Cape Town – Labour Minister Thulas Nxesi on Tuesday suggested employers may be withholding Unemployment Insurance Fund (UIF) benefits from workers on the false pretext that the fund failed to say how the benefits should be allocated, but the DA and Cosatu disputed this.

Nxesi told a briefing by cabinet’s economic clusters that companies who claimed they struggled to make allocations because they received lump sums from UIF with no further advice were being disingenuous.

“They must just be honest, we don’t just pay, we pay based on the payroll,” Nxesi said.

“We are on board with the moving train, except that employers must also play their role.”


Labour Minister Thulas Nxesi speaks at the Economic Cluster’s Covid-19 briefing on Tuesday. : Audio: GCIS
The Democratic Alliance and Congress of South African Trade Unions both said they had received complaints from employers who received money without payment advice on how much to give to each employee.

“We have received reports from some employers that they received bulk payments from the UIF but without a breakdown of how much must go to which employees,” Cosatu’s parliamentary coordinator, Matthew Parks, said.

“This is critical as employees receive different amounts depending on their different levels.”

Parks said the matter had been raised with the management of the UIF, who said they would address it.

DA labour spokesman Michael Cardo said he had been approached by employers who were paid lump sums with no payment advice, and therefore had no breakdown of how to distribute the money. He added that this was one of a range of problems encountered with payments.

In one case, Cardo said, he was approached by an employer who had claimed benefits for 52 employees but received benefits for only 29, though all were duly registered and their UIF contributions were up to date.

In another case in KwaZulu-Natal, the fund paid benefits only for South African staff, though the foreign staff complement were all legal immigrants.

Another had, without explanation, received a lump sum amounting to four percent of the claim he filed to the fund.

“There are clearly fundamental flaws in the system,” said Cardo.

He cautioned that the stress on the UIF would only increase given Nxesi’s projection that the impact of Covid-19 on the economy now seemed likely to add another 1.2 million people to the ranks of the unemployed.

On Tuesday, Nxesi said those who were improperly dismissed as a result of the crisis, should approach the Council for Conciliation, Mediation and Arbitration.

The CCMA has been closed for a month, and the opposition said it expected the council to be overwhelmed by new complaints, given that it now already had a considerable backlog.

The briefing heard that the UIF had so far disbursed a total of R3.3 billion in benefits to 862,000 workers affected by the impact of Covid-19 on the economy.

The payouts reflected a positive response to applications from 59,000 employees. However, the UIF received a total of 103,000 applications on behalf of 1.75 million employees.

In total, the UIF has over 1.8 million employers registered on its database, representing more than eight million workers.

According to government, some 10,000 applications could not be processed due to errors.  The companies in question had been asked to correct and resubmit their forms.

African News Agency (ANA)

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By ANA Reporter