Assisting distressed companies amid the COVID-19 pandemic

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Michael Yeates | Director | Employment Practice | Cliffe Dekker Hofmeyr | mail me |


The Department of Employment and Labour has recently provided much needed guidance in respect of questions which employers have been grappling with since President Ramaphosa’s declaration of a National State of Disaster on Sunday 15 March 2020.

Most of these questions relate to employees’ rights who are required to self-quarantine, sick leave and annual leave entitlements and under which conditions would employees have access to their UIF benefits.

Under normal conditions, section 20(1)(a) of the Unemployment Insurance Act, 63 of 2001 (UIF) outlines a contributor’s right to illness benefits. A contributor is entitled to illness benefits if ‘the contributor is unable to perform work on account of illness’.

This is however subject to the exclusion when a contributor is entitled to other unemployment benefits. The benefit to which a contributor is ordinarily entitled to is calculated in accordance with Schedule 2 of the UIF Act.


PODCAST

An interview with Michael Yeates, Director Employment Practice, Cliffe Dekker Hofmeyr, and Dr Ivor Blumenthal, CEO, ArkKonsult, discussing the relief and assistance for employers and employees as a result of the COVID-19 pandemic.


Funds Temporary Employer/ Employee Relief Scheme

Section 19 of the UIF Act states that the period of the illness is determined from the date the contributor ceases to work as a result of the illness, and is ordinarily pre-empted by a medical certificate.

However, these are no-ordinary times. Given the advent of the COVID-19 pandemic in South Africa, scenarios have emerged which are not necessarily contemplated by the UIF Act.

The Minister of Employment and Labour Mr Thulas Nxesi announced on 17 March 2020 that a period of reprieve will be considered in order for companies not to contribute to the Unemployment Insurance Fund (UIF). He said the Funds Temporary Employer/ Employee Relief Scheme will be used to avoid workers being laid off.

Minister Nxesi stated that the following measures are being considered in light of the COVID-19 pandemic:


Scenario Contemplated Government Assistance
Companies who decide to close for a short period
  • Short term UIF benefits will be available to employees
Companies who contemplate a short term shut down
  • Companies contemplating a short term shut down must notify the Department who will dispatch a team to visit these companies to provide assistance with the processing of UIF claims
Employees who must subject themselves to be self-quarantined for 14 days
  • such leave will be recognised as ‘special leave’ and employees will be permitted to apply for UIF benefits which will be paid on condition that the reason for the quarantine meets the necessary requirements
Employee who are required to be quarantined for periods longer than 14 days as a result of having travelled or been in contact with an infected person
  • such a leave will be recognised as  ‘special leave’ and employees will be eligible to apply for unemployment insurance benefits

The Minister urged employers to conduct a health and safety risk assessment in consultation with its employees, whilst ensuring that measures are put in place to ensure a healthy workplace in terms of its health and safety obligations such as the provision of the necessary protective equipment and put in place systems to deal with the outbreak, as well as including all mitigating measures that are to be put in place until the outbreak has been dealt with.

CCMA’s response to COVID-19

On 17 March 2020, the CCMA Director issued an urgent directive in response to COVID-19.

The details of the directive are the following:

  • Contact processes – These include all fact-to-face interactions such as conciliations and arbitrations where the parties are required to be physically present. The directive has postponed such processes. Please note that this is limited to matters set down between 18 March 2020 up to and including 14 April 2020.
  • Discretionary functions – These include conferences and training. These events are postponed unless otherwise advised. However, the CCMA may approve that large scale dismissals processes, Inquiry by Arbitrator processes and matters identified to be of public interest be set down and proceed in venues other than the CCMA offices, subject to adequate health and safety conditions and written agreement by the parties, Commissioner and CCMA.
  • Exceptional circumstances – The pre-conciliation process is not postponed since it is conducted telephonically. Further, conciliations which are conducted by telephone on agreement between the parties, the Commissioner and the CCMA are allowed. The directive empower Commissioners to try and resolve disputes telephonically or using approved online methods.

This directive does not prevent parties from filing referrals or documents and contacting the CCMA via email, fax and telephone.

It is clear that the applicable timeframes for processes will be enforced. The directive will apply with effect from 18 March 2020 until 14 April 2020.


 


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