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Bulletin | Covid-19

Further amendments to the Covid-19 temporary employer/employee relief scheme ('C-19 TERS')

Fasken
Reading Time 3 minute read
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It will be recalled that the Minister of Employment and Labour issued a directive on 26 March 2020 establishing the Covid-19 Temporary Relief Scheme, 2020, also known as the “C-19 TERS”.  This scheme formed the subject matter of our bulletin of 29 March 2020.  You can read this bulletin here

Added to this, the Minister issued a further directive on 8 April 2020 amending some of the provisions of the C-19 TERS. This amendment formed the subject matter of our bulletin of 10 April 2020. You can read this bulletin here

On 16 April 2020, the Minister signed another directive amending the previous directives mentioned above. This has not been published as required in the Government Gazette but we are assured by the Department of Employment and Labour that it will be.  In this bulletin we discuss the effect of this amendment on the assumption and in anticipation of publication in the Gazette.

Extension of C-19 TERS benefit in respect of the use of annual leave

As noted in our first bulletin of 29 March 2020, the national lockdown meant that the principle of no work no pay would apply and employers were not obliged to remunerate anyone not working as a result of the lockdown for as long as they were not allowed to tender their services.  As a response, a number of employers, on the request or with the agreement of employees, applied the employees’ annual leave for the period of closure of business.  This meant that employees continued to be paid against their annual leave entitlement. 

The recent amendment now allows for employees who have been required to take annual leave during the lockdown to be entitled to C-19 TERS benefits instead.  Since the extension of this benefit is being provided for after most employees will have taken their annual leave, employers who have required their employees to take annual leave during the period of the national lockdown, and have paid their ordinary remuneration through the period of annual leave, can now claim the C-19 TERS benefit. The employer may then set off any amount received from the UI Fund in relation to that employee’s C-19 TERS benefit against the amount paid to the employee in respect of annual leave. The employee must be credited with the proportionate entitlement to paid annual leave in the future. 

Importantly, the amendment permits the employer to make the claim and to receive the benefit even if it does not pay the amount over to the employee (it has already paid the employee’s remuneration) as long as it credits the employee with the leave taken.

This amendment certainly brings further relief to employees who may have used their annual leave in order to receive remuneration during the employer’s business closure. 

Employers to apply for C-19 TERS benefit for and on behalf of its affected employees

While the first directive provided that the employer qualified for the benefit and the employer was the one to apply for the benefit, the second directive provided that it was affected employees who qualified. This may have resulted in confusion as to whether employees could  apply for the benefit.  

The amendment makes it clear that it is the employer that must apply, for and on behalf of its affected employees.  It further emphasizes the need for social distancing and to avoid “in person individual employee” applications. 

C-19 TERS in bargaining councils

The amendment clarifies a further issue. Where employees may be entitled to receive a benefit from a bargaining council, an employer may not make an application to the UI Fund and its employees may not receive any benefit, other than through the bargaining council.

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