UIF will be under ‘very serious’ strain, warns labour minister

Minister of Employment and Labour Thulas Nxesi said on
Thursday afternoon that the Unemployment Insurance Fund was going to be under “very
serious strain” and that he foresaw a period where there would be heavy
dependence on the state.

Government may have to play a central role in dealing with employment
insecurity, he warned.

He also vowed to clamp down on predatory labour practices
during and after the coronavirus outbreak.

In a virtual meeting on Thursday, Nxesi was giving a briefing
on his department’s budget vote and annual performance plan for the 2020/21
financial year to Parliament’s Portfolio Committee on Employment and Labour; as
well as the Select Committee on Trade and Industry, Economic Development, Small
Business Development, Tourism, Employment and Labour.

He referred to Finance Minister Tito Mboweni’s confirmation last
week that he would table a revised budget to Parliament in due course, which
would respond to the Covid-19 novel coronavirus pandemic and outline how a R500
billion in relief funds would be spent.

Nxesi told Members of Parliament that while he did not wish
to pre-empt the revised budget, the department was not holding its breath for a
larger allocation in the revised budget, as financial resources were already
limited in the original budget, tabled in February.

Currently, the Department of Employment and Labour has a
budget allocation of R3.6 billion for the financial year.

“Clearly, we are not going to behave as if Covid-19 has
not impacted on our programs, but the reality is in the parliamentary process,
we have to present the program that we prepared prior to Covid-19 and that is
what we have done,” Nxesi said, adding that the department’s programmes
could be reviewed in line with any amended allocations if necessary.

UIF facing ‘very serious strain’

Nxesi warned that unemployment benefits were limited, and
that a long-term issue the state must deal with is employment insecurity.

The state could end up playing a central role going forward,
he added.

“I will not talk about the UIF. We have already paid R9
billion in Covid benefits which we have paid to employers and the bargaining

“We highlighted the role of enforcement during the
pandemic,” Nxesi said.

He said the state must “come into the centre and deal
with employment insecurity”, adding that government could do this by
ramping up public employment and formalising public employment programs that
are labour-intensive as opposed to putting everything to tender.

“Our own fund, the UIF fund, is going to be under very
serious strain and there is going to be heavy dependence on the state whilst
the state is heavily stressed. A number of international commentators who say
this is the era of the state moving to the centre,” he warned.

Clamping down

Director-General of Employment and Labour Thobile Lamati
said the department had set an overall target of 25{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} reduction in irregular
expenditure in the financial year from the baseline. This would mean a R3.4
million reduction in irregular expenditure and a R4.4 million reduction in
fruitless and wasteful expenditure.

“The current payments, we have R2.1 billion, and for
compensation of employees we have R1.4 billion; and then for goods and services
it’s R687 million and transfers and subsidies is R1.3 billion,” said

As for inspecting fair labour practice and protecting
workers from opportunistic dismissals, Lemati said the department set a target
of 221 556 employers to be inspected for compliance with occupational
health and safety. He said the Commission for Conciliation, Mediation and
Arbitration was standing by to arbitrate retrenchments under the guise of

“We have a system in place that deals with disputes and
the prevention of disputes. They are there and standing ready to provide a
service. We hope we won’t have retrenchments, but it seems that it will be
inevitable. But if it occurs, we have CCMA ready,” Lemati said.

He said the department also set itself a target for 90{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} of
non-compliant employers being served with notices of infringement within 14
days of inspection. The department set a target of 65{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} prosecution referrals
within 30 calendar days.

Congress of South African Trade Unions parliamentary liaison
officer Matthew Parks said government should be tough on predatory labour
practices and opportunistic referrals, saying businesses that received
assistance from government should not be allowed to retrench staff afterwards.


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