Must employees disclose their vaccination status?

While employers cannot force their employees to be vaccinated, there are various grounds for dismissing employees who object, provided that the employer has conducted a thorough risk assessment to determine the need for vaccination. They also need to provide every possible reasonable solution to accommodate them.

One of the grounds on which an employer can let go of an employee who refuses the jab is the refusal of sharing medical information if they wish to be exempt from their workplace’s vaccine programme for medical reasons. If an employee objects on medical grounds, they may be sent for medical testing to prove the veracity of their claims.

Employers must, however, ensure that they are obtaining the consent of their employees before they send them for medical testing and that all the provisions of the Employment Equity Act are closely complied with in relation to discrimination.

However, an employer can make the disclosure of medical information mandatory for a public policy reason. Employers can argue that mandatory vaccination and vaccination-related information are critical to the organisation and necessary for the company to continue its operations. An option would be for the inclusion of an employment policy or a workplace vaccination policy which states that vaccination and Covid statuses must be disclosed. If the employer can show that the non-disclosure of it prevents the company from operating, or that it endangers others, it can go as far as dismissing the employee.

In terms of the guidelines and directives of the Health Professions Council of South Africa, registered health practitioners can be approached for a patient’s medical details. Any personal information can, however, only be shared in alignment with the council’s ethical rules and regulations. Confidential information can only be shared with the express consent of the relevant parties. Any of the personal information can be shared if all parties expressly grant such permission.

However, in some instances, the law can require that medical professionals provide and/or divulge certain medical information without the consent of a patient, by way of a court order if required by law, and/or if the disclosure is in the public interest.

Although civil actions for breach of confidence are rare, the issue can be a minefield for the unwary. Thus, those who are about to reveal and/or compel the disclosure of confidential information should carefully consider their grounds for doing so and be clear that there is either consent, lawful authority, or some public interest justification.

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This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Distributions to beneficiaries of an employee trust

Binding Private Ruling 330 (“BPR330”) was issued on 3 October 2019 and relates to the tax implications arising from distributions of dividends and other amounts from an employee trust to beneficiaries on the termination of their employment.

The taxpayer (a resident trust) was established for the benefit of the black permanent employees of Company A. The object of the trust was to invest funds from time to time and to use the return on these investments for the economic, health, educational and emergency benefits of its beneficiaries.

The trust funds to be administered in this regard will include donations made to the trust, any assets the trustees may acquire (not limited to shares), any net revenue capitalised by the trustees in their discretion and any other interest, dividends or accruals in favour of the trust.

The trustees of the trust are entitled to, in their discretion, select one or more of all the employees to allocate or distribute all or part of the trust’s net revenue. These employees will only have a claim against the trust from the date of vesting of the benefit and are not entitled to deal in any way with the respective trust funds or interest in the trust before such date.

It is envisaged that the trustees will, from time to time, vest dividends in the employees that the trust receives from Company A. These dividends will be distributed immediately after it is received by the trust.

The trust deed furthermore provides for the allocation of beneficial units. Employees that hold these units may only dispose of them to the trust. Also, the trust must repurchase the units when the employee ceases to be an employee at a repurchase price determined by the trustees in their discretion.

The proposed transaction that was considered in terms of the BPR was the repurchase of a beneficial unit from a beneficial unitholder on the date the unitholder ceased to be an employee. The repurchase was funded by existing funds and not a specific dividend that was received.

In terms of the BPR, the unitholder received an amount as a beneficiary of the trust by reason of the termination of its employment and confirmed that this amount would be included in the employee’s gross income, in terms of paragraph (d) of the definition of “gross income”, and be subject to employees’ tax as provided for by the Fourth Schedule to the Income Tax Act.[1]

Also, all amounts to be distributed to the beneficiaries will constitute remuneration as defined in the Fourth Schedule and will be subject to employees’ tax.[2]


[1] No. 58 of 1962

[2] See section 10(1)(k)(i) and the definition of “remuneration” in paragraph 1 of the Fourth Schedule.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)