All workers can now benefit from UIF relief scheme

Distressed workers not registered with the UIF can now apply for special Covid-19 relief benefits, and they no longer have to depend on their employers to do it on their behalf.

Workers in precarious employment as well as domestic and farm workers who had been excluded from applying for benefits from the Unemployment Insurance Fund (UIF) have secured a victory after challenging the unfairness of certain rules governing the temporary employer and employee relief scheme (TERS). 

Facing an urgent court application that was to be heard on 28 May, the Department of Employment and Labour has opted for a settlement and made amendments to the TERS directives. It has broadened the definition of an eligible worker from being a UIF contributor to every worker affected by the Covid-19 lockdown, irrespective of whether or not their employer had complied with the laws regulating the fund.    

The application was brought by the Casual Workers Advice Office (CWAO), an organisation that provides free advice, education and assistance to lowly paid, precarious workers who need representation and support. It was supported by the Izwi Domestic Worker Alliance and the Women on Farms Project. 

The organisations welcomed the decision to amend the regulations, saying: “Workers who had previously been excluded from the scheme because their employers had unlawfully failed to register them for UIF will now qualify for the special benefit. Domestic and farm workers have been among the worst-affected groups of workers by the prior exclusion of non-contributors from the scheme, due to the precarious nature of employment in these sectors and the high levels of non-compliance from employers. Many industrial workers in precarious forms of employment have suffered a similar fate.”

For two months, excluded workers have been without an income. On average, the CWAO received 700 phone calls a week from distressed workers throughout South Africa about retrenchments, lay-offs, dismissals and UIF issues related to the lockdown.   

Although the organisations welcomed the decision as a victory for workers, they say that “the amendments to the [Covid-19] TERS directive come after an unnecessary slow and protracted process”.

Unfair discrimination 

The country went into lockdown at midnight on 26 March after a national state of disaster was declared to curb the spread of Covid-19. An inevitable consequence of the lockdown has been the closure of businesses that were deemed non-essential, which has had a direct impact on employees’ ability to earn an income. 

“Many were dismissed or laid off on account of the lockdown, while others had their working hours [and thus their salary] significantly reduced,” said CWAO director Ighsaan Schroeder in a founding affidavit attached to the urgent application.

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To mitigate the loss of income and the difficulty facing workers, Minister of Employment and Labour Thulas Nxesi introduced the TERS benefit. Employers who had to shut down their operations entirely or in part were mandated to apply for it on behalf of their employees. Depending on an employee’s salary, they could claim for an amount ranging between R3 500 and R6 700.

For lawyer Kelly Kropman, whose firm Kropman Attorneys represented unregistered workers in the matter, the TERS benefit constitutes social assistance and a right to social security that all workers should enjoy. She says it is unfair, irrational and unreasonable to exclude certain workers from accessing the scheme and cannot be justified. 

“We have the UIF, we have the TERS regulations as a way of protecting workers, but the state has decided to delineate between UIF-contributing workers and non-contributing workers irrationally,” said Kropman. “You could have been employed for one hour and then registered on UIF and then be able to get your full benefit of the TERS scheme. But you could work for 10 years thinking you were contributing to the UIF and in fact you weren’t, and you have no recourse. We are looking at the emergency relief that needs to be afforded to workers who, for the last eight weeks, have not been able to access any funds.”          

At the mercy of non-compliant employers 

Although the scheme was widely welcomed by organised labour and activists as a necessary relief measure during the income crisis, some activists like Schroeder said it had material flaws that went against its intended purpose, which was to benefit all distressed workers. In court papers, Schroeder said there were two fundamental flaws that needed to be rectified for the scheme to achieve its aim. 

The first, he said, was that the scheme’s reach was irrationally limited by allowing only employers registered with the UIF to apply on behalf of their employees. Employers that have flouted the law and abdicated their legal responsibilities in terms of UIF laws could not apply. This meant that workers, through no fault of their own, who would ordinarily qualify to get the benefit would miss out because of their employers’ negligence. 

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According to the labour department’s 2016-2017 annual report, almost 40% of employers in South Africa were not contributing to the UIF. The majority of workers in precarious employment are not registered by their employers with the fund despite the law saying they should be. Domestic and farm workers, taxi drivers, construction workers, security guards, restaurant workers and many others have had no access to social relief because the department’s directive expressly excluded them. 

Some workers have claimed that they have not received any form of UIF payments. They say employers claim to have registered them with the UIF, but they have not received any money for the past two months of lockdown. 

In Port Elizabeth, some workers went on strike to demand UIF payouts. The Herald newspaper has reported that employees of Lear Corporation, a vehicle components manufacturer, have refused to return until they are paid. The major problem, however, is companies that do not pay this benefit to workers on time, even when they have received payments from the TERS. 

Getting direct access

The second issue raised by the CWAO before the regulations were amended was that employers had to apply on behalf of their workers. In cases where employers failed to apply, workers were without alternatives to access any benefits other than litigation, which is an expensive option that takes a long time to conclude. 

The inability of workers to apply directly denied them access to much needed relief. According to a report by the University of Johannesburg’s Centre for Social Change on which the CWAO relied in its court papers, of the 40 companies the centre had surveyed, only nine had applied for their workers to receive the TERS benefit.   

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Having been served with court papers and facing a hearing, the government gave in and amended the directives to officially allow workers to apply directly if the employer has failed to do so.

However, the problem for the applicants is that “as of today, there is still no clear information on how workers can apply”, said the CWAO. It added that this needs to be addressed urgently to accommodate the large number of additional workers who now qualify as a result of the TERS amendments. It also warned that should the department fail to immediately establish a viable channel for individual applications, many vulnerable workers will continue to face extreme poverty.

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