|06 Aug 2021||Submissions received on UIF COVID-19 TERS funding process; Committee Oversight Visit Report|
The Standing Committee on Finance, Economic Opportunities and Tourism of the Western Cape Provincial Parliament (WCPP) convened virtually to address matters arising from the Unemployment Insurance Fund’s (UIF) response to the submissions made by the public on the COVID-19 Temporary Employer / Employee Relief Scheme (TERS) funding process. The presentation focused mainly on comments given by the entity, which indicated the progress of each individual case. It was highlighted that the UIF had direct contact with employers rather than employees as this was advised by bargaining councils and trade unions. The processes in place were indicated to be of a strict nature, where validation and verification are essential components of the application. These measures apply to both South African nationals as well as foreign nationals without exception. The UIF also indicated that there were systems in place to determine whether a payment had been made to the employees by the employer, and that employees were to make the UIF aware of the receipt of payment three days of the receipt of funds. However, due to non-compliance with accountability, the UIF had to implement an audit process to track released funds.
Members highlighted that the UIF had failed to respond to 40% of the complaint’s submissions which raised concerns about the service delivery in the Western Cape. There was also an observed information gap about the application process which had left potential applicants at a disadvantage. It was suggested that application information be more readily available and accessible, particularly in non-metro areas. Issues on the failure of the entity in contacting applicants regarding incorrect information were raised and the response time questioned.
The UIF delegates indicated that the infrastructure had not been capacitated for large volumes of applications and that the pandemic contributed immensely to the lack of desired outputs, citing the diminished human resources as one of the leading causes of delayed response and deficiencies in dispensing information about the application process.
The Chairperson informed Members that the Committee would be addressing matters arising from the UIF’s response to the submissions made by the public on the COVID-19 Temporary Employer / Employee Relief Scheme (TERS) funding process. She elaborated that the need for the meeting arose from numerous complaints from public representatives across the Western Cape constituencies regarding the payment processes.
The Committee had previously had a briefing with the UIF on the impact of the entity on various challenges and the impact of the funding processes on the Western Cape. The public submitted 123 written submissions which were forwarded directly to the UIF for further processing.
The Chairperson noted that the UIF representatives were in attendance to respond to the written complaints and queries from the public. She informed Members that due to the sensitivity of the matter at hand, the complainant's personal information would not be disclosed during the meeting as the discussions were broadcasted on YouTube.
She welcomed Adv Mzie Yawa, UIF Acting Commissioner, and invited him to make opening remarks and introduce the delegates.
Adv Yawa thanked the Chairperson and introduced his colleague, Mr Allan Ragavaloo, UIF: Provincial Support, who would be presenting on the findings and responses to the written submissions.
Mr Ragavaloo outlined that the presentation would only concentrate on the UIF‘s comments to indicate the progress or status of each individual case. He proceeded to proceeded to provide a detailed explanation of the complaint submissions and responses.
The Chairperson noticed that the presentation contained names and ID numbers of individuals and asked Mr Ragavaloo to remove them, due to the sensitivity of the information. She further requested the Committee Secretary to double check that any documents that would be made available to the public would not contain personal information of the participants.
Mr Ragavllo agreed and requested that the Committee Secretary rather share her documents as the personal information of the complainants had been blotted out in that document.
Mr Ragavaloo highlighted case number two and explained that the portal was still open, and employers were required to apply on behalf of employees as employees are attached to their employer. He cited that it was easier for the UIF to contact employers to solve outstanding issues rather than millions of individual employees. He said that the entity uses declared salaries in its data base to determine COVID-19 renumeration and that the payments often fluctuate as they are determined on an individual employee basis. He further added that most clients in the Western Cape were satisfied with their payments.
Mr Ragavaloo explained that the UIF follows the same procedure for foreign nationals, stating that a foreign national may be rejected if the UIF is unable to validate their application during processing as validation and verification are essential components of the application. He also noted that it was important for an application to be completed and submitted timeously and that no exceptions were made in this regard.
He stated that there were discrepancies identified by the Auditor-General (AG) in the UIF’s first audit in July 2020, however, these discrepancies had been mitigated and the repayment would recommence on the 22nd of September 2021. He clarified that the foreign national verification process was added in response to the AG’s response.
Mr Ragavello made further explanations responding to comments from 70 clients before handing over to the UIF Commissioner for additional remarks.
The Chairperson thanked Mr Ragavello for the presentation and invited Members make deliberations.
Mr A Van der Westhuizen (DA) thanked the UIF for their presentation and extended a special thanks to the administration staff who worked tirelessly to compile the report at hand. He noted and thanked the entity for their attention to detail in responding to the public’s submissions and their willingness to report back to the Committee for oversight.
He stated that in several cases there seemed to be delays in remuneration that were not attributed to application deficiencies and asked on the cause of non-application related delays. He pointed out that there was a common issue of people completing incorrect documentation and asked what could be done to resolve this and to what extent this problem could be avoided. He suggested practical adjustments to the form such as the use of bold font for the headings or adding a brief description.
Ms N Nkondlo (ANC) shared Mr Van der Westhuizen’s sentiments that the UIF did put a great effort in responding to the public submissions. She lamented, however, that there was a great information gap about the application process which left potential applicants “being sent from pillar to post” to find the correct information. She asked whether there were any interventions in place in this regard.
She highlighted that because of the power dynamics at hand, employees may be afraid to approach employers to discuss matters pertaining to UIF. She inquired on where the responsibility to ensure proper labour relations lies, asking whether there was an equal understanding of the rights and obligations that govern the employer/employee relationships in these cases. She further asked on what additional resources were necessary to close the information gap.
Ms Nkondlo pointed out that there were cases where employers did not give employees their UIF money and asked whether the problem was due to the current approach. She inquired on whether there was any verification done after the fact to ensure that employees had received their awarded funds as employers often misappropriate the funds. She asked for more information on the current approach and an explanation on what the current limitations of the system were.
The Chairperson agreed, shared Members concerns and praised Members for always having the interests of the community at heart.
The Chairperson expressed concern over the UIF’s failure to contact applicants regarding incorrect information timeously, stating that there was a three-week lapse between when the UIF became aware of the errors and the time the applicants were contacted. She pressed on this issue and asked for an explanation on why it took so long to contact the applicants.
She also shared Ms Nkondlo’s concerns on the delays and asked whether there were any steps taken to mitigate the delay in remunerations.
She said that the UIF often claimed in some of its responses to the submissions that the institution was often unable to contact individuals, but the members of the public indicated that they themselves found it difficult to contact the entity and to be attended to. She added that greater strides needed to be made to address this matter stating that the “backlog” excuse was dissatisfactory.
The Chairperson noticed that there were several submissions that had not been attended to and asked on when the Committee would be given a response in this regard. She stressed that the lack of information on the application process has led to frustrations for potential applicants.
She invited Adv Yawa to respond to the first round of questions.
Adv Yawa stated that the bodies, like bargaining councils and trade unions, advised that the UIF should communicate directly to employers. He explained that their data base enables them to give immediate responses, however, when additional response is needed, such as in the case of correcting incorrect information, it impacts the speed of pay-outs. He qualified that he was not merely stating stating this point to excuse the delays, but rather to provide context.
Challenges with non-compliance
Adv Yawa said that there was a system in place to determine whether a payment was made. After receiving the funds, employees are bound by the Memorandum of Agreement to make UIF aware of the receipt three days of the receipt of the funds. Employers are also required to communicate back to UIF once they have received the funds and raise any issues which may arise. Due to non-compliance with these accountability mechanisms, the UIF had to implement an audit process to track the money. This was an additional expense which complemented the system’s payment records. He added that the entity was not always aware of the number of employees in each company, which presented further challenges. He mentioned that the pandemic had stretched the UIF’s human capital beyond its means, lamenting that the challenges that the pandemic has placed on the institution were unprecedented. He also explained that employers often divided the funds intended for a single employee amongst all their employees which caused further challenges.
Lack of Capacity
Mr Ragavaloo explained that the UIF portal was designed to be a self-service portal and not to handle the large volume of applications received. It also functions in a manner that allows anyone to be able to access their application and track the progress. Although it was designed to communicate directly to employers, employees can also access and track the applications. He added that the UIF was consulting a tech company to improve the portal and make it more user friendly. He added that the Department of Employment and Labour was in talks to contact a call centre service provider.
He explained that the staff were working remotely during the pandemic which may have also contributed to delays and the difficulty of getting the right information, as was experienced by applicants.
He agreed with Adv Ywa that the entity did its best to follow the money trail and prevent fraudulent tractions through auditing and partnering with law enforcement.
Regarding the three-week delay, he explained that the issue was caused by an error in communicating information with the Cape Town office and apologised to the Committee for this shortcoming.
He stated that most of the unresolved cases that the Chairperson had referred to were cases where the UIF was unable to confirm receipt of payment.
Mr Mawele Ntamo, Chief Director Provincial Operations, Department of Employment and Labour (DEL), responded to the Committee’s questions explaining that the main contributor to the delay was due to inadequacies in applications and employers lack of timeous submission which have led to slow processing.
Responding to the Chairperson’s concerns on labour relations, he stated that if employers make it particularly difficult for an employee to apply for UIF assistance, employees were then encouraged making a complaint at the UIF offices so that the matter could be dealt with on an individual basis. He said that the success of the programme relied on amicable employment relations.
Mr Ntamo stated that the UIF had sent inspectors and invigilators to visit workplaces, but these efforts had also come to a halt under the current pandemic.
He indicated that there were a few submissions which had not been responded to, mentioning that these were still ongoing matters, and he did not want to cloud the report with matters that were still being addressed. He committed to providing an update once these matters were resolved.
Mr David Esau, Chief Provincial Inspector, DEL, stated that the UIF employed a variety of communication methods including, WhatsApp and SMS to follow up on applicants. Using these communication channels, the entity could identify and mitigate cases where no payments were received. He informed Members that complications arose when employers were not registered with the UIF, which forced the UIF to compel unregistered employers to be registered in terms of Section 6 and 32 of the basic conditions of the Employment Act. If there was further non-compliance, the UIF would escalate the matter to the Special Investigating Unit (SIU), which may launch criminal proceedings and may result in a fine to recover the funds.
The Chairperson thanked Mr Esau for his contributions and asked Mr Ragavaloo to provide an indication of the number of outstanding submissions, including those that required recontacting.
Mr Ragavaloo stated that he would follow up on the matter.
The Chairperson opened deliberations for follow up questions.
Ms Nkondlo said that one of the most cited issues was non-compliance and asked for more clarity on the extent of non-compliance. She highlighted that there had been a few remarks on employers registering fewer employees than they had and asked whether there were any remedial actions taken and whether there was any collaboration with the Department of Labour in attaining more accurate information.
She asked on the time it took, on average, to make individual payments and whether there were any feedback mechanisms in place.
Mr Van der Westhuizen indicated that he previously made a call to the UIF and found it difficult to find assistance telephonically through the call centre. He said that upon receiving assistance he was asked for his personal information and ID number, and asked Mr Ragavaloo to clarify whether the UIF telephone agents have direct access to the portal to better assist applicants. He explained to the Committee that although he was not a large employer, the website took a long time to load his page. He asked whether this was a normal occurrence and requested that the entity provides more information on whether their call centre agents kept a call log detailing their call attempts, especially where they were unable to reach the applicant.
The Chairperson shared Mr Van der Westhuizen’s sentiments and invited Mr Ragavaloo to respond accordingly.
Mr Ragavaloo responded to the Chairperson’s initial question about the number of outstanding responses, stating that there were 41 submissions that were still ongoing matters. He said that he would provide an update on these submissions after consulting with his colleagues.
He added that the performance information according to the Unemployment Insurance (UI) Act and Strat. Plan, with regards to the turnaround time for applications, was 15 days. However, this varies for unemployment benefits where the turnaround time for maternity leave is 10 days. He stated that the process was considered a semi-automated process as the Department was currently in the process of shifting to a more automated process. There are also mechanisms in place, such as alerts which notify agents to changes in applications.
He indicated that the UIF was affected by the pandemic as several employees contracted the virus, with a few reported fatal cases, and this had a direct impact on capacity. He confirmed that the call centres keep a call log that can be made available upon request. However, as there is no single unified registry of employers in South Africa, the UIF uses various avenues such as Home Affairs and the Department of Labour's registries to confirm its employer data.
Mr Ntamo responded to the question pertaining to the extent of non-compliance, stating that Mr Esau was better suited to respond on the matter.
Mr Esau highlighted that the pandemic revealed the extent of non-compliance, particularly pertaining to non-compliance in the form of non-registration by employers. He stated that the auditors and investigators found non-registration to be fraudulent and have maintained a strict approach to non-compliance.
The Chairperson observed that only 60% of the comments had received responses, which she noted as a concerning issue. She further indicated that there would be recommendations on the matter.
Ms Nkondlo indicated that she had not received a response on her question on whether there were any feedback mechanisms in place, asking for a response especially if there had been any attempts to gain feedback from employers.
Mr Ragavaloo said that there were attempts to get feedback from employers and that there was a National Economic Development and Labour Council (Nedlac) Operations Committee that dealt with operations issues and there had been interactions and sharing of information with businesses. He explained that Nedlac operations meetings occurred on a weekly basis to review operations and the entity was also considering how it could best address the claims connected to the recent unrest in July.
The Chairperson noted that Members were satisfied with the responses and thanked the UIF for engaging with the Committee robustly in providing a detailed report back.
The Chairperson remarked that all legislatures in South Africa consider themselves as being parliaments of the people, and that this was what Members attempted to do through their committee work. She added that Members ensure that the Departments who are to assist the people of the Western Cape were doing what they are meant to do.
The Chairperson gave the UIF delegates permission to leave the meeting and directed Members to administrative matters.
Mr Van der Westhuizen said that public service was disrupted by the pandemic when government workers were not declared as essential services. He stated that it was of importance that certain public services, which had not been considered government services, to be considered essential services. He said that people who had used the portal had been able to have their voices heard and their issues attended to. However, there were also members of the public who were unable to have their claims addressed. He asked whether feedback response channels could be instituted in to address this issue.
Ms Nkondlo and Ms M Maseko (DA) supported the resolutions.
Ms Nkondlo noted the importance of the meeting and asked that a report be drafted and presented to Parliament. She also suggested an oversight site visit in non-metro labour centres and further requested that the Committee follows up on the issue of non-compliance with the Cape Town Provincial Office. She expressed that there was a need for the Committee to engage with the chamber of commerce to see how industry can assist the UIF endeavour.
The Chairperson endorsed the site visit and UIF report and confirmed that there was currently a draft report being written. She stated that the Parliamentary Programme had not been finalised and there was uncertainty regarding EC dates which would likely only be considered next year.
She added that the Committee would be able to ask the Provincial Department to engage with the different sectors to find out what the current relationship with the UIF was and to encourage the entity at their respective engagements to ensure compliance.
Ms Maseko thanked the support staff for going beyond what was expected to provide accurate information. She lamented that some of the IT systems used provincially were still archaic and were in desperate need of an upgrade to be on par with what is required in the fourth industrial revolution.
Members agreed with this resolution.
The Chairperson asked whether Members were satisfied that the 25th of September was an appropriate deadline for a written report on the UIF’s response to the meeting. She also suggested that the UIF provide written reports monthly, until the lockdown regulations are concluded. She also added that the most appropriate means may be to require a response on the specific issues raised.
She stated that in terms of public participation, there was no precedent or provision on the use of paid social media for public participation and recommended that the matter be raised in Parliament.
Mr Van der Westhuizen agreed and stated that this should be extended to include all social media platforms.
The Chairperson thanked Members for their participation in the UIF matter at hand and minutes were adopted.
The meeting was adjourned.
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