Following the civil unrest in Gauteng and KwaZulu-Natal in July, many businesses were forced to close or reduce their levels of operation. This obviously negatively impacted employees. 

On 11 August 2021, the Minister of Employment and Labour gazetted the Temporary Financial Relief Scheme known as the: “Destroyed, Affected or Looted Workplaces: Temporary Financial Relief Scheme, 2021”. The scheme has been created under the Unemployment Insurance Act 63 of 2001 and will be reviewed bi-weekly by the Minister on the advice of the Unemployment Insurance Commissioner in respect of its continued operation. The scheme is not linked to normal unemployment insurance benefits. 

Building upon the lessons of 2020, the scheme applies not only to employees but also to workers. Where a worker who is receiving part or no remuneration because of the civil unrest (experienced between 9 to 18 July 2021), such persons are entitled to an income replacement, calculated on a sliding scale of 38% to 60% based on remuneration.

The remuneration taken into account in calculating the relief cannot exceed R17,712 per month. However, if the income replacement is below R3,500 then the worker must be paid a replacement income equal to this amount. Accordingly, the payment will not exceed R6,700 and shall not be less than R3,500 per month. A flat rate may also be determined by the Minister if financial considerations dictate. An employee/worker may only receive the relief if “the total of the relief together with any additional payment towards relief or salary in any period is not more than the remuneration that the employee would ordinarily have received for working during that period”.

Payments under the scheme will be made directly into the worker’s bank account unless the commissioner allows payment directly to the employer. However, an employer is required to apply for the temporary financial relief on behalf of its affected employees and must satisfy the following conditions (an application cannot be made by the employee):

• It must register and be registered with the Unemployment Insurance Fund (UIF).
• The closure of the employer’s business must be directly linked to the destruction or damage of its workplace.
• The employer must confirm in writing or electronically that the terms of the scheme or the procedure document issued by the UIF are accepted.
• Details of the destruction, damage, theft or closure of the workplace must be provided. Additionally, proof of a report to the South African Police Service (case number issued) must be provided and, if the business is insured, proof of submission and acknowledgement of receipt of the insurance claim must be submitted.

Any other information the commissioner may require.

The scheme should provide some measure of relief to employees not receiving their full or any remuneration because of the unrest. The UIF will announce the platforms to be used, claim process and dates for submission. These details have not been released as yet. 

Affected businesses should be aware of the scheme and be on the lookout for when applications open up with the UIF.

Written by by Imraan Mahomed and Storm Arends, Cliffe Dekker Hofmeyr