The Unemployment Insurance Fund (UIF) is a fund to safeguard employees should a situation arise where their income is reduced. The monies in the fund belong entirely to the contributing employees and employers and not to government, who does not contribute to the fund. Not only has our government failed South Africa by not timeously distributing employees’ own UIF investments to them during this crisis, but it has concurrently used the UIF in an attempt to gain political capital by boasting about the incomplete funding that has been paid out.
This is the viewpoint of Cape Town-based labour lawyer, Michael Bagraim, who says government’s only tasks relating to the UIF are:
- To invest the funds,
- To ensure that they do not get stolen, and
- To distribute them timeously to contributors who are in need of them.
As far as Bagraim is concerned the government has failed on all counts. He says his small two-man practice in Cape Town receives an average of 300 emails a day from people who are literally starving, as they wait for UIF payments that were applied for as far back as April.
Last week, Tourism Minister, Mmamoloko Kubayi-Ngubane, announced in Parliament that TERS had disbursed R34bn (€178m) in 7.4 million payments since March this year. According to Bagraim, the Minister ‘conveniently’ omitted that over a million South African applicants had yet to receive their UIF payouts. This was confirmed in a recent meeting with the Department of Employment and Labour, alleges Bagraim.
“We already have one of the worst unemployment levels in the world and it is estimated that by the end of the year an additional seven million jobless people will be added to the existing 10 million unemployed South Africans. The additional failures of the UIF safety net have also resulted in another two million South Africans being added to the list of starving people since lockdown began. The outbreaks of mass violence and widescale insurrection that we are already seeing as a result of these failures are only the tip of the iceberg of what is to come,” he continued.
Bagraim says his office is inundated with examples of clients who have been failed by the system. One client, a single mother who has been contributing to UIF for 32 years, has just received a response from her April application that the department has no record of her on file. The department has told her that they will investigate the matter but it is unlikely that she will see UIF funds until the crisis is over, said Michael.
The Tourism Minister applauded last week’s announcement of a TERS extension until August 15, saying that the tourism industry had greatly benefited from this scheme, but Bagraim said TERS had been anything but perfect and had failed in respect of paying applicants out timeously.
“The TERS June portal only opened in the first week of July and the portal for July applications has still not opened. People are literally going without food as a result of these delays and the government’s only reaction is to make weak excuses about faulty office cables.”
Further failures of the fund relate to mixed messages from the UIF. Bagraim explained that the UIF should pay out contributors for a number of reasons, including retrenchment, dismissal, and shortfall in income, maternity leave or the discontinuity of an employment contract. He said Section 17 of the UI19 form specifically related to UIF payments when contributors experience a shortfall in income. Despite this, the UIF is still communicating that applicants will only be paid out if they have been permanently retrenched.
Bagraim said he had written to the Labour Department’s Director General, asking why retrenchment was being recommended when the UIF specifically allowed payments to be made for applicants who were affected by an income shortfall, but that he had yet to receive a response. Of about 200 UIF applications for working hour shortfalls that Bagraim has assisted with, not one has been paid out since lockdown began.
“People are losing jobs on the government’s advice. This is completely counterproductive to governmental goals, which should be to increase employment levels.”
He also mentioned that South Africa’s self-employed had been completely forgotten by the government. The travel industry has seen huge growth in this sector with recent rise of ITCs.
“While the Labour Minister initially announced that South Africa’s large self-employed sector would also be permitted to claim from TERS, when the government regulations were released four days later, the Gazette excluded this sector and no relief was provided for them,” Bagraim said.
Tourism Update contacted the UIF for comment but had not received a response at time of publication.