best means to limit the spread of the virus is to limit interaction between people. Internationally, this has manifested itself in citywide lockdowns and widespread travel restrictions. Some of these measures have also been adopted as part of the State of Disaster in South Africa.

Employers and employees: Proactive steps to be taken 10. A number of proactive steps can be taken both by employers and employees in order to mitigate the risk of the novel coronavirus. These include the following: ●Employers should issue a communiqué to all staff, advising them of the symptoms and encouraging them to selfmonitor for infection. This should include a procedure for employees to confidentially report any suspected infection/risk of infection to the employer (i.e. where a family member has contracted the virus). ●A number of employers are implementing policies that permit so-called self-isolation/quarantine in the event that an employee suspects that he/she may have contracted the virus. This option may of course not be practical for critical employees, and employers may wish to retain the services of those employees until they exhibit signs of illness. ●Where possible, employees should be permitted to work from home, or alternatively limit the amount of physical interaction they have with other employees and clients. Email, phone and Skype/video communication should be encouraged, and unnecessary gatherings/meetings avoided. International travel should also be avoided, as should unnecessary air travel between different offices (i.e. in larger companies). ●In circumstances where working from home becomes necessary, a policy and procedure should be implemented by employers in order to regulate the workingfrom-home arrangement. To that end, employees should have a clear and detailed understanding of both the hours to be worked and the level of performance required for work performed at home. Critically, employees must understand their responsibility to report regularly to their line managers. The costs involved in working from home, if any, should be limited and comprehensively dealt with in the policy. It is regrettable that this may inevitably lead to abuse by certain employees; accordingly employers would be required to closely monitor such an arrangement. ●Employees should be advised of appropriate hygiene practices, including regularly washing their hands, avoiding face-touching, and cleaning commonly used surfaces (including eating surfaces). Employers should facilitate this by providing both soap and alcoholbased hand rubs (containing at least 60% alcohol). Posters containing such advice should also be posted around the workplace, and employers should adopt robust cleaning procedures in relation to commonly used surfaces (including bathrooms and kitchens). Employees who fail to abide by these workplace rules should be subject to disciplinary action. ●Employees should also be encouraged to exercise good respiratory etiquette, including practising the “vampire cough” (i.e. coughing into the elbow instead of the hand) and/or using tissues that are discarded appropriately.

Employers should also be mindful that the Unemployment Insurance Fund permits employees to claim from the fund in circumstances where they are sick for more than seven days and have exhausted their paid sick leave entitlements. Employers should, where possible, assist employees with the UIF application, although it is to be anticipated that payment would be delayed. Conversely, in circumstances where employees voluntarily self-isolate, in the absence of any symptoms and solely as a precautionary measure, employers should opt to place those employees on special leave for that purpose, for which a time period could be set.

●Employees should avoid sharing phones, desks, computers and other tools of the trade. Where shared equipment is used – for example, in the case of photocopiers – hand-washing should be encouraged immediately thereafter. ●Employers should revisit the planning of their offices in order to ensure appropriate distance is kept between employees (a distance of two metres is recommended). This will not always be possible, especially in factory settings. ●Where an employee is displaying symptoms of the novel coronavirus, employers must require that employee not to attend the workplace and to immediately seek medical advice. Employees should avoid emergency rooms/ hospitals and instead rely on their general practitioner as a first port of call. Employees should also be encouraged to telephonically contact their GPs, as many are conducting Skype/video consultations where symptoms are not severe in order to avoid further spreading the virus. Employees should also obtain and submit sick notes electronically where possible. ●Emergency occupational health and safety committee meetings should be convened to enable action plans to be put in place. These plans may vary according to type of employees, and different contingencies may be necessary.

Sick leave and other options to be considered 11. On the issue of sick leave, there has been a great deal of uncertainty and debate concerning its applicability. This includes uncertainty as to whether employees who voluntarily self-isolate are considered “sick” for the purposes of the BCEA, and consequently whether existing paid sick leave entitlements cover such voluntary self-isolation. 12. At the outset, a distinction must be drawn between employees who exhibit symptoms of illness and those who self-isolate as a precautionary measure. In circumstances where employees exhibit any signs of illness, the provisions of the BCEA dealing with sick leave find application, and the employees should be placed on paid sick leave. Where paid sick leave is exhausted, but the employee remains sick, the employee will then be subject to unpaid leave. 13. Employers should also be mindful that the Unemployment Insurance Fund permits employees to claim from the fund in circumstances where they are sick for more than seven days and have exhausted their paid sick leave entitlement. Employers should, where possible, assist employees with the UIF application, although it is to be anticipated that payment would be delayed. 14. Conversely, in circumstances where employees voluntary self-isolate, in the absence of any symptoms and solely as a precautionary measure, employers should opt to place those employees on special leave for that purpose, for which a time period could be set. Employees who choose to self-isolate could also be given the option of taking annual leave. 15. This is so because the placement of employees on sick leave in circumstances where they are, in fact, neither ill nor exhibiting symptoms may create unsustainable precedents susceptible to future abuse. Some employees may be tempted to take advantage of the pandemic and voluntarily self-isolate without cause. 16. Although employers are encouraged to pay employees during special leave to incentivise voluntary self-isolation in an attempt to curb the pandemic and contain the spread of the novel coronavirus, payment in terms of the law is not compulsory. We strongly recommend that these aspects be addressed in an emergency pandemic policy.

17. We also expect that one of the items that NEDLAC will discuss will be the utilization of UIF funds to ensure payment of employees who self-isolate and who are unable to receive paid sick leave for that period. 18. In respect of employees who refuse to voluntarily self-isolate and are forced to remain at home because they are displaying symptoms, the position is more complicated. Section 7 of the Employment Equity Act states that medical testing may be justified inter alia in light of medical facts and employment conditions. In our view, given the general health and safety obligations referred to above, employers are legally entitled to insist on medical testing before allowing an employee who is displaying symptoms to attend work. 19. Where an employee unreasonably refuses medical testing notwithstanding that he/she is displaying symptoms, but continues to tender his/her service, that employee should be placed on unpaid special leave pending a medical assessment. 20. It is possible that the situation may worsen in the coming weeks, and a State of Emergency may be declared. This could have drastic implications, including the closing of businesses, shops and other entities. In those circumstances, employers should consider implementing measures such as short-time, lay-offs or the taking of annual or unpaid leave as alternatives to retrenchment. Where financially possible, employers should try to avoid retrenching employees. Among other considerations, this could lead to loss of medical aid membership. This is an issue where all should attempt to make sacrifices for our common humanity. In specific circumstances it may be impossible not to implement a restructuring exercise. 21. Where conditions of employment do not deal with issues such as shorttime and lay-offs, the implementation of those measures must be discussed with the employees and consensus must sought. 22. Such arrangements are regulated by some bargaining council agreements and can be readily implemented in certain circumstances. For other employers, such arrangements will need to be negotiated with unions or employees, and where no agreement can be reached, may need to be implemented through an appropriate process.

Conclusion 23. Employers must develop contingency plans to deal with these and other issues which may be specific to their businesses. Employers should be adopting a flexible and practical approach to dealing with the novel coronavirus. 24. For smaller employers, a plan of action should be put into place and communicated to employees. Employees should be informed of the proactive steps they can take to avoid infection, what to do if they suspect that they have the virus, and the requirements for paid sick leave. This may include permitting voluntary self-isolation and compulsory isolation for employees displaying symptoms. 25. For larger employers, many are electing to put in place emergency COVID-19 policies dealing with these issues, including different contingency plans for different staff. This should of course be done in conjunction with occupational health and safety committees and take into account employee input. 26. Please feel free to contact us should you require any assistance – we are available to assist in the preparation of both COVID-19 and homeworkers policies on an emergency basis. As we are dealing with a pandemic, please distribute these guidelines to friends and colleagues.

For smaller employers, a plan of action should be put into place and communicated to employees. Employees should be informed of the proactive steps that they can take to avoid infection, what to do if they suspect that they have the virus, and the requirements for paid sick leave. This may include permitting voluntary self-isolation and compulsory isolation for employees displaying symptoms.