Government is coming to the assistance of distressed companies amid the COVID-19 pandemic

Under normal conditions, section 20(1)(a) of the Unemployment Insurance Act 63 of 2001 (UIF Act) 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.

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 COVID19 pandemic:

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.

This is a developing issue as we are still to receive further detail on Government’s considerations in this respect and when this will become effective.