Employment and Labour Minister Thulas Nxesi has signed an updated Covid-19 Temporary Employer/Employee Relief Scheme (TERS) Directive, which was gazetted on March 4, laying the foundation for the Unemployment Insurance Fund (UIF) to process claims for the new TERS extension.
The new Directive is the sequel to the announcement of the extension pronounced by President Cyril Ramaphosa in his State of the Nation Address in February of further support to sectors that are unable to operate owing to lockdown measures.
After much deliberation between the UIF and the National Economic Development and Labour Council (Nedlac) social partners it was agreed that the extension should cover businesses or establishments in sectors hardest hit by lockdown such as tourism, liquor, hospitality, conferencing events and other business activities still affected in related value chains.
Nedlac social partners considered the list that the UIF proposed and ensured that it covered all business activities that cannot fully operate as a result of lockdown regulations.
UIF acting commissioner Marsha Bronkhorst says the social partners emphasised the careful consideration of other business activities that get indirectly impacted if the main business they render a service to is not operational.
For example, she says a bottling supplier in the liquor industry is likely to be affected if production is stopped or reduced by the alcohol manufacturer, and so does the grape or grain farmer who supplies raw material to the manufacturer.
“So, the invaluable input from social partners has assisted in drawing up the comprehensive list that is attached as an annexure to the Directive.”
According to the new Directive, Covid-19 TERS payments will only be applicable to employees who are contributors to UIF. This means that any employee who is registered with the UIF as a contributor and falls within the identified sectors or business establishments, and has not been able to work normally, will qualify to receive the benefit.
The benefit will also cover vulnerable employees who have comorbidities, or who are 60 years and older and cannot be safely accommodated at work, and those who must isolate or quarantine to prevent infections, regardless of the sector they work in.
In addition, employees who do not work in the specified sectors but who continue to be affected by other Covid-19 factors – such as short-time, shift rotations, temporary layoff, or other operational requirements related to current economic conditions – will be entitled to claim relief under Section 12 (1B) of the UIF Act.
To assist employees in increasing the benefits associated with credits used in claiming under 12 (1B), the Directive permits for the benefit calculated to be paid out in full (and not as usual to the benefit level), providing that, when added to what the employee earned for work performed in the period, it does not exceed their normal earnings.
The UIF will follow two payment iterations for the extension period – the first being from October 16 to December 31, 2020, and the second from January 1 to March 15.
With immediate effect, the UIF says its online application system is open to start processing claims for the first payment iteration. Guidelines on the application process are available on the Department of Employment and Labour website.