Busa calls for UIF to be placed under administration

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JEREMY MAGGS: Business Unity South Africa [Busa] says it’s gravely concerned about what it terms ‘the systematic dysfunction’ at the Unemployment Insurance Fund [UIF] that’s putting the livelihoods of workers at risk.

Johnny Goldberg is Busa’s Nedlac [National Economic Development and Labour Council] market convener and joins me now at the top of the programme. Firstly, can you detail for us exactly why the systematic dysfunction, as you call it, within the UIF, is so concerning?

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Busa supports calls for the UIF to be placed under administration
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JOHNNY GOLDBERG: Well, in 2020 when Covid hit, we met regularly with UIF to bring in a scheme to pay out workers who were affected by the Disaster Management Act regulations in terms of no work, no pay. That system was called Covid Ters [Temporary Employer/Employee Relief Scheme] and it paid out some R64 billion over the last three years.

So we met weekly, daily, even on weekends to establish that system and at that stage we found that the current UIF systems of administration were problematic. This is back in 2020, call it May and June. At the same time, the late Rob Leigh convinced corporate South Africa to come up with a parallel system at UIF to help them with administration.

Well, the parallel system, because we knew billions were going be paid out, and that parallel system was designed and developed, and just before it was about to go live, it was jettisoned by senior officials. We never understood why.

We were very concerned that the system was going to take strain because it was already taking strain with normal payouts of people who were dismissed, maternity leave, paternity leave, and of course training layoff and layoff kinds of claims.

Read/listen: UIF battles with retrenchment and maternity claims [Aug 2021]

So we worked with the system and UIF to, of course, administer the payments out. There are still thousands and thousands of people who haven’t been paid Covid Ters, and as we know, Ters has gone. We then also invented another scheme called Wabu [Workers Affected by Unrest], those employees who were affected by the riots, and there are also thousands and thousands of employees who haven’t been paid out. We know the riots were sometime back and effectively that’s a problem.

We’ve been meeting biweekly with the senior officials, including the commissioner from UIF, and countless times promised obligations, system renewal, system improvements were not met, and the situation is not improving.

So as a result of that and staying in these meetings trying to get it right, we most probably stayed in these meetings for 12 months too long.

But, of course, we were always hopeful that there’d be some internal change. Now with all the press release and also the dysfunctionality that still continues, we decided it’s time to call for proper administration to have a proper look under the bonnet to see what’s going on.

JEREMY MAGGS: What happens if the status quo continues?

JOHNNY GOLDBERG: I think workers and employers should consider establishing their own fund. I don’t like these kinds of civil disobedience type approaches, but that’s not farfetched. Cosatu [Congress of South African Trade Unions], all the trade unions that I’m dealing with Fedusa [Federation of Unions of South Africa], Numsa [National Union of Metalworkers of South Africa] are all unhappy about the current status quo because they’re dealing with the brunt of their workers not getting the money.

On the WhatsApp groups we belong to, there are regular cases where the UIF money for maternity leave is paid out only when the child’s walking.

That might sound funny, but it’s not funny for the female employee who needed that money when she took four months unpaid maternity leave, that’s when she needed the money.

JEREMY MAGGS: Is this a problem of systems or corruption?

JOHNNY GOLDBERG: I cannot say there’s corruption because I don’t have direct evidence. But I can’t understand why you would jettison a free system coming in from business to support your system to make payments out more efficient.

Read: Give us our UIF money [Aug 2021]

Two, there have been multiple allegations of corruption and evidence of corruption seen by the SIU [Special Investigating Unit] in respect of officials at UIF around payment out of Ters and other particular payments. So effectively that needs to be investigated, including employers who have not used the system correctly.

Read/listen: UIF: 115 Ters fraud cases still under investigation

But the chaos that reigns is even with the SIU and other auditors auditing the money that was paid out, there’s a different calculation at UIF and there’s a different calculation at the auditors and the SIU. You must know what chaos that caused. Remember in 90-odd percent or more than 99% of the cases the employer paid out this money to employees on a calculation that is provided by UIF.

Read:
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JEREMY MAGGS: Is it actually worth, as you put it, looking under the bonnet, is this a system that can be fixed?

JOHNNY GOLDBERG: I think if the receiver of revenue came in, I think it’s fixable. I think it’s fixable quickly.

JEREMY MAGGS: What would it take though, in terms, again, going back to your analogy of looking under the bonnet, what’s the immediate fix here? What would your recommendation be in that respect as you talk about putting it under immediate administration?

JOHNNY GOLDBERG: My recommendation is that the president does that and gets a competent group of people to go in there, investigate and fix the systems as they investigate because again, they need to investigate the investments that have been made because the allegations are many of those are dodgy. That’s the allegation that’s been made.

We need to look at that. That’s workers’ and employers’ money. They need to look at the systems and start fixing the systems as quick as possible. We know that business would come to the party and even help. They need someone who really has got a handle on systems and collection and payment out of collections like the receiver of revenue.

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We’ve had problems with the payment out of social grants, but they’re fixed very quickly. Now, social grants payments are much, much more money and it’s much wider and much more difficult to disperse it. Effectively, if we can get that half right, then we need to get UIF right.

JEREMY MAGGS: Along with the union’s, Business Unity now raising this red flag, do you believe that your concerns are being listened to by government and particularly the Minister of Employment and Labour [Thulas Nxesi]?

JOHNNY GOLDBERG: I think it will be and we see the minister of employment and labour taking decisive action against senior officials at UIF and within the department in respect to the allegations that have been made around the billions that were allocated to a project without any track record. So I think yes, we are going to see significant movement.

JEREMY MAGGS: Johnny Goldberg, thank you very much indeed.