No more TERS Now What?
The Minister of Employment and Labour announced on 25 March 2020, just days before the start of the National Lock-down which is still in effect, that a special type of UIF had been created to support employees and employers who were negatively impacted by the lock-down. Under the provisions of the new Directive, employees could claim TERS UIF in circumstances where they were placed on Temporary Lay-off, or on Reduced Working Hours due to the lock-down.
The claims process was tedious and fraught with challenges from the very beginning, with many employees only receiving their April TERS pay-outs during the first two weeks of August! Communication from the Department of Employment and Labour was almost non-existent, and employers had to jump through proverbial hoops to find out how to resolve the huge number of rejected claims on the TERS system.
But now another stark reality faces distressed companies – the end of TERS!! Even though the economy has been reopened to a large extent under Level 3 and now finally Level 2 Regulations, many employers are faced with the dilemma of getting the wheels of their business turning again, which does not happen overnight. The knock-on effect of a shut-down economy is that orders come in slowly, customers take much longer to pay, and in many cases, turnover is far from what it was pre-lock-down. So, what does one do with your employees who can now no longer rely on TERS to prop-up their diminished salaries?
Well, there is a solution! Employees are still able to claim “normal” UIF benefits under certain circumstances. There is a provision in the Unemployment Insurance Act, which has been in place since 2018, which allows employees who are working Reduced Working Hours to claim UIF.
Here Is How It Works:
REDUCED WORK HOURS BENEFIT:
– Where a Company shuts down for a certain period or implements Reduced or Short Time.
– Benefits payable is the difference between what employer pays and normal UIF benefits payable should an employee lose employment.
– REQUIRED FORMS AND DOCUMENTS:
o UI19 and UI2.7 (completed by Employer)
o UI 2.1 (application)
o UI 2.8 (bank form completed by the bank)
o A letter from the Employer confirming Reduced Work Time is due to the Corona Virus.
o Copy of ID document.
IT SHOULD BE NOTED THAT:
For every 4 days worked the employee accumulates 1 credit day, and maximum credits days payable is 365 for every four completed years. Benefits are paid as per prescribed benefits structure from 239 to 365 days.
An Employer may not unilaterally change any Terms and Conditions (such as working hours or salary) WITHOUT the consent of the Employee. Thus, Reduced Working Hours must be negotiated with the employees, and agreed to. It is highly advisable to get professional assistance from a Labour Law Practitioner in order to implement Reduced Working Hours in a legally compliant manner and avoid costly Labour Disputes at the CCMA.