A waitress watches the TV as she waits for costumers in a restaurant, following the outbreak of the coronavirus. In the event that the employer is unable to pay employees, they may apply for the “National Disaster Benefit” from the Unemployment Insurance Fund in respect of reduced work-time, illness or unemployment benefits. Photo: Augustin Marcarian/Reuters
A waitress watches the TV as she waits for costumers in a restaurant, following the outbreak of the coronavirus. In the event that the employer is unable to pay employees, they may apply for the “National Disaster Benefit” from the Unemployment Insurance Fund in respect of reduced work-time, illness or unemployment benefits. Photo: Augustin Marcarian/Reuters

'Employers cannot impose leave during lockdown'- workers’ leave and pay issues explained

By Sizwe Dlamini Time of article published Mar 26, 2020

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CAPE TOWN – The 21-day national lockdown has raised some serious questions about how non-essential workers will be affected and whether they will be forced to take leave during this period or not.

Cameron Morajane, director of the Commission for Conciliation, Mediation and Arbitration (CCMA) said in an interview with Business Report on Thursday that no employer could force an employee to take vacation leave even during the national lockdown. 

He said vacation leave was by its nature a prior agreement on the date and duration between employer and employee, according to labour law.

During the 21-day lockdown, non-essential businesses will be forced to shut down, meaning workers in those companies will be required to either stay away from work or alternatively work from home.

The nature of some businesses – such as gyms, museums and various entertainment centres – makes it impossible for workers to work from home and impacts the employer and employee, something which Morajane likened to a temporary retrenchment or a layoff.

The government has set up a fund for employers and employees to mitigate such circumstances: Temporary Relief Scheme Services (TERS) and a National Disaster Benefit (NDB).

NDB applies to employers who may, as a direct result from the Covid-19 pandemic, close their business for a particular period and send employees home. 

This constitutes a temporary lay off and is not related to TERS at all.

In the event that the employer is unable to pay employees, they may apply for the “National Disaster Benefit” from the Unemployment Insurance Fund in respect of reduced work-time, illness or unemployment benefits.

The CCMA says:

In response to the several enquiries we have received regarding options available to the labour market in respect of TERS and S189A applications, please note the below for clarity purposes:

1. TERS Applications:

The process for applying for relief in terms of participation in the Temporary Relief Scheme is retained in the current format. That is:

  • A TERS agreement must be concluded
  • The TERS application must be made in the prescribed format (form to be completed) with all supporting documentation to the following mail address with supporting documentation at [email protected]
  • The following criteria still applies:
    • Business distress – drop in revenue as reflected in the audited financial statements or most recent management accounts and labour costs as a high percentage of operation costs
    • Employee distress – the likelihood of retrenchment, short-time, and /or any other layoff
    • Operational distress – example, occasioned by a prospective business (order book) that places the business and employees at risk in anticipation of new business such as re-tooling for new production lines etc.
  • Once the application is received, the application is then considered by the Single Adjudication Committee (SAC) for a recommendation.

2. TERS Applications during Covid-19

The same process applies as above. This applies to scenarios that are brought about by the pandemic that could lead to:

  • Business closure
  • Retrenchments

All the qualifying criteria are still applicable and the administrative process for application remains the same. It is likely that applications will be made as a consequence of the adverse impact of Covid-19 in the next 4 to 6 months and thereafter. Note: The TERS process is not applicable to the 21 days shutdown.

Businesses and employers in distress wishing to apply for TERS are urged to email: [email protected]

3. Essential Services

Users and Stakeholders requiring essential service related assistance or advice, kindly email: [email protected] or [email protected]

4. Relief available during the period of shutdown – National Disaster Benefit (NDB)

This applies to employers who may, as a direct result from the current coronavirus (Covid-19) pandemic close their business for a particular period and send employees home. This constitutes a temporary lay off and is not related to TERS at all. In the event that the employer is unable to pay employees, they may apply for the “National Disaster Benefit” from the Unemployment Insurance Fund in respect of:

  • Reduced work-time;
  • Illness; or
  • Unemployment benefits.

The party making this enquiry will be directed to the nearest UIF (DEL) centre or will be required to access their website (http://www.labour.gov.za/contacts). The CCMA has no role to play in this process. In order to ensure that relief is considered, parties who have adequate reserves or contingency plans in place should be encouraged to delay any application so that the most urgent applications are attended to.

Jean Ewang, attorney and director at Lawtons Africa said in accordance with the “Easy-Aid for Corona” Guide for employer issued by the Department, in the event an employer decides as a direct result of the Covid-19 pandemic to close their business for a period and send employees home, then the reduced work time benefit may be applied for. 

“As part of the application for the benefit, a letter from the employer confirming the company shut down or employee’s 'temporary lay-off' due to the Corona Virus must be included. The maximum benefit will be paid as per the benefit structure if the employer makes zero payment to the employee during the shutdown period. However, if payment is made during the shutdown period, then the benefit will be reduced accordingly.

“Where a company opts to close for a short period, the employer is requested to inform the Department so that it can dispatch its provincial rapid response team to assist with the application and payment of this benefit type.

“Where an employee has been quarantined for 14 days or longer, the Illness Benefit will apply. To apply for the Illness Benefit, a confirmation letter from both the employer and employee must be submitted together with the application as proof that both the employer and employee have agreed to 14 days ‘special leave’. 

“In this instance, the letters will stand in place of a medical certificate as it is anticipated that the beneficiary would have self-quarantined without prior consultation with a medical practitioner. Benefits will be paid based on these letters. However, should an employee be quarantined for more than 14 days, a medical certificate from a medical practitioner must be submitted together with the relevant forms.

“In the event a UIF contributor passes on from Covid-19, death benefits are paid to the beneficiaries of the deceased. People eligible to apply for the death benefits are the 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,” said Ewang.

So how will workers support themselves during the lockdown, or if they lose their jobs due to Covid-19?

The Department of Employment & Labour says:

Workers who are affected by the 21-day lockdown or become ill, from the side of the Department of Employment and Labour the main support will be:

  • Activation of Basic Conditions of Employment Act rights to sick leave and annual leave. Thereafter, employers and labour – through Nedlac – have agreed to negotiate special leave conditions.
  • Those who fall ill as a result of work, will be covered by the Compensation Act. 
  • UIF existing benefits for illness, reduced work time and unemployment will then kick in. In addition, the UIF will compensate affected workers through a new “National Disaster Benefit”.

BUSINESS REPORT

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