Lockdown & My Business

Many clients, both businesses and individuals, are concerned about:

  • business closures and retrenchments.
  • the legalities behind contracts and deals

Our law firm faces similar concerns, so we share your worries and are here for you.

We are happy to consult on employment related issues via Skype or Zoom for R500 plus VAT per ½ hour. Please email info@bmalaw.co.za if you are interested.

In the meantime, here is some useful information about the Temporary Employer/Employee Relief Scheme Services (“TERS”). This scheme offers temporary relief where UIF pays a portion of your employee’s salary during the lockdown or temporary layoff period.

To participate in the TERS:

  • a TERS agreement must be concluded; and
  • the application must be made in the prescribed format.

In addition, to qualify for the TERS:

  • there must be business distress – i.e., a drop in revenue as reflected in the audited financial statements or most recent management accounts and labour costs as a high percentage of operation costs;
  • there must be employee distress – i.e., likelihood of retrenchment, short-time, and/or any other layoff;
  • Operational distress – i.e., occasioned by prospective business (order book) that places the business and employees at risk in anticipation of new business such as re-tooling for new production lines, etc.
  • Employers must be registered with the Unemployment Insurance Fund (“UIF”).

Businesses and employers in distress wishing to apply for TERS must first send an email to covid19ters@labour.gov.za with wording like this:

ABC (Pty) Limited is registered with UIF. We seek replacement of lost income for our employees during the lockdown in terms of the Covid-19 Temporary Employer/Employee Relief Scheme (TERS). 

You will receive instructions on how to complete and submit the TERS application form. This application will then be considered by the Project Adjudication Committee for recommendation.

The benefits will only pay for the cost of salary for the employees during temporary closure of the business operations. The salary benefits are capped at a maximum of ZAR17 712 per month per employee and an employee will be paid in terms of the income replacement rate sliding scale (38%-60%) as provided in the Unemployment Insurance Act, 2001. The Directive also states that where such an employee’s income falls below the sectoral minimum wage, the employee will be paid a replacement income equal to minimum wage of the sector concerned.

However, an employee who is being paid by an employer during this period is not entitled to this benefit.

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