COSATU statement on the reckless and outrageous cancellation of the UIF Covid-19 TERS fund

2 November 2020

The Congress of South African Trade Unions is deeply incensed by the reckless and insensible decision by the National Coronavirus Command Council(NCCC) to unilaterally cancel the Unemployment Insurance Fund (UIF)’s Covid-19 Temporary Employment Relief Scheme (TERS).  This is a selfish and outrageous decision that needs to be rescinded immediately. 

This was done without any meaningful consultations with the real owners of the UIF, the workers. This is what happens when unaccountable bureaucrats are entrusted with the responsibility of taking decisions.

 On the 15th of September, the President in his address to the nation committed to extending the Covid-19 TERS in tandem with the disaster management restrictions.  Since then the UIF has deliberately refused to comply with the President’s sensible commitment. 

We cannot afford to have a system where a public commitment by the President can be ignored or rejected by some unelected and unaccountable group of bureaucrats. This is a slippery slope, and it will soon raise the question of who is in charge and whether the centre is really holding. This administration is becoming more unreliable and untrustworthy by the day and this trust deficit is a big problem for social partners who work and engage with it daily.

 Despite repeated engagements from organised labour and business at Nedlac these government bureaucrats and their political overlords, who are notorious for mismanaging and sometimes looting these funds have resisted doing the right thing by the workers by honouring this commitment. 

 This also represents another episode of government reneging on an agreement with unions. The UIF belongs to workers and not to the government. Government has refused to contribute a single cent to it despite being obliged by the Unemployment Insurance Amendment Act to do so.

 This is another reminder that the elite of his country is unaccountable and has bottomless contempt for workers. They believe in their own virtue and their self-regard can cross into self-righteousness.

 To date, the UIF has dispersed over R50 billion under this scheme to millions of workers who have lost wages or whose employers could not afford to pay them during the Covid-19 disaster period.  This has helped to ensure those workers have money to take care of their families and their companies can remain open and avoid retrenchments.

 The UIF has over R114 billion worth of assets and the cost of extending this scheme for the September to November periods will be less than R8 billion.  It is far cheaper to pay a few months TERS and save millions of jobs and prevent companies from closing than to allow them to collapse.  Not only does UIF avoid having to pay 12 months retrenchment benefits, but this keeps those workers and companies afloat and they can then continue to pay taxes, pay their UIF contributions and contribute towards the economy’s revival.

 We cannot expect those workers who are not allowed to work under the disaster management regulations to sit idly waiting for miracles.  They will rebel and return to work and potentially contribute towards a second wave.  Paying R8 billion is a sound and sensible investment in preventing a second wave and saving jobs.  

 It is galling to hear government claiming that the R50 billion dispersed by the UIF to date represents its contribution to saving jobs despite not contributing a cent towards it.  Now the government is acting as a stumbling block instead of providing leadership in saving jobs and taking care of the most vulnerable workers.

 It is pathetic that the Minister for Employment and Labour ThembelaniThulasNxesi resorted to misinformation and outright lies by telling Parliament that he will be engaging social partners at Nedlac when he has in fact has refused to do so.  Minister Nxesi and his leadership collective have shown absolute contempt for workers and it is becoming clear that there is a leadership vacuum in the department. 

 President Cyril Ramaphosa needs to intervene and resolve this impasse and leadership collective in the department and UIF accountable for defying an instruction. The commitment he made to extend the Covid-19 TERS in tandem with the disaster management restrictions must be honoured.  Failure to do so will condemn millions of innocent workers to poverty. 

Issued by Sizwe Pamla, National Spokesperson, COSATU, 2 November 2020