By Peter Cottrell CA(SA)
We hope that you are keeping safe and well. As the move to lockdown level 2 brings further easing of restrictions, we are acutely aware of the challenges that are encountered at each level of society. There is still a long road ahead, but we are hugely encouraged by the resilience we have seen within our client base and wider network.
The Temporary Employer-Employee Relief Scheme (TERS) has provided much relief to employees, but unfortunately has seen a number of complications and delays. This update will summarise recent developments and will give details of the limited extension that will apply to 15 August 2020.
- The application process has included a requirement for a registration number to be verified. Similar to the situation that occurred early in lockdown with registration of Essential Service Providers with CIPC, the UIF-TERS system only makes provision for verification of registration numbers of incorporated entities. System amendments have now been made to allow for verification of other entities such as non-profit organisations. It is likely that a manual verification process will need to be followed, which could result in further delays in remittance of benefits.
- Functionality has been introduced to rectify past applications where there were discrepancies between the benefits that should have been received and the actual result.
- A limited extension of TERS benefits has been announced for the period 1 July 2020 to 15 August 2020, with applications due to open on 17 August 2020.
Limited extension of benefits
A directive for the extension of TERS benefits was issued on 11 August 2020 and further guidance was issued by the Department of Labour over the weekend. We have had numerous enquiries from clients with requests for applications. At the outset we need to draw attention that the application of this new extension is extremely limited and we can only identify a few niche clients to whom the extended benefit will apply.
The extension of benefits to 15 August 2020 will apply in any one of the three circumstances listed below. We will set out the extract of the directive, and then give a brief explanatory note, with thanks to Warrick de Wet for his input on the interpretation of the directive.
“[Employers who are] not permitted to commence operations, either partially or in full, in terms of the Regulations published by the Minister of Cooperative Governance and Traditional Affairs in terms of section 27(2) of the Disaster Management Act, 2002 (Act No. 57 of 2002) pursuant to the declaration of a national disaster dated 15 March 2020 in terms of section 3 of that Act;”
Comment: This will only apply where the employer operates in a sector that was not yet permitted to partially or fully commence operations in terms of the Disaster Management Regulations. The affected sectors in the period 1 July 2020 to 15 August 2020 were fairly limited.
“[Employers who are] unable to make alternative arrangements for vulnerable employees to work from home or take other measures as contemplated in clause 20.3 of the OHS Direction;”
Comment: The vulnerable employees envisaged in this clause are those with age or co-morbidity factors where alternative arrangements cannot be made. For example, if an employee over the age of 60 cannot work from home and alternative arrangements cannot be made in the workplace to mitigate risk, then that employee would not be able to work and would be able eligible the extended TERS benefit.
“[Employers who are] unable to make use of their [employees’] services either fully or partially because of operational requirements based on the economic, technological, structural or similar needs of the employer caused by compliance with the Regulations made in terms of section 27 (2) of the Disaster Management Act, 2002 (Act No. 57 of 2002) or directions made under regulation 4(10) of those Regulations in particular the need to limit the number of employees at the workplace through rostering, staggering of working hours, short time, and the introduction of shift systems.”
Comment: This clause relates specifically to where the employer is unable to make full or partial use of an employee’s services due to restrictions in complying with the health and safety protocols in the Disaster Management Regulations. For example, a manufacturing business may ordinarily operate with a high number of employees in close proximity to each other. In order to comply with the Regulations, the employer may only have been able to bring the workforce on a short-time basis so as to implement social distancing protocols. The employees who have received reduced remuneration due to the application of these measures will be eligible for the extended TERS benefit.
To date, the application of the TERS benefit has been relatively broad, primarily giving benefit where employees have received reduced remuneration. From the above it is evident that the application for the extended benefit period is extremely limited, applying only within three limited circumstances. Employers will be held liable for invalid applications and the circumstances should be carefully considered against these new rules.