The Unemployment Insurance Fund (UIF) says public governance responsibilities are best achieved through continued engagement, constructive dialogue and institutional processes through which evidence is considered and policy positions are refined in the interest of the public.

Withdrawal from these forums limits opportunities to influence governance outcomes, it states in response to business organisation Business Unity South Africa’s (Busa’s) withdrawal of its representative from the UIF board of directors and UIF-related structures at the National Economic Development and Labour Council (Nedlac).

Busa earlier this week said the process to reform the UIF has stalled over the past two years, with no clear commitment to ensuring the effectiveness of the proposed task team that must develop a credible reform pathway for the UIF.

“The UIF remains deeply dysfunctional, characterised by persistent operational failures, governance weaknesses, delays, unresponsiveness and a drift away from its core mandate,” Busa said.

In response, the UIF says it has advanced proposals aimed at strengthening institutional governance and improving labour market outcomes.

These proposals include the need to improve employer compliance with the Unemployment Insurance legislative framework to protect contributors and beneficiaries, strengthen the financial sustainability of the fund and enhance service delivery, it says.

It adds that it has also advocated for policy reforms that would enable government institutions to respond more rapidly and effectively to internal and external economic shocks affecting employment, while supporting interventions that preserve jobs, facilitate labour market participation and reduce unemployment.

However, the UIF needs further information to engage with the proposals put forth by Busa, specifically proposals that would introduce new processes that would change the benefit processes, as this is not in line with the UIF process, it says.

“The Nedlac task team was established to provide a platform for government, organised business, organised labour and the community constituency to engage constructively on matters affecting the UIF and the broader labour market,” the UIF says.

The UIF has proposed that the task team's terms of reference be reviewed to better reflect current labour market realities, because the committee was initially established during the Covid-19 pandemic.

Additionally, to enhance transparency, the UIF would publish the names of Labour Activation Programme (LAP) partners and present the LAP Impact Report to Nedlac, once it is finalised during the current financial year.

“The fund acknowledges concerns raised regarding the frequency of reporting to the task team.

“However, the reports that form part of quarterly performance reviews are subject to rigorous internal quality assurance and validation processes and requiring these reports on a monthly basis may compromise their quality and reliability,” the UIF says.

Further, the UIF proposes that the Nedlac task team prioritise strategic issues, including improving the efficiency and timeliness of benefit payments by addressing the root causes of delays, particularly employers' failure to submit accurate and up-to-date employee declarations.

It also suggests that the task team prioritise strengthening initiatives to expand access to UIF services and improving communication strategies to ensure workers and employers are better informed about available services.

Additionally, it proposes that the team prioritise supporting initiatives aimed at revitalising the labour market in response to persistently high unemployment and evolving economic conditions.

The UIF also proposes that the task team prioritise exploring strategies to improve the resilience and labour intensity of the South African economy in the face of global economic pressures.

“Disengaging will not help to address the challenges facing the Fund or the South African labour market. These challenges require continued collaboration and focused discussions among all social partners to develop practical and sustainable solutions,” it says.