UIF benefits to be paid out through bargaining councils and firms during lockdown

The government is putting measures in place for payment of unemployment insurance benefits to workers affected by Covid-19 through their companies and bargaining councils, employment and labour minister Thulas Nxesi said on Tuesday.

About two weeks ago, the minister had announced that the government would use the Unemployment Insurance Fund (UIF) to ease the burden on employees and employers during the coronavirus pandemic.

This had been made possible courtesy of the UIF’s expected surplus of about R3.6bn over the next three years. The fund also has investments of about R180bn, which, after liabilities, amount to R160bn.

The minister had also said at the time that distressed companies would receive a period of reprieve from UIF contributions and would be helped to avoid layoffs through the Temporary Employer/Employee Relief Scheme, which suspends the employment relationship and pays workers 75% of their salary to receive training for up to six months.

During an interministerial media briefing on Covid-19 in Pretoria on Tuesday, Nxesi said that directives have been issued to explain processes to be followed in claiming from the fund and “the kinds of benefits workers are entitled to under UIF”.

He said because the labour centres could not deal with the “millions of individual claims” during this period as it would lead to delays in processing them, “we have put in place systems to pay out UIF benefits through companies, sectoral associations and bargaining councils”.

Nxesi said they wanted to cover all the crucial sectors of the economy including tourism and the small business industry.

They were also in the process of concluding an agreement with the textiles industry.

On Tuesday last week, the National Bargaining Council for the Clothing Manufacturing Industry in SA announced that parties in the sector had reached a “groundbreaking agreement” that would allow workers to receive their salaries during the lockdown period.

According to the agreement, payment to the industry’s 80,000 workers will be made up of UIF monies and employers funds, and the clothing industry bargaining council will be the institution for the UIF distribution payments to workers through company payroll systems.

The bargaining council said the agreement had been submitted to the department of employment and labour for an “emergency gazette and extension to nonparty companies in the clothing industry”.

Nxesi appealed to other sectors including the banking industry “to agree to this arrangement”, as they wanted to move away from the traditional model of claiming through the labour centres.

However, the minister said this kind of arrangement required that they enter into pacts with employer bodies that the use of monies be subject to an audit. “This has led to some resistance from some employers [but] these are public funds, which need to be audited,” he said.

“None of us has a choice on this matter. I urge all parties to engage so that we can expedite the payment of monies to workers.”

Regarding leave, Nxesi said employers could not force employees to take their annual leave, saying they should rather “negotiate with staff” on the matter: “This is a unique situation that requires all of us to act in a manner that promotes social solidarity.”

On labour inspections, he said their inspectors were following up about complaints lodged in Gauteng, KwaZulu-Natal and the Western Cape about employers who were making their staff work without protective equipment.

He also lashed out at other employers that did not deliver essential services but were nonetheless “forcing their employees to work”, saying that was a criminal offence that should be reported to the police.

On Monday evening, President Cyril Ramaphosa announced that the confirmed Covid-19 cases in SA had risen to 1,326. Three people have died from the respiratory illness caused by the coronavirus.

mkentanel@businesslive.co.za