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I have had a look at the code and made some comments and alterations, I haven't tested it though...

[code]

#target photoshop

function main(){

if(!documents.length) return;

var doc = activeDocument;

var dName = decodeURI(activeDocument.name).replace(/\.[^\.]+$/, '');

var oldPath = (activeDocument.path);

var rndrDir = new Folder(oldPath+"/"+"JPEG");

      if(!rndrDir.exists) rndrDir.create();

//the /JPEG/ should be in quotes

//Why are you re declaring the output folder?

//rndrDir has been declared as the output folder and created if it did not exist

//var newPath = (activeDocument.path + /JPEG/);

for(var a=0;a<doc.layerSets.length;a++){

activeDocument.activeLayer = activeDocument.layers.getByName(doc.layerSets[a].name);

//get the layers name before the layer is duplicated to its own document.

var lName = doc.layerSets[a].name;

//the following line duplicates the layer to its own document

dupLayers();

//the following line should not be required as only one layer copied

activeDocument.mergeVisibleLayers();

//newPath was incorrect, doc.layerSets[a].name does not exist as this layer is now by itself in its own document.

//var saveFile= File(newPath +"/"+dName+" - "+doc.layerSets[a].name +".jpg");

var saveFile= File(rndrDir +"/"+dName+" - "+ lName +".jpg");

SaveJPEG(saveFile, 12);

app.activeDocument.close(SaveOptions.DONOTSAVECHANGES);

    }

}

main();

function dupLayers() {

    var desc143 = new ActionDescriptor();

        var ref73 = new ActionReference();

        ref73.putClass( charIDToTypeID('Dcmn') );

    desc143.putReference( charIDToTypeID('null'), ref73 );

    desc143.putString( charIDToTypeID('Nm  '), activeDocument.activeLayer.name );

        var ref74 = new ActionReference();

        ref74.putEnumerated( charIDToTypeID('Lyr '), charIDToTypeID('Ordn'), charIDToTypeID('Trgt') );

    desc143.putReference( charIDToTypeID('Usng'), ref74 );

    executeAction( charIDToTypeID('Mk  '), desc143, DialogModes.NO );

};

function SaveJPEG(saveFile, jpegQuality){

jpgSaveOptions = new JPEGSaveOptions();

jpgSaveOptions.embedColorProfile = true;

jpgSaveOptions.formatOptions = FormatOptions.STANDARDBASELINE;

jpgSaveOptions.matte = MatteType.NONE;

jpgSaveOptions.quality = jpegQuality;

activeDocument.saveAs(saveFile, jpgSaveOptions, true,Extension.LOWERCASE);

}

[/code]