Road Accident Fund issues notice to retrench 400 workers
21 September 2022 - 20:06
by Bekezela Phakathi and Belinda Pheto
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The RAF is contemplating retrenching about 400 workers out of a staff complement of 3,000, according to Numsa. Picture: 123RF/ANDRIY POPOV
The Road Accident Fund (RAF) has issued a notice of retrenchment that may cause it to lay off about 400 employees.
Last week, the company issued section 189 notices to employees, informing them it will embark on a consultative process with staff to start the retrenchment process.
“The organisational structure review and implementation of an integrated claims management system are key objectives of the RAF’s 2020-2025 strategic plan to ensure a transformed and sustainable RAF. The previous operating model has proved to be unsustainable and did not enable the organisation to carry out its legislative mandate effectively,” the letter to staff reads.
The proposed effective date for retrenchments is November 31.
Numsa spokesperson Phakamile Hlubi-Majola said the union has been engaging the RAF and workers on the proposed retrenchments since June.
“Numsa does not support job cuts at the RAF and will do whatever is necessary to save jobs.
“The RAF says it is contemplating retrenching about 400 workers out of a staff complement of 3,000.
“We are waiting for the CCMA to set a date so the process can formally begin. That date has not yet been announced,” she said.
The RAF had not responded to questions sent to them on Tuesday at the time of publishing.
The RAF is regarded as one of the biggest threats to the state’s finances as the government would be obliged to step in and make payments should the fund fail to honour settled claims.
The fund is in a precarious financial position and is struggling to meet its settlement obligations.
The state-owned entity is responsible for providingappropriate cover to all road users in SA, rehabilitating and compensating people injured due to motor vehicles. It collects about R43bn a year through a levy on the fuel price, but has been financially unsustainable for decades and dogged by allegations of corruption, malfeasance and fraud, which have affected its ability to settle claims.
Early this month, the fund hit out at the auditor-general for issuing a disclaimer on its latest financial statements, saying the audit opinion was based on incorrect accounting standards.
A disclaimer is the worst possible audit outcome and signifies that a company’s accounts cannot be relied on and often indicates that the organisation is in serious financial trouble and poorly managed.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Road Accident Fund issues notice to retrench 400 workers
The Road Accident Fund (RAF) has issued a notice of retrenchment that may cause it to lay off about 400 employees.
Last week, the company issued section 189 notices to employees, informing them it will embark on a consultative process with staff to start the retrenchment process.
“The organisational structure review and implementation of an integrated claims management system are key objectives of the RAF’s 2020-2025 strategic plan to ensure a transformed and sustainable RAF. The previous operating model has proved to be unsustainable and did not enable the organisation to carry out its legislative mandate effectively,” the letter to staff reads.
The proposed effective date for retrenchments is November 31.
Numsa spokesperson Phakamile Hlubi-Majola said the union has been engaging the RAF and workers on the proposed retrenchments since June.
“Numsa does not support job cuts at the RAF and will do whatever is necessary to save jobs.
“The RAF says it is contemplating retrenching about 400 workers out of a staff complement of 3,000.
“We are waiting for the CCMA to set a date so the process can formally begin. That date has not yet been announced,” she said.
The RAF had not responded to questions sent to them on Tuesday at the time of publishing.
The RAF is regarded as one of the biggest threats to the state’s finances as the government would be obliged to step in and make payments should the fund fail to honour settled claims.
The fund is in a precarious financial position and is struggling to meet its settlement obligations.
The state-owned entity is responsible for providingappropriate cover to all road users in SA, rehabilitating and compensating people injured due to motor vehicles. It collects about R43bn a year through a levy on the fuel price, but has been financially unsustainable for decades and dogged by allegations of corruption, malfeasance and fraud, which have affected its ability to settle claims.
Early this month, the fund hit out at the auditor-general for issuing a disclaimer on its latest financial statements, saying the audit opinion was based on incorrect accounting standards.
A disclaimer is the worst possible audit outcome and signifies that a company’s accounts cannot be relied on and often indicates that the organisation is in serious financial trouble and poorly managed.
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