COVID-19 and employment Q&A

In this Q&A we will answer the most frequent questions we are receiving from our valued clients regarding COVID-19 and how such affects payment of Employees; Leave and Employment in general.

The Q&A will include questions that are not only applicable to the National lock down period but also to the period thereafter.

 

1. What UIF benefits are available to Employees and Employers and are they applicable during or after the National lock down?

Note: With the conclusion of UIF TERS, there exists confusion relating to what type of claims employees will now be able to make from the UIF. The below is a summary of the UIF benefits available but there is still uncertainty around whether employees on short time or temporary layoffs will in fact be able to apply, application processes, and how the UIF will manage the process. We are investigating the issue and will be providing more information in due course.

What is the benefit called and what is it for?

Who should apply and when?

How does it work?

What application forms are required?

Covid-19 TERS

The Covid-19 TERS benefit fund has been created to assist employers who may be unable to pay employees, in full or partially, for economic reasons as a direct result of the COVID-19 pandemic. TERS is available to employers who are required to temporarily close their operations, wholly or partially, for a period of three months (or less).

According to the current Government Directives, this benefit was only available for the periods April, May and June. Applications for these periods are still open.

  • The employer (rather than the employee) submits a claim for this benefit and the employer then pays over the money to the employees.
  • The salary to be taken into account in calculating the benefits will be capped at a maximum amount of R17 712.00 per month, per employee and an employee will be paid in terms of the income replacement rate sliding scale (38% – 60%) as provided in the UI Act.
  • Despite conflicting reports, our understanding is that the maximum benefit for a high earner would be 38 % of R17712 a month, which amounts to about R6 730 a month
  • Benefits will be delinked from the UIF’s normal benefits. I.e. claims are not dependent on an employee’s UIF credits and Employees will therefore be entitled to benefits irrespective of how long they have contributed.
  • Covid-19 TERS benefits will not affect any credits an employee currently has because it is a special benefit.
  • Should an employee’s income determine in terms of the income replacement sliding scale fall below R3500, the employee will be paid a replacement income equal to that amount. This means that an employee will not receive less than R3500.
  • Employees are entitlement to this benefit even if they receive partial payment, insofar as the payment the employer makes, plus the payment received from the benefit, is not more than the ordinary remuneration that the employee would have receive

Employers must visit https://uifecc.labour.gov.za/covid19/ to submit their application.

Employers who need assistance can contact us.

Reduced work time benefit

This benefit applies where Employees are laid off temporarily; or where Reduced/Short Time is implemented, as a result of the Covid-19 Pandemic.

This benefit is available to Employees who are laid off temporarily and not receiving any remuneration; or Employees who are only receiving a portion of their remuneration.

The claim is by the employee (with the assistance of the employer).

  • Employees will be able to claim UIF for the difference between their normal salaries and that earned during short time and during Temporary Lay-Offs.
  • The maximum UIF benefit will be paid as per the benefit structure if the Employer pays R 0.00 amount to the Employee during the shutdown period. However, if a certain Rand value is paid during the shutdown period, then the UIF benefit will be reduced (i.e. the difference between the benefit level and amount received as income from the Employer).
  • The UIF income replacement rate sliding scale of 38-60% of an Employee’s salary will be applied but to a capped maximum salary amount of R17 712. This means that even if an Employee earns R 30 000 per month, their benefit will be calculated based on a salary amount of R 17 712.
  • The claim is subject to the employee having enough credits. The Employees’ period of contributions to the UIF fund as well as the previous times they claimed from the fund may be taken into account to determine what percentage of the UIF benefit they will be entitled to.
  • It is possible that lower earning employees may get out less than the minimum wage under this dispensation.
  • UI19 and UI2.7 (completed by Employer- and Employer to indicate Code 17 on the UI19 form.
  • UI 2.1 (application form to be completed by the Employee).
  • UI 2.8 to be completed by the Employee
  • A declaration letter from the Employer confirming Reduced Work Time or Employee’s Temporary Lay-Off is directly due to the Corona Virus.
  • Copy of Employee’s ID document.

Illness benefit/14-days quarantine

This benefit applies in cases where companies decide or where Employees elect that an Employee has to be self-quarantined for 10 days and or in special circumstances more than 10 days.

This benefit will apply after lockdown, but Employees who were placed on 14-day quarantine prior to the lockdown will still be able to claim for that period retrospectively.

  • A written declaration from both the Employer and Employee must be submitted together with the application as proof that both the Employer and Employee have agreed to the 14 days “special self-quarantine leave”.
  • In this instance the declaration letters will be deemed to suffice in place of a medical certificate on the illness application form (UI2.2) as the beneficiary would have self – quarantined without prior consultation with a medical practitioner. Benefits will be paid based on these declaration letters.
  • The maximum UIF benefit will be paid as per the benefit structure if the Employer pays R 0.00 amount to the Employee during the quarantine period. However, if a certain Rand value is paid during the quarantine period, then the UIF benefit could be reduced (the combined value should not be more than the remuneration the Employee would have received if not on quarantine).
  • UI19 and UI2.7 (completed by Employer) – indicate Code 10 on the UI19 form
  • UI2.2 – Completed in full except the medical portion
  • The medical portion is replaced by the declaration letters from the Employer and Employee.
  • UI 2.8 to be completed by the Employee
  • Employer and Employee declaration Letters – use the Department of Labour templates in this regard.
  • Copy of Employee’s ID document

Extension of 10-day quarantine period

This applies in the event that an Employee is quarantined for more than 10 days.

Employees who were placed on 10-day quarantine and such quarantine was extended prior to the lockdown, will still be able to claim for that period retrospectively.

  • The Employee does not necessarily have to be sick, but if their registered Medical Practitioner advises that they should remain in self-quarantine due to, for example, still being exposed to the Corona virus or in the event that the Employee’s immune system is still compromised.

A medical certificate from a registered Medical Practitioner must be submitted together with the Continuation Form UI3, at the expiry of the 10 days in order for the Employee to be able to continue claiming UIF illness benefits.

Death benefit

This benefit applies in the undesirable event where a UIF contributor passes on.

It applies during and after lockdown.

  • Benefits are paid to the beneficiaries of the deceased. People eligible to apply for such benefits are a Spouse, Life Partner, Children and nominated persons, in that order.
  • In relation to the Reduced Work Time Benefit, the Illness Benefit and the Death Benefit, the normal rule that for every four days worked the Employee accumulated one credit day and maximum credit days payable is 365 for every four completed years, will apply.
  • UI19 and UI 53 (completed by the Employer)
  • UI 2.5 or UI2.6
  • Death Certificate
  • ID of deceased and applicant
  • Bank statement/confirmation from all verifying banks will be accepted instead of UI 2.8, during this time.
  • Copy of ID document
  • Claim needs to be submitted within 6 months after the death of the employee

Normal Illness benefit

This benefit applies when normal sick leave is exhausted.

Employees will be able to claim during or after lockdown.

  • This benefit becomes applicable when an Employee’s normal paid sick leave entitlement is exhausted, and the Employee has been booked off by a registered Medical Practitioner for longer than 7 days.
  • UI19 and UI2.7 (completed by Employer
  • UI 2.8 to be completed by the Employee
  • Medical certificate from a registered Medical Practitioner
  • Comprehensive medical report
  • A follow-up form

 

2. May commission workers and freelancers apply for UIF benefits?

No, unfortunately not as they are not covered under the unemployment Insurance Amendment Act.

In the event that an Employee earns both a basic and commission, benefits will be calculated on the basic salary only, if the Employee contributed to UIF.

 

3. How should UIF claims for Reduced Work time, Illness and Death benefits be submitted?

Employers must complete the required forms. The Employer or Employee should then submit the completed forms through the following methods:

  • A claim for illness can be lodged online at: www.ufiling.co.za
  • Email the application to the nearest UIF processing Centre
  • Application forms can be downloaded from the Department of Employment and Labour website: www.labour.gov.za

4. What is the application process for Covid-19 TERS?

According to the current Government Directives, this benefit was only available for the periods April, May and June. Applications for these periods are still open. Employers must visit https://uifecc.labour.gov.za/covid19/ to submit their application.

Employers who need assistance can contact us.

 

5.What is short time?

When Employees work for less hours and/or less days per week/per month than they would normally do as per their employment contract. Needless to say, they would then also be paid less proportionate to the hours/days worked.

They will be able to claim from the UIF for the difference between what they used to earn and what they will earn during the period of the National Lock down and possibly thereafter.

 

6. What is a Temporary Lay-Off?

When Employees do not work at all for a certain period. This period can be days, weeks or months depending on the circumstances.

In such circumstances, the Employees would not be paid, but would still be the Company’s Employees.

 

7. How long may Employees be placed on a Temporary Lay-Off?

Our legislation does not prescribe time periods within which Temporary Lay-Offs must be applied.

The prevailing circumstances and any agreement achieved with the impacted Employees will dictate these time periods. Should the Temporary Lay-Offs become indefinite or endure for an unreasonably long period of time, the Employer may elect to (permanently) retrench Employees, after following the provisions of s189 or s189A of The LRA (as amended).

 

8. What is the process for placing Employees on short time or a Temporary Lay-Off?

Employers may not unilaterally change Employees’ conditions of employment without first consulting with their Employees. However, consultations relating to Temporary Lay-Offs is much less onerous than retrenchment consultations, in light of COVID-19 and the resultant National Lock down.

Whilst the options need to be discussed with Employees, they did not have to agree to the decision to be placed on short-time or Temporary Lay-Off during the National Lock down as the Lock down was imposed by Government and is thus a decision beyond the Employer’s control. However, if the employer needs to place Employees on a further period of Temporary Lay-Off/short-time Employers should consult with the affected Employees.  In the event that consensus is not reached the Employers still has the right to place Employees on Temporary Lay-Off/short-time, provided the Employer bases their decision on sound business rationale.

Here are the steps Employers should take in the event that Employers elect to and need to place staff on short time/Temporary Lay-Offs after the National lockdown:

  • Issue Employees with a notice of intention to introduce short time/Temporary Lay-Off.
  • During the consultation period, give Employees the opportunity to propose alternative solutions.
  • Once you have consulted with your Employees, issue them with a notice of short time/Temporary Lay-Off.
  • Assist Employees with the documentation required to claim UIF benefits.

Feel free to contact us for the necessary notices/documents.

 

9. May Employers use different strategies for different groups of Employees in the same business i.t.o. who are placed on a Temporary Lay-Off/Short-time and who are afforded the opportunity to continue working?

Yes, as long as Employers can clearly justify their business rationale and reasons for the different working arrangements.

 

10. May Employers revoke remote working arrangements?

If Employers are able to accommodate some Employees working from home during these current times, then they should consider such. The concession can be revoked in the event that Employees abuse the conditions pertaining to working from home or where there is no longer an operational requirement to allow them the concession.

We recommend that clear guidelines be set for Employees in terms of requirements, management expectations, deadlines, communication, etc.

In the event that the concession is revoked due to abuse or if there is no longer an operational requirement to work from home (such as no work available), Temporary Lay-Offs or short time may be implemented.

 

11. Factors to take into account before embarking on retrenchment processes

The first priority should be to consider strategies to try and circumvent retrenchment. It is advisable to first consider which of the Employees are critical to the business, especially in the coming months.

Factors to be mindful of:

  • Keep in mind that for 12 months of their being made redundant, Employers are legally obliged to offer such Employees “first right of refusal” when suitable vacancies arise – provided that they meet the inherent requirements of the available positions. In other words, an Employer might have to rehire the same people they retrench now.
  • Severance packages are expensive. Employers would need to pay any accrued annual leave, notice periods and severance pay (i.e. one week for every completed year of service).
  • Retrenchment processes as per section 189 and section 189A of the Labour Relations Act (LRA) are onerous and there is a duty on Employers to meaningfully engage with Employees being contemplated as being made redundant before being able to procedurally and substantively fairly retrenching certain Employees.
  • Normal section 189 processes do not stipulate how long the process should take, but to be procedurally fair Employers should not rush the process. It should take nothing less than 2 weeks but consultations often take longer.
  • If Employers employ more than 50 staff and there is a good chance that they would need to retrench more than 10 people, such retrenchments would automatically be regulated by section 189A of the LRA. This means that Employers would be required to consult for at least 60 days before they may make Employees redundant. This also means Employers would have to cover the costs for at least 60 days unless such Employees wave their rights, which they are unlikely to do in today’s times.
  • Note: Section 189 is the section in the Labour Relations Act that governs restructuring processes. There is also section 189A which deals with large scale retrenchments.

If an employer chooses to embark on a retrenchment process, they must get legal advice as non-compliance with these obligations can have severe consequences.   

 

12. What are possible alternatives to retrenchment?

South African labour legislation prioritises job retention, therefore it will follow that employers should do everything reasonably possible to avoid retrenching employees. Here are some of the alternative to consider:

  • Reduced salaries:

Employers could either negotiate reductions in salaries or changes in contracts for a period, to retain staff as well as decrease its staff salary bill. All employees would have to be consulted in regard to the reduced salaries.

  • Applying a reduction in working hours and proportionate deduction in salary:

The use of short time involves shortening the hours in a working day or the number of working days in the week. Prior to placing short time into effect, the employees would have to be consulted.

  • Minimising overtime:

By reducing the overtime payout of the business, the costs of the salary bill will be significantly decreased.

  • Extending the period of unpaid leave or Temporary layoffs

The above can be used in conjunction with various other measures in order to decrease the costs of a business. However, both of these measures would have to be agreed to by both employers and employees.

The above would be deemed to be feasible alternatives to possible retrenchments. Whilst the afore-mentioned options need to be consulted with Employees, they do not have to agree to such if the Employer positions this decision as being reasonable alternatives to retrenchments.

Employees can thus be placed on a Temporary Lay-Off /Short-time even after the 16th April as a fair alternative to possible retrenchments.

 

13. Staff with comorbidities or staff over the age of 60

The employer carries a responsibility to firstly, identify potential risks & hazards, and then secondly, manage these as far as reasonably practicable in the workplace.

The regulations are clear that people above 60 and people with comorbidities are regarded as high risk employees and that they are required, if possible, to not work at the workplace during this time. In the instance where there is a very good justification for these employees to be at work, the employer is responsible to ensure that special measures are in place to protect them from Covid-19 exposure. The special measures will be specific to the person, role, function and work environment and in addition to the minimum measures as per the regulations.

The list of high-risk employees, if they will work from home or from the workplace, and the measures to protect them will have to be outlined in the risk assessment and plan that need to be in place before they can return to work. These documents need to be available when a Labour Inspector audits the workplace.

Even though a report/recommendation from a medical practitioner is not a legal requirement, it is advised that the employer, in the process of determining if a high risk employee can be at the workplace, can request a medical report in this regard.

It is important that an employer knows who the employees are that have comorbidities which put them in a high risk category. However, neither an employee nor a medical practitioner need to disclose what these comorbidities are. An employer can therefore ask employees to complete a questionnaire listing the comorbidities and only disclose if they have one or more of the listed comorbidities. A medical practitioner only has to refer to a identified medical condition.

 

14. Can Employees claim from COIDA if they contract COVID-19 at work?

COIDA is the Compensation for Occupational Injuries and Diseases Act. When an employee falls ill with the Covert-19 virus because they came to work, they may claim from the Workman’s Compensation Fund.

For the first three days if an Employee is booked off from work due to a work-related disease or injury, the Employer must pay the Employee in full. This is called COIDA/WCA leave and means that the first three days does not come out of the Employees’ sick leave entitlement.

From day 4, the Employer pays 75% of the Employee’s rate of pay. If the Employee is still booked off after three months, he or she can continue claiming but then such claim will go through the Compensation Fund.

 

15. Sick leave entitlement

An employee who cannot work because they have been infected with COVID-19 or are exhibiting symptoms to the extent that they have been booked off by a doctor, will be entitled to sick leave on full pay if they submit a valid medical certificate.

In the event that an employee’s sick leave entitlement is exhausted, and the Employee has been booked off by a registered Medical Practitioner for longer than 7 days, (for whatever nature of illness), he or she can claim Illness Benefits from UIF.

 

16. What if an employee has not yet tested positive for Covid-19 or is not booked off by a doctor, but is placed in quarantine?

If an employee has to stay home but have not yet tested positive and do not have symptoms the employee will not be entitled to paid sick leave.

If they are advised to/elects to be placed in self-quarantine for 14 days due to their being exposed to a person who has tested positive for COVID-19 TERS, such an employee is eligible to claim UIF illness benefits.  Hence these 14 days of self-quarantine is not processed as paid sick leave benefits hence does not reduce an employee’s paid sick leave entitlement.

 

17. What are the Employer’s responsibilities in terms of employees who Return to Work?

According to the Occupational Health and Safety Act, the employer is responsible to create a healthy and safe work environment for all employees. In the context of the COVID-19 pandemic, this implies that the employer is responsible, among others, to:

  • Implement a policy regarding the management of COVID-19 in the workplace.
  • Define and implement a written plan for a phased-in return of employees to the workplace.
  • Appoint a Compliance Officer to conduct risk- and health assessments.
  • Adopt responsible measures to prevent the spread of COVID-19 in the workplace.
  • Implement procedures to identify and report cases in the workplace.

Please note that the labour advice provided in this Q&A is always subject to the specific facts of each business case. We therefore recommend that you contact a labour relations expert for advice applicable to your specific labour challenges before carrying out any labour practices which may put the business at risk.

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