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The Department of Employment and Labour has announced an increase in the budget for its Temporary Employer-Employee Relief Scheme (TERS) from R400 million to R2.4 billion, for the current financial year. This significant boost aims to assist companies in distress and prevent employee layoffs amid unstable economic conditions, as revealed by Minister Nomakhosazana Meth.

About TERS

TERS is an intervention by the Department of Employment and Labour that provides financial assistance to companies in distress for up to 12 months. The scheme enables employers to retain employees by covering their salaries while the company focuses on implementing a turnaround strategy to remain operational. During this period, employers are only required to cover employee social costs such as provident fund and medical aid contributions.

Productivity SA, an entity under the Department, offers turnaround strategy solutions to companies in distress. Minister Meth urged companies experiencing financial challenges to participate in the scheme as soon as they notice signs of distress.

"The nature and degree of distress will be objectively measured through indicators, including but not limited to a decline in revenue. The application process for TERS begins at the Commission for Conciliation, Mediation and Arbitration (CCMA) and is entirely free of charge. There are no application, initiation, or administration fees required," says Minister Meth.

A single adjudication committee administered by the CCMA evaluates all TERS applications for eligibility using a combination of indicators.

Rationale for the Budget Increase

Recent economic challenges have led to significant job losses across various sectors. During the 2023/2024 financial year, the Commission for Conciliation, Mediation and Arbitration (CCMA) reported that out of 38,428 employees who were likely to be retrenched, a total of 14,887 jobs (39%) were saved through various interventions. However, actual retrenchments amounted to 22,554. The

alarming number of job losses, particularly in key industries, necessitated an adjustment in our budget to enhance TERS.

“The increase in the TERS budget is a proactive response to volatile economic trends that threaten the livelihoods of impoverished workers and the sustainability of businesses. Our goal is to preserve jobs and support companies facing financial difficulties.

“Furthermore, the increase in the scheme's capacity, aims to reduce the risk of further retrenchments and support economic stability," says Minister Meth.

The highest number of job losses were recorded in the following sectors:

• Mining: 5,153 job losses
  
  Manufacturing: 2,125 job losses
  
  Telecommunications: 1,680 job losses

Impact on Key Industries

Since its inception, TERS has been instrumental in supporting a wide range of industries severely impacted by economic challenges. The following sectors have notably benefited from the scheme:

Hospitality and Tourism: Hotels, restaurants, and travel agencies affected by decreased tourism.

Manufacturing: Factories experiencing reduced demand and supply chain disruptions.

Retail: Non-essential retail businesses facing reduced consumer spending.

Transportation: Bus services, and logistics companies dealing with decreased operations.

Statistical Highlights

Job Preservation: TERS has facilitated the retention of hundreds of thousands of jobs by providing salary support to employees who might otherwise have been laid off.

Economic Stability: TERS continues to play a significant role in stabilising the economy during turbulent times, ensuring a quicker path to recovery by alleviating the financial burden on companies.

Application Requirements

Employers seeking to participate in the TERS scheme will be required to provide documentary evidence for evaluation:

• Audited Annual Financial Statements for the past two financial years.
• Independently Reviewed Annual Financial Statements for companies not legally required to be audited, covering the past two financial years.
• Independently Reviewed Management Accounts with comparative figures if the latest financial statements are older than three months.
• Termination of Contract and Bank Statement for individual applicants.
  
  Business Case outlining the triggers for distress and proposed remedial actions.

For details about TERS and application procedures, please visit the CCMA Temporary Employer- Employee Relief Scheme.

ENDS//

Media enquiries and interviews:

Ms. Thobeka Magcai, Ministry Spokesperson. Email: Thobeka.Magcai@Labour.gov.za Mobile: 072 737 2205.

X (Twitter): https://x.com/Meth_Khosi

Tik Tok: https://www.tiktok.com/@nomakhosazana.meth

Issued by: MINISTRY OF EMPLOYMENT AND LABOUR​

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