Business Unity South Africa (Busa) has made the “challenging yet necessary” decision to withdraw from the Unemployment Insurance Fund (UIF) structures at the National Economic Development and Labour Council (Nedlac).
The organization confirmed this choice in a statement released on Wednesday, which includes pulling its members out of the UIF board.
This action follows six years of persistent engagement and numerous warnings regarding alleged mismanagement, alongside efforts to promote labor reforms.
“Regrettably, these initiatives have not yielded the anticipated results,” remarked Busa CEO Khulekani Mathe.
“This decision is crucial to uphold the integrity of our representatives, ensure sound governance practices, and clearly indicate that the present conditions are unmanageable.”
Since 2020, both organized business and labor have participated in various efforts aimed at reforming the UIF.
Busa has put forward detailed proposals aimed at enhancing governance, operational efficiency, and service delivery improvements.
In 2024, leading businesses called for the establishment of a task team at Nedlac to formulate a credible plan to rectify the UIF’s shortcomings.
ADVERTISEMENT
CONTINUE READING BELOW
However, Busa pointed out that the reform efforts have stagnated over the past two years, resulting in significant dysfunction, operational failures, and ongoing unresponsiveness.
“This has diminished trust in the process and raised fears that the fund is either unwilling or unable to rectify its dysfunction,” Mathe noted.
Read: You might be sending your UIF claim to a non-functional website
The organization has also highlighted long-standing issues where UIF resources have been redirected to government-to-government programs benefitting non-contributors, while legitimate contributors face delays in claim submissions.
Busa argues that the UIF-Ters (temporary employer/employee relief scheme) during the Covid-19 pandemic should have underscored the need for efficient systems and accountability; instead, it exposed significant weaknesses in the fund’s management.
The alleged misappropriation of UIF funds has been extensively documented.
In 2020, during the audit of the Covid-19 Relief Funds, then-Auditor General Kimi Makwetu uncovered issues such as payments made to deceased individuals, duplicate payments, overpayments, and government officials applying for and benefiting from the scheme.
ADVERTISEMENT:
CONTINUE READING BELOW
Last year, Parliament’s Select Committee on Economic Development and Trade reported that while the UIF disbursed over R800 million in Ters funding, more than R200 million remained unaccounted for.
Busa is urging Minister of Employment and Labour Nomakhosazana Meth to place the UIF under administration to stabilize operations, resolve claim backlogs, and address governance challenges.
“A forensic investigation should be initiated to assess the legality and appropriateness of all fund expenditures,” Mathe stated.
Increased pressure to place the UIF under administration comes in response to recent demands from major trade union federations, including Cosatu, Saftu, and the National Council of Trade Unions.
Meth, in a statement made in June, welcomed an investigation by the Special Investigating Unit concerning allegations of mismanagement, corruption, and unlawful actions related to training contracts at the agency.
It is still unclear whether she has considered the calls for an independent administrator to intervene.
Moneyweb has reached out to Meth’s office for comments on this matter and will update the article upon receiving a response.
