Covid-19 TERS extension: key information for employers

​​​​​A new directive sets out conditions for the extension of benefits under the Covid-19 TERS scheme, which applies only to four categories of employees

In our previous article, we provided some information on the extension of Covid-19 TERS to 15 March 2021. The Minister of Employment & Labour has recently gazetted a revised Covid-19 TERS Directive on the extension of the scheme. We summarise the key information for employers below.

Extended application periods

The TERS extension provides for two application periods:

Applications for Period 1 are currently open for submission. The UIF will issue a public announcement once applications for Period 2 are open.

Extension applies to certain categories of employees

The TERS extension only applies to four categories of employees:

It is important to note that category 1 is limited to the sectors specified in Annexure A to the TERS Directive. However, categories 2, 3 and 4 are not subject to the same limitation. In other words, employers from any sector are permitted to apply for employees that fall under categories 2, 3 and 4, provided that they meet the requirements listed above.

As part of the TERS application process, employers must ensure that they disclose any additional top-up payments or remuneration received by employees for each application period. Based on what we have seen in ongoing TERS audits, employers should ensure that they are able to reconcile amounts in their csv spreadsheets with their payroll information.

As with the previous TERS Directive, the definition of "remuneration" is the same as in the Basic Conditions of Employment Act 7 of 1997. Employers should use remuneration ordinarily received for work done before lockdown in column "K" of the application spreadsheet, averaging over 13 weeks if amounts fluctuate. Employers should complete column "O" amounts using what was reflected as remuneration paid on the payroll for each application period. If there is a difference, employers must be able to explain it, i.e. why a lesser or greater amount was used in the spreadsheet. Manual upload for each employee on the TERS application system is still the preferred and less error-prone method.

Employers who do not fall within the sectors specified under Annexure A for category 1 employees, and who do not have category 2 to 4 employees (not limited to sectors in Annexure A), can now apply for the UIF's reduced work time benefit. The Department of Employment & Labour website now provides a process for employers to apply for reduced work time benefits for their employees in bulk. This is a welcome development.

The TERS extension also clarifies that any additional payment made by the employer to supplement the reduced work time benefit received will not reduce the amount of this benefit calculated using the formula. The UIF credit days will, however, still be reduced by the reduced work time benefit paid, unlike a TERS benefit paid which does not reduce these credit days. Therefore, employers should first ascertain whether their affected employees fall into any of the categories 1 to 4 who are eligible for the TERS benefits before applying for the reduced work time benefit for their employees.

In our view, there should be relief and support for employees for their loss of income for as long as there is a national state of disaster, and perhaps even for some time afterwards. This is especially the case as economists broadly anticipate that South Africa's gross domestic product (GDP) will gradually climb back to 2019 levels by only 2023/2024.