It is understandable that business owners feel panicky because of the toll Corona is taking on business income. However, most businesses realise that if they implement wholesale retrenchments, they will not only lose valuable skills but will also reduce the buying power of the public. This would then further reduce their ability to earn an income.
Many businesses with stressed finances are therefore seeking, in consultation with employees, ways of avoiding retrenchment. These include, amongst possible others, the working of short time, pay cuts and temporary layoffs.
These employers are also finding out about the Department of Employment and Labour’s (DEL) Corona Disaster assistance schemes. While the operation of these schemes is still unclear, it appears that employers who temporarily lay employees off without any pay due to the lockdown can apply to the DEL for TERS benefits through which employees may qualify for state payments of up to R6300 per month for a maximum of three months. The DEL COVID-19 TERS EASY AID guide states that employers may email their TERS benefit applications to DEL together with the following documents:
- Letter of Authority granting permission to an individual specified to lodge a claim on behalf of the company
- An agreement between the state and the employer
- Critical information from the employer
- Evidence/payroll as proof of last three months employee(s) salary(ies)
- Confirmation of bank account details in the form of a letter from the bank.
However, as DEL’s process and requirements for applications appear to change from time to time, we suggest that employers contact DEL for the latest process via the following email address: firstname.lastname@example.org. or phone 0800 030 007.
The DEL guide states that it will also assist through other UIF benefit schemes that already exist including Illness and Reduced Work Time benefits.
Where employers are successfully able to assist employees with obtaining these benefits this could go a long way to alleviating their financial hardships and keeping the business going.
Employers are warned that, where retrenchments are truly unavoidable, these must be implemented according to the requirements of section 189 of the LRA.