Nonprofit organisation Business Unity South Africa (Busa) says it is “gravely concerned” about the systemic dysfunction at the Unemployment Insurance Fund (UIF), which it believes is putting the livelihoods of workers at risk.

“The ineptitude of the UIF to fulfil its promises has led to workplace disruption and has a negative impact on the employer-employee relationship. Of major concern is the fact that calls for the authorities to intervene have gone unheeded,” Busa notes in an October 4 statement.

Busa says it has been engaging the government, together with labour, at the National Economic Development and Labour Council (Nedlac), to try and resolve the serious systemic dysfunction and alleged corruption in the administration of the UIF office.

These engagements have been continued for the past three years, but Busa says no progress has been made owing to the inability or unwillingness of UIF commissioner Teboho Maruping to address systemic issues.

Busa says it has also written to Employment and Labour Minister Thulas Nxesi several times, but has not received any positive responses.

“The systemic issues at the UIF office have been publicly revealed recently by news that questionable investments have put at risk billions of rands that should be allocated to workers in distress. This, especially at a time when poor economic conditions owing to loadshedding, escalating inflation, and diminishing consumer demand, are likely to lead to employees being placed on short-time or potentially even laid off. For impacted individuals, the safety net afforded by the UIF benefits scheme is not guaranteed,” Busa states.

The organisation adds that the systemic dysfunction has also resulted in lengthy delays in application processes, including via online systems, receiving incorrect information, or constant changes in requirements. Payments, when finally processed, are typically received long after the period of lost earnings, providing little financial support when needed most, it explains.

Special schemes, including the Covid-19 Temporary Employee/Employer Relief Scheme, Workers Affected by Unrest, and others designed to support affected individuals, while positive in their intention, remain to a significant extent ineffective as hundreds of thousands of applications remain unresolved, Busa says.

“Recent media reports highlighting the depth of corruption that has taken place within the UIF are of major concern. We have consistently urged that the systems be modernised to identify and limit corrupt practices, including within the ranks of the UIF,” Busa adds.

Central to this is the implementation of effective information and communication technology systems that contain risk mitigation measures while enabling simple, efficient, and timeous service delivery to enable workers to access funds when they are in periods of unemployment or on reduced earnings – such as during maternity – and not many months later, if at all.

“It is clear the current management within the UIF is unwilling or unable to execute their mandate and has embarked on ill-considered systems, such as the eCompliance platform, which have failed and introduced risk in the business landscape, both for companies seeking assurance about the compliance of their providers and for the protection of workers,” Busa says.

It believes that a failure to address the systemic issues, including alleged corruption, will result in increased frustration among employers and employees, and in greater financial losses that could impact the overall sustainability of the fund.

Busa says it supports the call by other business organisations and organised labour to have the UIF put under immediate administration.

“We remain committed, as we have been over the past three years, to providing support, advice, and expertise to drive a clear modernisation programme that addresses the changing needs of the new world of work and ensures efficient, cost-effective, and timely service delivery to beneficiaries.

"The resolution of the systemic issues in the UIF architecture is of critical importance to workers and employers alike. Business stands together with those seeking an urgent resolution to the problems in the UIF system and calls on the minister to act with speed,” Busa states.