Citizen Reporter
2 minute read
6 Nov 2020
4:31 pm

Labour department ‘exploring alternative arrangements’ after Ters backlash

Citizen Reporter

So far, engagements with partners in labour, business and communities have not been able to find common ground.

Minister of Employment and Labour, Thulas Nxesi during the swearing in of the new Presidential Cabinet at the Presidential Guesthouse in Pretoria, 30 May 2019. Picture: Jacques Nelles

Employment and Labour Minister Thulas Nxesi is currently engaging with partners to find the best way to continue supporting industries that need the support of the Covid-19 Temporary Employer/ Employee Relief Scheme (Ters).

This after the announcement that the Unemployment Insurance Fund (UIF) would not provide Ters payments past 15 September. 

Nxesi said in a statement on Friday that the fund is “not run down in such a way that it cannot meet its future obligations to its contributors”.

However, he said the department is conscious that lockdown is still in force, even if it is at Level 1, which means there are still industries that need support.

“That is why we have been engaging with partners to find the best way forward.”

The National Economic Development and Labour Council (Nedlac) added its voice to the growing list of displeased stakeholders, employers and employees. 

But negotiating a future for Ters payments is a tricky business. 

Nxesi said that engagements with partners in labour, business and communities have not been able to find common ground “at this stage”. He did assure that engagements are continuing, “and in fact have been escalated to the leadership level”.

He confirmed that meetings are taking place “to explore possible alternative arrangements and options which would enable us to continue to provide some much-needed support to workers, while ensuring long-term sustainability of the fund.”

“Some of those engagements includes the meeting held this morning between the actuaries of the UIF, the PIC [Public Investment Corporation], National Treasury and representatives of both business and labour,” Nxesi explained. 

Nxesi isolated three key points that need to be taken into account while discussing the future of Ters payments. 

First, the fact that the UIF has delivered on its initial commitment of paying R40 billion over three months. Nxesi said this figure has since increased to payouts amounting to more than R51 billion. 

Second, that the UIF is a “contributory insurance scheme” responsible to the fund’s contributors, namely registered employers and employees. 

And third, that indications point to a significant increase in normal UIF benefit applications, due to the roughly 2.2 million jobs that have been lost so far. 

Nxesi has committed to keeping the country informed on what the department’s final decision will be.

Compiled by Nica Richards

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