It has been almost two years since the initial lockdown in March 2020, yet many businesses are still trying to stay afloat due to the effects that Covid-19 has had on the economy. While retrenchments or business rescue can often be quite expensive for the average business to consider, there is an alternative that may assist small or medium businesses in avoiding retrenchments – Temporary Employer/Employee Relief Scheme.
In short, a company that is accepted into the scheme would allow employees to undergo approved training courses and receive 75% of their salaries, subject to a prescribed maximum amount. This will be paid to employees while they attend courses funded by the scheme. Employees enrolled for the training would not have to be remunerated by the employer as the scheme would fund their salary. It must also be noted that certain criteria must be met for a company to apply for the scheme on behalf of its employees.
- Employers and employees would have to agree to participate in the scheme. No party may be forced to participate in the scheme. They would do this by signing an agreement to participate in the scheme.
- Employers would have to show that their business is under financial strain and that they would be using the scheme as an alternative to retrenching employees.
- Employers would have to show a significant financial loss, and the potential to recover should the employees be enrolled. This is done via a presentation. Employers should use financials, future projections, and various other documentation to show financial loss to participants and the potential to recover as a result of enrolling employees into the scheme when presenting to the CCMA.
- After the presentation, the CCMA would then decide as to whether a company would qualify to be enrolled into the scheme.
- Employers are not allowed to enrol employees and then retrench them while they are participating in the scheme.
- Further, the employer must compile several documents prior to the presentation occurring.
An employee can be placed in the scheme for up to twelve (12) months and would receive 75% of his salary while he undergoes training, both the training and the salary are funded by the scheme. Attendance at training is mandatory for employees.
Employers are encouraged to contribute towards the balance of the 25% of the employee’s salary. However, there is no legal obligation on the employer to do so. The benefit is that the employer’s wage bill may be decreased and will allow the employer to trade its way back into a favourable position. While the employees that participate in the scheme would retain their employment without placing financial strain on employers through a high wage bill. Once in a favourable financial position, the employees may return to work.
The CCMA must also be contacted initially to conduct a presentation between both employers and employees prior to the process commencing.
Should you have any further questions on the Temporary Employer/Employee Relief Scheme, kindly contact your nearest CEO office for assistance.
Article by: Krian Rathinam
Dispute Resolution Official – Durban