The Unemployment Insurance Fund (UIF) has set aside R5.3-billion for the new Temporary Employer/Employee Relief Scheme (TERS) benefit to help employees and employers negatively impacted by the civil unrest in KwaZulu-Natal and parts of Gauteng in mid-July, Employment and Labour Minister Thulas Nxesi confirmed on July 28.
TERS is designed to assist companies who are temporarily in distress, but with a plan in place to turn the business around within 6 to 12 months.
The Minister said the new TERS benefit should not to be associated with the Covid-19 TERS benefit of 2020, which had assisted about 5.4-million workers with over R61.2-billion disbursed.
According to the Department of Employment and Labour’s (DEL's) estimates, about 75 000 employees have been affected by the unrest in the two provinces, which saw widespread looting, violence and vandalism, as well as damage to property and stock loss.
The result of this unrest may mean a temporal work stoppage or outright retrenchment, Nxesi said.
“The UIF has a basket of benefits that can serve as an intervention mechanism to the affected workers and companies as a result of the unrests,” he added.
To ensure that some of the basic tenets of the Unemployment Insurance Act are not violated, the department will draft a special directive dealing with the affected workers in the two provinces. “The spirit of the directive would be to ensure that workers who would normally not qualify for these benefits due to noncompliance with the Act are able to access the benefits,” he said.
However, Nxesi emphasised that the benefit would not be a “free for all”, as the criteria to determine who qualifies would be “very stringent and payments will not be generous”.
Nonetheless, he said that, while it was the department’s desire to pay all affected workers, it was important to remember that finance was a limited resource. “Therefore, I have instructed the officials to gather data of businesses that have been affected, and also perform an analysis of those who will be able to afford to carry their employees’ salaries during this period.”
On the basis of this analysis, Nxesi said, the department would be able to indicate the benefit calculation it permits – whether this is a flat rate across the board, an income replacement rate or combination of the two. This determination will be dependent on the nature of the application.
All details pertaining to who qualifies, payment structure, the application process and the duration of the payment period will be outlined in the direction.
Further, he said the department was mindful of the urgency of the matter and, therefore, committed to expediting the process of drafting and approval of the directive. “The UIF already has a system in place that will help fast-track the payments.”
To ensure the funds get to the affected employees, Nxesi said employers would play a key role in the application process.
In terms of paying affected employees, he adds that applicable benefits will be paid directly into the account of the employee, thereby making such relief immediately available, in addition to reducing the risk of fraud.
Applications for TERS are made through the Commission for Conciliation, Mediation and Arbitration, while an independent adjudication committee evaluates all proposals and makes a recommendation to the DEL director-general.
Meanwhile, he said it was a reality that some of the businesses impacted by the unrest would not fully recover from the damage inflicted, which would result in retrenchments.
“The UIF will ensure that it prioritises those retrenched employees in some of the labour activation programmes that are designed to place retrenched workers in employment opportunities.”
Also, Nxesi added that as some destroyed factories and shops would be rebuilt in the next few months, requiring the meeting of construction regulations and the requisite construction works permits, the department planned to expedite such processes.
Often the applications of such permits takes about 30 days, he said. “Our inspection and enforcement services will hasten to facilitate the issuing of construction works permits to construction companies to ensure speedy rebuilding of damaged infrastructure.”
Further, Nxesi said the Compensation Fund continues to support those who have become sick in the line of duty, and has to date paid just under R90-million for temporary total disablement, medical aid, permanent disablement, funeral costs and dependent benefits.
As a result of the unrest, he said, 92 people had died, while a total of 26 073 claims have been submitted either directly to the Compensation Fund or the mutual funds that have been licensed by Nxesi.