Employees whose companies deducted unemployment fund deductions from their salaries and did not forward payments to the Unemployment Insurance Fund (UIF) can breathe a sigh of relief.
This is because the fund will still pay the affected workers the temporary employee relief (TRT) scheme benefit and then recover those monies from employers.
“This was not their own making. We have to pay them and take issue with the employers. We will raise debt so that they know how much they owe the UIF,” Employment and Labour Department director-general Thobile Lamati said on Wednesday.
Lamati made the statement when responding to a question during a joint virtual meeting of two parliamentary committees.
Minister Thulas Nxesi said they had flagged non-compliance with employers when processing the claims for the TER scheme.
Nxesi said there were instances where deductions for UIF were made and not forwarded to the fund.
There was also understating the size of the payroll for purposes of UIF deductions and claiming for a large number of employees. Nxesi said such claims were supposed to be repudiated and fraud investigations instituted.
“We return them and talk to them. We understand the sensitivity of this period,” he said.
“We have an undertaking that the sins of the employers will not be visited upon the employees. The benefits will be paid out,” he explained.
Nxesi encouraged defaulting employers to use the opportunity to regularise their situation.
“It will save us a lot of trouble down the line,” he added.
Lamati said they were engaging companies that submitted applications with incorrect information.
“The onus is on the employer to provide the correct information. We would like them to do so because if they do that they show solidarity to their workers,” Lamati said.
Nxesi revealed that R1.6 billion from the TER scheme 37 companies and 606 000 workers assisted.
“We continue to pay the claims that are coming in. We are finalizing applications that will be paid out shortly,” he said about the entity that has 1.8m employers and 8m employees in its books.
Nxesi said they were refunding bargaining councils that have paid out of their funds R150m to affected workers.
“We are in the process of reimbursing this amount from UIF. We encourage more employers who can pay the workers to do so and claim from the fund.”
The minister also warned about massive retrenchments and scores of companies likely to go under after the Covid-19 pandemic.
“It is a fact that a number of companies, after Covid-19, might not be able to recover. They might take up to six months to recover,” he said.
“Some might take a year. Some might not come back and be able to operate,” Nxesi said.
“The reality is that there are going to be massive retrenchments. We might add one million or two to the high unemployment which we have in the country,” he said.
The minister painted a serious situation that might result in lots of companies applying for the temporary employee relief (TER) scheme.
“The fund we have will be under strain. At some stage we will have to rationalize,” he said.
Nxesi noted with concern that some were not complying with regulations and did not want to submit claims on behalf of their workers, something that caused the government to amend regulations to compel them to do so.
“We expect more numbers to come after the lifting of the lockdown.”
Nxesi also anticipated a spike in thousands of disputes to be lodged with the CCMA arising from Covid-19.
“Some employers have already informed workers about Section 189 in terms of retrenchments. There is a lot on a plate to deal with.”
He made comments as the Unemployment Insurance Fund (UIF) paid out R1.6 billion in TER scheme benefits as from Tuesday.