UIF operations during Covid-19 period: Department briefing

Employment and Labour

01 May 2020

Video: PC on Employment and Labour, 1 May 2020 (1)
Video: PC on Employment and Labour, 1 May 2020 (2)


Inspection and Enforcement Services: Response to COVID19 Lockdown

Compensation Fund: Response Plan to COVID-19

Department of Employment and Labour: COVID-19 Occupational Health and Safety Measures in Workplaces COVID-19 (C19 OHS), 2020

UIF: Response to COVID19 Lockdown 

COVID-19: Regulations and Guidelines
Disaster Management Act 57 of 2002

Schedule of Services to be phased in as per COVID-19 Risk Adjusted Strategy

President Cyril Ramaphosa: South Africa's response to Coronavirus COVID-19 pandemic

Meeting Summary

The Portfolio and Select Committees on Employment and Labour met to assess the progress made by those under the joint Committees’ oversight during the COVID-19 lockdown. Presentations were made by the Unemployment Insurance Fund (UIF), the Compensation Fund (CF), and the inspection and enforcement services that were supporting operations during lockdown. The Minister and Deputy Minister also provided input at the meeting.

The Committee was informed that roughly R4 billion had been paid to workers affected by lockdown-related employment pressures since the national lockdown period regulations had been implemented. Over a million workers had received the disbursements, while the Department had received close to 140 000 applications from employers for assistance. It had also received several incorrect and/or fraudulent applications from 750 employers, involving close to 9 000 workers, during the period. The Chairperson urged the Department to collaborate swiftly with law enforcement agencies to ensure that those attempting to defraud the system during such a tumultuous period would be brought to justice.

The UIF said it had R6.8 billion in available funds. Its portfolio had investments in government and state-owned enterprises’ bonds, domestic equities and other markets. R71 billion was the amount in government bonds, while there was R12 billion invested in SOEs. R13 billion would be available on 1 May, as a maturing fixed deposit of R7 billion would become available. The Fund had R40 billion set aside for contingency operations, which would cover three months without liquidity. As the lockdown could extend beyond three months, there would potentially be a need to sell the government bonds in order to continue operating.

The CF had received 42 claims relating to COVID-19. The CF had accepted liability for 39 of these claims.

The Committee was concerned that a continued increase in COVID-19 cases would lead to an extended lockdown, which would place untenable pressures on the relief funding, and stressed that the intervention schemes at the disposal of the Department and its affiliated entities had to be used for their intended purposes. It needed to investigate matters where vulnerable workers were involved. Domestic workers and petrol filling station attendants were emphasised in this regard. The increase in the number of inspectors was welcomed, and the Department was urged to ensure that companies resuming operations with the introduction of Level Four were checked to ensure they were in compliance with the new requirements.

Members expressed their appreciation of employers who had played an active role in engaging with the Department to ensure cooperation during the lockdown, as well as those who had correctly made use of the government interventions for the benefit of their employees.

Meeting report

The Chairperson said the meeting would be a means for the Committee to be kept abreast of Unemployment Insurance Fund (UIF) developments during the national lockdown. It was important to be briefed by the Department on such matters, rather than to depend on the media.

She had received an apology from the Co-Chairperson from the National Council of Provinces, whose wife was unwell.

Minister’s overview

Mr Thulas Nxesi, Minister of Employment and Labour, said he would not go into detail in the introduction, but would just province context. The details would be left to the relevant officials in their substantive presentations.

The major tasks of the Department during the COVID-19 lockdown were to repurpose the UIF to deal with the impact on employment and labour by facilitating the flow of funds to workers.

The mandate of the UIF had been expanded to provide financial support at least equal to the national minimum wage for workers who had been laid off, regardless of the length of their contributions. The solution was the introduction of the COVID-19 Temporary Employer/Employee Relief Scheme (TERS).

In anticipation of the UIF being overwhelmed by claims, given the circumstances under COVID-19, the lack of social distancing that would result from large numbers of claimants queueing at offices had required a redesign of the UIF systems. For this reason, a strategic decision had been taken to close UIF systems and move to mass distribution of benefits through employers. This measure could not have been undertaken without the assistance of business stakeholders.

Stakeholders who had assisted the UIF included the banking and insurance sectors, as well as the South African Revenue Service (SARS), which had been assisting in the validation of claims.

Call centres had been reinforced. The operators had been increased from 25 to 200 members. Later increases aimed to boost this to around 400 operators.

The Department had been mindful of individual workers who were not supported by the move to online claims and distribution through employers. For this reason, drop boxes had been placed for applications outside UIF offices for those who could not register online.

Domestic and farm workers were specific communities of workers that had been identified as vulnerable.

There had been initial delays in operational readiness and distribution. Substantial progress had since been made.

Minister Nxesi said that Mr Thobile Lamati, the Director-General, would provide detailed numbers of UIF claims in relation to the COVID-19 benefits.

He emphasised that the reach of UIF disbursements had increased due to many of the recipients having family members who were their dependents. There were 220 000 workers who were entitled to claim, and had not yet done so. The Department had reached out to these people. He also implored employers to reach out to their employees and the Department.

Through the Crisis Management Committee, a COVID-19 response plan had been established as part of departmental cooperation.

COVID-19 contracted in the workplace would be counted as a criterion for a worker to be eligible for compensation.

The Department would have to expand workplace investigations due to the increased number of operational offices under level four lockdown conditions.

The Department had supported employment enterprises which had been repurposed to supply Personal Protective Equipment (PPE) and hospital supplies, such as bed linen.

Unemployment Insurance Fund response to COVID19 lockdown

Web Platform Application

Mr Lamati said the Department had had to work on its systems in order to deal with the increased number of applications. It had automated the entire applications value chain, allowing employers to submit applications through an online web platform. The web platform had been initiated in April, and the Department had received 67 970 applications through it to date.

 An “Easy Aid Process” document had been developed to further guide employers.

New and pending normal claims applications and enquires were being dealt with through dedicated email addresses for each province, promoting social distancing.

There had been a web-based system formed to process claims. As of 29 April, 188 employers had applied on behalf of over two million employees. There had been 137 386 valid claims, of which 77 801 had been paid.  750 employers had submitted incorrect bank information.

Since the TERS had been launched on 16 April, over R4.4 billion had been paid. The breakdown of payments by province included Gauteng (28%), Western Cape (15%) and KwaZulu-Natal (11%), making up the significant payments.

Unemployment Insurance Fund portfolio

The liquidity of the UIF was R6.8 billion available funds. Its portfolio had investments in government and state-owned enterprises’ (SOEs’) bonds, domestic equities and other markets. R71 billion was the amount in government bonds. There was R12 billion invested in SOEs.

R13 billion would be available on 1 May, as a maturing fixed deposit of R7 billion would become available.

The UIF had R40 billion set aside for contingency operations, which would cover three months without liquidity. As the lockdown could extend beyond three months, there would potentially be a need to sell the government bonds in order to continue operating.

Ordinary benefit claims arising from unemployment, maternity and illness from 26 March to 30 April had seen 65 000 people being paid over R1 billion.

Challenges and interventions

The challenges and interventions had been indicated in the Minister’s overview.

The UIF call centre had been flooded at the beginning of lockdown. These included non-COVID-19 enquiries, as people had taken advantage of it being a government number to voice other concerns. The UIF had accepted an offer by Harambee Call Centre for assistance. 200 Harambee Call Centre agents had been added to boost the productivity of call centres.

Drop boxes had been established outside labour centres for those who could not access the UIF online, or were unable to use technology.

Employers had not been submitting their lists of employees correctly. Incorrect formatting and/or poor-quality applications had led to the development of an online platform with mandatory sections.

There had been non-compliance from some employers. The Department had introduced an auto-return function that was sent to employers, which indicated the non-compliance issues needing to be addressed.

Some employers had been underpaying on their claims and did not know how to accurately distribute the funds among staff. This had led to the development of an online system for employers to get advice on how to schedule the payments.

The Department had been in constant contact with SARS. Contingency plans had been made to use SARS should the system crash due to overload. It was also working with Hollard Telesure.

Compensation Fund’s COVID-19 response plan

Mr Vuyo Mafata, Commissioner: Compensation Fund (CF), said the CF had established national and provincial response teams to ensure it was prepared. Dedicated medical teams, as well as teams of claims processors, had been formed to manage claims related to COVID-19.

All claims were to be submitted online by employers using the CompEasy website. A dedicated email address had been set up to receive all manual submissions sent to the CF. Claims would be registered as well as adjudicated on the system, using the recommendation from the relevant national/provincial response team.

Challenges included issues around the reporting of claims. Despite the large numbers of confirmed COVID-19 cases, there had been little increase in the number of claims registered by employers.

COVID-19 was a new disease which could be community or occupationally contracted. This made it difficult to assess compensation claims once they were reported. A questionnaire had been published with the regular documents to assist medical officers in the assessment of unclear claims. This was made more difficult by confirmation of COVID-19 not necessarily involving a medical professional, meaning it was more difficult to compile the medical reports required under the Compensation for Occupational Injuries and Diseases Act (COIDA).

Of the 42 already submitted claims, one case’s liability had not been accepted. Two cases were pending due to outstanding medical questionnaires and/or lab results for confirmation. The CF had accepted liability for 30 cases. Nine were awaiting adjudication at the time of presentation.

The majority of claims received came from the health care sector. Geographically, the majority came from KwaZulu-Natal. One case had involved an engineer.  

Branch: Inspection and Enforcement Services

Ms Aggy Moiloa, Inspector General, Department of Employment and Labour, said the focus had been on investigations of compliance with social and physical distancing, as well as the provision of PPE.

The purpose of Occupational Health and Safety (OHS) during the period was to provide inspections to ensure that there was compliance with the OHS COVID-19 directive, hazardous biological agents, and the COVID-19 regulations.

Referring to the period of lockdown until 28 April, she said inspections had been conducted in both the public and private sectors. KwaZulu-Natal had been the highest contributor to the number of inspections. The Northern Cape was the lowest because there had been a delay in sending PPE, meaning compliance could not be investigated.

Private sector entities that had been inspected included retail and wholesale outlets, supermarkets, pharmacies, petrol stations, manufacturing, finance, agriculture, hospitality, iron and steel, transport, and laundry services. The greater proportion of inspections (89%) had been in the private sector.

Public sector institutions that had been inspected included the South African Post Office (SAPO), the South African Police Service (SAPS), and the Departments of Justice, Community Services, Health, Social Development, Home Affairs, Education, Employment and Labour, and Correctional Services. Municipalities had also been inspected.

Analysis of the inspections indicated that compliance levels had picked up at a steady rate of increase. The public sector compliance levels were higher. There had been a revised turnaround time for compliance periods due to the nature of COVID-19. Entities now had 48 hours before there would be follow-ups.

Instances where “other” was used a category, meant that the workplace was prohibited from investigation as result of the jurisdictional area not being in the Department’s mandate. Examples were workplaces where almost everyone working in the space was a foreign worker illegally in South Africa, and Department of Home Affairs’ officials accompanying the inspectors would arrest the workers immediately, and the workplace would de facto be closed. Other instances were workplaces operating with illegal licences fraudulently declaring them as essential services during the lockdown. These were found to be fraudulent by the Department of Trade and Industry, and were then closed.

Overall, there had been a steady increase in compliance levels at the companies inspected.

Ms Moiloa said she was anticipating that with the Government’s risk-adjusted strategy, there would be increased demand for the Department’s services. This would in particular involve the Inspectorate, which was set to strengthen its investigate capacity and “stakeholder relations.”

The Inspectorate would intensify its project-based approach to its work, and would strengthen the pillars of its inspections and enforcement strategy. These pillars were advocacy, inspections, and enforcement.

Beyond occupational health and safety instances, the Inspectorate was an employer of auditors for UIF, COIDA and Conditions of Employment Act compliance.

There had been complaints aired in public over issues of illegal deductions from the national minimum wage. The volume of such complaints meant that the Inspectorate had needed to bring its inspectors into the matter.

A number of workers’ claims had been submitted but not declared. Auditors were being brought back to the Inspectorate to deal with such issues of non-declaration and non-contribution.

The Inspectorate was in the advanced stages of employing 500 new inspectors. This process would be concluded by the end of the following week. This would boost its capacity to deal with complaints. 

The Inspectorate would never have the numbers to cover every workplace in South Africa, but it appreciated the contributions from whistle blowers such as employees, the public and/or civil society, as well as unions, which assisted it in conducting its work.

The Chairperson asked the presenters and Members to avoid using abbreviations as there were many anxious members of the public watching the broadcast for information, and they would find it difficult to follow. She gave the example of the Basic Conditions of Employment Act, which had been abbreviated to BCEA.


Mr M Dangor (ANC, Gauteng) said there was an issue of employers who had not declared, or who had under-declared. This could become a legal matter. There was also a moral aspect -- had the views of the businesses who represented employees expressed a view as to the morality of under-declaring, which needed to be considered as fraud? What steps would be taken against such members of the business sector?

Dr M Cardo (DA) said that the National Treasury had given a harrowing presentation to the Standing Committee on Finance the previous day. In the presentation, 3.7 million job losses had been predicted due to the combined effects of COVID-19 and the recent ratings downgrade. This was a far more disastrous figure than had been anticipated. Minister Nxesi had told the Committee the previous week that between one and two million people would become unemployed. Adding three million to the already 10 million unemployed would be incredibly difficult for the UIF. He asked if the Committee could get a sense from the Minister or the DG as to whether the UIF would be able to cope in such worst-case scenarios with the R13.8 billion funding available.

Foreign national workers had approached him, saying that legal foreign national workers had not been paid. He had received a written response from Minister Nxesi that all foreign workers who were legally working in South Africa were entitled to prompt payment. The details needed to be checked against the Department of Home Affairs’ databases. Was there any way to speed up this process to ensure foreign national workers received urgent payment?

Mr X Ngwezi (IFP) asked about the turnaround time for the Department to pay the employers or employees. What were the causes of the delayed payment of the 8 000 employers who had provided incorrect details? What was the cause of the submission of the wrong bank account details -- the employers had the correct account details for their employees?

How many people had been supposed to claim? Should the lockdown continue, how many were predicted to claim?

The Chairperson asked members to keep questions short and precise.

Ms H Denner (FF+) said Minister Nxesi had mentioned that the call centre staffing would be increased to 400 operators. When would this be completed?

Regarding system upgrades, in cases where incomplete claims were submitted, employers were informed, and they resubmitted. However, there was no feedback given on the follow-up submissions, meaning if there was a second incorrect submission, the employer would not know. There was a delay in payment of incomplete submissions. She asked for feedback on the timeline for the matter to be rectified.

Mistakes entered on to the system could not be corrected. One could not go back and amend them.  Was the Department aware of this and looking into how to remedy it? Many people could not claim because they were unable to correct mistakes.

The Department had tweeted on 24 April that employees could report employers who had forced them to use their annual leave, rather than paying them during the lockdown. The Basic Conditions of Employment Act stated that this was not the case. This had caused confusion amongst employees.

Mr M Bagraim (DA) said the system had come online on 16 April. What about those employers who had claimed prior to this date? Were these claims being processed?

The building industry bargaining council had issues. He asked for comment on this.

National Treasury had said there could be three to seven million people losing jobs. These would not be TERS claims -- they would be retrenchment claims. Were there funds available for that?

Mr Lamati had said normal claims were being neglected owing to the focus on COVID-19-related claims. When would this be corrected?

He asked Mr Lamati about the “zero” amount for people not following regulations. Would they be revisited, and would the employers be told?

The 42 claims submitted on the CompEasy system was a low figure. How was it determined whether illness had been caused at the workplace, or in the community of the employee?

Regarding the problem of employees who were found to be positive, was it compulsory to report their diagnosis to employers? It was a moral dilemma.

Mr M Hendricks (Al Jama-ah) said that the presentation came as breath of fresh air. He commended the leadership on giving hope to the country. UIF benefits of over R1 billion had been provided in the past month.

He asked for an indication of the spread of infection at workplaces by essential workers. One million more workers would be added to this core. The Department needed to know whether oversight needed to be increased as a result of these people returning to the workplace.

He had a feeling there was a spike of infections at the workplace. Had there been a spike of infections among essential workers? The Committee needed peace of mind about sending the workers back to the workplace.

Many workplaces had permanent shop stewards to make sure of fair labour practices between employer and employee. There also needed to be permanent health and safety representatives at large workplaces to play a similar role in employee safety. This was particularly necessary, given the 64% compliance rate with COVID-19 workplace health and safety regulations.

Ms S Boshoff (DA, Mpumalanga) asked about the cost involved in 500 extra inspectors being added. Had these inspectors had the necessary training, and what had been the cost of that?

Mr M Nontsele (ANC) congratulated the Department for the job it had done under trying circumstances. He had an issue with regard to workplaces that were closed after finding infections amongst employees. The issue was workers who had been sent packing when the workplace was closed. This related in particular to Ceres farm plantations, where the farm workers had been sent home. What was the responsibility of employers to look after the well-being of employees? This concerned whether employers had the power to decide to send employees back home, or allow them to stay. This required testing and screening. Workers such as farm workers were too often packed into transport and sent home from their places of work. This risked the spread of infection. It was the responsibility of employers where there was closure as a result of infection among workers.

What was the state of readiness by the Department for workers who were coming back into the workforce under level four provisions? What responsibility did employers have to ensure the safety of their workers?

Regarding the undeclared numbers by employers, there seemed to be many instances of over-claiming, and the DG had alluded to this issue. What steps was the Department taking to avoid a repetition of this? What penalties were being put in place?

A key point was the carrying out of processing the ordinary benefits of the UIF and CF -- ordinary benefits that had been supposed to be carried out over the same period, had COVID-19 not impacted operations. How would the CF ensure there was no abuse of the system for claiming occupational injuries, given the situation of massive closures to protect the CF going forward?

Mr S Mdabe (ANC) asked about employers not submitting lists of employees. It was his limited understanding that if employers then submitted a list of UIF contributors, these would include the name of the employee, their salary, the one percent value, plus the employer contribution. How would the employer submit on behalf of the employee without the list? They needed to reconcile from UIF contributors.

Companies that had underpaid would normally have had to submit an individual contributor list of employees, prior to their overall figure. This system came from any payroll used by companies. However, if the systems used by companies or the UIF were not in line with one another, this would be a contributor to the under-payment.

He asked for a reconciliation of the number of companies that had been paid versus individual employees making applications, and how this could affect double payments. Should the company not be applying on behalf of the employee?

The Chairperson said she had heard on Umhlobo Wenene Radio about cases where employers were not paying their workers. Filling stations fell under the category of essential workers. She asked the Minister what was being done to remedy this.

The domestic worker sector was similarly an issue. How would domestic workers be assisted? It needed to be ensured that employers applied for relief for them. This was difficult, as it was based on an individual house for each domestic worker.  

How ready would the Department be in terms of the change to the level four lockdown conditions and the partial reopening? Mr Nontsele had alluded to this already. The volume of work would increase for inspection and enforcement. Ms Moiloa had said the Department could not be everywhere. Would their systems cope with this changed situation?

Department’s response

Mr Lamati referred to the question of undeclared employees, whose businesses had then claimed for them, and said the Department had been in discussion with the business sector, which was as concerned as they were. This had not yet been expressed in public, but there was engagement behind the scenes and the issues were being raised.

On the matter of the impact of COVID-19 on the economy and possible job losses in relation to whether the UIF would be able to cope, the UIF had paid just over R5 billion if the normal UIF benefits payments were included in the calculations. If the UIF had to pay the 16.4 million employed people from the R146 billion available, this was not be possible for a lengthy period. If the lockdown continued for a long time, the UIF could not cope. It was not designed for that type of situation. Money would have to be found elsewhere. The UIF was coping at the moment, but if it had to continue operating under lockdown, and if companies continued to retrench significantly, this would not be possible.

Retrenchment was, however, inevitable. The Department was monitoring the situation. This was why the Members had been given an indication of what was available in the portfolio. This was why the impact of selling bonds under the current portfolio had been considered and identified as an issue to the Committee. R80 billion had been put aside to deal with COVID-19 retrenchments.

The matter of foreign nationals involved the Department of Employment and Labour, as well as the Department of Home Affairs and SARS. Payments to foreign nationals would begin the following week.
On the matter of determining those who qualified to claim but had not done so, as raised by Mr Ngwezi, the Department would ask employers, bargaining councils and other entities to assist by applying on behalf of their employees.

The turnaround time for claims that were valid was 24 hours at best, and 48 hours at worst. The causes of delays -- such as the 740 incorrect bank accounts -- could be due to human error or changes to bank accounts that had been made without informing the employers. He had not looked at the causes at this stage, but the Department was looking to correct the situation, and to get what was due to employees.

He said there would be inevitable retrenchments, and unemployment would balloon as a result of COVID-19. The government was compiling recovery plans, and it was hoped that those who worked with companies would avert a situation of total collapse.

Regarding the call centres, Minister Nxesi had indicated that a limited number of call centre agents had been available at the start of lockdown. The Department had increased the numbers as a matter of necessity.

When numbers of call centres or hotlines were given out; people phoned them for other matters simply because they were government hotlines. The lines then became clogged. This was the reason for continuing to increase the number of agents, in partnership with Harambee Call Centre. 100 operators from call centre agencies had been added in order to increase capacity the previous day.

Incorrect applications could be due to issues such as entering identity document (ID) numbers incorrectly. The information technology (IT) people at the Department were working with companies to try and address those sorts of problems. This involved a strategy of picking up the issues and informing the company concerned, and walking them through the relevant system problems. The Department had learnt to make adjustments to the capability of their systems as they went along.

Concerning the annual leave issue, when beginning the COVID-19 benefits scheme, the view had been that despite the Basic Conditions of Employment Act stipulations, it was preferable that employers did not force employees to take leave. The Department had wanted it to be that if companies shut down due to the lockdown, it would be treated as a special case. Most companies had not done this. They had forced people to take leave. This was in compliance with the law. However, a benefit had been put in, and the Department wanted companies to use the benefit instead of the taking of leave being forced on employees.

The first claims made prior to lockdown had amounted to 39 000. Only 34 000 of these had been accepted, and had been paid. The rest had been sent back, and the companies had corrected them. The 39 000 figure was part of the total number of 77 000 claims received, which involved R4.4 billion in payments.

He had missed the question regarding the construction bargaining council.

Money had been put aside for retrenchments.

On the issue of top ups, from the UIF side, there was nothing untoward when using existing Unemployment Insurance Act provisions. If the employer topped up an employee’s salary and exceeded what the UIF gave, the employee no longer qualified for a benefit in terms of Section 12 of the Act. If the employer topped up and exceeded the amount that would be paid by the UIF, the employee would not get anything from the UIF, otherwise this would defeat the purpose of the income replacement model that was being used. This was not in line with the spirit of what the government wanted to do.

However, it had been decided to change and amend the directive. The decision with top-ups was being made to be in line with this, to put money in the hands of employees. The matter was an ongoing issue. Officials were following up and ensuring that those who had received less than what they would have received if the top up had initially been allowed, would be paid. Companies were able to top up.

He did not have the information on the spread of infections at the workplace. The indication from the CF was as per the report given by Commissioner Mafata.

They had received 42 applications to date, and these were being processed. A database of information and intelligence would be built to better assess the situation from those cases that had been received, in order to know which sectors were being hit.

In response to the suggestion of there being permanent health and safety representatives at workplaces, Mr Lamati said the Department was in no position to prescribe to companies how to deal with health and safety issues. However, it sounded like a good suggestion. In the directive the Department had mentioned the importance of health and safety representatives. Whether they were permanently employed was up to the individual companies. Most companies had health and safety practitioners, however.

He agreed with the need for there to be 100% compliance with the COVID-19 health and safety regulations by employers. Without employers submitting claims to the Department (which included risk assessments), they could not re-open their companies. Companies needed to take into account the risks employees would be exposed to. Initial guidelines had been provided by the Department. If companies complied, they would be allowed to operate.

Referring to the recruitment of the additional inspectors, he said that once employed, inspectors could not be released to perform the work without stringent training for the task at hand. The additional 500 inspectors would undergo serious training to be ready. It was hoped that they would assist. The potential costs of this operation were not available at the moment, but could easily be obtained and provided to the Committee.

On the matter of workers who were sent back because of the possibility of one of them contracting the disease, it was difficult to know the numbers involved. If the matter was occurring at the workplace, the Department would need to inspect to ensure compliance upon reopening. The Department of Health would immediately respond when someone contracted COVID-19, and take over to ensure compliance with protocols. Almost all workplaces inspected had followed protocols.

Ms Moiloa had indicated the state of readiness of the Department. The key issue was how ready workplaces were to return to economic activity. How ready were they to receive their workers?

The Department had put in place the Occupational Health and Safety directive in collaboration with the Departments of Health and Trade and Industry, to ensure readiness upon return. This detailed what needed to be done in terms of the provision of masks, social distancing and the like. These directives needed to be complied with, and would help the Department.

The Department did not have the resources to be everywhere. Ms Moiloa had said the Department relied on employers taking seriously the responsibility of care towards their employees and ensuring workplaces were safe for a return to economic activities. The Department needed the activism of unions, as well as employees, to ask it to inspect workplaces they thought were not in compliance. Even employers themselves had asked the Department to check their compliance.  

Regarding the obligation to pay undeclared employees, companies had an obligation to pay the UIF contributions. The Department was working with the companies to determine why under-declarations had occurred. He did not want to call the under-declaring fraud until all the facts had been gathered. If it was picked up that there was under-declaration in terms of the Unemployment Insurance Act and other laws, this was an offence. The Department was bringing back a group of auditor inspectors to assist, to ensure that those who had fraudulently under-declared were dealt with.

The UIF system that had been developed was in some instances not aligned with employers’ payrolls. This was why employers had been asked to submit information in a particular manner, so as to be easily absorbed by the system. The system knew the declared employees with reference numbers from the UIF, and those without a reference number were put aside. This was how undeclared workers were determined. Reconciliation did take place with the system.

In instances where the employer had not submitted claims on their employees’ behalf, the employee could submit individually. The system would pick up if their employer had in fact submitted for them and whether they had been paid.

Filling stations had been deemed as essential services during the lockdown. No issues had arisen in relation to their claiming COVID-19 benefits. This was the case, unless workers had been dismissed or retrenched. They would then have to apply for ordinary UIF benefits. He would hold a discussion with the bargaining council to which the filling station workers belonged.

Domestic workers were another difficult matter. The issue was how to conduct inspections. Regarding the COVID-19 benefits for domestic workers, a free zero-rated service had been procured to send bulk messages to employers. This stated that for domestic workers who were locked down prior to 1 May, the employers would have to apply on their behalf. Domestic workers would also be informed by a bulk message and that they could apply as individuals, in case their employers decided not to pay.

Commissioner Mafata dealt with Compensation Fund issues, and said he had anticipated the difficulties of assessing claims for communicable diseases such as COVID-19 when publishing the notice. It was difficult to assess claims about communicable diseases as to whether they had been contracted in the workplace or the community. This was why the questionnaire had been attached to the regular form, which would allow claims officers to look at the circumstances around the claim and better determine whether it had been contracted at the workplace or in the community. There would be those who tried to test the system and try their luck, given the discretionary nature of the situation. The increasing number of cases reported would allow the process to be improved.  

Mr Lamati referred to the issue of spikes in sectors that were re-opening. During lockdown, the majority of claims had been in the health care sector. Opening up would expose other sectors. Ms Moiloa would be in contact with the new entries to ensure worker protection, and the Department could then assess whether other sectors experienced spikes.

Regarding the Construction Council bargaining matter that he had missed, there had been unhappiness expressed over payments being made to employers. The Department was in discussion with the bargaining council about this, and it would be resolved by the following week.

The Section 12 recalculations would be paid the following week. Regarding the top-up, those who had not received anything because of Section 12 of the Act, the provisions of the act would be changed to allow for top-ups.

The 15 888 domestic workers had been paid over R60 million. This showed that applications had been received. He knew there were those who had not submitted, and they would be the ones who would be sent SMSs.

The Chairperson asked Ms Moiloa if there was anything she wished to respond to.

Ms Moiloa referred to the 500 inspectors, and said not everyone would be completely ‘new.’ Some of the posts were promotional in nature. This meant some had been in the system already, and had already been trained on issues of hygiene.

The Chairperson asked Deputy Minister Boitumelo Moloi if she wished to make any inputs.

She said that the Portfolio and Select Committees needed to agree that policies and existing legislation needed to be aligned to COVID-19 regulations. It was not a matter of changing laws, but ensuring they were aligned to ensure the Department was functional during the process. This was particularly important, because disruptions appeared to be the new normal. Alignment needed to be speeded up.

It was necessary to address the lessons learnt from COVID-19. This, for example, could extend to the ‘new normal’ of remote working. The predictability and anticipation of human life disruptions in the future needed to be reflected in law and regulations, and this needed to be communicated. This meant that what was spoken about and presented in committee meetings needed to be aligned with the law, policies and regulations.

She said Mr Lamati had already dealt with issues of employers intending to put workers on leave instead of continuing to pay them.

The issue that was most worrying was the 750 employers whose applications had been declined -- there needed to be a follow up. Benefits could not just be declined due to incorrect banking details. If there was reason to believe there was an intention to defraud the system, law enforcement needed to be brought in to ensure the full consequences were felt. This could not simply be left hanging. Did errors on applications received mean a possibility of fraudulent claims? In the continuous reporting, this would be determined.

There would be a follow up at the next meeting on the figures of employers who had been paid on behalf of employees thus far. The Department needed to follow up and evaluate a report with the numbers of workers who had to be paid (outstanding payments), where the money had not necessarily been transferred to employees from the employers.

She pointed out a typographical error on one of the slides. “Offshoe” was meant to be “offshore.” This was referring to tax haven investments. It could also be referring to equity and investment spending. If this was referring to investments, it needed to be considered whether they were safe investments, given the current global crisis. There was a question of whether the returns would still be sufficient, given the strain on investment portfolios globally.

The Chairperson asked Minister Nxesi for input.

The Minister said he would respond to two issues.

On Dr Cardo’s statement on foreign nationals, it was important to remember they were foreign nationals in South Africa who were properly documented, and they qualified for benefits if they were legally employed. Unfortunately, those who were improperly documented workers could not be paid.

COVID-19 had triggered a debate on employment policy. The Minister of Finance, Mr Tito Mboweni, had spoken on employment billing in the media. It was important to anticipate what would happen in the future -- it could mean seven to eight million (50%) unemployment in South Africa. The Department was counting the losses over time. There would definitely be massive job losses, and many companies would not come back from the impact of COVID-19. The debate on how to mitigate this best was going on throughout government as a whole.

On the issue of the sustainability of the UIF, it depended on the actuaries’ calculations. Potentially, the UIF would not be that sustainable and would be forced to recall investments. He did not know how this would play out.

On the issue raised by Mr Nontsele of allegations that workers were being dumped from farms, the Department was following the matter and investigating it closely. Once they had all facts, action would be taken.

Regarding the responsibility of employers in terms of COVID-19, and the preparations for reopening, he reminded Members that on 17 March, the Department had come up with a directive that had been very clear on what was expected of employers. This had been for essential services, but now there was a new directive focusing on health and safety for all employers that were re-opening. For example, if they were employing more than 500 employees, risk assessments needed to be submitted to the Department. A health and safety committee needed to be established in terms of Section 19 of the Occupational Health and Safety Act at the workplace. The employer needed to notify all workers on the contents of the directive.

A directive had been signed on 28 April, saying an employee needed to notify their employer if they were sick and had to take sick leave. A manager needed to be appointed to manage the sick workers and address workplace concerns.

It was criminal of an employer to dump a sick worker. These were serious problems. The Department would rely on unions, socially responsible employers, and their inspectors to enforce this.

The following day, or on Sunday, employer expectations would be published by the Department in response to the regulations released by the Minister of Cooperate Governance and Traditional Affairs, Nkosazana Dlamini-Zuma. This would provide details of what was expected. Employers had an obligation to protect workers. When workers were sick, they also had an obligation to report this sickness and protect other workers.

Chairperson’s concluding remarks

The Chairperson thanked the delegates at the meeting. She hoped employers, employees, trade unions and committees would be vigilant on matters of employment and labour during the forthcoming period.

She commended bargaining councils who had applied on behalf of, and had paid, their workers.

The COVID-19 virus did not have a colour or gender. Profit could not be put before health during this period. She hoped that where those employers had been found to be fraudulent in their applications, Mr Lamati would ensure law enforcement would be able to do its work. It was a contravention of the law and the COVID-19 regulations.

She asked Minister Nxesi to provide the Committee with the directive when it was finalised, as some of the Committee Members were from industrial areas, such as Port Elizabeth, and it would be useful when going to the workplaces to make oversight visits. They could ensure employers were taking care of their workers and the safety environment.

There would be digital Committee meetings going forward, should meetings continue to be necessary. She wished to commend the patience and vigilance of the Members to continue oversight through the online medium.

The following week there would be a joint meeting. The Department would table its annual performance plan in line with the February 2020 budget. Nothing had changed in respect of the budget at the present time, so it would remain unchanged.

She asked the Minister and the Department to circulate documents on time so they could be circulated to the Committee Members in preparation for the meetings.

The meeting was adjourned.