During periods of uncertainty, scarcity and general public angst global markets and companies tend to take a knock. The Carona Virus Disease of 2019 (‘COVID’) has already cleared 2.3 Trillion Rand from the JSE[1], and the United Nations Trade Agency estimates that COVID will cost the global economy no less than 1 Trillion Dollars.[2] These are not small figures. The effect COVID may have on local business is undeniable and has already affected many large and smaller companies.
Other than the clear economic risks all companies face, smaller businesses may be directly affected by COVID. Employee’s and customers face the risk of being exposed to COVID, which, if infected or quarantined, may reduce sales and income. Indeed, the best method of combatting COVID is by application of self-isolation and social distancing all in a bid to ‘flatten the curve’. The smart and efficient use of various technologies presents smaller businesses with methods of mitigating against the harm caused by COVID. Indeed, the legal argument is that each business owner has a fiduciary duty to take steps to protect the business.
This article will present a few technology-based strategies and tactics smaller business may be able to implement to mitigate against risks faced by the company, its employees and which will hopefully preserve a survivable turnover.
The Legal Risks Faced by Business during COVID
The risk faced by businesses is that customers will not leave their households for anything but the most essential of goods. Countries like South Africa have been placed under mandatory lockdown. Although people are permitted to leave their houses to buy essential goods and services, customers will still be reluctant to leave their residence. This decrease in business will shatter many bottom-lines meaning that many companies will be rendered unable to comply to the terms of various agreements including Service Level Agreements, Lease Agreements, Suppliers and Distributions Agreements and many others.
Further, the regulations imposing formal 21 day period of lockdown have placed severe restrictions on individuals and companies by limiting trading hours, limiting social interactions and setting penalties and criminal sanction on people and companies who act in a way which does or may be seen to, spread COVID.[3]
Companies will have to elect to cancel, renegotiate the terms or adapt their business model to suit the change in the status quo.
The Impact of Social Distancing
An important element during this a global epidemic is for people to limit social contact with people who are not members of their household.[4] Companies are faced with the stark reality that customers and employees are to be forced into self-isolation, quarantine or and even with the ability to leave their residence for essentials may elect to practice social distancing.
Employees, Customers, and, now that the country has been placed into lockdown, the government will demand that your company operate remotely. If your company is unable to operate remotely, then you will be faced with weeks or months of no or limited business activity. The first step is to ensure that your employees can work remotely, which may require supplying laptops and other hardware to allow them to work from home. Think headphones, wireless ‘dongles’ and whatever else they may need to carry on working.
Smaller companies also have access to a host of applications and software, which further enable remote working. Meetings can be conducted by way of Virtual Conference using facilities such as Zoom or Skype. Products such as Microsoft Office 365 and Google Office allow for online collaboration between remote workers. Many of these products have free to use options and can be implemented and rolled out very quickly. Many internet providers offer VoIP solutions which present an opportunity to forego hardware for a more software-based approach to telecommunications.
For customer-facing retail stores, it becomes imperative that your employees can transact without any concern for their safety. The use of products such as Snapscan, Zapper and other application can be implemented in such a way that no money changes hands. Where possible, the use of online platforms to promote a system which allows your customer to order online for delivery or collection of goods. An online shopping facility, social media and working website are all methods of ensuring a level of continuity.
Some companies offering services may be able to replace these by sharing pre-recorded instructional videos or possibly host virtual conferencing facilities. The reality faced by many customers is that they will be placed in quarantine and will welcome the option to continue, albeit limited, the services or products usually offered by the companies they traditionally support.
Indeed, the simple act of signing a new contract can be done virtually using many different products which allow for contracts to be uploaded, signed virtually and are legally binding on all parties. Thankfully, the Electronics Communications and Transactions Act (‘ECTA’) allows for electronic signatures, but it is advised that agreements be amended to provide for the applicability of ECTA.
Communication is essential during a time of crisis and change. However, considering that an estimated 22 million South Africans have access to a mobile phone,[5] using a variety of social media platforms, email or SMS functionality to continue to market your product and services is simple.
Maintaining Compliance with Regulatory Framework
Developing strategies and tactics to cope with and manage fall out from a national and global pandemic can be difficult and time-consuming. However, we live in an age where it has never been easier to live and work entirely remotely. Technologies allow for many products and services to be bought and sold entirely virtually without ever having to leave the comfort of home.
That being said, implementing these strategies must be done in cognizance of a variety of rules, law and regulations which govern how businesses and individuals engage with the virtual world or a world where the rules have been adjusted to limit the spread of COVID.
Adapting to an entirely remote and virtual business operation requires strict adherence to existing laws and regulations. The Protection of Personal Information Act, although not wholly enacted, should be complied with strictly which dictates that personal information may not be abused or treated unlawfully. Further, the Terms and Conditions appliable to online sales must be in line with the terms of the Consumer Protection Act as read with the ECTA which dictate certain minimum requirements relates to return policy’s and quality of goods as well as a whole host of rules.
Employee’s working remotely must still be monitored and managed, and as such, the terms of employment must be amended to allow for remote working and the type of management that needs to be enforced. These rules can be found and read on our website.
If moving online and sharing services remotely, the ability for Intelectual property to be stolen and exploited without your permission becomes a simple affair. That is why companies must think about preserving and protecting their reputation and to seek advice now.
Conclusion
The effects of COVID-19 are dangerous, and the ramification may be far-reaching. However, companies which adopt early to a new way of doing business will survive. Indeed the benefits may very well present some form of silver lining in an otherwise tragic event.
If your business can move to a remote and virtual method of operations, feel free to contact SchoemanLaw Inc for this and all your legal needs. We recommend establishing a clear security framework reducing the risk of breach or damage. Our online products are cost effecting and may be useful at this time and can be found at www.contract4biz.co.za .
For all your legal needs, contact an expert at SchoemanLaw Inc.
[1] https://www.moneyweb.co.za/news/markets/another-covid-19-crash/ (accessed 24 March 2020)
[2] https://news.un.org/en/story/2020/03/1059011 (accessed 24 March 2020)
[3] Disaster Management Regulations GNR398 Government Gazette 43148 15 March 2020 as amended.
[4] https://www.forbes.com/sites/brucelee/2020/03/21/social-distancing-101-for-covid-19-coronavirus-here-are-the-dos-and-donts/#575d8b2d2dd6 (accessed 24 March 2020)
[5] https://www.statista.com/statistics/488376/forecast-of-smartphone-users-in-south-africa/ (accessed 24 March 2020)
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