UIF brings in foreign workers

Changes to Unemployment Insurance Act with new Bill….

Nearly thirty changes are proposed to the Unemployment Insurance Act, governing the Unemployment Insurance Fund (UIF) in the form of the Unemployment Insurance Amendment Bill now tabled. Among other things, the Bill will qualify foreign workers for unemployment insurance benefits, as well as employees with learnership contracts.

In fact it is not quite clear whether Cabinet has approved the Bill for tabling in Parliament, no cabinet statement to this effect having been issued but the portfolio committee on labour has been briefed on the subject just before Parliament was closed.

It was stated that the Bill had been endorsed by Nedlac without any substantive amendments.

Aims of the Bill

The preamble to the Bill, which has not been debated, provides for “unemployment insurance benefits to learners who are undergoing learnership training and civil servants; to empower the Unemployment Insurance Board to provide in its constitution for the functions of regional appeals committees; to finance employment services and to adjust the accrual rate of a contributor’s entitlement to unemployment insurance benefits.”

On accrual issues, the proposed amendment will change the maximum accrual of 238 days to 365 days in a four year period. This will extend the period of payment of an unemployed contributor from eight months to twelve months. Beneficiaries will also accrue one day’s benefit for every four days of employment as a contributor.

 Payment period extended

The proposed amendment will change the maximum accrual of 238 days to 365 days in a four year period. This will extend the period of payment of an unemployed contributor from eight months to twelve months.    Beneficiaries will also accrue one day’s benefit for every four days of employment as a contributor.

The Bill also makes it quite clear that funds raised through the UIF process, other than money required to meet the current expenditure of the fund, must be deposited on behalf of the Fund with the Public Investment Corporation Ltd (PICC).

LegalBrief comment

Says LegalBrief, “The amendment will improve benefits from 38% – 60% to 45% – 65% in the various brackets. The amendment will also enable the minister to change or vary both minimum income replacement rate and the maximum income replacement rate without having to go to Parliament.”

“The present position is that the minister can vary the minimum income replacement rate only. Once the amendment becomes law the minister will simply use a regulation to vary either the minimum or maximum or both.”

A copy of the Bill as tabled in Parliament is available on the department’s website.
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