Get more Mail & Guardian
Subscribe or Login

Covid-19: ‘Unemployment benefits will not be extended to the informal sector’

Unemployment Insurance Fund (UIF) benefits will not be extended to cover workers in the informal sector in the wake of the national lockdown declared to curb the spread of the coronavirus.

This is according to Employment and Labour Minister Thulas Nxesi, who announced that a new national disaster benefit will be launched through the UIF by his department to mitigate the effect of the lockdown on workers’ pockets.

“The issue of the informal sector, the workers who are not registered with the UIF or the Compensation Fund, how will they be assisted? Unfortunately, from our side we [are not] able to deal with this matter, because it is beyond this particular legislation,” Nxesi said at an interministerial press briefing on Tuesday.

According to Statistics South Africa’s most recent quarterly labour force survey, there were almost three million workers in the informal sector at the end of 2019. This is almost 18% of the total employed workforce in the country.

On Tuesday, Nxesi said these workers will be assisted through the safety net announced by President Cyril Ramaphosa on Monday night

“This is still a work in progress,” Nxesi said.

The minister provided more details on how the UIF will be used to help workers at companies that will have to shut down during the 21-day national shutdown. 

Emergency personnel, health workers, the army and police, and companies involved in production of food and medicine will be declared essential service workers and will be exempt from the lockdown.

Millions of claims

Nxesi noted that “millions of workers that are going to be claiming from the UIF”. This means that the claims system will have to be decentralised.

To do this, the department has decided to advance the money to companies and bargaining councils to allow them to pay those employees, Nxesi said. There will be strict audits “after the big storm, so there is no abuse of the money”.

These benefits will be calculated on a scale, and will not be less than the R3 500 minimum wage.

“The administrative capacity we have at the moment never anticipated these huge numbers, which are likely to come,” Nxesi said. “But if the companies come to the party, the bargaining councils come to the party, we think that we will be able to deal with that influx.”

The Temporary Employee Relief Scheme — which is funded by the UIF to assist distressed companies through subsidies — will be “expanded and expedited”, Nxesi said. Companies will be able to draw from benefits through this scheme, provided they embark on turnaround programmes overseen by the Commission for Conciliation, Mediation and Arbitration.

Workers with employers that are not UIF compliant cannot be “punished” because of this, Nxesi said.

The minister would not be drawn on the exact amount in benefits workers and companies will be allowed to claim. “We cannot just pronounce figures and raise expectations and then we cannot fulfil that later on [if] we find that it is too expensive.”

He said the department’s actuaries are “crunching the figures” and meeting with all the National Economic Development and Labour Council (Nedlac) stakeholders to determine the UIF’s capacity to effect these payouts.

A dedicated line will be launched for workers and employees seeking information about these interventions, Nxesi said.

“As a department and Nedlac, we have reminded the parties of their responsibility in terms of the Occupational Health and Safety Act, in terms of them taking all measures to protect the health of their employees,” he said.

More details about the national disaster benefit are expected to be announced on Wednesday.

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

Coko vs S ruling: The case against a subjective test...

Acting judge Tembeka Ngcukaitobi’s acquittal of a rape suspect has raised controversy, but legal experts say the fault lay with legislators and not the court

DA’s egregious sexual harassment case finally begins

The party is accused of protecting a councillor, who’s also implicated in R1.2m graft

More top stories

Lucas Radebe: ‘My football career began behind my parents’ back’

Soccer legend Lucas ‘Rhoo’ Radebe is a busy man, but he made time in his hectic schedule to speak to Ntombizodwa Makhoba about his fondest childhood memories, how his soccer career began, and, as a father of eight, his legacy

Coko vs S ruling: The case against a subjective test...

Acting judge Tembeka Ngcukaitobi’s acquittal of a rape suspect has raised controversy, but legal experts say the fault lay with legislators and not the court

Defend journalists and media freedom in Eswatini

Journalists are censored through cruel and illegitimate detention, torture and the removal of means to disseminate information to citizens crying – and dying – for it

It’s safe to open the beaches, says UPL after chemical...

Agrochemical producer UPL said it has paid R250-million in chemical spill clean-up
Advertising

press releases

Loading latest Press Releases…
×