The Training Lay-off Scheme
by Claire Stewart on 13/11/09 at 7:30 am
No comments
I received the following article to a website that I subscribe to- HR Works and thought it would be very interesting as an alternative to organizations that might be considering retrenchments.
As a result of the international economic crises, the South African Department of Labour has introduced a “Training Lay-off Scheme”, with effect from 18 September 2009. The Training Layoff Scheme (TLS) should be utilized by employers that are in financial distress due to the economic situation and where workers are at risk of retrenchment.
What is a Training Layoff?
A Training Lay-off is a temporary suspension of work of a worker or group of workers that is used for training purposes. The layoff depends on an agreement between an employer and a trade union on behalf of workers, or, in the absence of a trade union, between an employer and individual workers, who may otherwise be subject to dismissal for operational requirements.
Participation in a Training Layoff is voluntary; however the social partners are strongly encouraged to participate in the training layoff as an alternative to retrenchment. Those that agree to use this process are subject to the rules and procedures agreed to by the social parties in the NEDLAC process.
The TLS will assist employers by reducing payroll costs for a period so as to ensure that the employer remains operational and has an opportunity to strengthen itself and be in a position to reabsorb workers. The TLS should not be used by employers to reduce employee costs irrespective of their financial situation.
The employer must continue the contract of employment and parties are free to negotiate the continuation of existing benefits such as medical aid. The aim is to ensure that the contract of employment remains in place and that only the wage component changes. The worker agrees to forfeit their normal wage, to attend a training programme and to accept a training allowance during the period of training.
The key elements of the scheme that have been agreed to by the social partners and as announced by the president on the 5th August 2009 are as follows:
- A temporary suspension of work used for training;
- Retention of the employment contract;
- Training to be flexible, but linked to the skills needs of the employer;
- A training allowance paid to the worker;
- Employer carries cost of basic package of social benefits.
The CCMA will be responsible for facilitating, overseeing or verifying all Training Layoff applications unless there are existing exemption procedures contained in a bargaining council agreement.
The Training allowance will be set at 50% of the employee’s basic salary, subject to an overall cap of the UIF threshold of R149 736. The maximum monthly allowance payable to any employee participating in this scheme will be therefore be R6 239. This allowance will be guaranteed for 3 months with the possibility of an additional 3 months.
The TLS is limited to employees earning up to R180 000 per annum (20% above UIF threshold) with the maximum payment still being R6 239.
Implementing a Training Layoff:
The employer, trade union or worker may give notice to the CCMA requesting facilitation. For purposes of the training layoff, this requirement will apply to all employers irrespective of their size.
Alternatively, parties may conclude a training layoff agreement independent of the CCMA. This agreement must then be submitted to the CCMA to ensure that the agreement complies with the general rules and procedures before it can be implemented under this scheme.
The relevant SETA will advise on training options and carry the cost of the training.
The National Skills Fund (NSF) will fund the cost of the training allowance and will transfer funds to the SETA which will in turn transfer funds to employers and training providers.
It is the responsibility of the employers to ensure payment of the training allowances to workers participating in the training layoff.
As this is newly introduced to South Africa and many unknowns will need to be addressed, the training Layoff will be launched for an initial period of three months, with the first six weeks constituting the pilot phase. Success of the scheme will be reviewed by the social partners together with implementing partners.
This summary has been drafted using the information on the CCMA website. A detailed guide to the “Training Lay-off” Scheme and application forms can be found here. Enquiries can be emailed to TrainingLayoff@CCMA.org.za
Claire Stewart is the founder of PeopleWise, an HR and Employment consulting service. Like Neo in the Matrix, Claire sees through the convoluted mess of SA employment law and makes sense of it for you, loyal Ideate reader. View more articles by Claire Stewart.
