Business, labour united in demands that Ters be extended
The government has put itself on a collision course with labour and business over its failure to extend the Covid-19 scheme that provides income relief to laidoff employees during the lockdown.
Labour and business representatives have used the words “blindsided” and “in bad faith” to describe the decision by the National Coronavirus Command Council (NCCC) to end the Covid-19 Temporary Employer/ Employee Relief Scheme (Ters) as of 15 September. The NCCC, which was formed in March, comprises at least 19 Cabinet ministers and co-ordinates government efforts to stop the spread of Covid-19.
The spat over Ters has the potential to fracture the relationship between labour, business and the government, which has mostly been cordial since the start of the lockdown.
The relief scheme, which is administered by the Unemployment Insurance Fund (UIF), was introduced in March to provide income support for employees who were temporarily or permanently sent home due to the pandemic.
It was open to all employees who, along with their employers, make monthly contributions to the UIF.
The amount of relief for employees is based on a sliding scale of between 38% and 60% of earnings — the lowest-paid employees are paid at the top of the scale. Employees receive a minimum monthly payment of R3,500 (tied to the national minimum wage) and a maximum of R6,730.
The scheme was initially intended to run for three months, from April to June — when
South Africa was under a hard lockdown that ravaged the economy and labour market. Further extensions of the state of disaster prompted the government to extend Ters from 16 August to mid-September.
Labour and business are unhappy
Labour federation Cosatu and the business lobby group Business for South Africa (B4SA) said they were informed on 30 October by the National Economic Development and Labour Council (Nedlac) that the NCCC had decided against further extensions of Ters. B4SA, grouping Business Unity South Africa and the Black Business Council, was formed to respond to the Covid-19 crisis.
Cosatu and B4SA said they were not consulted on the NCCC’s decision, despite negotiations with the government at Nedlac over the past two months to extend Ters.
What particularly vexes Cosatu and B4SA is that the NCCC’s move comes after President Cyril Ramaphosa made a commitment that the income relief for laid-off workers would be available until the end of the state of disaster, which the government has extended to 15 November.
Cosatu wants an urgent meeting with Ramaphosa and Employment and Labour Minister Thulas Nxesi to seek an extension for Ters. A spokesperson for Nxesi said he will formally respond to the matter later this week.
NCCC powers
Cosatu has gone further, questioning the NCCC’s powers and whether its mandate extends to Ters when it is usually tasked with lockdown rules.
“The NCCC has no [mandate] under the UIF Act to make any decision regarding the UIF’s operations,” Cosatu parliamentary coordinator Matthew Parks told Business
Maverick.
“The NCCC can be taken to court because it has no legal standing on the UIF. It is the minister [Nxesi], the UIF board and commissioner that can make such decisions.” B4SA supported Parks’s view.
“In ordinary times, these decisions [on Ters] should be made by the minister and director-general of the labour [department], based on consultations with the other social partners [labour, business and community partners],” it said in a statement.
“Unfortunately, as has been so often the case over the last seven months of the state of disaster, the minister and the director-general seem to be removed from the decision-making.”
B4SA believes that for as long as the national state of disaster and lockdown are in place, Ters is still required.
“There are still a significant number of employees who are vulnerable and whose employers are unable to implement special measures to ensure their safe return to work, or who are unable to return to work on a fulltime basis on account of the current government restrictions under the state of disaster.”
Parks said Ters should be extended until January 2021 because there is a possibility that South Africa might impose further lockdown restrictions on the movement of people and on public life — as has happened in such countries as the UK, France, Spain and Germany to counter a second wave of infections.
Cosatu wants Ters to be extended for employees who still cannot work under level 1 lockdown restrictions, such as those over the age of 60 and those with comorbidities.
Parks believes that extending Ters would cost the UIF about R3-billion to R4-billion a month.
Although the administration of the UIF is widely regarded as poor, with long delays between workers applying for benefits and receiving them, B4SA said the UIF can still afford to extend Ters.
The business group said research by the Nedlac social partners found that the UIF has a significant amount of illiquid investments amounting to R59-billion, which could be freed-up to fund benefits for employees.
There are still a significant number of employees who are vulnerable and whose employers are unable to implement special measures to ensure their safe return to work.