Southern African Catholic Bishops' Conference
Submission on the Unemployment Insurance Fund Bill
- The Southern African Catholic Bishops' Conference welcomes this opportunity to make a submission on the Unemployment Insurance Fund Bill. We see this as an important piece of legislation in the fight against the dehumanising effects of poverty on South African society.
- At the end of the 19th century, Pope Leo XIII saw the negative effects of industrialisation and in his encyclical Rerum Novarum clearly stated that it was incumbent on the State to try to alleviate the suffering caused by poverty where it could. The negative effects of development have exacerbated the problems that existed in his time and thus calls on the State to assist those who are unemployed have increased. We would thus like to welcome all of the positive steps that the government is taking in this regard.
The proposed Bill intends to widen the ambit of employees contributing to the fund, which we welcome. It is encouraging to see the government trying to address the social and economic problems faced by unemployment. We commend all moves to ensure that those who are lower wage earners will benefit from the proposed remuneration.
Further advancements include de-linking maternity and unemployment benefits so female employees are not unfairly disadvantaged by having to draw on their unemployment benefits.
The coming years are likely to see a marked increase in the number of AIDS orphans and the Church welcomes Part E (sections 27-29), which deals with adoption benefits.
This Bill shows some changes from the one submitted for comment in March 2000. We would like to commend the drafters for taking into account some of the suggestions made to improve the Bill.
In particular, we welcome changes to :
- The overall drafting that has cleared up some of the ambiguities of the previous draft;
- The definition of "employment office" to include agencies designated by the Director-General;
- Section 4 which requires parliamentary appropriation;
- Section 14 which removes the denial of benefits for periods when the contributor is outside of the Republic;
- Section 24 which extends the maximum period of benefit for maternity leave;
- Section 34 which exempts benefits from taxation;
- Section 36 which reduces the maximum period of suspension from 12 to 5 years.
3. Areas of Concern:
3.1 Having said this, however, there are some sections in the Bill that are a cause for concern and it is these that we now turn our attention to.
Exclusion of State Employees
- As noted earlier, many of the inconsistencies of the earlier draft have been corrected. There are, however, some inconsistencies that still exist. We would draw your attention to the inconsistencies in section 30 regarding the right of dependants to claim UIF benefits. While section 30(1) mentions "spouse or life partner" the subsequent references to "life partner" in section 30(2)(a) and 30(2)(b) have been omitted.
- Domestic workers
- Domestic workers comprise a considerable number of workers in South Africa. Historically, their gender, race and economic status have disadvantaged them. The Bill explicitly intends to redress the situation of the most vulnerable in our society, and the exclusion of Domestic Workers (section 3(1)(e)) is a serious and potentially unconstitutional omission. It would seem anomalous that domestic workers are included in the Basic Conditions of Employment Act 2000, yet are excluded, albeit temporarily, from this Bill.
- We recognise that there are administrative difficulties around the collection of contributions from this sector, but this should not preclude them from inclusion in the fund. We propose that domestic workers are included in the Bill, but that there are transitional mechanisms in place to deal with their inclusion, pending the outcome of a further investigation. This investigation must be completed within 12 months. Should the new mechanisms not be in place at the end of the twelve-month period, the transitional arrangements should continue to be enforced until such a time as the new arrangements are finalised.
- Furthermore, we suggest that the investigation into establishing the requisite structures be widely advertised and that domestic worker's organisations, as well as other relevant parties, be consulted in this process.
- We are also concerned that employees who are employed for less than 24 hours a month by an employer, but who work for a number of people, will fall foul of section 3(1) (a). It is important that this issue be resolved so as not to unfairly disadvantage those, for example domestic workers, who have multiple employers. This should form part of the investigation mentioned above.
Section 3(1)(c) explicitly excludes employees of both national and provincial governments from receiving UIF benefits. The State employs a significant number of people and it would seem unfair to exclude them on the basis that inclusion would create a drag on the fiscus and that they have access to the State pension fund and are given severance packages.
While we understand that there are serious cost implications for including the public sector, this should not stand in the way of the government’s duty to assist those who are unemployed, regardless of which sector they were employed in.
Given that the State is less likely than other sectors to embark on massive retrenchments, there will be a certain amount of stability leant to the fund by the inclusion of the public sector. It is also important to have as wide a contributor base as possible and to this end the public sector could greatly expand contributions to the fund. For these reasons we would urge the Committee to re-consider the exclusion of public sector workers from the Bill.
With the current levels of unemployment being as high as they are, we would like to see the State playing a more proactive role in the area of contributions if the resources of the fund become too strained. In this respect we would like to propose that section 10 includes a positive duty on the State to ensure that the fund is maintained by the State.
Application for Employment Benefits
There is some concern about the way in which section 17(5) has been drafted. The previous draft stated that: "the claims officer must, if the defect in the application can be remedied, advise the applicant how to do so" (section 9 (5)(a)).
This has been changed to "the claims officer must advise the applicant in writing that the application is defective and the reasons why it is defective" (section 17(5)).
In a country with high unemployment and low literacy levels, there is a very real possibility that many people may be denied benefits due to a lack of understanding on how to remedy problems in their applications.
We therefore propose that the wording of old section 9(5) be used in section 17(5).
Monies paid in error
Section 35 deals with monies paid in error. Those paid in error must be given adequate time to respond to demands made, and we would propose that in section 35 (2) the 30-day limit is changed to 60 days. Thirty days is not a reasonable time period to respond given that people may live in rural areas and thus have limited access to the means necessary to respond in that time.
In addition to this, we propose that a time-limit be set on the amount of time the State has to recover monies paid in error. The burden of recovery should be borne by the State and not the beneficiary of UIF. People receiving UIF are already economically disadvantaged. In many instances the money will be spent as it comes in. Demanding that the money be speedily repaid might have serious economic implications for the beneficiary. Added to this, unless a time-limit is stipulated, beneficiaries may be required to pay back money they received years ago. For this reason we propose that a time-limit of one year be imposed for the State to recover monies paid in error.
Section 33(2) states that "for the purposes of subsection (1), "debt" does not include a debt arising from benefits paid in error under the provisions of this Act". We would like to support the South African Council of Churches position and suggest that Section 33(2) is deleted to ensure that the rights of the contributors are adequately protected. It is unfair to penalise a beneficiary for an error not made by him/her. The consequences of the State setting off the debt could lead to further hardship on the unemployed person or beneficiary.
Composition of the UI Board
The present draft of the Bill differs from the previous one in terms of the composition of the Unemployment Insurance board (section 49(2)(a-c)). Whereas the previous draft allowed for members of "organisations of community and development interests in the Development Chamber in NEDLAC" (section 40 (2)(c)), these are excluded from the present Bill.
It is of the utmost importance that members from these sectors of society are represented on the Board given their direct interest in the decisions that will be taken by that board.
- Our Bishops have stated that "[r]egarding the unemployed the State must recognise that, as guardian of the interests of the whole community, it carries the ultimate responsibility for their support".
- We would like to reiterate our support for the proposed changes to the current legislation. The new Bill will increase benefits to those who are most vulnerable to the effects of unemployment. But it also needs to be borne in mind that there is still a long way to go. The effects of Apartheid are still being felt and the State must intervene to ensure justice, the new UIF Bill is one means to achieve this.