The Deputy Minister of Labour has announced that the temporary employment Relief Scheme (TERS) has been extended to the 15th of August 2020, which is the date that President Ramaphosa has indicated as the end of the National State of Disaster.
What to Do After TERS
It seems that the Department of Labour is not going to extend the Temporary Employee Relief Scheme (TERS), beyond June 2020, although many companies are not yet able to have their employees return to work. Many companies have not yet been paid for the June TERS as submissions have only really been possible since the implementation of new security measures were completed for the online system on Sunday 12 July 2020.
Please note that if you had submitted a claim before this date (for April, May or June) and it has not yet been processed, you must enter your Company Registration Number and update the system. If you do not, none of the outstanding claims will be processed.
Where employees have not yet been able to return to work or where they are working a very reduced short time, they are able to claim the Reduced Work Time Benefit. This benefit was promulgated on 1 November 2019 and it is this legislation which allowed for the TERS benefit.
The Unemployment Insurance Act says in clause 12(1B):
A contributor employed in any sector who loses his or her income due to reduced working time, despite still being employed, is entitled to benefits if the contributor’s total income falls below the benefit level that the contributor would have received if he or she had become wholly unemployed, subject to that contributor having enough credits.
This means that employees will only be eligible if their earnings fall below the amount, they have been receiving from TERS and then they will only be given the difference between their actual earnings and the benefit from TERS.
Example: an employee earning R6 000-00 per month is currently working 2 days per week.
- His monthly earnings during short time will be: R2 397.78
- His benefit from the UIF Fund for the month of July would be: R3 657.12
- UIF would pay him the difference, i.e. R1 259.34
If they earn more than R3 657.12 then they are not eligible for a benefit.
This benefit is only going to be truly beneficial for employees who are laid off and not earning at all as they will be able to claim the same benefits as they did from TERS.
However, this benefit does use the UIF Credits. This means that an employee claiming Unemployment, Ill Health or Dependents Benefits uses credits. They get one day of UIF for every 4 days that they have contributed to a maximum benefit of 12 months UIF Payments. In order to “earn” the full benefit an employee must have contributed for 48 months. However, if the employee enters a claim and then starts working again, they start earning back their credits.
The UIF benefit for retrenched employees will pay out the same amount, so there is no UIF benefit for being retrenched at this time.
How to Claim Reduced Working Time Benefits
Employers Responsibility
| Step1: | Employers must complete the UI19 form for their employees citing code 17 (Reduced Working Hours) as the reason for not earning. |
| Step2: | Prepare a letter stating that the employee is not able to return to work or is earning short time as a consequence of the COVID 19 Disaster Management Act Lock Down. |
| Step3: | Complete the Remuneration whilst in employment Form UI2.7. |
Employee’s Responsibility – On line (ufiling)
| Step1: | Use Unemployment Benefits tab to claim Reduced Work Time On-Line |
| Step2: | Use cover sheet of “other” to scan a UI 19, UI 2.7, a letter from the employer confirming a shutdown and copy of identity document under or email the supporting documents to online.BCP@labour. gov.za fax to E-Mail 0864397297 |
| Please Note: The subject line for scan/email must be the employee’s identity number or the Case Number once one has been allocated. | |
| Step3: | Assessment to be conducted once claim is complete/correct/valid and applicant will be advised of the outcome via SMS/email. |
| Step4: | If claim is approved, employee will be advised to submit a request for payment. Submit request for monies to be paid into a Banking Account, UI2.8 |
| Step5: | If further claims are required submit Continuation of Payment UI6A (COP). |
| Step6: | Applicant is paid |
Employee’s Responsibility Manual Claims
| Step1: | Download and complete the UI2.1 (application for Reduced Work Time and, UI 2.7 and UI 2.8 forms. |
| Step2: | Attach the abovementioned forms, a letter from the employer confirming a shutdown and copy of identity document as well as a UI19 from the Employer. |
| Step3: | Reason for termination code must be 17 (Reduced working hours) |
| Step4: | Email all the attachments to the relevant province |
MAILBOX FAX TO EMAIL NUMBER
| Office | Email Address | Fax Number |
|---|---|---|
| Gauteng | Germiston.BCP@labour.gov.za | 086 439 7295 |
| Gauteng | Johannesburg.BCP@labour.gov.za | 086 439 7294 |
| Gauteng | Preotia.BCP@labour.gov.za | 086 439 7290 |
| Kwa-Zulu Natal | Petermari.BCP@labour.gov.za | 086 439 7296 |
| Kwa-Zulu Natal | Durban.BCP@labour.gov.za | 086 439 7297 |
| Eastern Cape | EastLondon.BCP@labour.gov.za | 086 439 7299 |
| Eastern Cape | Portelizabeth.BCP@labour.gov.za | 086 439 7298 |
| Western Cape | Capet.BCP@labour.gov.za | 086 439 7300 |
| Western Cape | George.BCP@labour.gov.za | 086 439 7301 |
| North West Province | NorthWest.BCP@labour.gov.za | 086 439 7302 |
| Limpopo | Limpopo.BCP@labour.gov.za | 086 439 7303 |
| Mpumalanga | Mpumalanga.BCP@labour.gov.za | 086 439 7304 |
| Free State | Mpumalanga.BCP@labour.gov.za | 086 439 7305 |
| Northern Cape | NorthernCape.BCP@labour.gov.za | 086 439 7309 |
Alternatively, the employee can visit their nearest labour centre taking all the documentation with them. More details are listed in the Electronic Claims Pamphlet which also outlines how to claim for ill health or unemployment benefits.
Remember that when employees die in service, their dependents are entitled to a benefit from UIF which is equal to the full 12-month benefit that they would have received if they had been unemployed.
A word of Caution: Employees who have been claiming TERS and have tried claiming unemployment or maternity leave benefits are finding that they cannot submit a claim until the TERS claims have been finalised. It may be best to wait until all the TERS claims have all been paid out before making application.
Please contact the office if you have any questions or require any assistance.
Downloads
BREAKING NEWS (2020/06/24)
TERS Application open for June 2020
The website has been opened for June applications for TERS Refunds. This despite the fact that some April and May applications have not been approved. In the latest information from the Department, we have been assured that the backlog is being attended to and that the systems reruns every 3 to 4 days. We have seen movement on applications this week and the computer system does seem to be working more smoothly.
We are waiting for final information with regard to the closing dates for applications, but at this time new applications for TERS for April and May are still being accepted. The sooner you apply, the sooner payment will be made.
For more information regarding TERS see our COVID-19 Guide on our website
Breaking News 2020/06/26
MAY TERS APPLICATIONS OPEN AT 12AM 2020/05/27
The department of labour posted a news article on their website indicating the issues they have faced in processing the April 2020 TERS payments and promising to open the site for new applications at midnight tonight.
The statement can be downloaded Below
Breaking News – TERS open at 12am 2020-05-27
Breaking News 2020/04/30
Department of Labour – TERS
The Department of Labour has recognised that the manner in which they have been paying out the benefit for TERS is at odds with the intention originally.
The FAQ issued today clarifies that an employee is entitled to their full benefit (in terms of the calculation as a percentage of salary of between 60% and 38% of salary up to a maximum benefit of R R6 638.40).
All those companies who have paid their employees less than their normal salary can now submit claims. Those who did submit and were rejected will automatically be reassessed and payment will be made to the employer.
The calculation which applies to this is Scenario 2 in the pamphlet COVID 19 FAQ.
New Regulations
TERS Regulations
The TERS regulations were amended on 16 April 2020. Essentially they have recognised that many employers have allowed employees to take annual leave during the lockdown. They are now allowing such employers to claim the TERS benefit and when the UIF payment is made to the Company to then credit the employee for the leave taken proportionately.
We are urging all employers who have applied to contact us. We have agreed with the Chief Inspector of UIF to be the communication hub for all our clients so that UIF has one point of contact if they have any queries. The process for queries is for them to issue compliance orders and we want to streamline this process as effectively as possible. If you want to be added to the list, please fill in the form below.
Disaster Management Act
Regulations for the Disaster Management Act were passed on 18th March 2020 (Regulation 318). These regulations were amended on 25 March 2020 (Government Gazette 43148), 26 March 2020 (Government Gazette 43168), 1 April 2020 (Government Gazette 43199) and 16 April (Government Gazette 43232). The document on the website combines all these regulations for ease of use.
Downloads
BREAKING NEWS (2020/04/09):
The Department of Labour has amended the regulations with regard to the TERS Fund. The amendments have clarified the following:
- Eligible companies can include those who have had a partial closure of the business operations
- Employees who are receiving short-time will have their salaries capped at a maximum amount of R17712. The maximum benefit remains 38% of the maximum amount, i.e. R6730-56.
- The minimum benefit will be R3500 if their salary after short-time, falls below this figure. We no longer need to worry about Sector minimum salaries
- The scheme will only pay out if the total of the benefit together with any additional remuneration that the employer pays is less than the remuneration they would normally have received.
- Employers will be able to top up salaries where this can be afforded.
COVID-19 Combined UIF TERS Regulations
COVID-19 Lockdown
Every day is bringing us new information and processes to follow in terms of applying for assistance for companies who are experience business distress and how we can assist employees when we are unable to pay them full salaries, or indeed any salary.
Below is some of the new information that we have in this process.
TEMPORARY EMPLOYEE RELIEF FUND
Having had a long conversation with the call centre this morning we have established the following:
- We cannot force employees to take annual leave during the lockdown, it should be treated as special leave, but the special leave does not need to be paid. The implication is that if staff would prefer to use their annual leave they can. We have changed our letter format to suit.
- The Memorandum of Agreement was meant for Bargaining Councils and not for individual employers applying. This means that:
- You do not need to open a special banking account.
- You do not need to do a proforma invoice attracting VAT.
- The letter of authority is still necessary and the UIF reserves the right to do an audit, but this MOA does not need to be signed, although there might be another document later.
- The application of TERS is meant for employees who will be receiving no funds during the lockdown period and perhaps for some time after this. There is a separate process for employees whose income is affected by a reduction in their working hours. This definition does not include those employees who are still working a full day, but may, due to financial constraints, have had their salary cut by a percentage.
- Employees whose time has been reduced will receive a benefit even if their salary after reduced hours is more than the maximum benefit from UIF of R6,730.56 (I asked this question several times, so really hope the information is correct).
- To claim for UIF benefits for reduced time we are now able to use the same process as TERS, but to include in the leave payment column of the spreadsheet, the value of the payment made to the staff member.
At this stage we are unable to determine what payment the employee will receive
Please don’t let employees use the online system as this will utilise their UIF credits and payment may not be received any time soon.
TAX CONCESSIONS
A draft document has been posted on the SARS Website with proposed assistance to employers to assist them during this time. There are basically two proposals:
- ETI Benefit: the proposal is to extend the Employment Tax Incentive to cover all staff to the age of 65 whose income is below R6500-00 by allowing employers to deduct R500-00 from their PAYE and to increase the benefit for employees with less than 24 months service and who are below the age of 29 by R500.
- Allowing small and medium-sized companies (turnover below R50 million) to defer the payment of 20 per cent of their PAYE liability, without SARS imposing administrative penalties and interest for the late payment thereof.
- The deferred PAYE liability must be paid to SARS in equal instalments over the six month period commencing on 1 August 2020, i.e. the first payment must be made on 7 September 2020.
RETIREMENT FUNDING RELIEF
Responding to calls from Employers wanting relief from the cost of paying over Retirement funding during this period, the FSCA has responded to say that while the risk benefits need to be paid (life insurance, disability insurance, funeral cover etc), with a rule change, which they are going expedite as quickly as possible, companies will not need to pay over the investment portion of the Retirement Funding during this period. The official communique from the FSCA is posted below. Please contact your Retirement Fund Administrator for assistance.
We will inform you when the regulations have been passed into law.
Covid-19 Temporary Employer/Employee Relief Scheme (TERS)
The Department of Employment and Labour has made money available to companies who are experiencing difficulty paying staff as a consequence of COVID-19. They will also pay benefits to employees who are ill as a consequence of COVID-19. To streamline the process they will sign an MOA with the company and once information has been provided they will pay the company who can then reimburse the employees.
Unfortunately, the benefits remain the same, i.e. The salary benefits will be capped to a maximum amount of R17 712, 00 per month, per employee and an employee will be paid in terms of the income replacement rate sliding scale (38 % -60 %). They have said that there will be a minimum amount of R3500-00 which is the current minimum salary. This means that anyone earning above R17 712-00 will only be reimbursed at R6 730.56.
If you would like us to assist with the claiming process please contact the consultant you normally deal with or contact Debbie Mason here.
COVID-19 LABOUR LAW OPTIONS
We are having a number of conversations with our clients with regard to the effect that the effective global shut down has had on the Country and the world with regard to this virus and no doubt viruses to come in future years. I cannot think of a business that is not going to be negatively affected by this, even the health industry as products shipped from China and Europe will be delayed, but those involved in travel and eventing will be the most seriously affected initially.
Below I have given a number of the frequently asked questions with the advice that is being given by the Department of Labour and the Legal Fraternity.
HEALTH AND HYGIENE
The Department of Labour has issued a directive in terms of our responsibility as employers in answer to the question of what our responsibilities to our employees are.
The Department of Employment and Labour has appealed to employers to use the prescriptions of the OHS Act of 1993 in relation to Coronavirus Disease 2019 COVID-19.
The OHS requires the employer to provide as far as is reasonably practicable, a safe working environment which is without risks to the health of all employees.
Current risk assessments need to be reviewed and updated taking into account the new hazards posed by exposure to COVID-19 in the workplace.
Employers who have not yet prepared for pandemic events are requested to prepare themselves for potentially worsening outbreak conditions.
The Department has developed a COVID-19 guideline which is based on infection prevention and occupational hygiene practices.
It focuses on the need for employers to implement the following measures:
Engineering controls:
Isolating employees from work-related hazards, installing high efficiency air filters, increasing ventilation rates in the work environment and installing physical barriers such as face shields to provide ventilation
Administrative controls:
Encouraging sick employees to stay at home; minimizing contact among workers, clients and customers by replacing face-to-face meetings with virtual communications e.g. conference calls, skype etc; minimising the number of workers on site at any given time e.g. shift work; discontinuing local and international travel; developing emergency communication plans, including a task team for answering worker’s concerns and internet-based communications; provide workers with up-to-date education and training on COVID-19 risk factors; training workers on how to use and wear protective clothing and equipment
Safe work Practices:
Provide resources that promotes personal hygiene e.g. no-touch refuse bins, hand soap, alcohol-based hand rubs containing at least 70% alcohol, promote regular hand washing
Personal Protective Equipment:
This includes the provision of gloves, goggles, face shields, face masks, gowns, aprons, coats, overalls, hair and shoe covers and respiratory protection.
Employers and workers should use this information to identify risk levels in the workplace and identify additional appropriate control measures. Additional guidance may be needed as COVID-19 outbreak conditions change. In the event that new information about the virus and its impact is established, plans may need to be modified accordingly.
In the case of suspected exposure, contact the Coronavirus hotline in South Africa – 0800 02 9999
SICK LEAVE
The questions that are being asked of us are:
Does quarantine count as sick leave?
If a doctor orders it then yes it does, but if a person voluntarily goes into isolation then it does not. However, if the employer imposes quarantine on its employees, then that should be treated as special paid leave (not annual leave).
If an employee catches Coronovirus at work will it be a WCA Claim?
If the employee’s job is to work with affected or potentially affected people and it was acquired during the course of his work, then it will be a WCA claim. In other circumstances, we will have to allow the Commission to decide. It is going to be difficult with certainty to determine where the infection came from.
All other infected and ill employees will be entitled to normal sick leave.
ALTERNATIVE WORKING ARRANGEMENTS
Many staff are requesting permission to work at home, particularly as schools have closed and alternative childcare may not be available.
How do I monitor staff who want to work from home and what do I do if they cannot work more than 3 or 4 hours a day?
Companies are going to have to look at this very seriously and improve their monitoring systems so that they can measure work done. Maybe they need to agree an hourly rate for work done during this period. It is going to have to be on a case by case basis.
What do I do with staff who cannot work from home?
They need to come to work or take annual or unpaid leave. We will have to monitor what happens to public transport, but if hygiene factors are looked after, there should not be a problem with continuing to work.
What do I do with staff who choose not to come to work (childcare, immune system compromise, self-isolation etc.)
We have suggested to our clients that they have discussions with their staff about the hygiene factors and the real risks of the virus, but also about the effect that it is going to have on their businesses and seriously introduce the possibility of short time or requiring employees to take some of their annual leave. They also need to discuss the “no work no pay” principle for people who choose for whatever reason to not come to work.
OPERATIONAL REQUIREMENTS
For many of our clients, they literally have little or no business for the length of time that the global shut down is in place. The following questions have been asked:
Can I lay-off staff or ask them to take unpaid leave?
The discussion is around what the Department of Labour calls Reduced Working Hours. There are no guidelines to this in the Basic Conditions of Employment, but employees can apply for UIF benefits whilst on a Reduced Working Hours (Short Time) arrangement. This is seen as an alternative to retrenchment and the consultation with staff would be in terms of how this could best be arranged. Each Company would have to look at their particular circumstances. To be fair and in line with Bargaining Council Agreements, reduced working hour arrangements must be applied to everyone in the business and there should be 5 days notice of the implementation of short time.
Can I retrench?
If the business requires it then you can, but you need to follow the process outlined in section 189 of the Labour Relations Act. This requires consultation with staff on how to select employees to be retrenched, timing, severance packages etc. Part of the process is to look at alternatives to retrenchment such as reduced working hours and to ask for volunteers. It is a difficult process and really should only be considered if the company was contemplating retrenchments prior to the virus outbreak.
LABOUR COURT AND CCMA
We have received information that the Labour Court and the CCMA will effectively be closed. The CCMA will not be doing any face to face meetings between 18th March 2020 and 14th April 2020. They will only accept e-mailed applications for disputes and have postponed all arbitrations. They will do telephonic conciliations where possible. They will assist with large retrenchments, but only if it is held at the company premises and they can be assured that health and hygiene arrangements are adequate. Otherwise, they are closed.
CONCLUSION
I think it is important not to panic. 80% of infected people will be mildly affected and have very light symptoms. It’s the 20% who become critically ill that will overload the health system. We need perhaps to have separate conversations with people who have hypertension, diabetes, HIV, respiratory conditions, cancer, cardiovascular disease, smokers and people with autoimmune conditions and find specific ways to protect them.
Particular advice: Wash your hands when you go into a meeting and when you leave a meeting. Sterilize your phone with an alcohol-based sanitiser, don’t shake hands, hug or kiss anyone in the workplace.
A good source of information is Alanah Shaikh’s Ted Talk on Covid-19.