Minister of Employment and Labour Thulas Nxesi. Picture: Henk Kruger/ANA/African News Agency
Minister of Employment and Labour Thulas Nxesi. Picture: Henk Kruger/ANA/African News Agency

Massive job losses, closure of companies on the cards, warns Thulas Nxesi

By MAYIBONGWE MAQHINA Time of article published Apr 23, 2020

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Johannesburg - Employment and Labour Minister Thulas Nxesi has warned about massive retrenchments and scores of companies likely to go under after the Covid-19 pandemic.

Addressing a joint meeting of two parliamentary committees, Nxesi said: “It is a fact that a number of companies after Covid-19 might not be able to recover. They might take up to six months to recover.

“Some might take a year. Some might not come back and be able to operate,” Nxesi said.

“The reality is that there are going to be massive retrenchments. We might add 1 million or 2 million to the high unemployment (rate), which we have in the country,” he said.

The minister painted a serious situation that might result in lots of companies applying for the temporary employee relief scheme (TERS).

“The fund we have will be under strain. At some stage we will have to rationalise,” he said.

Nxesi noted with concern that some were not complying with regulations, and did not want to submit claims on behalf of their workers, something that caused the government to amend regulations to compel them to do so.

Nxesi also anticipated a spike in thousands of disputes to be lodged with the Commission for Conciliation, Mediation and Arbitration arising from the Covid-19 pandemic.

“Some employers have already informed workers about Section 189 (notices) in terms of retrenchments. There is a lot to deal with.”

His comments come as the Unemployment Insurance Fund (UIF) paid out R1.6 billion in TERS scheme benefits as of Tuesday.

Nxesi said the UIF continued to pay the claims as they were being submitted.

“We are finalising applications that will be paid out shortly,” he said.

Nxesi noted that some bargaining councils have paid R150million out of their funds to affected workers.

“We are in the process of reimbursing this amount from the UIF. We encourage more employers who can pay their workers to do so, and claim from the fund.”

He was concerned about employers who did not apply for the TERS scheme on behalf of their workers.

This also applied to those who made UIF deductions from workers, but did not forward the monies to the UIF and those who understated their payroll, yet claimed for a large number of workers.

Nxesi said they were returning the claims to the employers for re-submission, instead of repudiating them and instituting fraud investigations.

“We gave an undertaking that the sins of employers will not be visited upon the employees. The benefits will be paid out,” he said.

“I encourage non-compliant employers to use the opportunity to regularise their situation. It will save us a lot of trouble down the line,” he said.

Thobile Lamati, the department’s director-general, said they were engaging companies that submitted applications with incorrect information.

“The onus is on the employer to provide the correct information. We would like them to do so because if they do that, they show solidarity to their workers,” Lamati said.

He said only 45% of employers were not complying with occupation health and safety during the Covid-19, as at April 15.

Lamati also said there were still areas which really had no regard for the health and safety of employees. “We want to appeal to the employers to protect their workers. If you give money and they contract the disease, you have not done anything,” he said.

Political Bureau

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