Earlier this week, President Cyril Ramaphosa announced that the Unemployment Insurance Fund’s (UIF) special Covid-19 benefit had paid out R1.6bn by close of business on Tuesday, assisting more than 37,000 companies and 600,000 workers. There’s a different story from employers and unions who say there are logjams in the system. And Labour and Employment Minister Thulas Nxesi reportedly told MPs on Wednesday that the UIF administrators had found instances where employers have attempted to over-claim from its Covid-19 special cover, though concerns that the UIF is vulnerable to fraudsters were quickly quashed. In this podcast BizNews editor-in-chief Alec Hogg interviews Gerhard Papenfus, the Chief Executive of the National Employers Association of South Africa (NEASA), for the lowdown on how employers are accessing Covid-19 UIF payments. – Jackie Cameron
Well it’s nice to be talking with Gerhard Papenfus again. He’s the Chief Executive of the National Employers Association of South Africa or NEASA. Gerhard, good to have you on the line. How are you holding up with the lockdown and Covid-19 crisis that we’re going through?
Very good, Alec. My days are flying past. I’m actually more busy now than in my normal working day prior to Covid-19.
Well, that wouldn’t surprise me because the amount of questions we’re getting from employers is significant. The main one at the moment is, ‘what is going on with UIF payments?’. Many employers are confused. They don’t believe the numbers that the president trotted out in his most recent address to us – they say that there is only a fraction of that that’s being paid. What’s your experience?
We’ve got a very wide reach into the market – even far beyond our membership (in other words, people that make use of our legal services). I think our reach into the market is six times our membership. We’ve been monitoring the unfolding of the UIF thing from the beginning and we’ve been advising employers every day and sometimes more than once a day. And initially, it was a huge confusion – the rules changed every day and employers battled to submit their applications or claims. But I think that’s much improved and what we do now is a survey (daily) amongst employers and we ask that those that have claimed and gotten paid participate in the survey daily as well as those that have applied or claimed and haven’t been paid. And our latest feedback is this morning (and we’ve published it just a few minutes ago) – that 30 percent of employers who have claimed have, in fact, been paid.
That’s quite impressive, Gerhard – because the numbers COSATU is talking about is only 2%.
The survey that we conducted this morning – and if I say this morning the survey went out yesterday afternoon and 8:00 this morning we stopped it – over a thousand employers have participated. That’s quite a broad number in terms of a survey. Our figure is 30 percent on this thing and that’s improved. I think the way we see it and what we hear – that’s perhaps quite a reasonable reflection of what’s happening and I think, to a large extent, the problems have been sorted out. One of the problems that we do have is that the payment to the employer is supposed to be accompanied with a schedule of the list of employees that have been paid (in respect of which payment is given) and the amount. Now, that’s lacking. Less than 1 percent of employers that do get paid get an accompanying schedule. Now, that poses a bit of a problem for employers because they need to work out and (on that basis) they are supposed to pay the employees. If they don’t have the schedule – they can’t do it accurately. But to some extent, we need to have sympathy. There was a point where I did not have so much sympathy because I said, ‘ you’ve just got to get this right, because if you don’t – employers are not going to get paid and if employers are not going to get paid, then the money won’t reach the employees’. They wouldn’t be paid. And employers cannot within this time (many of them, at least) pay employees in advance and then wait for the money too long. But as I said, I think there’s much improvement and our figure this morning went up from 5.5% three days ago to 17.8%t to 30% this morning. What can also play a role is the enthusiasm with which employers participate in a survey. But we actually do very well – I’m impressed with the eagerness of employers to tell us what’s happening.
This is really good news but it’s still a long way from 100 percent. If you think there’s still 70% of employers who aren’t being paid and, presumably, their staff are thinking that the business has been paid – so now, ‘why aren’t these guys paying me?’.
Well, of course. Employers must stay in contact with their employees at this time. I spoke to an employee yesterday and he was very impressed that his employer sent out a video telling them what’s going to happen. That’s a good thing – but it’s quite late in the day and it’s a terrible thing for employees to sit there not knowing what’s happening. So, if an employer hasn’t received money – then say so. And if you do – then say so as well. And if you did receive money but you haven’t received a schedule and you don’t know what to pay – then say that at least the money is there but the uncertainty is really bothering you. NEASA has claimed; for NEASA itself, and for one of the NEASA affiliate companies – NEASA Labour Compliance – and we received our money within days. Again with no schedule, but if I look at the figure I’d say that’s more or less correct. And it really happened within days.
But that’s also… many employers are probably sitting on the side and saying this is not working, I hear it’s not working, and as a consequence – they might not even have bothered to put in their claims. We’ve heard reports that trying to get hold of the UIF is not an easy thing either. They don’t seem to have call centres adequately manned. What’s your take on that?
Well, I think it has improved. The lodging of the application isn’t that simple, but we sit here in the city with accountants and your HR people, IT specialists (well, at least very well informed) – and they’ve struggled. So, you can imagine a small business in a rural area where a guy is focused on other stuff and now they have to submit a claim which our informed people have struggled with. I think that might be a problem. And there was a time where the UIF said you can lodge your claim by means of email. Now, nobody that did that got any response and the UIF has changed that and said – unless you do it online, we’re not going to in any way accommodate you. So, I think from that point of view that there might be employers – good employers, in fact – that have thrown their hands in the air and said, ‘there’s simply no way that I can do this – I don’t know how.’ That might be the case and that’s not necessarily the result of a bad attitude, but it is difficult. We battled. We got it right and we got paid. So, there might be employers that might struggle. I haven’t had any feedback from employers that say they’re not going to claim.
How would you advise them? Can you take us through the process of a small business, and I think it applies to businesses with less than R100m turnover per annum (you can correct me there). How did they start going through this process?
I will advise and I will go as far as to say to the employers that if you’re not equipped now to do that – get somebody that can assist you (and one might perhaps give them the name of somebody). And I would make an arrangement with an accountant to say, ‘let’s set up a hotline for this and if somebody needs assistance; give them a special price – do it for a thousand rand or something like that’. Because, it is just not possible to say to a guy, ‘this is what you’ve got to do now’. You won’t even know where to start if you don’t have the systems ready to do that. NEASA has got a helpline now (but I’m not promoting NEASA now). What I’m saying is that people have used that and said help us, take us through this. But again, it wasn’t technical help. If you don’t have the system at all to do that, I think you’ve got a problem. So you have to get professional assistance there and I think that we need to make an arrangement with somebody who sits ready and assists these employers. Make that call, because I understand that the whole scheme will close for applications or claims on the 30th of April. So, we’ve got a week left for the claims to be lodged.
Gerhard Papenfus is the Chief Executive of NEASA and some good news there to see that the percentages – in three days – have gone from 5-17% and, as you said a moment ago, to 30%. The hotline number – and he makes a point to call that number – it is manned and they will be able to at least point you in the right direction. That’s 086 016 3772.