WHAT EMPLOYERS NEED TO KNOW ABOUT THE TEMPORARY EMPLOYEE / EMPLOYER RELIEF SCHEME (C19 TERS)

WHAT EMPLOYERS NEED TO KNOW ABOUT THE TEMPORARY EMPLOYEE / EMPLOYER RELIEF SCHEME (C19 TERS)

TEMPORARY EMPLOYEE / EMPLOYER RELIEF SCHEME (C19 TERS)

During this period of lockdown, employers will have to shut down and employees may be laid off temporarily. This means that employees are compelled to take leave, which is not out of choice.

There is a definite possibility that employees may lose significant income. Even though employers have been encouraged to continue paying their employees, this will not always be economically possible. For such an eventuality the Department of Labour has created a special benefit under the Unemployment Insurance Fund referred to as the Temporary Employee / Employer Relief Scheme (TERS).

The Department of Labour has signed a Directive to implement the TERS as of 25 March 2020. In terms of section 2, the purpose of the Directive is as follows:

  1. Payment of benefits to the Contributors (employees) who have lost income due to the Covid-19 pandemic;
  2. Minimising the economic impact of loss of employment due to the Covid-19 pandemic.

In terms of section 3.1 to 3.6 of the Directive, the following shall apply:

  • Should an employer, as a direct result of the Covid-19 pandemic, close its operations for a period of 3 (three) months or a shorter period and suffer financial distress, the company shall qualify for a Covid-19 Temporary Relief Benefit.
  • The benefit shall be de-linked from the UIF's normal benefits and therefore the normal rule, namely that for every 4 (four) days worked, the employee accumulates a one-day credit, with the maximum credit days payable being 365 for every 4 (four) years, shall not apply.
  • The benefits shall only cover the cost of salary for the employees during the temporary closure of the business operations.
  • The salary benefits shall be capped to a maximum amount of R17 712,00 per month per employee and an employee           shall be paid in terms of the income replacement rate sliding scale (38% - 60%) as provided for in the UIF Act.

In terms of section 3.7 of the Directive, the company must satisfy the following requirements to qualify for the temporary financial relief scheme:

  1. The company must be registered with the UIF;
  2. The company must comply with the application procedure for the financial relief scheme; and
  3. The company's closure must be directly linked to the Covid-19 pandemic.

Illness benefit in terms of section 4 of the Directive

  • Where an employee is in quarantine for 14 days due to Covid-19 pandemic, the employee shall qualify for illness benefit.
  • Confirmation from both the employer and the employee must be submitted together with the application as proof that the employee was in agreed-upon precautionary self-quarantine for 14 days.
  • In this instance, the confirmation letters from the employer and employee shall suffice.
  • Should an employee be quarantined for more than 14 days, a medical certificate from a medical practitioner must be submitted together with the continuation form for payment.

Application process in terms of section 5

  • The employer shall apply by reporting their closure to email box Covid19ters@labour.gov.za, after which they shall receive an automatic response outlining the application process.
  • The employer shall be required to furnish the Unemployment Insurance Fund with the following completed documents:
  • Letter of authority from the company;
  • Signed Memorandum of Agreement (MoA) concluded by the employer or Bargaining Council with the UIF
  • An employee who is being paid by the employer during this period is not entitled to this benefit.

Commencement and application in terms of section 7

  • This Directive shall commence immediately as of the date on which the Minister of Employment and Labour published the notice in the Government Gazette.
  • This Directive remains in operation for a period of 3 (three) months or until it is withdrawn by the Minister, whichever comes first.

SERR Synergy will continue to keep employers fully abreast of the latest COVID-19 developments during these challenging times. We provide assistance to employees to understand the process and utilise the appropriate documents to apply for benefits as per the TERS guideline. These processes are still relatively new, have not been fully thought through and do contain many ambiguous clauses. We will seek to provide employers with the best and most professional interpretation of these new and unprecedented regulations.

About the Author: Jared Francis joined SERR Synergy in October 2016, and currently holds the title of KZN Labour Manager. He is an admitted attorney who has practised in KZN and Gauteng and has more than 10 years' experience in the legal and industrial relations field respectively. He holds an LLB degree, a Post-Graduate Diploma in Industrial Relations and a Post-Graduate Certificate in Forensic Investigation from the University of KwaZulu-Natal. He also holds Post-Graduate Certificates in Advanced Labour Law, Corporate Law, Advanced Human Resource Management and Health and Safety from UNISA. He is currently studying towards his MBA.

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