Johannesburg - Proposals to include people who have resigned from their positions to get Unemployment Insurance Fund (UIF) benefits would cripple the fund, the Department of Labour has warned.
The fund has billions of rand in the kitty that is paid out in claim benefits to people who have been dismissed, retrenched or are unemployed.
Director-general in the department, Thobile Lamati, and Chief Director for Labour Relations Thembinkosi Mkalipi told the portfolio committee on labour in the National Assembly yesterday that they had received amendments from the National Economic Development and Labour Council (Nedlac) with critical proposals.
The UIF bill was passed by the National Assembly in May and was referred to the National Council of Provinces for consideration.
Nedlac has proposed that people in the informal economy and people who have resigned must all get UIF benefits.
But Lamati and Mkalipi said such a move would cripple the fund.
Lamati said it would be too costly for the UIF at this stage.
Mkalipi agreed, saying resignations would shoot up costs for the fund.
They did not want people to quit their jobs in order to get UIF benefits.
“The fund is able to cover all the amendments in the current bill that is in the National Council of Provinces. But the resignation part is expensive. It will affect the affordability of the fund,” said Mkalipi.
Lamati said actuaries had also looked at how affordable resignations to the fund would be.
He said it would have unintended consequences of people leaving their jobs just because they wanted to get UIF benefits.
“The actuaries have made a recommendation that if push comes to shove, if the UIF does that, they have to monitor the fiscal position of the fund,” Lamati said.
They did not want to run the risk of testing the proposal and then reverse it after some of the people had already benefited from it.
The UIF bill was backed by business, labour and all parties in Parliament when it was tabled in February. It extended the payment benefit period from eight to 12 months.
For the first time, it also included pregnant women as beneficiaries of the UIF.
The bill was adopted by the National Assembly three months ago and is currently in the National Council of Provinces for approval.
This is one labour bill that was backed by all parties in the national legislature, unlike in the past where opposition parties have tried to block some of the labour laws.
POLITICAL BUREAU & THE STAR