The COVID-19 pandemic saw the Department of Employment and Labour dig deep into its pockets as it attempted to provide a safety net for those adversely affected by loss of jobs due to the associated lockdowns, says Minister Thulas Nxesi.
“As government, working with social partners, we were able to mitigate some of the effects of the pandemic and the lockdowns,” said the Minister on Friday.
Mitigating effects of lockdown
Distributing UIF benefits during lockdown
Nxesi made the remarks during the department’s webinar on its role and interventions to mitigate the worst effects of COVID-19 on the labour market.
Leveraging its social security institutions – the Unemployment Insurance Fund (UIF) and the Compensation Fund (CF) – and working with business and labour, Nxesi said the department was able to build a massive network to distribute the benefits on an unprecedented scale.
“At the same time, we used our health and safety measures to support our social partners at Nedlac [National Economic Development and Labour Council] drafting COVID-19 health and safety directions, as well as to inspect and enforce the new regulations alongside health and safety regulations.
“This we achieved with a reduced budget, as the pandemic and economic trends adversely impacted government revenue.
“To enforce health and safety compliance, despite the COVID-19 conditions, over 31 000 health and safety inspections were conducted for the period 1 April 2020 to 31 March 2021,” Nxesi said.
The department has appointed an additional 500 occupational health and safety (OHS) inspectors in the past year, which Nxesi said was a welcomed addition in the battle against COVID-19.
During the current financial year, inspectors are expected to conduct over 96 000 OHS inspections.
In April 2020, the UIF began paying out the Temporary Employer/Employee Relief Scheme (TERS) benefits.
By 30 March 2021, Nxesi said, TERS benefits had been disbursed to 267 000 employers and 5.4 million individual employees at a cost of R58 billion.
The Minister said the pandemic also exposed the inadequate capacity of the State on many fronts.
“The payment of COVID TERS benefits by the UIF quickly became a target of fraud and corruption.
“We are therefore grateful to the office of the Auditor-General for their assistance in analysing systemic weaknesses requiring strength in controls, and to the SIU [Special Investigating Unit] for investigating possible fraud and corruption.”
The UIF’s “follow the money” strategy to audit all employers that received the COVID-19 TERS funding also added a layer of security.
COVID-19 TERS funding
These interventions saw auditors verify payments of R16 billion and traced R228 million that was fraudulently claimed by employers.
“They are not yet done. There are 121 employers that are already been handed over to the Hawks via the Presidential Fusion Centre,” Nxesi said. Of these, 16 have already appeared in court.
The pandemic saw the department exposed to the shortcomings of the UIF as a social safety net, particularly around the social sector.
“We recognise the role of the CF [Compensation Fund] and the licensed mutual insurance companies which have paid for medical treatment, and the replacement of the lost income for 12 500 claims over the last 12 months,” Nxesi said.
— @SAgovnews (@SAgovnews) June 11, 2021
Extra caution to prevent fraud
The Compensation Fund and mutual assurance companies – Rand Mutual Assurance and Federated Employer’s Mutual Assurance – have joined forces to contribute R1.35 billion to procure vaccines for workers without medical aid cover and UIF pensioners.
Nxesi, however, warned that the department needs to take extra caution in ensuring that systems are in place to prevent further fraud and corruption.
“We must be extra careful on social dialogue. The pandemic has also taught us the value of social dialogue, a core value upon which South Africa’s democracy was founded.”
Nedlac, he said, also continues to facilitate social dialogue around issues of growth and jobs, and monitoring the implementation of the Presidential Jobs Summit commitments.
“Also, there will be facilitated input by the social partners in government’s Economic Reconstruction and Recovery Plan (ERRP), which is set to lift us out of the economic doldrums.”