Business welcomes revised Covid-19 relief fund regulations
The revised directive clarifies that an employer may claim benefits in respect of employees who have taken annual leave during this period
Business and labour on Friday welcomed the government's amendments to the directive governing the Covid-19 Temporary Employee/Employer Relief Scheme (TERS), saying the changes brought clarity to its structure.
The TERS, administered by the Unemployment Insurance Fund (UIF), was established by employment and labour minister Thulas Nxesi on March 25 to provide relief to those in formal employment expected to lose their income due to the Covid-19 lockdown.
In a statement, Business for SA (B4SA) said: “The revised directive clarifies that an employer may claim benefits in respect of employees who have taken annual leave during this period; and that the employer may retain these amounts, provided that it credits the employee with leave days proportionate to the value of the benefit in the future.”
“This means that it is not the case, as some legal opinions held, that there is a need to reinstate leave and putting employees on unpaid leave in order to claim. B4SA welcomes this further clarification,” B4SA said.
The directive also urges employers to pay employees the equivalent of their TERS benefits in advance should these not have been received by the employer on their payment date, and retain those amounts when the payment is received, according to the B4SA.
“One additional matter is that we understand that at some point the UIF was saying that a separate bank account would be needed to receive the TERS monies. This is no longer going to be required. Businesses will be able to use their existing bank accounts for this purpose.”
Nxesi could not immediately be reached for comment. His spokesperson Sabelo Mali also did not respond to requests for comment.
Cosatu spokesperson Sizwe Pamla said the trade union federation welcomed the amendments as Cosatu had been “pushing for this kind of firmness and leadership from the department”.
“This ministerial directive deals with the issues that the federation has been demanding, namely, compelling employers to claim from UIF on behalf of their employees. It also instructs them to credit back workers their leave days because they will be paid from the UIF’s Covid-19 relief fund,” said Pamla.
“Employers are also instructed to proceed to pay workers from their own funds and then seek reimbursement from the UIF.”
Pamla said they wanted to see “decisive action” taken against employers who fail to comply with the directive. “The government needs to be legally audacious and tough against delinquent employers.”