Minister of Employment and Labour, Thula Nxesi, has published a new directive which aims to make it easier for South African employees to receive financial support from the Temporary Employee/Employer Relief Scheme (TERS).
The TERS applies to employers who are ‘facing distress’ and are unable to pay salaries due to the lockdown. It is one of the key ways that the government is helping distressed workers during the coronavirus pandemic.
The scheme allows employers to apply for financing on their employees’ behalf, and these employers are then responsible for distributing funds to them.
However, in a directive published on Friday (15 May), Nxesi states that employers may now apply directly for financial assistance where:
- The employee is a UIF contributor who has lost income due to the Covid-19 pandemic;
- The employee’s employer has ‘failed or refused’ to apply for Covid-19 benefits;
- No bargaining council or entity has concluded a memoranda of agreement (MOA) with the UIF.
The directive does not include any additional information on how employees can apply for this funding directly, however the process is likely to be the same one for employers.
Employers not paying
The South African Payroll Association (SAPA) says it has received several complaints from employees whose salaries have been cut, but their employers have not attempted to claim from the Department of Labour’s Temporary Employee/Employer Relief Scheme (TERS).
Arlene Leggat, president of the SAPA, said that many employers believe they won’t receive funds from the TERS, but this isn’t true.
“There is a lot of negativity about the TERS and the government’s ability to process payments. The payment system initially had its hiccups, but the reality now is that TERS benefits are being paid out but employers are being too stubborn to apply for the benefits on their staff’s behalf.”
“If your company has had to reduce employees’ hours, cut salaries, or both, it is your responsibility to start the application process so that your employees don’t have a reduced salary during these uncertain times,” said Leggat.
If you are working for a company that isn’t prepared to claim from the TERS, then you need to notify the Department of Labour so that they can follow up on this, she said.
The latest directive comes after Nxesi made a number of changes to the TERS at the start of May. One of the biggest amendments relates to annual leave and how it impacts TERS claims.
The directive states that an employer, who has required an employee to take annual leave during the period of the lockdown in terms of the Basic Conditions of Employment Act, may set off any amount received from the UIF in respect of that employee’s Covid-19 benefit against the amount paid to the employee in respect of annual leave.
This is subject to the proviso that the employee is credited with the proportionate entitlement to paid annual leave in the future.
In addition, to speed up the payment of benefits, the directive urges employers to pay employees first before claiming reimbursement or setting-off the claim through the UIF.
Any company that was a contributor to the UIF before 15 March is allowed to apply for the TERS scheme.
The fund has also emphasised that all businesses with employees, from spaza shops to hair salons who are registered with UIF can apply for this relief.
Even employers of domestic workers should also apply for the relief as domestic workers are included in the UIF.