Retrench or ReTrain

As a result of the economic downturn, many enterprises could be forced to retrench employees. As a means to circumnavigate this unpleasant situation, the Department of Labour (DOL), together with its partners, has introduced a Training Layoff Scheme, which will allow the employer to send a worker for training which the relevant SETA will pay for. This scheme is for a period of up to three months

The National Skills Fund will pay the Employee 50% of his/her salary up to a maximum of R6 239 and the employer will pay both the employer and employee contributions to the social benefits.

Employers stand to gain from a training layoff by reducing payroll costs for a period so as to ensure that the employer remains afloat and has an opportunity to strengthen itself and therefore be in a position to re-absorb workers. Employers also have an opportunity to build the skills of their workers at little cost. 

Workers under threat of retrenchment should consider a training layoff as a serious alternative to retrenchment, rather than opting for a severance package.  Workers gain further skills through a training programme and their access to a basic social benefit package is maintained at no cost to them.  In addition, they retain their contract of employment for longer. 

For further information, view the Department of Labour guide to the Training Layoff Scheme.

Victor Smith | Training Manager