Dept of Labour causing confusion over annual leave statement

Posted 30 March 2020 Written by Ciaran Ryan
Category Labour

From SA Accounting Academy: The Department of Labour is causing confusion over its statement that employers should not force employees to take their annual leave during the Covid-19 lockdown period.
Even though the department recognises employers are within their rights to request employees to take annual leave during this time, it urges employers to rather use “the financial assistance that the department has placed at their disposal through the Covid-19 Temporary Employer/Employee Relief Scheme (TERS) in cases where companies cannot afford to pay employees."
This is according to a statement issued last week by the Department of Employment and Labour’s chief director of labour relations, Thembinkosi Mkalipi.

The National Employers Association of SA (Neasa) says such statements are causing confusion. “South Africa’s sources of law are the common law, acts of parliament, secondary legislation and case law. Speeches, press releases and statements do not create laws,” says Neasa chief executive Gerhard Papenfus.

What the law says

Section 20(10) of the Basic Conditions of Employment Act (BCEA) states that:

Annual leave must be taken:
(a) in accordance with an agreement between the employer and employee; or
(b) if there is no agreement in terms of paragraph (a), at a time determined by the employer in accordance with this section.

“Therefore, annual leave must be taken by agreement between the employer and employee, and failing such an agreement, at the employer's discretion. The current Covid-19 lockdown is no different to an annual shutdown in December,” says Papenfus.

“Therefore, until one of the legitimate sources of law is amended, employers can require their employees to take their annual leave now, during this lockdown, and be paid.”

Employers who have an annual shutdown in December may even, if practical, exchange this lockdown closure for the December shutdown and require employees to work during December.

Neasa says the other alternative available to employers who cannot place employees on leave or continue paying them, is to lay them off temporarily as a result of the lockdown and to claim UIF benefits for the employees in terms of the expanded Covid 19-TERS benefit.

Employer/Employee Relief Scheme (TERS)
The scheme is aimed at assisting employees where employers are unable to pay them during the lockdown.

The basic criteria, according to the regulations, are as follows:
  • should an employer as a direct result of Covid-19 pandemic close its operations for a 3 (three) months or lesser period and suffer financial distress, the company shall qualify for a Covid-19 Temporary Relief Benefit;

  • the benefits will only pay for the cost of salary for the employees during the temporary closure of the business operations;

  • the salary benefits will be capped to a maximum amount of R17 712.00 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;

  • should an employee's income, determined in terms of the income replacement sliding scale, fall below the minimum wage of the sector concerned, the employee will be paid a replacement income equal to minimum wage of the sector concerned;

  • the company must be registered with the UIF;

  • the company must comply with the application procedure for the financial relief scheme;

  • the company's closure must be directly linked to the Covid-19 pandemic;

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

Application procedure
  • The employers shall apply by reporting their closure to email box [email protected]. On receipt of a request, an automated response will be sent outlining the procedure and documents/information required by the Fund to process application.

  • The employer shall be required to furnish the Unemployment Insurance Fund with the following completed documents:

Please click here to view the regulations and a guide issued by the Department.

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