COVID-19 Assistance to clients - CCMG

2020

COVID-19 Assistance
to clients.
MICHEAL | DANSHAW

COVID-19 ASSISTANCES TO BUSINESS

Amid the outbreak of Covid-19, President Cyril Ramaphosa has announced that the
country will undergo a Nation-wide lockdown starting March 26th until April 16th.

   1. Introduction

All business should continue as far as possible up until Thursday 00:00. From Friday the
27th of March 2020, all employees will be prohibited from coming to work unless they
from part of the essential services instructed by the IDC to remain in operation.

The list of people who will be exempted from the lockdown is as follows:

      health workers in the public and private sectors,
      emergency personnel, those in security services – such as the police, traffic
       officers, military medical personnel, soldiers – and other persons necessary for
       our response to the pandemic.
      production, distribution and supply of food and basic goods,
      essential banking services,
      the maintenance of power, water and telecommunications services,
      laboratory services, and the provision of medical and hygiene products.

   2. Transportation
The South African National Taxi Council (Santaco) will us a skeleton staff to continue
transporting passengers performing essential services during the 21-day lockdown to
and from their workplaces.

Minibus-Taxis will be allowed to transport essential services workers and those allowed
to make the necessary permitted movements. Transport movements in this regard will
be allowed to operate from 05h00 to 09h00 and again from 16h00 to 20h00. These
times must be used for workers that stay at home and want to go out for shopping.
People living in rural areas will be catered for - 5-9am and 4-8pm.

A draft document emailed to all our clients is to be completed by those businesses that
form part of essential services that will not go in lockdown. We advise that this document
be placed on a company letterhead. It is important to explain to employees that they
must always carry this document together with their ID with them. Should they be
stopped they will have to produce this document.

   3. Remuneration of Essential Employees
Employees who form part of essential services will continue to work and be
remunerated. Depending on the availability of work, it may be necessary to work
reduced hours (Short time) in which case employers will consult and inform employees.
Should short time be implemented employee’s remuneration will be reduced, but they
will be able to claim UIF to compensate for the short fall.

   4. What to do after lockdown

Employees are advised to follow the steps to mitigate the adverse effect on employees:

   1. Utilise Employee’s annual leave during the period of shut down. Consult with
       employees and explain this to them so that they understand that if this is done,
       they will not be eligible for further leave later during the year.
   2. Thereafter, employees will be able to claim from UIF.
   3. Guidelines with regards to Temporary Employer Employee Relief (TERS) and
       “Disaster Benefits” will be issued.
   4. Employers should assist and/or complete the application process on behalf of
       their employees as guided below. The documents that are available from the
       Department of Labour Website or can be requested from a consultant at
       Danshaw Consulting.

*Only one of the UIF benefits may be applied for

*UIF can be paid by employer to the employee and then claimed back from UIF.

4.1.   Annual Leave

In terms of the contract of employment, employees need to tender their services and in
return the company is then obliged to pay the employee. Due to the lockdown, effect
cannot be given to the contract of employment and as such the employers obligation to
pay the employee will also fall away. Companies are implored to assist employees as far
as possible.

Employee’s annual leave will be used during the period of shut down. Employers must
meet with employees and explain this to them so that they understand that if this is
done, they will no longer be eligible for further leave later during the year. It is important
that Employees give their consent, and this should be done in writing. Employees must
also understand that should they not wish to utilise their annual leave during this period,
the period will be unpaid.

Clients who fall under bargaining councils will not pay the leave to the employee – it will
have to come from the bargaining council.

      4.2.   Outline of UIF:

The government will make use of the UIF system to help support the workers in the
event of loss off income due to reduced work hours or shutdown employees will be able
to claim UIF under the reduced working hours benefit.

The documents required to submit a UIF claim due to Reduced working hours/Shutdown
is:

      -   UI-2.7 application form
      -   UI19 and UI2.7 (completed by employer)
      -   UI 2.8 (banking details form completed by bank)
      -   Declaration from employer confirming shutdown and/or reduced working time as
          a result of Corona
      -   Copy of Employee’s ID Document.

Application Process

Online at www.ufiling.co.za (illness benefit)

Or email/fax application to nearest UIF processing centre.

Capet.BCP@labour.gov.za 0864397300

Online.BCP@labour.gov.za 0864397306

   4.3.    Disaster Benefit

The Unemployment Insurance Fund will compensate affected workers through a new
“National Disaster Benefit” and its existing the Illness, Reduced Work Time and
Unemployment benefits.

If the owner decides to close their business as a result of COVID-19, it will be constituted
as a temporary layoff. If the employer cannot pay his employees for this period, the
employer can apply for the “National Disaster Benefit” from the UIF.

This benefit will be at a flat rate equal to the minimum wage (R3 500) per employee for
the duration of the shutdown or a maximum period of three months, whichever period is
the shortest.

Documents Needed

UI19 and UI2.7 (completed by Employer)

• UI 2.1 (application form)

• UI 2.8 (bank form completed by the bank)

• A letter from the Employer confirming company shutdown or employee’s “temporary
lay-off” is due to the Corona Virus

• Copy of employee’s ID document 4.

An employer or employee cannot apply for the “National Disaster Benefit” and any other
UIF benefit simultaneously.

Application Process

Employers must complete the UI 19 Form stating the last date of termination and the
reason thereof.
The forms can be submitted through the following methods:
    • Online at: www.ufiling.co.za. (Illness benefits)
    • Email the application to the nearest UIF processing Centre. (Illness/ Reduced
Work Time/Death benefits)
Fax the application to the nearest UIF processing Centre. (Illness/ Reduced Work
Time/Death benefits)

   4.4.    Illness benefits or where an employee must be quarantined for 14 days

Forms and documents for illness claims (quarantined for 14 days or more than 14 days)
are the same as above.

Application Process
      A Confirmation Letter from both the employer and employee must be submitted
       together with the Illness application as proof that both the employer and
       employee have agree to the 14 days ‘special leave’.
      The letters will replace the medical certificate on the Illness application form
       (UI2.2) as the beneficiary would have self – quarantined without prior
       consultation with a medical practitioner. Benefits will be paid based on these
       letters.
      Should an employee be quarantined for more than 14 days, a medical certificate
       from a medical practitioner must be submitted together with the Continuation
       Form UI3.

A claim for illness as per the stated scenario can be lodged through the

      Online at: www.ufiling.co.za. (Illness benefits)
      Or email or fax the illness application to the nearest UIF processing Centre.

   Application forms can be downloaded from the Department of Employment and
         Labour website: www.labour.gov.za

     4.5.   Death Benefit

This portion corresponds to cases where the contributor passes on due to corona virus
in
terms of Part F of the Unemployment Insurance Act, as amended. Benefits are paid to
the beneficiaries of the deceased.

Documents Needed
     -   UI19 and UI 53 (completed by the Employer)
     -   UI 2.5 or UI2.6 ( deceased application)
     -   Death Certificate
     -   Copy of ID of deceased and applicant
     -   UI 2.8 (banking details completed by the bank)

Application Process

A claim for deceased benefits can be lodged by
        Emailing or faxing the deceased application to the nearest UIF processing
         Centre.
        Application forms can be downloaded from the Department of Employment and
         Labour website: www.labour.gov.za
        The email and fax numbers are as stated in point above.
     CONCLUDING
     4.6.   Temporary employer/employee relief scheme
Government will make use of the TERS (temporary employer/employee relief scheme)
easy aid process. The UIF may fund distressed companies directly in relation to the
TERS Allowance only if they meet the key requirements of the UIF. Thus, the distressed

company must be able to demonstrate that it has been compliant with the relevant UIF
legislation.

Application Process

To obtain application forms and all relevant details, please send an email to
infoTERS@labour.gov.za.

       Companies must send an application for TERS to the CCMA (applications should
        be sent to MosaB@ccma.org.za.

       A company with a successful application shall be required to enter into a formal
        Memorandum of Agreement (MOA) with the UIF.

       The draft MOA shall then be subjected to legal scrutiny and vetting. After which
        the final MOA (with all the required supporting documents) shall be signed by the
        company and the UIF.

       Upon conclusion of the agreement, the first tranche payment shall be made to
        the company within 5 days. It is important to note that TERS allowances are
        payable monthly to each participating employee will not exceed R17, 242.00.

       The remaining payments shall be made in line with the signed MOA.

What to include with your application?

       Invoice supported by the following:
       Proof of employment and list of employees
       Salaries of Directors
       Dedicated bank account
       Registration with Central Supplier Database (CSD)
       Power of Attorney
       Turn Around Strategy implementation plan
       Report of progress on the implementation plan.

Claims will be submitted by employers, then distribute to employees. Employers and
employees must fill in the declarations.

   4.7.    Tax Relief

In terms of making use of the tax system, a tax subsidy of up to R500 will be provided
monthly by government for the next four months to employees earning below R6500.
Business who are tax compliant with a turnover of less than R50 million may withhold
20% of their PAYE for the next 6/4 months without rates or interests.

R500 million has been made immediately available by the department of small business
development to help aid small to medium business that are in distress through the
following simplified process. You can apply for relief via http://www.smmesa.gov.za/.
This application is only relevant to SMME.