The Department of Labour has published a new directive around its Covid-19 Temporary Employee/Temporary Employer Scheme (TERS), introducing a number of new amendments and regulations for South African businesses.
The TERS is one of the key measures that government is using to financially support employers and employees during the coronavirus lockdown, with the new directive providing further clarification on the new scheme and the rights of employers and employees.
Below law firm Werksmans outlined the salient aspects of the TERS and how the new amendments impact the labour market.
1. Due to Covid-19 employees may be laid off temporarily and not paid, either fully or in part.
2. Whilst employers are encouraged to pay employees during this period they are not obliged to do so.
3. Where it is not economically possible for employers to pay employees, either fully or at all, a special benefit fund has been set up under the auspices of the Unemployment Insurance Fund (UIF) – the TERS.
4. A company which has had to close its operations, or a part thereof, for a period of three months or less as a direct result of the Covid-19 pandemic will qualify for TERS benefit, provided that:
- The company is registered with the UIF;
- The company must comply with the application procedure for TERS; and
- The company’s closure must be directly linked to the Covid-19 pandemic.
5. The benefit shall be de-linked from the UIF’s normal benefits and therefore the normal rule that for every four days worked the employee accumulates a one day’s credit and the maximum credit days payable is 365 for every four years will not apply.
6. The benefit will only be for the cost of salary for employees during the temporary closure.
7. The benefit an employee can receive under this scheme will be capped to a maximum amount of R6 730.56 per month per employee. The maximum salary to be taken into account in calculating the benefits will be R17,712.00 per month and the employee will be paid in terms of the income replacement sliding scale (38%-60%) as provided for in the Unemployment Insurance Act.
8. An employer may then top up the benefits for an employee provided the employee does not end up receiving more than 100% of his/her ordinary salary taking into account any payments received from the UIF in terms of the TERS.
9. Employers must apply by reporting their closure via email to [email protected] An automatic response, which has recently been updated, will be generated setting out the application process. The employer will be required to submit various documents including a letter of undertaking from the company and a signed memorandum of agreement.
You can read more about the directives and how to apply for the scheme here.