The Temporary Employee Relief scheme, not to be confused with the COVID 19-TERS, provides an alternative to retrenchment whereby the employment relationship is suspended whilst employees go on a skills training programme. The scheme is entirely voluntary and is based upon an agreement between the employer and workers, whether unionized or not.
Purpose of the Scheme
· Avoid retrenchments
· Enhance skills of workers
· Support companies through recession
How the scheme works
In order to participate in TERS, an agreement must be concluded by the employer and the relevant union or workers, and such agreement must be approved by a Department of Labour (DoL) Committee. The employer also needs to demonstrate financial distress, meaning that there must be at least a 10% decrease in turnover, orders or production output.
Should such agreement be concluded, the workers will remain employed during the layoff period, but they will forego their normal wage for a training allowance. The employer must pay the necessary social security contributions such as UI, and pension funds, and may also top up the salary if possible. The envisaged training period is flexible but usually lasts 3 to 6 months.
The Training Allowance
· During the TERS period an employee will receive an allowance equal to 75% of the worker’s basic wage, subject to a maximum allowance of R12,840 per month.
To qualify for the allowance
· There must be a full layoff, lasting at least 4 weeks.
· A partial layoff (short-time) lasting at least two days a week, for a period of at least 8 weeks.
How to apply
1) A request for a training layoff is made either to the CCMA by completing a form, or it may arise as an alternative to retrenchment.
2) A CCMA committee evaluates the eligibility of parties for participation based on whether:
– The business is in financial distress;
– Has the potential to turn it around after the layoff period; &
– Whether workers are eligible to participate in the scheme.
3) The CCMA then makes a recommendation in the form of an advisory award.
– If they recommend the scheme, they will facilitate the conclusion of a training layoff agreement.
4) The Department of Labour (DoL) Committee will then consider the CCMA’s recommendation.
– if successful it will pay training allowances to the Sector Education and Training Authority (SETA).
– SETA then facilitates the provision of training and costs to the employer, who then in turn provides the training allowance to the employee.