The COVID-19 Temporary Employee / Employer Relief Scheme

The COVID-19 Temporary Employee / Employer Relief Scheme

In terms of Section 27(2) of the Disaster Management Act 57 of 2002, and Regulation 10(8), the Minister of Employment and Labour issued the Directives for the COVID-19 Temporary Employee / Employer Relief Scheme (C19 TERS) to assist Employees and Employers during this period of lockdown and the financial implications as a result thereof.

During this period of lockdown, companies will have to shut down and employees laid off temporarily. This means that employees are compelled to take leave, which is not out of choice. Employers are encouraged to continue to pay employees, but where this is not economically possible; the C19 TERS makes provision -:

1. The payment of benefits to the Contributors who have lost income due to Covid -19 pandemic;
2. To minimise economic impact of loss of employment because of the Covid -19 pandemic;
3. To avoid contact and contain the spread of Covid -19 during the process of application for benefit;
4. To establish the Temporary Employee /Employer Relief Scheme and set out the application process for benefits of the Covid -19 pandemic and to alleviate economic impact of Covid -19;

Employers who has to close operations for a period of 3 (three) months or less and suffers financial distress, as a direct result of the COVID-19 pandemic, will qualify for the C19 TERS. The benefits received here from will be delinked from UIF regular benefits. Therefore, the regular rule that for every 4 (four) days worked, the Employee will accumulate 1(one) day credit and the maximum of 365 (three hundred and sixty-five) fays for every 4 (four) years will not apply.

The benefits are however limited, since the benefits will only pay for the costs of the employee’s salary during the temporary closure. The benefit will be capped to R17 712.00 per month per employee. What exactly is meant by the costs of the salary, has not yet been specified. The benefit will be paid in terms of the ‘Income Replacement Rate Sliding Scale’ (between 38% to 60% of the employee’s salary). It is certain that the employee will be paid at least equal to the minimum wage for the appropriate sector.

For company to qualify for the temporary financial relief, the company must:

1. be registered with the UIF;
2. comply with application procedure for financial relief scheme; and
3. Company’s closure must be directly linked to COVID-19 pandemic.

An employee who is quarantined for 14 days due to COVID-19, will qualify for illness benefits. To qualify for this benefits, confirmation (by way of a confirmation letter the employer and employee) from both the employer and the employee must be submitted together with the application as a proof that the employee was in an agreed pre-cautionary self-quarantine for the 14 (fourteen) days. Where an employee has been quarantined for more than 14 (fourteen) days, a medical certificate from a medical practitioner is required, along with the completed continuation form for payment.

Application procedure

Employers must report their closure to Covid19ters@labour.gov.za . Employers will receive an automatic response which outlines the application process. The employer will have to deliver the following completed documents to the Unemployment Insurance Fund:

• Letter of authority from company; and
• Signed Memorandum of Agreement from the employer or bargaining council with the UIF.

Employees who are being paid during this period will not qualify for this benefits. We are currently waiting an update on whether employers who have partly paid their employees, will be able to claim the difference or anything.