Business organisations and labour unions have expressed dire concern regarding the dire state of South Africa’s Unemployment Insurance Fund (UIF).
Business Unity South Africa (Busa) said that there is systemic dysfunction at the UIF that is putting the livelihoods of workers at risk.
“The ineptitude of the UIF to fulfil its promises has led to workplace disruption and had a negative impact on the employer-employee relationship. Of major concern is the fact that calls for the authorities to intervene have gone unheeded,” Busa said on Wednesday.
Busa said it had been engaging with the government, together with labour, at Nedlac to try to resolve serious systemic dysfunction and alleged corruption in the administration of the UIF office.
“These engagements have been going on for the last three years and no progress has been made due to the inability or unwillingness of the UIF commissioner to address the systemic issues. Busa has also written to the minister of Employment and Labour several times, but we have not received any positive responses,” Busa said.
The issues at the UIF office have put at risk billions of rands that should be allocated to workers in distress.
“This, especially at a time when poor economic conditions due to load shedding, escalating inflation, and diminishing consumer demand, are likely to lead to employees being placed on short-time or potentially even laid off. For impacted individuals, the safety net afforded by the UIF benefits scheme is not guaranteed. The systemic dysfunction has also resulted in lengthy delays in application processes, including via online systems, receiving incorrect information, or constant changes in requirements,” Busa said.
“We have consistently urged that the systems be modernised to identify and limit corrupt practices, including within the ranks of the UIF. Central to this is the implementation of effective ICT systems that contain risk mitigation measures whilst enabling simple, efficient, and timeous service delivery to enable workers to access funds when they are in periods of unemployment or on reduced earnings (maternity), and not many months later, if at all,” Busa said.
“It is clear the current management within the UIF is unwilling or unable to execute their mandate and has embarked on ill-considered systems, such as the eCompliance platform, which have failed and introduced risk in the business landscape, both for companies seeking assurance about the compliance of their providers and for the protection of workers. Failure to address the systemic issues, including alleged corruption, will result in increased frustration amongst employers and employees, and in greater financial losses that could impact the sustainability of the fund.”
Busa said it supported the call by other business organisations and organised labour to have the UIF put under immediate administration.
“We remain committed, as we have been over the past three years, to providing support, advice, and expertise to drive a clear modernisation programme that addresses the changing needs of the new world of work and ensures efficient, cost-effective, and timely service delivery to beneficiaries,” it said.
Meanwhile, Cosatu also said was concerned about the endless challenges workers experienced when submitting their claims to the UIF, as well as allegations and revelations of serious corruption surrounding some UIF investments.
“The UIF is an employer-employee contributions scheme established to provide salary compensation for workers when they are retrenched or dismissed or when they are on maternity, parental or adoption leave. The state does not contribute a cent to it. It exists solely to support workers when they are in need of salary relief. It is not a slush fund for anyone, whether they are politicians, state officials or failed businessmen. Workers struggle to submit their claims and receive their payments,” the union said.
“There are perennial queues at UIF offices across the country where workers wait in vain for days on end to have their claims processed. The problems at the UIF are many and completely unnecessary in the 21st century when information technology is readily available. The issues range from an IT system that is routinely off-line, to understaffed offices, overstretched employees, user unfriendly and confusing forms and applications systems, as well as delinquent employers who pickpocket workers’ contributions and fail to hand them over to the UIF. The consequence is millions of workers fall through the cracks and struggle to access their unemployment insurance funds when they are most in need,” Cosatu said.