Cape Town - Government has thrown a R2.4bn lifeline to workers who are threatened with retrenchment, with a new scheme that will allow companies to suspend them for a maximum of three months while government trains and pays them.
President Jacob Zuma announced the alternative-to-retrenchment scheme on Wednesday as part of a broader plan aimed at limiting the impact of the recession. It was devised by his economic crisis response team where leaders from government, labour and business are represented.
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The so-called Framework Response to the Economic Crisis plan, announced on Wednesday, also includes support for struggling companies in the auto sector as well as a rescue package for the clothing and textile industry.
"Growing job losses and rising indebtedness require clear and purposeful action to respond to the
needs of our people," said Zuma.
He gave details on the training lay-off scheme, that will essentially allow workers to move off the company payroll for a limited time at government's expense. The cash for the scheme will be drawn from the national skills fund as well as the unemployment insurance fund (UIF).
The scheme is open only to workers earning less than R180 000 a year and will pay out 50% of their basic wages to a maximum of R6 239 a month.
Zuma's government has been criticised for being tardy in coming up with concrete plans to limit the impact of the crisis. However, trade federation Cosatu has hailed the announcement as a sign that the new administration was keeping its promise to take workers' plight seriously.
Sectoral Education and Training Authorities (Setas) have been requested to set aside additional funds for training courses. Government hopes the training will encompass basic education and ICT knowledge in addition to skills useful to the company employing temporarily laid-off workers.
The Commission for Conciliation, Mediation and Arbitration (CCMA) will administer worker applications for the programme. The CCMA will also help trade unions and employers restructure employment contracts to enable the "training layoffs", and presumably secure some sort of re-employment for workers.
"While significant technical work has been done and important progress made, implementation needs to be speeded up so that the effects of this work will begin to be felt by the population," said Zuma. He promised that the final details would be worked out by the end of August, so that the project can start in September.
However, he did not provide details on planned support for the auto industry and a rescue package for the clothing and textile sector, apart from saying the plan also included R6bn from the Industrial Development Corporation over the next two years to respond directly to the crisis by helping firms facing financial difficulties.
While resources and manufacturing companies are expected to benefit most from this bailout finance, incentives will also be made available for the manufacture of capital equipment, transport equipment and fabricated metal products linked to the country's R787bn infrastructure programme.
He added that agreement had been reached on ways to strengthen the hand of the South African Revenue Service (Sars) when it came to fraud that "had led to so many job losses".
"Sars has reported significant progress in respect of investigations, the confiscation of goods and prosecution of persons responsible for fraudulent import transactions involving, among others, smuggling, 'round-tripping' and under-declaration of value," said Zuma.
Another leg of Zuma's anti-recession plan includes the Competition Commission's investigations into firms at various points in the food supply chain, including bread, milling, dairy, poultry, fats and oils, fertilizers and supermarkets.
The National Debt Mediation Association, a business initiative to assist indebted consumers, has also been established to provide rules, standards and processes to address debt restructuring.
- Fin24.com