Business Unity SA (Busa) has reiterated its call for the Unemployment Insurance Fund (UIF) to be placed under administration immediately because it is failing to pay benefits to workers — many of whom wait for months or even years to be paid.
Busa said the weak operations and lack of governance, accountability and transparency in the UIF underlined the need for active oversight.
“The operational inefficiencies and governance failures of the UIF are letting down hundreds of thousands of workers, many of whom are now facing a festive season without any income. The UIF is failing in its primary function — paying unemployment benefits — and must be placed under administration with immediate effect,” the business organisation said in a statement on Friday.
“It is now almost exactly a year since the initial calls by organised business and labour for the UIF to be placed under administration. Despite promises of a major overhaul, by the new minister of employment and labour, Nomakhosazana Meth, nothing has changed,” Busa representative on the National Economic Development and Labour Council (Nedlac) Jonathan Goldberg said.
“Workers and their employers remain frustrated by the inefficiencies and lack of support during times of need.”
Busa said the inefficiencies at the UIF were compounded this year by a legal wrangle that left the uFiling and the UIF App offline for several weeks. The recent addition of new types of leave for employees, to be paid by the UIF, further burdened a system that is already operationally weak.
Busa referred to reports that the UIF had allocated R26bn to labour activation programmes of “dubious origin and impact” while it continued to deny benefits to workers who contributed to the fund.
Highlighting the need for an efficient UIF, Busa’s acting director for social policy, Sanelisiwe Jantjies, noted Stats SA data showed about 500,000 more people joined the ranks of the unemployed in the first six months of 2024.
In addition, tens of thousands who, while still employed, had suffered significantly reduced work hours due to supply chain challenges and weakened economic conditions. Workers could lose up to two-thirds of their usual earnings and still not receive any assistance from the UIF.
Jantjies said the CCMA Temporary Employer/Employee Relief Scheme (TERS) programme which was established to allow companies to access funds from the UIF and sector training authorities to support their workers while their businesses were turned around, had not been of much assistance.
“This programme had the potential to avert job losses, yet the slow pace of processing means that most applicants are already retrenched, and businesses closed before receiving any assistance,” Jantjies said.
“Given this reality, it is difficult to celebrate the recent announcement of an increase in the CCMA TERS budget to R400m, when it cannot be accessed due to the administrative issues within the UIF.
“Strained economic conditions and the resulting reduced work time and job losses demand a well-functioning, easily accessible insurance scheme for impacted workers. The UIF, in its current and proposed forms, is not that.”
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