BACKGROUND ON TERS

TERS was reaffirmed during the Presidential Jobs Summit in 2018, where the Social Partners signed an Agreement outlining mechanisms to minimize the loss of jobs and create new job opportunities.Rebranded and revitalized: Temporary Employer / Employee Relief Scheme –TERS [not the same as the Covid-19 TERS].

The TERS is administered by the CCMA through the Single Adjudication Committee TERS has 3 components:

• TERS allowance paid by UIF
• Training Programme at the cost to the SETA
• Business Turn-around and Recovery Programme provided by Productivity S

WHAT IS TEMPORARY EMPLOYER/EMPLOYEE RELIEF SCHEME(TERS)

• The TERS is a 12-month (maximum) solution which benefits employers and employees in companies facing distress.
• It enables the retention of employment by such companies in a manner which has little cost to the employer and which ensures employees continue to receive an income.
• It also gives companies the maximum opportunity to recover during the temporary relief from distress and to re-absorb employees into ordinary work at the end of the TERS.
• Companies can implement a turnaround strategy on their own or through Productivity SA during the period of participation.
• Under the TERS, employees affected by short-time / layoffs / possible retrenchment may be placed on SETA-funded training for up-skilling / re-skilling for a maximum of 12 months and during this period their wage cost is covered by the UIF and not by the employer.
• Employers are only required to cover the social contributions of employees (e.g. provident fund, death benefits, medical aid, etc.).
• Employers are also encouraged to top up on the amount paid to the employees by the UIF.
• Where training occurs, it is conducted by SETA-funded service providers either on-site or off-site and is either linked to the skills-needs of the employer or the needs of the economy.
• The TERS is flexible. If it is used for a layoff, employees will be on the TERS every working day of a 12-month period / period approved for by the Single Adjudication Committee (SAC).
• If it is combined with short-time, employees will only be on the TERS during the days when there is no work in the company over a 12-month period.
• Participation in the TERS is voluntary and by agreement between the company and the employees.

WHAT ARE THE BENEFITS OF TEMPORARY EMPLOYER/EMPLOYEE RELIEF SCHEME?

The benefit of the TERS for struggling companies is that they can:

• reduce their wage costs for employees on the TERS over a 12- month period while in distress;
• use this period to focus on recovery;
• bide their time for a favorable change in market conditions; and
• have a better-skilled workforce available at the end of the 12-month period to enable more competitiveness.

Employee benefits

• The benefit for employees is that instead of having no earnings, working short-time or being laid off, or facing the risk of retrenchment, the TERS provides employees with income while in some instances, also ensuring they receive training and have a better prospect of avoiding retrenchment/securing alternate work at the end of the TERS.
• An employee on the TERS receives 75% of their ordinary wage/salary up – to a maximum of R211 596,30 per annum (in terms of the Basic Conditions of Employment Act threshold) – all of which is paid by the UIF.

HOW TO ACCESS TEMPORARY EMPLOYER/EMPLOYEE RELIEF SCHEME?

• The employer may consider participation in the Scheme at the first sign of
  either financial, operational or employee distress.
• A request to participate may come directly from the workplace.
• During a S189A (large-scale retrenchment) process or any other collective
  bargaining dispute, the parties may explore participation in the Scheme.
• All requests to participate in the TERS must be made via the CCMA, on the
  TERS Application Form and submitted to the CCMA (applications should be sent to TERSapplication@CCMA.org.za)
• The applicant may request the CCMA to facilitate a TERS Agreement on the
  TERS Application Form.
• The CCMA facilitator will explain how the Scheme works and assists the
  parties to reach an agreement to participate in the TERS.
• The facilitator will check to ensure that all the documents are complete.
• The employer must provide financial information to show that the business is
  in distress or is facing distress. i.e.
  • Annual financial statements (AFS) (audited) for the past 12 months. If
    the business/company is not required to be audited by law, the AFS must
    be independently reviewed in terms of ISRE2410/ ISRE2400 standard of
    accounting.
  • Management Accounts with comparative figures for the same period if the
    AFS are older than 3 months (must be independently reviewed in terms of
    ISRE2410/ ISRE2400 standard of accounting) in the same format /structure as their AFS.
  • Any other evidence, e.g. order books, production schedules, etc.
    *Information that is submitted is private and confidential
• The SAC has the discretion to invite applicants to make oral representations.
• In exceptional circumstances, a company may request to make representation directly to the SAC.
• The TERS Single Adjudication Committee – comprising of CCMA, Productivity SA, Department of Trade, Industry & Competition (DTIC) and Unemployment Insurance Fund (UIF) representatives – recommends participation in the TERS in the form of a Recommendation Ruling.