As the COVID-19 lockdown progresses, we find that uncertainty and anxiety are on the increase. We find ourselves in a situation the likes of which no one has ever experienced before. Both employers and employees are equally anxious about issues such as leave, salaries and operational costs.
We have been inundated with queries from people whose employers are requiring them to utilise their paid annual leave during the lockdown. Employees are concerned about this as many have already booked (and paid) for leave during December and they will now, effectively, not be able to take that leave.
The Department of Labour issued a directive that clarifies the types of leave recognised by the Basic Conditions of Employment Act (BCEA) which includes, but is not limited to, annual leave, sick leave and family responsibility leave which may be applicable to the employee’s absence as a direct result of the Covid-19 lockdown. This directive clearly states that an employer may indeed request that employees take their annual leave during this period as the BCEA lawfully allows employers to determine the time when employees may take their annual leave.
Regardless of the above, the department has urged employers not to request employees to use their annual leave, but to rather make use of the financial assistance that the department has made available by means of the COVID-19 Temporary Employer/Employee Relief Scheme (TERS). This allows employers to apply for benefits during the lockdown period. According to the Directive on Covid-19 TERS that was printed in the Government Gazette No 43161, it is anticipated that “companies will have to shut down and employees laid off temporarily” during the lockdown and that “employees may lose income”.
The question was raised as to whether this relief is only available to companies that are properly registered. Later in the same directive, reference is made to benefits being payable to “Contributors to have lost income due to the Covid-19 pandemic”. Since the definitions of contributor, employer and employee are very broad in the Unemployment Insurance Act, this cannot be limited to only companies and their employees. The salary benefit will be capped at a maximum amount of R 17 712 per employee per month paid according to the income replacement sliding scale (38% to 60%) as stipulated in the Act. The maximum amount payable is R6 731, calculated on a salary of R17 712.
It is important to note that a benefit will not be paid to employees who are being paid by the employer, but it may be possible to apply for a shortfall in salary, should the employer be paying only part of the employee’s salary. The following is required in order to apply for the benefit:
- A letter of authority on the letterhead of the employer that authorises the person to apply on behalf of the employer;
- The Department has a standard Memorandum of Agreement that it sends out and that needs to be signed by the UIF and the employer and attached to the application;
- All information about the employer as requested in the application form;
- Three-months of payroll information;
- Confirmation of bank details (supported by bank statements);
- Applications to be sent to [email protected]
Des Squire is a Managing Member of AMSI & Associates cc in association with MHH Consulting.
