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Vavi, Godsell urge workers to make use of training layoff scheme

Millennium Labour Councils chairpersons Zwelinzima Vavi and Bobby Godsell call on businesses to rethink retrenchments. Camera: Nicholas Boyd Editing: Darlene Creamer

8th December 2009

By: Esmarie Swanepoel
Creamer Media Senior Deputy Editor: Australasia


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The Congress of South African Trade Unions (Cosatu) said on Tuesday that it was disappointed in the number of employees and employers that have taken up government’s training layoff scheme initiative.

President Jacob Zuma said last week that the R2,4-billion scheme had saved around 4 482 jobs.

Cosatu general secretary Zwelinzima Vavi told journalists that the training layoff scheme still had a long way to go before making up for the estimated 959 000 job losses that had occurred in South Africa, since the start of the economic recession.

The scheme aims to provide companies with an alternative to retrenching workers, and thereby enabling employees to have continued income, employment security, and skills acquisition.

“The training lay-off scheme is a fantastic opportunity,” Millennium Labour Council chairperson Bobby Godsell told journalists on Tuesday.

“[As a company], you are released from your wage cost for a period of time, while you ride out the storm. If you believe that your business has a reason to survive beyond the cycle, the lower sales, the loss of a contract, or the strong rand, then you can take this three-month period and release part of your costs, increase the training of your work force, and maintain that relationship.”

Godsell and Vavi also called on labour and business to investigate all avenues of cost cutting, before considering retrenchments.

At a joint media briefing, Vavi noted that although the country had officially moved out of a recession, more job losses were anticipated in the new-year.

“This is the perfect time to call on the conscience of business, and we are asking them to act now.”

Godsell noted that while the cost of workers’ wages was likely to be a significant cost in most businesses, it was not the only area where cost reductions could be affected.

“Two major areas which require at least equal review are those of capital expenditure and shareholder returns in form of dividends. We do not suggest that cuts in these areas are either easy or without consequence, but simply urge that they also be considered.”

Godsell added that in most companies, management costs were also significant.

“Possible reductions here include the cancellation or deferment of bonuses, salary freeze, salary cuts, costs of running company boards, transport, electricity bills, and so on. A freeze on filling posts which become vacant, as well as early retirement and voluntary retrenchment programmes, can also reduce these costs.”

Vavi noted that cost cutting from the labour’s side could also be undertaken in an effort to curb retrenchments.


Under the scheme, companies which are experiencing financial difficulties could temporarily suspend workers, and use the time for training purposes. Workers will remain employed during the training layoff period, but will forego their normal wages for a training allowance.

The Department of Labour (DoL), which placed adverts in weekend newspapers to promote the training layoff scheme, explains that the training has to be linked to the skills requirements of the employer. The training period would be three months or less.

The training lay-off could be combined with short-time work arrangements during the period of the training, and seeks to positioning workers and employers to take advantage of the next economic upswing.

Only workers earning up to R180 000 a year, and who were facing possible retrenchment, would qualify to participate in the training layoff scheme.

The DoL has stated that under the training lay-off scheme, employers would be expected to pay full contributions towards a social basic security package, as workers will have to be paid a training allowance up to a maximum of 50% of their basic wage, or a salary of up to R6 239 a month.

The Sector Education and Training Authorities (Setas) would pay for the cost of training, as well as allowances, from their discretionary grants, while the R2,4-billion provided by the DoL from the National Skills Fund and the Unemployment Insurance Fund, would provide top-up funding to the Setas to pay for training allowances and training costs, where necessary.

Employers wishing to participate in the training lay-off scheme had to complete a request to participate form, and submit it to the Commission for Conciliation, Mediation, and Arbitration (CCM), along with any written agreements between the affected parties.

The CCMA would, in turn, recommend participation in the scheme, and facilitate the conclusion of a training layoff agreement. At this point, the relevant Seta would interact with the employer and workers on the type, cost, duration, and provision of the training required, and would submit an application to the DoL.

The DoL's adjudication committee would process the application for funding, conclude an agreement with the Seta, and transfer funding to the Seta.

The Seta would then, in turn, conclude an agreement with the relevant company, facilitate the provision of training, and transfer funding to employers.

Around 200 commissioners have been briefed on the training lay-off scheme, and around 40 experienced commissioners were trained to facilitate training lay-off applications, across South Africa.



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