Important change to South Africa’s coronavirus relief funding and annual leave

20 April 2020

The Department of Employment and Labour has announced an amendment to the Temporary Employee/Employer Relief Scheme (TERS) scheme that will be of great importance to any employer which has required employees to take compulsory annual leave during the national lockdown, says law firm Werksmans Attorneys.

In an amendment to the directive establishing the Covid-19 TERS scheme, and to the direction issued on 8 April 2020, the TERS scheme now allows that –

“An employer who has required an employee to take annual leave during the period of the lockdown in terms of section 22(1)(b) of the Basic Conditions of Employment Act, 75 of 1997, may set off any amount received from the UIF in respect of that employee’s Covid-19 benefit against the amount paid to the employee in respect of annual leave provided that the employee is credited with the proportionate entitlement to annual leave in the future.”

If the employer placed any employees on compulsory annual leave in order to continue payment to that employee during the lockdown, the new amendment makes it clear that the employer can recover this amount from TERS, as long as the employee’s leave entitlement is reversed and credited back to the employee, said Werksmans.

“The wording of the new section seems to restrict this set-off only to employers who have placed employees on compulsory leave, but would not extend to an employer who allowed an employee, on application by the employee, to do so,” said Werksmans.

“We do not believe that this is the purpose of this amendment and that any employer which has placed or allowed employees to use their annual leave entitlement during the lockdown, would be entitled to the set-off.”

The amendment comes after the Department of Employment and Labour published a list of frequently asked questions about the Covid-19 TERS.

Werksmans said that the FAQs offer insight into what the Department and Unemployment Insurance Fund (UIF) view as the requirements that must be met in order to obtain benefits under the TERS.

Source: Business Tech at https://businesstech.co.za/news/business/390805/important-change-to-south-africas-coronavirus-relief-funding-and-annual-leave/