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Bosses ‘must’ pay workers under South Africa’s Covid-19 lockdown? Experts say no

“Bosses must pay workers who are on lockdown,” claims a document circulating on social media in South Africa, dated 18 April 2020.

The country has been on lockdown since 27 March to slow the spread of Covid-19. Lockdown restrictions were slightly eased on 1 May, but many businesses are still unable to operate.

The document is by the Casual Workers Advice Office. CWAO is a non-profit organisation providing labour advice and support to workers.

“Latest amendments to the Covid-19 Ters regulations say bosses must pay workers who lose wages because of the coronavirus lockdown,” its document says.

But is this advice correct?



Covid-19 relief scheme


C19 Ters is the Covid-19 Temporary Employer/Employee Relief Scheme. It allows qualifying employers to claim from the Unemployment Insurance Fund (UIF) to pay employees during the lockdown. The fund provides short term unemployment relief to workers who qualify, through a tax on the wage bill and therefore benefits only contributors.

“Bosses are now legally compelled to get money from the UIF’s Ters fund to pay workers who have been laid off,” CWAO says. But this does not seem to be the case.

The regulations, first published on 26 March, have been updated twice. They say that “employers are encouraged to continue to pay employees”. If not economically possible, they can then turn to C19 Ters.

 C19 Ters is referred to as “a special benefit” under the UIF but, unlike normal UIF applications, an employee cannot apply directly for the benefit except in the special case where “the employee’s employer has failed or refused to apply”. Otherwise, their employer must apply on their behalf.

The relief funds are available to any employee who is already covered by the UIF, but only if the Covid-19 outbreak has forced their employer to stop operating, even partially, for three months or less, causing financial loss.

Once granted, the funds are not allowed to fall into the general assets of the employer. 

But the regulations don’t say that employers are “compelled” to apply for the funds. 

Further updates to C19 Ters

Africa Check asked Igsaan Schroeder, CWAO’s coordinator, for the source of the claim that employers are compelled to pay their employees during the lockdown.

Schroeder pointed us to the most recent update to the regulations, a government notice signed by labour minister Thembelani Nxesi on 16 April. It was published in a Government Gazette on 4 May, and appears on the Department of Labour website.

The notice changes the wording of the regulations to state that employers to whom Ters is relevant “must apply” for benefits on behalf of their employees. But this does not necessarily mean that they are obliged to access Ters benefits and pay workers.

What do the experts say?


Africa Check asked Bradley Workman-Davies, a director at Werksmans Attorneys, about the document. His firm has commented on the updated regulations. He told us that employers are not legally obliged to pay workers if their operations have been suspended due to the lockdown.

“If the employer and employees are unable to perform work and conduct operations respectively ... the obligations of both parties are suspended, including the obligation to pay salary,” he said in an email.

The phrase “must apply” in the regulations does not mean that employers have no option but to pay workers. Workman-Davies said “it means that whereas an employee would ordinarily apply for UIF benefits individually”, their employer should apply on their behalf.

Law firm Webber Wentzel has said: “To the extent that the employer simply does not apply for the relief even without the consent of the employee it can still be argued that the employee is objectively entitled to earn an income.”

But Webber Wentzel does not say that payment of wages is a requirement of C19 Ters. Nor do legal firm Bowmans. And the Law Society of South Africa also does not suggest this in the journal De Rebus or their pages on C19 Ters regulations and Covid-19 related directives. – Keegan Leech




 

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