MARCH 2020 – SOUTH AFRICA

Updated COVID-19 Temporary Employer and Employee Relief Scheme Information

It is important that employers note the following:

Temporary Employer and Employee Relief Scheme (TERS)

Following the declaration of the COVID-19 pandemic as a national disaster by the President on 15 March 2020, the Minister of Employment and Labour issued a directive called COVID-19 Temporary Employee/Employer Relief Scheme (C19 TERS) on 26 March 2020.

Notice 215 of 2020 from Government Gazette 43161 outlines the steps regarding the administration of C19 TERS.

As a result of the lockdown, companies will have to shut down and employees may be laid off temporarily.  This means that employees are compelled to take leave and may lose income.

Employers are encouraged to continue to pay employees.  Where this is not economically possible, a special benefit under the Unemployment Insurance Fund (UIF) as per the C19 TERS directive has been created.

COVID-19 TERS is a scheme established to compensate employees who will lose income due to the COVID-19.

C19 TERS lost income benefits:

  • Where an employer is forced to close its operations for a 3 (three) month or lesser period as a result of the COVID-19 pandemic, the company will qualify for the relief benefit.
  • The benefit will be delinked from the UIF’s normal benefits, therefore the rule where an employee accumulates one day credit for every 4 (four) days worked will not apply.
  • The benefits will only pay for the cost of the salary for the employees during the temporary closure of the business.
  • The salary benefits will be capped to a maximum amount of R17 712 per month per employee and the employee will be paid in terms of the income replacement rate sliding scale of 38% to 60%.
  • Where an employee’s income replacement sliding scale falls below the minimum wage of the specific sector, the employee will be paid a replacement income equal to the minimum wage of the respective sector.
  • For a company to qualify for the C19 TERS:
    • The company must be registered with the UIF.
    • The company must comply with the application procedure for the financial relief scheme.
    • The company’s closure must be directly linked to the COVID-19 pandemic.

C19 TERS Illness benefit:

  • An employee will qualify for an illness benefit if the employee is in quarantine for 14 (fourteen) days as a result of the COVID-19 pandemic.
  • Both the employee and the employer will be required to submit confirmation that the employee was in an agreed precautionary self-quarantine period of 14 (fourteen) days.
  • Where an employee is quarantined for more than 14 (fourteen) days, a medical certificate from a medical practitioner must be submitted together with the payment continuation form.

Application procedure:

  • Employers must report their closing to Covid19ters@labour.gov.za, whereupon an automatic response will follow, outlining the application process.
  • The following documents will be required:
    • Letter of authority from the company.
    • Signed Memorandum of Agreement (MOA) from the employer or the Bargaining Council.

Employees being paid by their employers during this period are not entitled to the benefits.

The directive comes into operation with immediate effect and will remain in operation for a period of 3 (three) months or until withdrawn by the Minister.

To view the directive, follow the link

 

Contact our legislation team at info@crs.co.za if you require any additional information.
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