Introduction
In the wake of the Covid-19 Pandemic, the government has moved to calm fears about the economic impact of the national lockdown, offering assistance to those whose livelihoods will be affected through a series of measures. One such measure is the use of a Temporary Employer/Employee Relief Scheme (TERS). The current directive is effective from 26 March 2020 for a period of three months.
Who Qualifies
If an employer is forced to close its operations as a result of the Covid-19 pandemic, it will qualify for a Covid-19 temporary relief benefit. The benefit is de-linked from the UIF’s normal benefits and therefore the normal rule that every 4 days worked grants the employee a credit is no longer applicable. Instead, the applicable time period will be the closure of business operations.
The following requirements must be satisfied:
- The company is registered with the UIF;
- The company complies with the application procedure for the financial relief scheme; and
- The company’s closure must be directly linked to the Covid-19 pandemic.
In addition the employer will be required to furnish the Unemployment Insurance Fund with the following documents:
- A letter of authority from the company;
- A signed Memorandum of Agreement (MOA) from the employer or Bargaining Council with the UIF;
- Confirmation of bank account details in the form of a certified latest bank statement; and
- Proof of employees’ salaries.
Benefits
The advantage of the TERS lies in the extent of the benefits offered. Salary benefits are to be capped in accordance with current UIF benefits scale (your salary is considered as capped at a maximum of R17,712.00), with the employee to be paid in terms of the income replacement rate sliding scale (38%-60%) as provided for in the Unemployment Insurance Act. Although the current directive is not entirely clear, it would appear that the maximum possible benefit one could receive is R6,730.56 (38% of R17,712.00). At no time will the benefit paid fall below the minimum wage.
Illness Benefits
An employee who is quarantined for 14 days due to the pandemic will qualify. In order to prove this, both the employer and the employee will be required to submit an application as proof that the employee was in a pre-cautionary self-quarantine for 14 days. Should an employee be quarantined for longer than 14 days, a medical certificate must be submitted together with the continuation form, for payment.
Conclusion
The Covid-19 TERS scheme provides a welcome reprieve for employees struggling without pay during the Covid-19 pandemic. Whilst there is still much uncertainty surrounding the payment of employees, this scheme greatly benefits those employees who receive no pay through the duration of the shutdown.
Useful Information
Covid19ters@labour.gov.za: To start the process.
Covid19UIFclaims@labour.gov.za : Submission of documents .
021 337 1997 : Enquiries on claims lodged.