– TERS (Temporary Employer/Employee Relief Scheme), is temporary financial assistance on the wage bill provided to employers and employees in distress for a period not exceeding 12 months.
– TERS was reaffirmed during the Presidential Job Summit in 2018, with a primary focus on job-saving and job creation.
– Rebranded and revitalized – previously known as the Training Lay-off Scheme now called the Temporary Employer/ Employee Relief Scheme – [ not the same as the Covid-19 TERS]
– The TERS is administered by the CCMA through the Single Adjudication Committee (SAC).
TERS COMPOSITION:
– CCMA – Single point of entry into the scheme and ensures compliance until adjudication stage
– UIF – responsible for processing declarations and payment of the TERS allowance
– DTIC and Productivity SA – Provides Business Turnaround and Recovery Solutions
- 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.
The benefit of the TERS for distressed 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 the maximum BCEA threshold as gazzeted per annum (in terms of the Basic Conditions of Employment Act threshold) – all of which is paid by the UIF.
- 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 24 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.
