Job-saving project in crisis
SA business drags its feet on joining R2.4bn state scheme
THE retrenchment of thousands of workers in different sectors last year may have been partly due to the lack of involvement of businesses in the government’s R2.4 billion lay-off scheme aimed at preventing job losses, analysts said.
Last year’s economic recession saw nearly a million people laid off from work as companies struggled financially.
Azar Jammine, chief economist at Econometrix, suggested this week that a lack of buy-in may have increased the number of retrenchments across the country.
As a result of the lack of participation by some companies, he said, there had been an underspending in the scheme, which raised concerns about “a lack of skills in the public sector to process applications”.
The fund was set up by President Jacob Zuma in September in a bid to prevent further job losses.
It allowed workers threatened with retrenchment to undergo special advanced training in their field while still working for their original companies, and earning a subsidised salary of R6 239.
Terms and conditions for the deals and other agreements between employers and employees were to be facilitated by the Commission for Conciliation, Mediation and Arbitration (CCMA).
Workers would be trained for three months with a relevant sector education and training authority (Seta), with an option to extend their training for a another three months.
However, it is not clear how many employees or their companies have joined the scheme, but it appears there has been a poor uptake.
The government expected to distribute the budget of R2.4bn by this April.
Earlier this week Jimmy Manyi, the department of labour’s director-general, revealed that so far only R10 million had been spent on training programmes.
He said he had discovered this just this week when inquiring about the scheme’s progress, and said the scheme was in an “emergency state”.
“We will have to meet up with the CCMA and go back to the drawing board.”
Jammine said some businesses may have chosen to stay away from the scheme.
“A lot (of them) often feel jittery when it comes to certain proposals. Companies are sometimes afraid of getting caught up in a bureaucratic matter. They sometimes enter schemes and later find themselves in an undesirable situation.”
One of the causes to the underspending could be the “lack of managerial skills in the public sector”, said Jammine.
But the director of the CCMA, Nerine Khan, disputed this.
“Our processes are speedy and efficient as always; we are not at fault. There has been a lot of interest by corporates in the scheme and many have been saved from the bad eco- nomic effects as a result.”
She agreed, however, that some companies feared a bureaucratic “nightmare”, although she could not say this was what was keeping them from buying into the project.
“When some businesses find out about the fund, they express initial interest and then back away.”
She could not say whether the companies’ lack of interest in the scheme had affected the 959 000 job losses last year.
JITTERS: Azar Jammine says many businesses fear being caught up in bureaucracy.