The Unemployment Insurance Fund has committed close to R159m to save close to 4,000 jobs in 34 distressed companies. According to the latest Quarterly Labour Force Survey from Statistics SA, the unemployment rate has stubbornly remained unchanged at 29.1%, and this figure is likely to increase considering announcements made by some big companies to retrench workers.
The TERS entails temporary suspension of work of a worker or a group of workers that are facing a risk of retrenchment due to their company being in distress. Through the TERS, workers agree to forego their normal wage to attend the training programme and accept a training allowance during the training period, and UIF pays 75% of their salaries during the training period.
Employers gain a recovery period by reducing payroll costs for a stipulated period while improving the skills of their workers at limited costs to the company. The employer must commit that the contract of employment for employees participating in the TERS will be retained, and that the employer will pay all contributions of social security benefits during the training period.
The scheme has proven to be a significant catalyst in saving jobs and keeping companies financially sustainable. Since its inception in 2008, more thancompanies have participated with more than 60,000 employees receiving training and being able to retain their jobs.