Category: Coronavirus Reliefs

In the current economic climate, organisational change is almost certain for many companies. This has led to fluctuations in the labour market as companies have been forced in many instances to downsize and go through retrenchment processes.

Employers and businesses are encouraged to adopt best-practice retrenchment programmes that look to empower those being retrenched – both emotionally and practically. This best practice should help limit the damage to the remaining employees helping productivity recover faster, thereby mitigating the negative impact of the retrenchment process.

It is not only the retrenched employee(s) that experience a high degree of stress and anxiety during the process, but the remaining employees and stakeholders as well – be they the line manager, the human resources department, or the business owner.  All involved parties go through a substantial amount of psychological stress before, during, and long after the process has ended.

Irrespective of the reason for the retrenchment, a portion of the psychological stress can simply be lessened through programmes that aim to empower the retrenched employee/s. These programmes include inter alia:

• Training to help the employees find alternative employment
• Counselling
• Financial advice

If the impact of retrenchment can be minimised, then all parties can move on with their lives quicker, leading to a healthier working environment, more constant efficiency levels, upkeep of employer brand, and lower rates of post-retrenchment resignations.

By investing in a programme that assists each individual being retrenched to move on and find new opportunities, some of the pessimism of retrenchment can be eradicated.

Author: Douw van der Walt & Meagan Cesare

 

Editor’s note: there are some useful options for employers to consider in this article. However, they all assume the proper functioning of the Department of Labour UIF Department and the CCMA. The UIF Department particularly is under immense strain. It is not certain therefore if these solutions are all workable practically i.e. will the processes at UIF allow them and will there be enough money to make payment and by when? This has an impact on employee / employer relationships as the employee naturally assumes that where they are not being paid it is the employer’s fault. Please be careful, communicate well and do your homework first.

South African business owners are emerging at the end of the lockdown period with a lot more wisdom, having suffered through some of the most testing times in recent history.

HRTorQue has experienced a high volume of enquiries from clients on how best to proceed in order to safeguard their business and to preserve jobs.  The importance of having well-structured financial plans and high levels of accounting acumen became starkly apparent, as for many small business owners these issues have not always been a priority and became lost in the everyday need to keep their company working and afloat.  This is an opportune moment to instill good financial habits or partner with a financial advisor and check in frequently with accountants for up to date results, which could allow analysis of problem areas before they go past a point of no return.

The introduction of the TERS UIF benefit by Government in March 2020 provided some relief to companies. However, TERS as a benefit has only been gazetted for a three-month period (April, May and June) and unless that stipulation is revised and a new Government directive passed; employers must now look for alternative relief to help them through another few months of potentially slow business conditions.  There has been recent talk of extending the benefit for those businesses that are ostensibly still in lockdown, such as the tourism industry, but nothing has been clarified.

Our advice to business owners who are still not yet fully operational is to consider the following alternatives:

 

Remote Working: 

This is a key consideration before more drastic measures are considered and could be beneficial for both the employee and employer. Many companies cannot bring all their staff back due to COVID-19 regulations which prescribe social distancing measures between employees, as a result of limited space at their business premises.  We suggest a careful analysis of your business structure and to identify those employees who are responsible, with good work ethics, and the right infrastructure to enable them to work from home.

 

Temporary Lay-Offs:

Lay-offs are envisaged as a temporary solution to a problem that will hopefully resolve itself once business confidence strengthens.  The principle of lay-off is that an employee remains employed with the company, but with no work and no remuneration for a certain period.  This may be covered in the employee contract or in bargaining council agreements.  If not, the employer and employer should enter into a consensus seeking process to enable the arrangement as provided for in s189 of the LRA.  This gives the employer temporary relief for the stipulated period where salaries won’t be required to be paid, but the employee is entitled to receive benefits from the Unemployment Insurance Fund.

 

Short Time or Reduced Working Time:

This is another option in terms of s189 of the LRA, and for many employers this may be the only way forward for another month or two. Short time is a fairly new concept in the definitions under which the UIF provides assistance, having only been introduced in 2018. The concept is defined as: “A contributor employed in any sector who loses his or her income due to reduced working time, despite being employed, is entitled to benefits if the contributor’s total income falls below the benefit level that the contributor would have received if he or she had become wholly unemployed, subject to that contributor having enough credits.”

An employee can apply either online or in person at a labour office and the documents are the same as those for temporary layoffs. However please note our concerns that there is still no certainty on the calculation and practical payment of the short time benefit by UIF yet.

 

Illness Benefit UIF for fourteen-day quarantine period:

Where an employee is ill, but has exhausted their sick leave days they can apply for the illness benefit from UIF.

 

Training Lay-Off Scheme:

(Editor’s note: we have not seen this operating in practice yet, so caution is warranted)

This benefit is overseen by the CCMA.  It is another temporary relief scheme designed to assist employers in distress and was envisaged as a means of reducing retrenchments.

Employees are laid off work for a period whilst they undergo training; they are provided with a training allowance grant from the Department of Labour and calculated on similar principles to UIF unemployment benefits.  Workers remain employed during the training lay-off but are not paid their normal salaries.  The lay-off may be combined with the short-time work arrangement.  The time period is flexible but is usually based on three to six months of training.

Employers may apply to the Department of Employment and Labour for the benefit and these are granted based on the submission of financial statements and budgets as well as a proposed turn-around plan. The CCMA also has dedicated resources that can be contacted for advice on how to start the process.

 

Retrenchments:

Should employers be forced to restructure their Company and retrench staff they must be careful to follow the required labour legislation and established protocols.

Consultations must be initiated with all employment parties such as workplace forums, registered trade unions whose members are likely to be affected, as well as with individual employees as the situation dictates.

An attempt to reach consensus must be made on the following:

• Avoiding possible dismissals; this can be done by introducing reduced working time, temporary layoffs, offering early retirement to some employees or stopping overtime pay or the discontinuation of temporary employee contracts.
• Negotiating ways to minimise the retrenchment of employees as well as discuss the timing of the exits.
• The method of selecting employees to be retrenched must be stated as well as the severance pay envisaged.

The employer should provide all information related to these issues in writing; particularly the reasons for the retrenchment process as well as how many employees are going to be affected.   Reduce to writing any alternatives that were proposed and why they have been rejected. The number of employees affected must be disclosed, the timing of the retrenchment process as well as the severance pay that has been proposed.  There should be a reassurance of re-employment should the company find itself to have increased capacity at a later stage.

Retrenchments cannot be used for the sole purpose of getting rid of unwanted employees.

The employees or other consulting party must be given an opportunity to present alternatives and these must be considered, and a response provided.

At the conclusion of the consultation process, should no agreement be reached on the criteria for selection, then often the LIFO (last in, first out) principal may be applied, but this is not the only means of selection, i.e. for instance a combination of methods such as early retirements or departmental restructuring, or retention of key skill personnel may be used. The CCMA has published guidelines on how restructurings should be conducted, and these are updated from time to time and serves as a useful reference for parties involved in restructuring.

Severance pay as well as notice pay (per labour law) must be paid out.  Employees are entitled to their outstanding leave pay as well as any other criteria stipulated in their employment agreement.

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There have been multiple press releases and changes announced over the past three months in relation to UIF benefits or DOL policies. These may change from day to day.  Details reflected in this article are correct at the time of going to press.  Kindly ensure that you check for updates from us on a regular basis.

Author: Douw van der Walt & Meagan Cesare

 

The Temporary Employer / Employee Relief Scheme (TERS) claiming process certainly did not start smoothly. The process changed regularly, and the systems often crashed due to the sheer volume of applications.

With the three-month legislated TERS period closing; employers have become increasingly concerned about the financial implications and long-term viability of retaining staffing at historical pre-Covid levels. The month of July looks to be a watershed month and without the TERS cushion, many employers may have to start looking at retrenchments or deeper short-time implementations. There is no simple answer as again mixed messages are being received from Government as to the likelihood of further Government support using UIF funding. The most recent message clearly states that TERS benefits will cease at the end of June as there has to be enough funds in the UIF coffers to pay out benefits based on the other UIF benefit pillars. That said, there have also been rumours that TERS will be extended for one more month as there is at least a system in place to get benefits to those employees in need. We hope that this uncertainly is cleared up by Government well before the next pay cycle comes around, but don’t hold your breath…

Assuming TERS benefits ends, there is still a potential alternative. An additional benefit pillar was introduced in 2018 to cater for ‘reduced working time’ (short time). The big differences between this benefit and TERS are:

• The ‘reduced working time’ benefit is paid out based on the number of credits that the employee has.
• This benefit is paid out directly to the employee based on a claim made by the employee.

In an ideal world this process is not that complicated. We are not in an ideal world though and having hundreds of thousands of employees trying to make applications at the Department of Employment and Labour under COVID-19 conditions would be a disaster. In addition, there is still no clarity on how the benefit would be practically calculated. Any application at the current moment would need to be made with reduced expectations of the timing and amount of payment. This makes the process difficult particularly as the claim needs to be made by the employee.

So, we are at a crossroads.

If TERS is extended for a month, HRTorQue will be able to assist you in submitting the claim for that month.

If TERS is not extended employers can still theoretically use the ‘reduced working time’ UIF benefit, with the hope that the UIF systems will allow for claims to be made with minimal human interaction. Bulk uploads by employers for such claims cannot currently be done on uFiling. HRTorQue, will however be able to assist your employees with the collection of the paperwork necessary to make a claim. We are in daily contact with the Payroll Authors Group of South Africa in this regard, and we are aware that they are having high level discussions with the Head Office of the Department of Employment and Labour. We will disseminate information as soon as it becomes available.

You are welcome to give our Team a call to discuss these options. We understand the pressures that business owners are facing and will do our best to provide practical and cost-effective advice in these challenging times. Due to the constantly changing landscape presently surrounding UIF benefits, both for TERS and possibly short-time scenarios, our information and advice is correct as of today, but may well change at a future time.  Ensure that you check in with us regularly for updated information.

The Department of Health issued a new directive in late May to protect vulnerable employees from Covid-19 infection. While well intentioned the directive has the potential to offer some employees a way to get out of doing any work while still being paid. We have reproduced the directive and then look at this risk and how to mitigate it.

What is our concern?

In summary the directive creates quite onerous obligations for employers and requires employers to look after vulnerable employees (including the elderly, late pregnancies and severely obese employees) and provide them with an opportunity to see a doctor about their comorbidity vulnerabilities. This may end up in the doctor recommending the employee remain at home and/or take sick leave while requiring the employer to continue paying a salary while on sick leave and continue paying any medical aid benefit. Given the nature of some employees this seems to us to be an ideal opportunity for shirkers to be paid for doing nothing where the circumstances don’t warrant it. We would therefore recommend employers either work through a company appointed doctor so they can control the process or alternatively provide the employee with a detailed description of the safety precautions being taken at the workplace for presentation to the doctor (also requiring the doctor to confirm by signing that they have read the precautions). Feel free to contact us to discuss.

Note: non-compliance with the directive could be seen as non-compliance with the OHSA Act which carries some potentially quite stiff penalties for managers in their personal capacity.

In relation to the actual requirements of the directive:

What does the directive say? (source: Ministry of Health)

Who is a vulnerable employee in the context of COVID-19?

Section 5, subsection 5 (d) and (e) of the Regulations issued in terms of section 27(2) of the Disaster Management Act, 2002, specifically requires employers to adopt “special measures for employees with known or disclosed health issues or comorbidities, with any condition which or may place such employees at a higher risk of complications or death if they are infected with COVID -19; and “special measures for employees above the age of 60 who are at a higher risk of complications or death if they are infected with COVID-19.”

COVID-19 is a new disease and there is limited information regarding individual risk factors for an infected person with complications and needing higher levels of medical intervention. In order to minimise the adverse consequences of COVID-19 on selected persons, employers should implement a process in identifying employees who:

• are at high-risk of developing severe illness from COVID-19; or
• reside with or care for persons that are at high-risk for severe illness from COVID-19 (including family members, aged parents etc.)

The major categories of vulnerable employees include:

1. 60 years and older
2. One or more of the underlying commonly encountered chronic medical conditions (of any age) particularly if not well controlled:

• • chronic lung disease: moderate to severe asthma, chronic obstructive pulmonary disease (COPD), bronchiectasis, idiopathic pulmonary fibrosis, active TB and post-tuberculous lung disease (PTLD)
  • diabetes (poorly controlled) or with late complications
  • moderate/severe hypertension (poorly controlled) or with target organ damage
  • serious heart conditions: heart failure, coronary artery disease, cardiomyopathies, pulmonary hypertension; congenital heart disease
  • chronic kidney disease being treated with dialysis
  • chronic liver disease including cirrhosis

3. Severe obesity (body mass index [BMI] of 40 or higher)
4. Immunocompromised as a result of cancer treatment, bone marrow or organ transplantation, immune deficiencies, poorly controlled HIV or AIDS, prolonged use of corticosteroids and other immune weakening medications
5. >28 weeks pregnant (and especially with any of co-morbidities listed above)

 

Assessing a vulnerable employee

1. The employee should be assessed by his/her treating doctor, or, in the event that a worker cannot afford such costs, the employee should be assessed by a doctor, at the expense of the employer (noting the doctor-employee confidentiality) and preferably one who has insight into the workplace and its processes.
2. The doctor should provide a confidential note to the employer, indicating the presence of any of the above conditions, without specifying the diagnosis. Should the employee have a condition not listed above, which in the opinion of the doctor renders this employee vulnerable a motivation would be necessary. The treating doctor should refrain from commenting on the employee’s fitness to work.
3. The doctor should ensure that the employee’s health condition is fully optimized, which may include:
   • recommending flu vaccinations (and pneumococcal vaccine where appropriate)
   • INH prophylaxis for workers as stipulated in the Department of Health’s guidelines
   • continuous advice on maintaining compliance with treatment plan
   • the employee has adequate supply of chronic medication for up to 6 months
   • advise the employee not to delay getting emergency care for their underlying condition
   • advise employee to maintain ongoing health consultations if they have any concerns
   • ensure that the employee has access to psychosocial support for new onset or exacerbation of pre-existing mental illness

 

Protecting and managing vulnerable employees in the workplace:

1. Employers should have a clear and transparent policy and appropriate procedures to address the specific needs of vulnerable employees beyond the workplace risk control measures for all employees. These policies and procedures should be based on legislative provisions specific to their sector.
2. These measures need to take into account the individual circumstances of the employee in relation to their work environment and activities and would include:

2.1 Ensuring that potential exposure to the SARS-CoV-2 virus by this employee in their current job is eliminated or reduced such that the risk for infection is substantially minimised

2.2 If potential exposure cannot be eliminated or reduced, then the employer, in consultation with the relevant employee, should explore other ways of temporary workplace accommodation to prevent the risk of infection. These accommodations should be granted based on optimal utilisation of the employee’s skills/competencies, without a reduction in benefits and accompanied with adequate training where appropriate:

• • • • alternative temporary placement / redeployment to a different role and responsibility which has a negligible risk for transmission
      • restriction of certain duties (not allowed to perform high risk procedures)
      • protective isolation (e.g. providing a dedicated, clean office, etc.)
      • provision of specific PPE appropriate to the risk of the task/activity identified in the workplace risk assessment and adherence to PPE usage protocols
      • stricter physical distancing protocols (including staggering of shifts), barriers or additional hygiene measures
      • limit duration of close interaction with clients, colleagues and/or the public reducing external risks (use of public transport) by providing alternative transport arrangements where feasible

2.3 If the above steps are not possible, then consideration should be given to allowing the employee to work from home if able to do so, and the necessary equipment, internet access, etc. is available

     3. Leave procedures:

• • temporary incapacity, for the period of the COVID-19 epidemic, may be motivated by the treating doctor /occupational medical practitioner on the grounds that workplace accommodation is not possible
  • should this not be possible the employee should be able to utilise his/her sick leave if appropriate, as advised by the treating doctor/occupational medical practitioner
  • should sick leave be exhausted, the employee should be able to utilise his/her annual leave if an employee’s working time is reduced or temporarily stopped due to operational reasons (workplace functioning at 50% of capacity), an application can be made to the Department of Employment and Labour for the TERS benefit (COVID-19 temporary relief scheme)
  • where applicable the eligibility of the employee to receive additional company benefits and/or UIF (may be topped up by TERS benefit) should be considered
  • unpaid leave is not recommended and if contemplated, should be the last resort

4. Ensure employee’s existing health benefits are ensured:

• maintain all employer-related medical aid benefits for employees already eligible for benefits until the employee is deemed eligible to return to work

Return to work (RTW) and incapacity management of the vulnerable employee post COVID-19 illness

• ensure adequate worker’s compensation claim (WCA/COID) processing and rehabilitation if exposure was work-related
• ensure that any sick leave related to a workplace-acquired COVID-19 related illness is managed under COIDA procedures
• employees with mild illness (not requiring hospitalisation) should complete the mandatory 14 days isolation and return to work
• employees that have been hospitalised due to COVID-19 prolonged illness and complications should be assisted by the employer to ensure RTW integration
• a fitness to work medical evaluation should be performed in those with moderate to severe illness by an occupational medical practitioner/specialist and occupational therapist, where appropriate, to assess the presence and degree of clinical deficits (e.g. lung function impairment) and health problems related to ICU (muscle weakness, memory and concentration problems, mental ill health) since these employees may require prolonged work adjustment
• rehabilitation may be recommended by the occupational therapist and other allied health professionals as appropriate

Temporary Employer Relief Scheme (TERS) benefit claims proved to be extremely challenging in April with the practical application of the legislation changing on a number of occasions and the UIF website crashing on occasion.

It was hoped that May applications would be better. However, the website only opened for May applications in very late May and while there are some promising signs with new questions being posed by UIF, there continue to be some practical challenges which employers need to work through. There is still a level of uncertainty and risk in making applications and employers need to be cautious.

Some points to note include:

• There was a rumour that the UIF would be only paying funds directly into employees’ bank accounts even if employers had advance funded employees through the May payroll. Thankfully the system still allows you the option of selecting where the funds are paid…
• It was clear from April submissions that if you are part of a larger group with the same UIF number, or if you are part of a bargaining council but not all employees are members, then the employer needs to be careful in making one submission themselves (rather than individually for each company or separately for the bargaining council and no bargaining council employees as neither would work)
• The UIF website now asks some specific questions to employers. It is important that the employer has thought through how their TERS application ties up with their communication and practical implementation with employees:
  • Confirmation of April’s submission by the employer:
    • Employee/s did not work, or any amount paid was deemed to be leave income/an advance by the employer
    • Employee/s did work and received remuneration and any excess above normal salary refunded to UIF by the employer
    • Employee/s did work and received remuneration and full amount paid by UIF paid over to employee
  • Please confirm you have the following document available to make the submission:
    • Bank Confirmation Letter
    • Signed Approval/Acceptance Letter for April
    • Proof of TERS Payment to Employees for April
    • Refunds to the UIF (if applicable)
  • For May 2020, are the salaries and remuneration during lockdown for the employees still the same as in April 2020? (Note: if you answer Yes to this be careful because the application automatically submits and you have no further ability to change anything)
• The “Leave Income” field which has caused so much confusion has been amended for May to be “Remuneration for work to be done in May 2020 (excluding leave income or payment in advance”. While more helpful than April there is still no legislative guidance on what this means. Expert opinion suggests an employer should be clear with employees what is happening and should include in this column only remuneration for actual hours worked as opposed to any leave pay, taxable advances (to provide remuneration to employees in anticipation of the TERS benefit) or income where no work has been done. But be aware because there is no practical guidance there is still risk here for employers.

 

Overall, probably our biggest concern with TERS is the potential interpretation the UIF may take in future where employers have claimed where their business has been impacted by Covid-19, but where they struggle to show clearly that they have faced partial closure. We fear this may come back to bite employers who may have been too aggressive in their interpretation in this space.