Conflicting information from within the Unemployment Insurance Fund (UIF) regarding whether temporarily laid off staff are entitled to receive UIF payments is motivating employers to permanently cut more jobs to ensure that employees can benefit from unemployment insurance funds.
“Our understanding is that TERS was set up by the UIF to offer temporary relief for businesses affected by the COVID-19 pandemic. This scheme has now ended. The UIF mandate has always been applicable to permanently retrenched staff and not to employees who have been temporarily laid off,” said md of FCTG, Andrew Stark. Andrew added that the curtailment of temporary relief options was forcing employers across the industry to move forward with further permanent retrenchments to ensure that these staff members could apply for UIF benefits.
“A call centre agent at the UIF told us that our staff members could claim relief from the UIF if they had been temporarily laid off but only for a maximum period of 12 months. We were told that payments were conditional, depending on length of time that a staff member had been employed and whether they had made any previous claims. The call centre agent also told us that UIF applications could only be accepted once the June TERS payments had been made and that it would take up to 40 days from the date of UIF application for payments to be made. This means that staff will be out of pocket for relief for July for a long time to come,” said owner of Sure Map Travel, Melissa Philips.
Ceo of Asata, Otto de Vries, said Asata was aware of the confusion relating to UIF claims and said it was worrying that there were contradictory messages coming out of the UIF about who was entitled to receive relief and how applications could be made.
“We have consulted with two labour law experts and they both interpret the Unemployment Insurance Act as allowing employees who have been temporarily laid off to claim benefits from the fund. We understand that companies can apply for UIF benefits on behalf of their staff but that UIF payments must be made directly into the individual’s bank account,” said Otto.
“Retrenchment is always the last resort for an employer who foresees a future for their business, as it requires them to lay out severance packages for employees who may be needed again down the line. Inaccurate communications from within the UIF indicating that benefits are only applicable to permanently retrenched employees are having the opposite effect to preserving jobs. They are instead motivating employers to cut jobs permanently in order to ensure that their employees are able to claim benefits,” he added.
SATSA motivates for more support
The TBCSA, Asata and SATSA continue to lobby for the reopening of South Africa’s borders and for more relief for travel and tourism employees in the interim. Below is an extract from a motivation submitted by SATSA to the TBCSA this week in support of its efforts to either reopen South Africa’s borders or extend TERS to the travel and tourism sector until December.
The UIF TERS benefit saved many thousands of tourism jobs over the past three months, with more than 250 000 employees applying for the scheme in April and May, and this is something that the industry wishes to express its sincere gratitude for. However, with TERS discontinuing from June 2020, the sector is facing mass retrenchments – a sobering fact considering that South Africa’s official unemployment rate was at 30,1% for the first quarter of the year.
The most recent TBCSA, IFC and National Department of Tourism survey of 1 500 respondents indicates that 61% of tourism businesses remain fully closed and 33% are only partially operational. We therefore call on the public sector to partner with industry to assist our sector to ensure employees have some income and to protect tourism jobs for the recovery. The motivation for continued employee support is as follows:
- Hundreds of thousands more people will be destitute as tourism income, jobs and TERS support dries up.
- The tourism sector will recover (as demonstrated in countries that have moved beyond their peak). As such, tourism can and will continue to be an engine of beneficial, job-rich economic growth for South Africa.
- Since the lockdown regulations and travel restrictions are enforced by government regulation, and the industry is unable to continue to do business, we believe that there is an innate fiduciary responsibility for government action to assist the industry to survive.
Without support there will be no industry to reopen. We will lose a substantial portion of an industry that contributes in total 8,6% to GDP, supports 1,5 million jobs and is our second biggest export sector and critical to our balance of payments and to support all our international trade and FDI.
Ceo of the TBCSA, Tshifhiwa Tshivhengwa, told Travel News that no announcement had yet been made by the UIF or the Department of Labour relating to the discussions the TBCSA had been having about additional measures for out-of-work members of the tourism industry.
Travel News contacted the UIF for more information but our calls and emails were unanswered at time of publication.