The operational inefficiencies and governance failures of the Unemployment Insurance Fund (UIF) are letting down hundreds of thousands of workers, many of whom are now facing a festive season without any income, says industry body Business Unity South Africa (Busa).

Busa says the UIF is “failing” in its primary function of paying unemployment benefits and argues that it should be placed under administration, with immediate effect.

“It is now almost exactly a year since the initial calls by organised business and labour for the UIF to be placed under administration. Despite promises of a major overhaul by the new Employment and Labour Minister Makhosazana Meth, nothing has changed.

“Workers and their employers remain frustrated by the inefficiencies and lack of support during times of need,” says Busa labour market chamber convenor at the National Economic Development and Labour Council (Nedlac) Jonathan Goldberg.

Busa posits that claimants are often shuffled from pillar to post, waiting months and sometimes even years to receive their benefit payouts.

It notes that, this year, the inefficiencies at the UIF were compounded by a legal wrangle that left the uFiling and the UIF App offline for several weeks.

The recent addition of new types of leave for employees, to be paid by the UIF, further burdens a system that is already operationally weak, it adds.

Busa points out that there are also reports that R26-billion has been allocated to labour activation programmes of dubious origin and impact, while the UIF continues to deny benefits to workers who contribute to the fund.

The weak operations and lack of governance, accountability and transparency underlines the necessity for active oversight of the UIF, from organised business and labour, who represent the funders and beneficiaries of the fund, the industry body says.

“Advisory boards at the UIF do not work, as the risks they highlight and their recommendations, are simply ignored.”

Busa acting director for social policy Sanelisiwe Jantjies, points out that, according to Statistics South Africa, half a million more people joined the ranks of the unemployed in the first six months of this year.

She notes that tens of thousands of people have, while still employed but at reduced work hours, are unable to receive the UIF assistance they need.

Jantjies posits that workers can lose up to two-thirds of their usual earnings and still not receive any assistance, from the UIF.

She adds that the Commission for Conciliation, Mediation and Arbitration (CCMA) Temporary Employer / Employee Relief Scheme (TERS) programme was established to allow companies to access funds from the UIF and Sector Education and Training Authorities (Setas) to support their workers while their businesses were turned around.

Jantjies expresses that this programme had the potential to avert job losses, yet the slow pace of processing means that most applicants are already retrenched and businesses closed before receiving any assistance.

Given this reality, she says, it is difficult to celebrate the recent announcement of an increase in the CCMA TERS budget to R400-million, when it cannot be accessed owing to the administrative issues within the UIF.

“Strained economic conditions and the resulting reduced work time and job losses demand a well-functioning, easily accessible insurance scheme for impacted workers. The UIF, in its current and proposed forms, is not that,” says Jantjies.

“It is time for the UIF to finally be put under administration – to rescue workers and companies from its weak governance and maladministration,” says Busa.