Times of Eswatini

Concern on political will to improve employees’ social security

- B< NOND8D8=O .8NENE

MBABANE – Is there any political will to improve the social security of employees, particular­ly those in the private sector?

This and other concerns have been raised by affected private sector employees and concerned emaSwati, because of the delay in the action of laws which will enhance their social security.

The workers are pained by the delay in passing two pieces of legislatio­n, which will speak to private sector employees’ social security. These are the Eswatini National Provident Fund (ENPF) Conversion Bill and the Employment Bill.

One of the key areas that have to be unlocked by these Bills and allow workers to leave work in a better position than today is the issue of severance pay or end-of-service pay.

The workers feel there is no political will to implement these two pieces of legislatio­n that are crucial in improving the social security status of the private sector, especially those employed in industries that pay low wages. These are employees affiliated with the Trade 8nion Federation of Swa]iland (T8COS:A).

Currently, most employees who are employed under the 1 industries, whose salaries are determined by the wages councils under the Ministry of /abour and Social Security are not entitled to severance pay at the end of their employment or pension because of the absence of the legislatio­n.

In Eswatini, it is not a requiremen­t in law for a worker to be pensionabl­e. The only requiremen­t is the provident fund contributi­on, and this has resulted in thousands of emaSwati retiring from work with their last wage and going home with nothing else. Sadly, the provident fund amounts to nothing because it comes as a lump sum, and is little, based on the contributi­ons.

The issue of non-payment of severance pay by employers was tested in court in 1 , when 9iolate Thring took Dunns Swa]iland /td to court. She was contending that the store should pay her severance after retirement.

The of severance pay at retirement was an amendment of 19 to the Employment Act of 19 . Thring work for the store and was not paid the severance allowance because she had retired and the store understood that the severance allowance should be paid when an employee has been unfairly dismissed or retrenched.

Argument

The argument was that the severance allowance could only be paid if the terminatio­n of employment was initiated by the employer, not when the employment contract was ending in terms of retirement.

The Industrial Court confirmed the position of the employer. The court ruled that the employer could not be punished with a severance allowance if the relationsh­ip ended based on retirement. The judgment highlighte­d that if the legislatio­n intended to ensure that an employee should be paid a certain allowance upon retirement for the services rendered as compensati­on for loyal service, they should have named it differentl­y. The judge instructed that the legislator should attend to the issue. Observably, it has been 1 years since the judgment was issued, and employees in the private sector are still worse off, because employers are not obliged by law to pay severance pay upon retirement. Surprising­ly, some are not paid the severance pay even upon retrenchme­nt or dismissal.

In the case of Thring, she sought an order inter-alia, declaring that the respondent was in breach of Section

(1) of the Employment Act No. of 19 , as well as an order directing that Dunns paid her a severance allowance amounting to E .

In her applicatio­n, she contended that she had worked for the respondent for

years as a regional sales manager when she retired. She was employed on November 1 , 19 and retired on February , 1 aged .

According to documented informatio­n, since 1 , employers and employees, through the /abour Advisory Board (/AB) have been attempting to amend the Employment Act of 19 , where they changed the term of severance allowance to service benefit. The calculatio­n remained the same, meaning it would be 1 days per each completed year minus one year. If you have worked for years, the service benefit would be calculated at 19 years. However, this amendment has not been passed into law since 1 .

:ith so much back and forth, workers strongly feel there is no political will to improve the status of over 1 workers employed in the 1 industries, the most vulnerable being those in security, manufactur­ing and retail. “It is very clear there is no political will from the side of government to improve the social security of private sector workers. :hat worries us is that government seems to be seriously dragging its feet when it comes to laws that would see monies getting directly into the pockets of workers,´ said the Secretary-general (S*) of the Trade 8nion Congress of Swa]iland (T8COS:A), Mdudu]i *ina.

Legislatio­ns

*ina said they believed the two legislatio­ns should be among those which government should be speedily pushing because they were crucial in terms of creating social stability in any country. He said social stability was a result of government putting in place a mechanism that would enable workers to feel secure after their working life. *ina said severance pay or service benefit allowance could make employees commit to their workplaces and not leave their jobs because they would not want to interrupt the continuity of the service benefit allowance.

The S* said such provisions of the Employment Bill would bring trust to workers that if they were employed, they would have job security. He said in the absence of such, the country would create a poor working class.

“Notwithsta­nding that you are employed, the outcome of your employment will produce a poor nation that would retire and become poor individual­s that would rely on the government for support. That creates social instabilit­y in any country,´ he said.

*ina said these legislatio­ns that include the payment of severance allowance, service benefit, and unemployme­nt benefit fund are not unique to Eswatini; it was happening in several other countries in the region, therefore, there was no way one could say it would scare investors among other issues.

*ina added that there was no reason to delay the legislatio­n because it was agreed between workers and employers that all these benefits should be legislated.

In South Africa, severance pay is primarily governed by the Basic Conditions of Employment Act (BCEA) and the /abour 5elations Act (/5A). The calculatio­n of severance pay typically depends on the specific circumstan­ces and agreements in place.

On the other hand, *ina decried the delay in the conversion of the ENPF to a national pension scheme. Currently, the ENPF is a defined contributi­on fund, meaning it is funded by employees and employers and has no control over the performanc­e of the scheme.

The contributi­ons in Eswatini are made by the employer and the employee equally then invested in the scheme. In terms of payouts, a defined contributi­on scheme is calculated based on the interests that would have been declared by the scheme in that particular year a member had been part of the scheme. 8nder the current set up a member can withdraw all of their savings.

The Bill, however, states that after the conversion to a pension fund, the ENPF will change to a defined benefit scheme. 8nder this form of pension scheme, at retirement, a member will receive a monthly payment until they pass on, as well as a lump sum payout which would be a certain percentage of the entire savings calculated on the years one had been part of the scheme.

8nder the defined benefit pension scheme, members are paid based on how many years they have been part of the scheme and the salary they have earned when they leave or retire. The pay-out secures income for life for the beneficiar­ies, which is the same formula of the PSPF.

The ENPF Conversion Bill was once tabled in 1 by the then Minister of /abour and Social Security, :innie Magagula, five days before the dissolutio­n of Parliament, but she quickly withdrew it. Since then stakeholde­rs are told it is at Cabinet.

 ?? ??
 ?? (File pic) ?? Minister of Labour and Social Security Phila Buthelezi.
(File pic) Minister of Labour and Social Security Phila Buthelezi.
 ?? (File Pic) ?? TUCOSWA Secretary General Mduduzi Gina.
(File Pic) TUCOSWA Secretary General Mduduzi Gina.

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