The Department of Employment and Labour provided an update on 28 March 2020 in respect of employment and labour issues arising during the lockdown period caused by the COVID-19 crisis. This update addressed the issues of employers insisting their employees use their annual leave during this period and employees who are being forced to take unpaid leave.
The Minister of Employment and Labour, T.W. Nxesi, said the following in the update:
“We do understand that in terms of the leave determination, employers can compel employees to take leave at any time as they deem fit. However, this is a different situation that requires all of us to act in a manner that seeks to promote social solidarity.”
Although measures have been put in place, there still seems to be confusion regarding the benefits that can be claimed from the Unemployment Insurance Fund (“UIF”) and the Temporary Employee/Employer Relief Scheme (“TERS”). This article will shed some light and highlight the important aspects.
Under what circumstances will the UIF come into play during the lockdown?
- If an employer has no choice but to close its operations during the lockdown, an employer has the option to temporary lay-off employees. This means that the employees will not receive any income for the duration of temporary lay-off.
- Another option available to employers is to implement reduced working hours leading to the employee only receiving part of his/her monthly income.
- The UIF can be approached to claim benefits and the Department of Employment and Labour has urged that the employers to assist with submitting the claims. The following documents must accompany a claim to the UIF:
- UI 19 and UI 2.7 (completed by employer);
- UI 2.1 (application form);
- UI 2.8 (bank form that must be completed by the bank);
- A letter from the employer confirming that the reduced working hours or temporary lay-off is due to the COVID-19 virus and the lockdown; and
- Copy of identity document.
- During the lockdown and COVID-19 crisis, claims for UIF benefits can also be done online.
What is this “TERS” that everyone is talking about?
- TERS is a special benefit created for under the UIF and aims to provide emergency relief to employers so that they may continue to pay their employees during a temporary lay-off.
- The benefits under TERS are available to an employer who closes its operations due to the COVID-19 crisis for a period of three months or less and as a result are in financial distress.
- It is important to note that the employer submits a claim for the TERS benefit and, if successful, pays the necessary over to its employees. This will lead to a less cumbersome and quicker procedure, rather than having individuals receiving payments from the UIF.
- The benefit will be capped to a maximum threshold of R17 712.00 (may change from time to time) and will be calculated in terms of the income replacement rate sliding scale as provided in the Unemployment Insurance Act (from 38% for high earners up to 60% for low earners.
- When applying for this TERS benefit, an employer must include proof of being registered with the UIF, a letter of authority and a signed agreement between the employer and the UIF.
- Employers can apply for the TERS benefit by sending an e-mail to and they will then receive an automated response outlining the process and further requirements.
- Unfortunately, no manual claims will be accepted, however, queries may be directed to the dedicated hotline number at 012 337 1997.
Can you claim for the normal UIF benefits and the TERS benefits?
- The simple answer is no. Seeing as TERS is a benefit specifically for temporary lay-offs and also being a separate benefit scheme, an employer who implemented temporary lay-offs cannot make a claim in terms of TERS and normal UIF.
What happens if an employee tests positive for COVID-19 and is unable to work?
- The COVID-19 virus has been declared an occupational disease. This means that if an employee is absent from work due to contracting the virus during the course and scope of his/her employment, such leave will be covered in terms of the Compensation for Occupational Injuries and Diseases Act (“COIDA”).
- If the COVID-19 virus was not contracted during the course and scope of employment, leave taken will be considered as sick leave.
- The employee must give written notice of the disease to his/her employer and to the compensation commissioner and follow the process in place.
- However, there is also an illness benefit that can be claimed from the UIF if the employee and the employer agreed to the employee being placed under a 14 day quarantine period. If this is the case, the claim must also include proof of this agreement between the employee and employer.
In light of the above, there are specific measures and benefits put in place to assist employers and employees during the COVID-19 crisis and the lockdown. Employers are urged to make use of these measures and benefits as far as possible. The website of the Department of Employment and Labour can be visited for further information.
Date updated: 2 April 2020