The South African Minister of Employment and Labour has issued a Directive called Covid19 Temporary Employee/Employer Relief Scheme (C19 TERS) effective 26 March 2020.
This Directive will remain in operation for a period of 3 months or until it is withdrawn by the Minister, whichever comes first.
During this COVID-19 lockdown period, most companies have shut down/closed and for some employers it is not economically possible to continue to pay employees. In this case, the Department of Employment and Labour have created a special benefit under the Unemployment Insurance Fund as per the Directive.
Purpose of the Directive:
- To make provision for the payment of benefits to contributors who have lost income due to the Covid-19 pandemic.
- To minimise economic impact of loss of employment due to the Covid-19 pandemic.
- To avoid contact with, and the spread of Covid-19.
- To establish the Temporary Employee/Employer Relief Scheme and set out the application process for benefits.
- To make provisions of online applications for benefits in order to avoid contact during the national disaster period.
- Should an employer as a direct result of the Covid-19 pandemic close its operation for 3 months or lessor 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 (for every 4 days worked, the employee accumulates one day credit and the maximum credit days payable of 365 days for every 4 years) will not apply.
- The benefits will only pay for the cost of salary for the employees during the temporary closure of the business operations.
- The salary benefits will be capped to a maximum amount of R17 712 per month, per employee and an employee will be paid in terms of the income replacement rate sliding scale (38% - 60%) as provided in the UI Act.
- Should an employee’s income determined in terms of the income replacement sliding scale fall below the minimum wage of the sector concerned, the employee will be paid a replacement income equal to the minimum wage of the sector concerned.
- Qualifying employees will receive a benefit calculated in terms of section 12 and 13 of the UI Act, provided that an employee shall receive a benefit of no less than the sector specific minimum wage.
- For the company to qualify for TERS, it must satisfy the following requirements:
- the company must be registered with UIF,
- the company must comply with the application procedure for the financial relief scheme, and
- the company’s closure must be directly linked to the Covid-19 pandemic.
Illness leave benefit:
- Where an employee is in quarantine for 14 days to the Covid-19 pandemic, the employee shall qualify for illness leave benefit.
- Confirmation from both the employer and employee must be submitted together with the application as a proof that the employee was in an agreed pre-cautionary self-quarantine for 14 days.
- In this instance, the confirmation letters from the employer and employee shall suffice.
- Should an employee be quarantine*** for more than 14 days, a medical certificate from a medical practitioner must be submitted together with continuation form for payment.
*** ‘Quarantine’ means separating a symptomatic individual potentially exposed to a disease from non-exposed individuals in such a manger so as to prevent possible spread infection or contamination.
- The employers shall apply by reporting their closure to email box [email protected] and there shall be an automatic response outlining the application process.
- The employer shall be required to furnish the Fund with the following documents:
- Letter of authority of company,
- Signed Memorandum of Agreement (MOA) from 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.
For more information regarding TERS, please refer to the TERS Guide for Employers on the Department of Employment and Labour website.
UIF has also developed a hotline for COVID-19 TERS Benefit enquiries during lockdown period: 012 337 1997.
Workers, companies and stakeholders are urged to follow @DeptofLabour and @UIFbenefits on Twitter and visit www.labour.gov.za for regular updates.