COVID-19: TERS Funding: Obligations of Banks and Employers

COVID-19

TERS-FUNDING

OBLIGATIONS OF BANKS

and

EMPLOYERS

As per the regulations regarding the COVID-19 TERS funding, both employers and their respective banks, taking receipt of the funds from the UIF, have certain obligations.

BANKS

The Department of Employment and Labour has gazetted the following responsibilities to be observed by banks which received TERS benefits:

• all amounts paid by or for the UIF to employers or bargaining councils under the terms of the Scheme shall be utilised solely for the purposes of the Scheme and for no other purpose;
• no amount, paid by or for the UIF to an employer or bargaining council, under the terms of the Scheme that is required to be paid to an employee, will fall into the general assets of the employer or bargaining council; and
• no bank may refuse to release or administer the transfer of those amounts into the bank account of the employee as required by the Scheme – irrespective of whether the employer or bargaining council is in breach of its overdraft or similar contractual arrangements with the bank concerned.

It is therefore clear that banks which receive UIF TERS benefits in favour of an employer or bargaining council may not utilise such funds to settle any other obligation of the employer or bargaining council.

EMPLOYERS

Furthermore, it should be noted that the directives, issued by the Department of Employment and Labour, state that:

• employers must keep all their accounting records relating to the Memorandum of Agreement and the COVID-19 benefit for 5 years;
• employers must keep accounting records relating to the MOA and the COVID-19 benefits separate from accounting records relating to its business. (This will enable them to be identified on a standalone basis from the business-related accounting records);
• employers must keep a proper audit trail of the UIF funds received and benefits paid to employees;
• employers may not withdraw the funds paid by the UIF or draw any cheques from the funds; and
• the UIF may appoint an auditor or investigator to audit the employer’s implementation of the Memorandum of Agreement.

NEASA 24/7 NATIONAL HOTLINE: 086 016 3272
legalhotline@neasa.co.za

Regards

We are all in this together.

Privileged and challenged to be South African.