The benefit of the TERS for struggling companies is that they can:
- reduce their wage costs for employees on the TERS over a 12- month period while in distress;
- use this period to focus on recovery;
- bide their time for a favorable change in market conditions; and
- have a better-skilled workforce available at the end of the 12-month period to enable more competitiveness.
- The benefit for employees is that instead of having no earnings, working short-time or being laid off, or facing the risk of retrenchment, the TERS provides employees with income while in some instances, also ensuring they receive training and have a better prospect of avoiding retrenchment/securing alternate work at the end of the TERS.
- An employee on the TERS receives 75% of their ordinary wage/salary up - to a maximum of R205 433,30 per annum (in terms of the Basic Conditions of Employment Act threshold) – all of which is paid by the UIF.