Unemployment Insurance Fund Amendment Bill [B25-15]: deliberations, with Deputy Minister

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Employment and Labour

02 March 2016
Chairperson: Mr Y Yengeni (ANC)
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Meeting Summary

The Committee discussed the three clauses on which objections had been raised in the previous meeting:
▪ Clause 10(b) inserting subsection 24(7) into the Act
The Committee agreed to remove the subclause.

▪ Clause 4 inserting subsection (1A) into the Act
The Committee agreed to remove clause 4 which allows the Minister to designate any employee of the Department of Labour or UIF as Accounting Officer as this provision was not discussed at Nedlac.

▪ Clause 13 amending Section 33(3) of the Act
Some members supported amendments to clause 13 that seeks to bar middlemen who fish on the benefits of claimants. Other were critical, saying the wording: 'When processing application for benefits neither the Fund nor any agency or person purporting to act on behalf of the applicant may charge any fee against the applicant’ was incorrect because a dispute may arise between the Department and a UIF claimant who may need to seek and pay for legal advice. After some discussion, the Deputy Minister suggested that the simplest way to solve the puzzle was substituting the phrase “any fee” with “a fee”. This was agreed to.

Meeting report

The Committee discussed the three clauses on which objections had been raised in the previous meeting.

Clause 10(b) inserting subsection 24(7) into the Act
The Committee had sought legal advice from Parliament on this subclause in Clause 10(b) that inserts section 24(7): “Subsection (5) does not apply to a contributor who voluntarily terminated her pregnancy”.

Ms Noluthando Mpikashe (Parliamentary Legal Adviser)said this subclause in the Bill was against the provisions of section 2(a) and (b) of the Choice on Termination of Pregnancy Act as the voluntary termination may be driven by medical advice and complications, but the mother will still have to consent to it which makes it a voluntary termination. She advised the clause be removed.

Mr Thembinkosi Makalipi, Chief Director: Labour Relations, DoL, agreed that the clause be removed.

Ms F Loliwe (ANC) and Mr D America (DA) also agreed with the removal of the clause.

Clause 4 inserting subsection (1A) into the Act
Mr Mkalipi proposed that clause 4 which provides the Minister the discretion of designating the UIF Commissioner or any appropriate officer to perform the function of the Accounting Officer be removed as there were arguments that this provision was not discussed at NEDLAC. The DoL had thought that similar to Nedbank, which was owned by Old Mutual, making its own decisions without consulting Old Mutual, it could also do the same by delegating authority to perform Accounting Officer duties.

Mr Bagraim agreed with the removal of clause 4.

Clause 13 amending Section 33(3) of the Act
"When processing application for benefits neither the fund nor any agency or person purporting to act on behalf of the applicant may charge any fee against the applicant"

Mr I Ollis (DA) said this amendment can prevent some from filling a UIF claim form, but it reads as if it barrs someone from seeking legal advice.

Mr M Bagraim (DA) said DoL cannot prohibit any person or agency purporting to act on behalf of the claimant.

Ms Loliwe said the discussion was now going beyond what was discussed last week. Since UIF benefits were very low, this clause seeks to bar the involvement of middlemen so that all the money goes the claimant.

Mr T Rawula (EFF) said this clause seeks to discourage the involvement of consultants in claiming UIF benefits.

Mr Ollis suggested that the wording be changed to: No fee cannot be charged in submitting a UIF application.

The Chairperson said sometimes the Labour Office queues were too long and some women cannot stand there with their children and they may ask someone to claim on their behalf.

Mr Mkalipi said the clause limits payment to the processing of applications not seeking legal advice. The skills development strategy prevents agencies from charging money to applicants.

Mr Ollis said the clause said any fee against the applicant and any fee may include payment for legal advice sought.

Mr Phatekile Holomisa, Deputy Minister of Labour, said he was new to the discussion, but from following the discussion, he could sense there were two sides to the story. The first was to protect against middlemen getting money from applicants. The second was what will happen should a person not get his expected benefits or the processing of his claims takes longer than expected. He has often heard of such complaints and sometimes asks the UIF Commissioner to make a follow up. The person who was frustrated can seek legal advice and the Bill cannot bar payment for such a service.

Ms Mpikashe thought the payment was only limited to the processing of applications.

Mr Rawula said even if a dispute arose in the processing of the application, the person must not decide in his own frustration to enter an agreement with a lawyer using the fund as a collateral.

Ms S van Schalkwyk (ANC) said the discussion was running around in circles.

Mr Ollis said “any fee” will cause a problem with law societies and the Bill may end up in the Constitutional Court seeking to interpret the meaning of "any fee". Parliament can avoid such challenges by clarifying "any fee".

Mr Bagraim said no definition of "processing" was given. Processing starts from the time of filing the application to receiving the money. The Department can lose the form in the process and to bar the payment for service in ensuring the UIF money was received, was very wrong.

Ms Mpikashe said the Department can deal with such nitty gritties in the regulations on processing applications, which do not need to be contained in the Bill.

Mr Boas Seruwe, UIF Commissioner, DoL, said if people have problems in processing their applications, they can call the Call Centre, Minister or UIF Commissioner. They can use the appeals process if they have any dispute. The clause seeks to avoid lawyers charging R5 000 for benefits of only R2 000.

The Chairperson thought legal advice was only sought if a person had exhausted all internal mechanisms.

Deputy Minister Holomisa said the use of the word "any" was the problem and a simple solution was changing it to "a".

Members agreed to changing "any fee" to "a fee".

The Committee will have clause by clause deliberations on the Bill next week.

That meeting will include a briefing by the Financial and Fiscal Commission and the Auditor General on the third quarter performance of the Department. The Department of Labour will present on its third quarter performance  in the successive week.

The Committee adopted minutes of 9 and 24 February 2016.

The meeting was adjourned.



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