The Covid-19 Temporary Relief Scheme (TERS) explained by Tracey Mouton, our Labour Director:
When would a company / employee qualify
- Company / business must shutdown owing to the lockdown/ corona virus and employees temporarily laid off;
- Financial distress directly related to the shutdown;
- Employees earnings must be compromised;
- May be in place for 3 months;
- The company and employees must be contributors to UIF.
How must a company apply?
- Applications are made to covid19claims@labour.gov.za
- A letter of authority on the letterhead of the employer authorizing the person to make the application on behalf of the employer;
- A standard Memorandum of Agreement (MOA) signed by the UIF and the employer;
- Critical information relating to the employer that is requested in the application form;
- Payroll information backdated to 3 months;
- Bank account supported by bank statements;
What happens after application?
- Whilst it is the intention of the dept of labour to process the claims timeously, the standard MOA does not set a time period in which the application is to be processed. Also, given the voluminous applications that have been received, it is only fair to understand that there will be a slight delay.
- The MOA that must be signed by the company prior to the submission does mention a period of 30 days for payment to be made after the company has submitted its documents for verification.
- However, the guidelines developed by the Dept of Labour mention that the 1st tranche would be paid within 4 days of the MOA being concluded.
- The Company must then pay directly to its employees within 5 days of receipt of the monies.
How much could be paid over to the employees?
- It is important to note that TERS allowances payable monthly to each participating employee will not exceed R 17, 242.00.
- 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 %) as provided in the UI Act.
- Should an employee’s income (determined in terms of the income replacement sliding scale) fall below the minimum wage of the sector concerned, the employee will be paid a replacement income equal to minimum wage of the sector concerned.
Is it possible for the shortfall to be paid by the employer?
There is no reason to believe that the shortfall cannot be paid by the company.
Illness benefits in terms of TERS
- Where an employee is in quarantine for 14 days due to Covid19 pandemic, the employee shall qualify for illness benefit.
- Confirmation 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 14 days.
- In this instance, the confirmation letters from the employer and employee shall suffice.
- Should an employee be quarantined for more than 14 days, a medical certificate from a medical practitioner must be submitted together with continuation form for payment.
Download the official Government Gazette notice by clicking on this link: Government Gazette
For more information, contact Tracey Mouton at Goldberg & de Villiers Inc on 082 898 7841 | email traceym@goldlaw.co.za.