Two new ways to apply for UIF benefits
Fasken lawyers explain the new ways to access the Covid-19 Temporary Employee/Employer Relief Scheme (TERS).
On 15 May 2020, the Minister of Employment and Labour issued a directive amending the rules that govern the Covid-19 Temporary Employee/Employer Relief Scheme, 2020 ("C19 TERS"). This scheme formed the subject matter of our bulletins of 29 March 2020, 10 April 2020, and 30 April 2020.
The new directive introduces two new ways in which C19 TERS applications may be made and benefits disbursed to employees who have lost income as a result of the Covid-19 pandemic.
Previously, applications for TERS benefits could be made only by employers or by bargaining councils. The bargaining council had to have met the prescribed requirements to apply for, receive and disburse TERS benefits. Where there was such a bargaining council having jurisdiction, employers could not apply, and its employees could not receive benefits other than through the bargaining council. Employers were entitled to apply only where they did not fall under the jurisdiction of a bargaining council which had met the prescribed requirements.
Now, the amended directive allows employees to apply directly to the UIF for the payment of TERS benefits under certain circumstances. Provision is also made for the disbursement of benefits to employees through ‘entities’.
TERS applications by employees
Employees may now apply personally for TERS benefits under the following circumstances:
- the employee is a UIF contributor who has lost income or has been required to take annual leave due to the Covid-19 pandemic;
- the employee is not employed by an employer bound by a collective agreement providing for the disbursement of TERS benefits which has been concluded in a bargaining council which in turn has concluded the required agreement with the UIF (in other words that there is no bargaining council meeting the prescribed requirements to apply for, receive and disburse benefits to that employee);
- the employee is not employed by an employer which is a member of an ‘entity’ which has concluded an MOA with the UIF (as to which see below); and
- the employee’s employer has failed or refused to apply for Covid-19 benefits for or on behalf of that employee.
TERS applications by ‘Entities’
The new directive introduces the concept of an ‘entity’. This is defined as:
The first part of the definition - which refers to a “juristic person that…has employees or employers as members” - appears to contemplate both employer organisations (which have employers as members) and trade unions (which have employees as members) as well as organisations which may have employer organisations and trade unions as members.
However, the second part of the definition – which states that the entity must be “permitted to pay TERS benefits directly or indirectly through its employer members” suggests that trade unions which, of course, do not have employer members, are excluded from the ambit of the directive. Moreover, no role appears to be assigned to trade unions in the directive.
Where an entity has concluded an MOA with the UIF, there are two consequences: First, an employee of one of the employer members of the entity may not apply personally; and secondly, an employer which is a member of that entity may not apply for benefits on behalf of its employees.
In summary, employers must apply for the TERS benefits on behalf of their employees but they may not do so if there is a bargaining council or entity which has met the prescribed requirements and is entitled apply for, receive and disburse the TERS benefits to employees in their scope. Lastly, employees may personally apply for the TERS benefits if no employer, bargaining council or entity has done so on their behalf.
The amended directive is expressed to take effect from 27 March 2020.
This article was co-written by Fasken partner Neil Searle, senior associates Venolan Naidoo and Daphney Willem, and associate Owethu Mbambo