Nedlac to discuss UIF’s capacity to pay out funds

The National Economic Development and Labour Council (Nedlac) will tomorrow discuss the Unemployment Insurance Fund’s financial capacity to continue paying Covid-19 temporary relief benefits in the long run.

Employment and labour minister Thulas Nxesi, who will lead the department’s delegation to Nedlac, said they needed to guarantee the sustainability of funds beyond June.

The UIF has disbursed more than R11.3bn in the Covid-19 temporary employer/employee relief scheme (Ters) to date.

The Covid-19 Ters, administered by the UIF, was established by Nxesi on March 25 to provide relief to those in formal employment expected to lose their income due to the lockdown.

Nxesi said he would ask social partners at Nedlac to work with the government to resolve existing and anticipated challenges.

“We will encourage employers to consult broadly when it comes to major decisions with an impact on job security such as intentions to lay off workers,” he said.

“Retrenchments must be the last resort out of all the available remedies to the challenges we face.

“We also expect employers to fully co-operate with labour inspectors who continue to enforce workplace regulations to protect the welfare of workers.”

The department expects social partners at Nedlac to pledge their commitment and support for “return-to-work strategies that place the safety and welfare of workers above any other interest”.

The minister said the social partners were going to Nedlac to collectively explore opportunities to address challenges presented by the coronavirus.

On Monday, Cosatu called on finance minister Tito Mboweni to issue an emergency directive allowing employed workers who were members of retirement funds once-off access to a part of their savings, to supplement the Ters benefits.

The trade union federation warned that if urgent additional income during the Covid-19 pandemic was not secured for working-class families, it might result in high levels of indebtedness and social unrest.

Since the lockdown began in March, many employees have had their salaries cut — some by more than half.

Others have had their contributions to retirement funds and medical aid, among other employment benefits, withheld as companies struggle to keep afloat.

Last month, President Cyril Ramaphosa announced a R500bn social and economic relief package for the country.

“While the easing of the nationwide lockdown regulations to alert level 3 would see the economy gradually opening, the negative impact of Covid19 would continue to be with us for a foreseeable future,” Nxesi said.

“We expect an increase in labour-related disputes due to retrenchments and terminations of employment as employers try to stay afloat.

“This would undoubtedly place further strain on our ability to meet our social security obligations to the public,” he said.

According to projections by the Treasury, SA could lose up to seven-million jobs and see unemployment shooting up from 29.1% to 50%.

It projected the economy would contract 6.4%.