A company which is in financial distress and has to close its operations for a period of three months or less as a direct result of the COVID-19 pandemic will qualify for TERS (Temporary Employer/employee scheme) benefit.
The company must be:
- Registered with the UIF
- Comply with the application procedure for the financial relief scheme &
- The company’s closure must be directly linked to the COVID-19 pandemic
- 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.
- The benefit will only be for the cost of salary for employees during the temporary closure.
- The salary benefits will be capped to a maximum amount of R17,712 per month per employee and an employee will be paid in terms of the income replacement sliding scale (38%-60%) as provided for in the Unemployment Insurance Act. This is subject to the limitation that at no time will the salary paid fall before the minimum wage provided for in a particular sector. Presumably this would also take into account the National Minimum Wage.
- In addition to the above, an employee who is in quarantine for 14 days due to the COVID-19 pandemic will qualify for illness benefits. Where the employee is in an agreed self-quarantine for 14 days then the employer and employee must both submit confirmation of this. Confirmation letters will suffice in this regard. Where the employee is quarantined for a period exceeding 14 days then a medical certificate must be submitted by a doctor for continued payments.
- Employers must apply by reporting their closure via email to Covid19ters@labour.gov.za. An automatic response will be generated setting out the application process. The employer shall be required to submit the following documents:
(a) Letter of authority from the company; and
(b) Signed memorandum of agreement from the employer or Bargaining Council with the UIF.