Alarming number of job losses in formal economy sees hike in Ters budget

The budget for the temporary employer/employee relief scheme (Ters) has been increased to R2.4bn from R400m for the latest financial year in response to the loss of 22,554 jobs through retrenchments in the formal sector.

The job losses for the 2023/2024 financial year were recorded by the Commission for Conciliation, Mediation and Arbitration (CCMA). The commission also reported that out of 38,428 employees who were likely to be retrenched, 14,887 jobs (39%) were saved through interventions.

Employment and labour minister Nomakhosazana Meth said the increase in the Ters  budget is intended to assist companies in distress and prevent employee layoffs amid unstable economic conditions.

“The alarming number of job losses necessitated an adjustment in our budget to enhance Ters Our goal is to preserve jobs and support companies facing financial difficulties,” she said.

Ters 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 time, 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 the companies in distress.

The application process for Ters support, which is free, begins at the CCMA, where a panel assesses eligibility.

Alongside a “business case” report outlining the triggers for distress and proposed remedial action, applicants must provide audited annual financial statements for the past two financial years or independently reviewed financial statements for companies not legally required to be audited, also for two years.

Individual employers must provide termination of contract documentation and a bank statement.

Ters, which was introduced in 2020 during the coronavirus pandemic, paid subsidy amounts of a minimum of R3,500 and maximum of R6,730 per worker per month. By its two-year anniversary, R64bn had been disbursed to 5.7-million workers.

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