A new directive sets out conditions for the extension of benefits under the Covid-19 TERS scheme, which applies only to four categories of employees
In our previous article, we provided some information on the extension of Covid-19 TERS to 15 March 2021. The Minister of Employment & Labour has recently gazetted a revised Covid-19 TERS Directive on the extension of the scheme. We summarise the key information for employers below.
The TERS extension provides for two application periods:
Period 1: 16 October - 31 December 2020
Period 2: 1 January - 15 March 2021
Applications for Period 1 are currently open for submission. The UIF will issue a public announcement once applications for Period 2 are open.
Extension applies to certain categories of employees
The TERS extension only applies to four categories of employees:
Category 1
- Employees whose employers are not permitted to commence operations, either partially or in full, due to Covid-19 Disaster Management Regulations, and who operate in a sector specified in Annexure A* to the TERS Directive
Category 2
- Vulnerable employees (i.e. employees with known or disclosed health issues or co-morbidities that may place the employee at higher risk of complications or death if infected with Covid-19 and employees over the age of 60) whose employers are not able to implement alternative arrangements to enable them to work from home or to take special measures to ensure their safety at work
- On application, the employer will need to prove that it is unable to make alternative arrangements for vulnerable employees by submitting certain documents to the UIF
- This category of employees is not restricted to the sectors specified in Annexure A of the TERS Directive
Category 3
- Employees whose employers are unable to make use of their employees’ services because of operational requirements (based on economic, technological, structural or similar needs of the employer) in compliance with the Covid-19 Disaster Management Regulations and in particular the need to limit the number of employees at a workplace through rostering, staggering working hours, short time and the introduction of shift systems
- This category of employees is not restricted to the sectors listed in Annexure A of the TERS Directive
Category 4
- Employees who are required to remain in isolation or quarantine after a high-risk contact with any individual who has tested positive for Covid-19 as set out in the Occupational Health & Safety Direction
- On application, the employer will need to prove that the employee was required to be in quarantine/isolation
- This category of employees is not restricted to the sectors listed in Annexure A of the TERS Directive
It is important to note that category 1 is limited to the sectors specified in Annexure A to the TERS Directive. However, categories 2, 3 and 4 are not subject to the same limitation. In other words, employers from any sector are permitted to apply for employees that fall under categories 2, 3 and 4, provided that they meet the requirements listed above.
As part of the TERS application process, employers must ensure that they disclose any additional top-up payments or remuneration received by employees for each application period. Based on what we have seen in ongoing TERS audits, employers should ensure that they are able to reconcile amounts in their csv spreadsheets with their payroll information.
As with the previous TERS Directive, the definition of "remuneration" is the same as in the Basic Conditions of Employment Act 7 of 1997. Employers should use remuneration ordinarily received for work done before lockdown in column "K" of the application spreadsheet, averaging over 13 weeks if amounts fluctuate. Employers should complete column "O" amounts using what was reflected as remuneration paid on the payroll for each application period. If there is a difference, employers must be able to explain it, i.e. why a lesser or greater amount was used in the spreadsheet. Manual upload for each employee on the TERS application system is still the preferred and less error-prone method.
Employers who do not fall within the sectors specified under Annexure A for category 1 employees, and who do not have category 2 to 4 employees (not limited to sectors in Annexure A), can now apply for the UIF's reduced work time benefit. The Department of Employment & Labour website now provides a process for employers to apply for reduced work time benefits for their employees in bulk. This is a welcome development.
The TERS extension also clarifies that any additional payment made by the employer to supplement the reduced work time benefit received will not reduce the amount of this benefit calculated using the formula. The UIF credit days will, however, still be reduced by the reduced work time benefit paid, unlike a TERS benefit paid which does not reduce these credit days. Therefore, employers should first ascertain whether their affected employees fall into any of the categories 1 to 4 who are eligible for the TERS benefits before applying for the reduced work time benefit for their employees.
In our view, there should be relief and support for employees for their loss of income for as long as there is a national state of disaster, and perhaps even for some time afterwards. This is especially the case as economists broadly anticipate that South Africa's gross domestic product (GDP) will gradually climb back to 2019 levels by only 2023/2024.
* Annexure A – Sectors applicable to category 1 employees: cinemas; theatres; casinos; museums, galleries, libraries and archives; gyms and fitness centres; restaurants; venues hosting auctions; venues hosting professional sports; night clubs; swimming pools; bars, taverns and shebeens; public parks; domestic and international air travel; rail, bus services and taxi services; e-hailing services; sale, dispensing, distribution and transportation of liquor; beaches, dams, rivers and lakes; passenger ships; venues where social events are held; venues hosting concerts and live performances; hotels, lodges, bed and breakfasts, time share facilities, resorts and guest houses; conferencing, dining, entertainment and bar facilities; international sports, arts and cultural events; any industries that form part of the value chain of the above at the discretion of the UIF.
Written by Joon Chong, Shane Johnson, Bianca Viljoen from Webber Wentzel