UIF under fire, but no administration request yet

The Department of Employment and Labour says it won’t be drawn to comment on calls for the Unemployment Insurance Fund (UIF) to be placed under administration until a formal process has been lodged.

This is despite growing calls for a clean-up at the agency, which has been accused of poor governance for some time. The latest escalation of the concerns comes from Business Unity South Africa (Busa).

Earlier this week, the business group confirmed its decision to withdraw from UIF structures at the National Economic Development and Labour Council (Nedlac) and to sever ties with the fund’s board in what it said was a bid to safeguard the reputation of its representatives, uphold sound governance principles, and “send an unequivocal message that the current situation is unsustainable”.

As part of the proposed remedy to the dysfunction at the UIF, Busa called on the government to appoint an independent administrator to fix the fund and to conduct a forensic probe into its spending.

Read: Busa pulls out of UIF structures at Nedlac over dysfunction concerns

The UIF provides short-term financial relief to workers who lose their jobs or are unable to work due to illness, maternity, adoption, or parental leave.

However, it’s been hobbled by inefficiencies, claims backlogs and accusations of maladministration.

As far back as 2022, labour federation Cosatu called for President Cyril Ramaphosa to intervene. Cosatu, other major trade union federations and the Economic Freedom Fighters (EFF) again called for action earlier this year.

But the spokesperson for the Employment and Labour Department, Teboho Thejane, told Moneyweb that no formal request to this effect has been placed on the President’s desk.

“Procedurally, once there’s a formal process, then we can take it from there,” Thejane said.

If a formal request were to be filed to the President, he is likely to send it back to Employment and Labour Minister Nomakhosazana Meth before a decision is made.

Read:
You may be sending your UIF claim to a dead website
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UIF responds to Busa’s withdrawal from UIF board and Nedlac structures

In a written statement published on Friday, the UIF described Busa’s decision as “regrettable”.

“Withdrawal from these forums limits opportunities to influence governance outcomes through the very mechanisms established for that purpose,” the fund said.

The UIF added that it does not believe that disengagement is the most constructive approach to addressing the challenges facing the agency or the South African labour market.

“Rather, the fund is of the view that these challenges require continued collaboration and focused discussions among all social partners to develop practical and sustainable solutions.”

It also rejected any suggestion that meaningful governance reform can be achieved outside the established statutory structures or through disengagement from the institutions created to facilitate oversight and social dialogue.