1. WHAT THIS FAQ IS ABOUT & HOW WE WILL UPDATE IT
ASATA’s general counsel, Elizabeth de Stadler, has done two interviews with Fatima van Toorn from FvT HR Consulting. If you would like to listen to the webinars again or if you missed them, you can now access the full webinars by clicking on the links below.
Third Webinar on Occupation Health and Safety Requirements for re-opening:
In this document we will keep track of the most recent developments on the employment front.
We will update the FAQ as more information becomes available. We will send out an ASATA Alert and do a post on the ASATA coronavirus website with details of the update.
We also created an FAQ for all of the economic assistance that the Government is providing. In that you will find information about the Temporary Employer Relief Scheme, any special tax dispensations and other relief measures.
In this FAQ we will answer the most frequent questions we are getting regarding labour law. But, please be careful: Your specific context might dictate a different approach and you should get some advice if you are uncertain.
2. A guide to your first decisions and your options
You should immediately classify your workforce in the following categories:
- Staff who are critical to your business and who can work remotely.
- Staff who can work reduced hours and can work remotely.
- Staff whose services are not needed right now (whether they could work remotely or not).
- Staff who cannot work remotely.
You can take different approaches to these different categories of employees. This will help you to keep your business open without wasting too much of what precious cash you have left.
|1||Staff who are critical to your business and who can work remotely.||For them it is business as usual. They do their work per their job specification or any new responsibilities you have given them.|
|2||Staff who can work reduced hours and can work remotely.||You can put these employees on short time.|
|3||Staff whose services are not needed right now (whether they could work remotely or not).||You can do a temporary lay off.|
|4||Staff who cannot work remotely.||You can do a temporary lay off.|
Of course, given the uncertainty of the duration crisis and the strain that businesses are under, permanent retrenchment may come into play. If you do not believe that your business will recover in time, you can start the retrenchment process at the same time as short time and temporary lay offs.
3. Why is retrenchment not a good idea during the government lockdown?
When you retrench, you have to pay any accrued annual leave, notice periods and severance (one week for every completed year of service). And you cannot arrange for payment plans. So, it won’t solve your cashflow problems.
Retrenchment processes take a lot of time – and you have to continue paying your employees while you do it. So, it won’t solve your immediate problems. Here are the time periods:
- Section 189A of the Labour Relations Act apply to large scale retrenchments. You will have to consult for at least 60 days, unless your employees waive their rights – which they might not do.
- If you employ less than 50 people, there isn’t a specific timeline, but you have to make sure that it is procedurally fair, otherwise you may have to reinstate your employees. You should not give them less than 2 weeks to consult regarding your intention to retrench.
Also keep in mind that for 12 months after retrenchment, employers are legally obliged to reach out to employees who have been made redundant in the event that suitable positions become available and reasonably accommodate them. So, you might have to rehire the same people you retrench now.
4. Should you at least start the retrenchment process during the lockdown?
This depends on how much cash you have on hand and how long you think it will take before bookings pick up again. You need to calculate something called your cash burn rate to figure out how much time you can trade for.
If you don’t think things are going to pick up before you run out of cash, you should consider starting the retrenchment process now. You can do this while you place people on short time or you do temporary layoffs. Remember that you must have meaningful consultation, and this might be difficult during the lock-down.
The retrenchment process is technical and if you get it wrong you can be forced to reinstate employees. If you want to go this route you should get the advice of a labour law specialist.
5. What is short time?
You can ask your employees to work for less hours or less days per week than they would normally. This means that you will also pay them less.
They will be able to claim from the UIF for the difference between what they used to earn and what they will earn now. The UIF formula of 38-60% of the UIF cap of R17 712 will be applied, and the Employees’ period of contributions to the UIF fund as well as the previous times they claimed from the fund will also be taken into account to determine what they will earn now.
6. What is a temporary layoff?
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.
They will be able to claim from the UIF during a temporary lay-off. The UIF formula of 38-60% of the UIF cap of R17 712 will be applied, and the Employees’ period of contribution to the UIF fund as well as the previous times they claimed from the fund will also be taken into account to determine what they will earn.
If your business shuts down and all employees are placed on temporary lay-off, you can also apply for the National Disaster Benefit. Read more about that below.
7. What is the process I must follow to put someone on short time or to do a temporary layoff?
You can’t just unilaterally change your employees’ conditions of employment, so you are going to have to consult, but it is not as onerous as the retrenchment period.
Here are the steps you have to take:
- Issue staff with the “notice of intention to introduce short time/temporary lay-off” document you will find here.
During lock-down it will be considered reasonable to cut the consultation process short as the employer does not have a choice.
- During the consultation period, give employees the opportunity to propose alternative solutions. You never know what they will come up with.
NB: Employees do not have to agree to this. As long as you can show that you have consulted with them and that this option is a reasonable alternative to retrenchments.
- Once you have consulted with your employees, issue them with a “notice of short time/temporary lay-off” document which you will find here.
8. When can employees claim for UIF
|What is the benefit called and what is it for?||When should you claim?||How does it work?||What application forms are required?|
|Reduced work time benefit This benefit applies if a company shuts down for a certain period,employees are laid off temporarily, or short time is implemented.||Employees can claim for this benefit during and after the lockdown.||Employees can claim UIF for the difference between their normal pay and what they earned during short time and during temporary layoffs. The UIF formula of 38-60% of the UIF salary cap of R17 712 will be applied, and the employees’ period of contribution to the UIF fund as well as the previous times they claimed from the fund will also be taken into account to determine what they will earn. The maximum UI benefit will be paid if the employer does not pay the employee during the shutdown period. However,if the employer pays part of the salary during the shutdown period, the UI benefit could be reduced by that amount.||UI19 and UI2.7 (completed by employer- indicate Code 17 on the UI19 form)UI 2.1 (application form)UI2.8 bank form completed by the bank, a bank statement, or confirmation letter from the bank A letter from the employer confirming Reduced Work Time or Employee’s Temporary layoff is due to the Corona VirusCopy of employee’s ID document|
|Illness benefit/14-days quarantine This benefit is available if an employee is self-quarantined for 14 days. In addition, the normal illness benefits also still apply (see below).||This benefit is available after the lockdown. Employees who were placed on 14-day quarantine prior to the lockdown can claim for that period retrospectively.||You must submit a confirmation letter from both the employer and employee together with the application to prove that both agreed to the 14 days “special leave”. The letters will stand 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 letters.The UIF formula of 38-60% of the UIF salary cap of R17 712 will be applied, and the employees’ period of contribution to the UIF fund as well as the previous times they claimed from the fund will also be taken into account to determine what benefit they will receive. The maximum UI benefit will be paid as per the benefit structure if the employer does not pay the employee during the quarantine period. However, if the employer pays part of the salary during the quarantine period, then the UI benefit could be reduced by that amount,||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 letters from the employer and employeeUI2.8 bank form completed by the bank, a bank statement, or confirmation letter from the bank Employer and employee confirmation lettersCopy of employee’s ID document|
|Extension of 14-day quarantine period This applies in the event that an employee is quarantined for more than 14 days.||Employees who were placed on 14-day quarantine and the quarantine was extended prior to the lockdown, will be able to claim for that period retrospectively.||The employee does not necessarily have to be sick, but a doctor advises that they remain in self-quarantine.||You must submit a medical certificate from a medical practitioner together with the Continuation Form UI3, at the end of the 14-day period.|
|Death benefit This benefit applies if a contributor passes away.||This benefit is available during and after lockdown.||Benefits are paid to the beneficiaries of the deceased. People eligible to apply are a spouse, life partner, children and nominated persons, in that order.||UI19 and UI 53 (completed by the employer)UI 2.5 or UI2.6Death certificate ID of deceased and applicantUI2.8 bank form completed by the bank, a bank statement, or confirmation letter from the bank Copy of ID document|
|Normal Illness benefit This benefit applies when normal sick leave is exhausted.||Employees will be able to claim during or after lockdown.||This benefit kicks in when an employee’s normal paid sick leave entitlement is exhausted, and the employee has been booked off for longer than 7 days by a medical practitioner.||UI19 and UI2.7 (completed by employerUI2.8 bank form completed by the bank, a bank statement, or confirmation letter from the bank Medical certificate from a doctorAmplifying medical reportA follow-up form|
|Covid-19 TERS Employer who temporarily closes its operations, or part of its operations for a maximum of 3 months and suffer financial distress as a direct result of the COVID-19 pandemic, will qualify for a COVID-19 Temporary Relief Benefit.||Government has now officially stated that the applications for June TERS payments are open, and has committed to paying this benefit up until the end of June 2020.||Employers apply for this benefit. The Scheme will pay the benefit into the employer’s account and the employer will have to pay its employees in accordance with the agreement with the UIF.Employees will be paid in accordance with these guidelines issued by the Department of Labour. Benefits will only pay for the cost of salary for the employees during the temporary closure of the business operations.Benefits will be delinked from the UIF’s normal benefits and therefore the normal rules re the accumulation of credits will not apply.In the event that an employee’s income determined in terms of the income replacement sliding scale fall below R3 500, the employee will be paid a replacement income of no less than R3 500. .||See process and documents required in section 10 below.|
9. How should employees submit UIF claims for reduced work time, illness and death benefits?
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. (Illness benefits)
- Email the application to the nearest UIF processing Centre. (Illness/ Reduced Work Time/Death benefits)
- Fax the application to the nearest UIF processing Centre. (Illness/ Reduced Work Time/Death benefits)
The UIF has relaxed some of their processes to accommodate the current circumstances caused by COVID-19 pandemic:
- The UIF will now accept ALL applications through email, fax and Dropbox. Please find email addresses and fax numbers in the Easy Aid for Corona UIF Benefits.
- Bank statements/confirmations (from verifying banks only) will be accepted instead of the UI2.8 form.
10. What is the application process for corona virus Temporary employer/employee relief scheme (covid-19 TERS)?
Employers must follow these steps to apply for COVID-19 TERS benefits:
|Step 1: Apply||Employers must apply at https://uifecc.labour.gov.za/covid19/covid19.|
|Step 2: Submit||Employers must submit documents required including: Letter of authority on an official company letterhead granting permission to an individual specified to lodge a claim on behalf of the companyMOA (completion of the agreement between UIF, Bargaining Council and Employer) – not required if you have less than 10 employees Prescribed template that will require critical information from the employerConfirmation of bank account details in the form of certified latest bank statementEvidence/payroll as proof of the last three months employee(s) salary(ies)Letter of undertaking NB: If the spreadsheet is complete, valid and accurate, it will be dumped into an automated calculator to produce the benefit amount due to the beneficiaries and the total amount to be transferred to the employer or bargaining council or whichever method agreed.|
|Step 3: Conclude MOA||Conclusion of the MOA between parties. Payment will only be made after MOA sign off between the UIF and the Employer/Bargaining Council.|
10.1. The Tourism Business Council of South Africa has offered assistance
The TBCSA has signed a Memorandum of Agreement (MOA) with the UIF to expedite payment of benefits from COVID-19 TERS. Employers can claim on behalf of their employees and associations on behalf of their members.
The UIF will take up to 48 hours to verify information after they received an application and will take up to 48 hours to disburse the benefit if the application is approved. All fully compliant applications will be completed and paid within 10 days maximum. The TBCSA will have meetings with the Department of Employment and Labour/UIF every 5 days to monitor progress of applications and payments to beneficiaries. The TBCA has indicated that applications should take a minimum of 10 days to be processed and paid.
If you want to take advantage of this assistance and monitoring from the TBCSA, you must follow the steps to claim from the UIF listed above and log your application after submission at https://covid19ters.typeform.com/to/ID2B0H.
11. What are the requirements to qualify for covid-19 ters?
The company must:
- be registered with the UIF
- comply with the application procedure, and
- have temporarily closed business operations, or part of its operations directly due to the COVID-19 pandemic.
The COVID-19 TERS Directive has been amended several times since its first publication. The latest consolidated directives can be accessed here. The main amendments made are as follows:
- Employees who were required by their employers to take annual leave during the period their employer was closed due to the COVID-19 pandemic, are allowed to apply for the TERS COVID-19 benefit. Essentially, the days of annual leave which the employee was required to take will be treated as ‘no income’ days for the purposes of their TERS COVID-19 application. The employer must apply on behalf of the employee. Once the employer has received the TERS COVID-19 benefit payment on behalf of that employee, they must then credit the employee concerned with the proportionate entitlement to annual leave.
- Employers must apply for TERS COVID-19 benefits on behalf of their affected employees in situations where the employer has closed all or part of its operations as a result of the COVID-19 pandemic. Employees cannot apply in their individual capacity.
- Employers are urged to pay employees their TERS COVID-19 benefit in advance, and then to offset the advance payment against the payments under the TERS COVID-19 scheme.
- Keep in mind that the COVID-19 TERS application and other UIF claims take some time to be processed and paid out. You should consider extending employees temporary loans that they can repay when they receive UIF payments. You should consult your HR consultant and accountant about the best option for you and your employees.
A concern has been raised, is that where employees have already been paid by the employer at the time when the TERS COVID-19 benefits were received, such TERS payment will not be reflected on the payslip or payroll. This is especially problematic as there is a requirement to pay these benefits over to employees within 48 hours and to provide proof to the Department of Employment and Labour. The suggestion is that the employer should then provide the UIF with an affidavit setting out the process followed and confirming that the leave credits will be processed with the next pay run.
12. How is the TERS COVID-19 benefit calculated?
Please see the official TERS Guide for a detailed formula explanation. The pay-out works on the IRR (Income Replacement Rate) calculated at a pay-out running between 38%-60% of the employee’s salary up to a ceiling of R17 712. The maximum amount that could be paid by the UIF is R6 638.40 and the minimum amount is R3 500.
Please see a detailed explanation of how this formula is calculated, as explained by the South African Institution of Charted Accountants (SAICA).
13. What if an employee gets infected at work?
When an employee is infected, because they came to work, they may claim from the Compensation Fund in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA). Here is the link to the Government Notice which extended these benefits to COVID-19 cases.
Please note that it is compulsory for all companies with one employee or more to register with the Compensation Fund and pay annual assessment fees under COIDA.
An employee may claim from COIDA if the employee contracted COVID-19 during the course of their employment. The following situations will qualify:
- occupational exposure to a known source of COVID-19
- a reliable diagnosis of COVID-19 as per the WHO guidelines
- an approved official trip and travel history to countries and/or areas of high risk for COVID-19 on a work assignment
- a presumed high-risk work environment where transmission of COVID-19 is inherently prevalent
- a chronological sequence between the work exposure and the development of the symptoms.
13.1. What documents do you need to apply?
You will need:
- Employers Report on Occupational Diseases (Form W.CL.1);
- Notice of Occupational Disease and Claim for Compensation (Form W.CL.14);
- COVID-19 Exposure and Medical Questionnaire (Can be found at the end of the regulations);
- First Medical Report in respect of and Occupational Disease (W.CL.22) indicating U.07.1 as the ICD-10 code for COVID-19;
- Exposure History (Form W.CL. 11) and any other appropriate employment history which may include any information that may be helpful to the Compensation Commissioner;
- A medical report on the employee’s symptoms that details the history, establishes a diagnosis of COVID-19, and laboratory results and chest radiographs where appropriate or any other information relevant to the claim;
- For each consultation, a Progress Medical Report (Form W.CL.26);
- Final Medical Report in respect of an Occupational Disease (Form W.CL.26) when the employee’s condition has reached Maximum Medical Improvement (MMI);
- An affidavit by the employee if employer cannot be traced or will not timeously supply a Form W.CL.1.
The forms can be found here:
- All the forms for claiming from the Compensation Fund can be found on the Labour Department’s website here.
- You can also find all the necessary forms together on this website here.
- For online access to COIDA and more information about the step-by-step process of how to claim, please go here.
- For the Labour Department’s Basic Guide on claiming from the Compensation Fund, please go here.
13.2. Where to submit your compensation claim?
You can make online claims through the following channels:
- Compensation Fund: CompEasy (https://compeasy.labour.gov.za:44328/fiori)
- Rand Mutual Assistance: CompCare (www.randmutual.co.za)
- Federated Employers Mutual: IMS (https://roe.ferm.co.za)
You can submit manual claims for COVID-19 to these email addresses:
- Compensation Fund: email@example.com or phone 0860 105 350
- Rand Mutual Assurance: firstname.lastname@example.org or phone 086 022 2132
- Federated Employers Mutual: FEM-Registry@fema.co.za or phone 011 359 4300
14. What safeguards must employers put in place when employees start come back to work?
The Government has issued the COVID-19 Occupational Health and Safety Measures in Workplaces COVID-19 (C19 OHS) Directive, which set out the measures that businesses must take when re-opening to ensure the safety of employees and customers.
ASATA has also conducted a webinar to answer all your questions, which can be found here with a FAQ and various resources.
15. How do we approach leave during the lockdown period?
Each organisation will have different leave policies suited to their particular needs. In this section we attempt to answer some of your questions relating to leave.
15.1. When do employees qualify for paid sick leave for COVID-19?
If an employee has tested positive for COVID-19 (confirmed by a medical doctor) or if they have symptoms and get booked off by a doctor, normal sick leave applies. The employee will be required to produce a medical certifcate from their doctor confirming the employee tested positive for the COVID-19 virus or is too sick to work.
If employees have run out of sick leave, they will be able to claim UIF illness benefits if they have been sick for more than 7 days. Note that they cannot claim the UIF illness benefit if they still have sick leave.
15.2. What if an employee is not sick, but placed under quarantine?
The employee will qualify for the new illness benefit under the UIF, or they can take annual leave. If the employee takes annual leave, they cannot claim from the UIF illness benefit. They will not automatically qualify for sick leave.
15.3. Can you force employees to take annual leave during the lock down?
If employees cannot work remotely you can ask them to take their annual leave.
Although it is not technically illegal to require them to take annual leave, it is discouraged. The Department of Employment and Labour issued a directive stating:
‘In as much as employers are within their rights to insist that employees take annual leave during the lockdown, as the department, we encourage employers not to request employees to utilise their annual leave credits for the lockdown, but to rather utilise the financial assistance that the Department has placed at their disposal through COVID-19 TERS in cases where companies cannot afford to pay employees.’