On 26 March 2020, the Minister of Employment and Labour issued a Directive that set out the requirements for the newly established COVID-16 TERS benefits (the Temporary Employer/Employee Relief Scheme). These benefits were provisioned to alleviate the economic impact of the national disaster by assisting employers to pay their employees during the closure of their businesses.

On 8 April 2020, the Minister issued an amendment to the Directive which cleared up some of the questions that arose from the previous draft.

Below are the key changes that have been effected:

1. Employees affected by the partial closure of their employer’s business are entitled to benefits

  • The previous Directive did not define ‘closure of operations’ and it was not clear whether a partial closure of operations would meet this requirement.
  • Businesses that are still in operation, albeit partially, because they provide essential services and goods may now claim on behalf of employees who have been affected by the partial closure.

2. Employers do not need to prove financial distress in order to claim

  • Employers simply need to prove that they have partially or totally ceased business operations as a direct result of the COVID-19 pandemic.
  • The focus is now on ‘affected employees’ rather than a business in financial distress.

3. The maximum salary to be considered when calculating the benefit is R17 712

  • The previous Directive stated that salary benefits would be capped at R17 712.
  • The amendment confirms the position that benefits are calculated on the income replacement rate sliding scale and are therefore capped at 38% of R17 712.

4. C19 TERS benefits may be used by employers to ‘top up’ salaries of affected employees

  • The previous Directive precluded employees who were being paid during the closure of their employer’s business operations from claiming these benefits.
  • Employees who are being paid a portion of their salaries may now claim benefits, provided that the sum of the partial payment from their employer and the UIF benefit does not exceed their normal remuneration.

5. No employee shall receive a total remuneration of less than R3 500

  • This provides protection to employees whose benefits fall below the national minimum wage.
  • This applies with the proviso that the total amount that an employee receives from both the UIF and their employer must not exceed that employee’s normal remuneration (except where the normal remuneration was below R3 500).

6. The Memorandum of Agreement between the employer or bargaining council and the UIF may be concluded electronically

  • The employer or bargaining council may either submit a signed MOA or may confirm their acceptance of the terms and conditions stipulated in the MOA in writing or electronically.

7. Where a bargaining council has applied for benefits, an employer falling within the council’s scope may not apply

  • This provision only applies if the required collective agreement has been concluded and if the bargaining council has entered into the requisite MOA with the UIF.
  • The MOA may provide that employees falling outside the scope of the bargaining council may claim these benefits.

8. No bank may withhold the C19 TERS benefits owing to employees

  • This provision applies even in circumstances where an employer or bargaining council has breached the terms of their overdraft facility or any other similar contractual arrangement with their bank.