25 March 2020 Updated | COVID-19: The Employment Survival Guide

How do we measure up? The impact of the economic recession and COVID-19 on the performance of the CCMA and UIF

On Wednesday 4 March 2020, the Parliamentary Portfolio Committee on Employment and Labour was briefed by the Commission for Conciliation, Mediation and Arbitration (CCMA) and the Unemployment Insurance Fund (UIF) on their respective second quarterly performances 2019/20. The discussions raised the negative impact on performance of the economic recession and in turn budget constraints, as well as the challenges posed by COVID-19 (Coronavirus).

The pressure on UIF was noted following the 2017 amendments to the UIF Act, which was aimed at improving benefits to contributors. It was reported that the increase in benefits payments estimates resulted in a 146% overspend. It was further noted that the recession results in employment in the form of seasonal and contract work as opposed to permanent employment (particularly in the agricultural and construction sectors), which increases unemployment. This, in turn, increases UIF claims. The increasing claims reflect a worrying lack of skills amongst the youth. Important questions were raised by the Committee as to whether UIF was ready and had sufficient finances to deal with the anticipated spike in claims given the possible increase in the retrenchment of civil servants following the Budget Speech and in addition, as a result of the Coronavirus.

The Committee noted the Department’s launch on 6 March 2020, of the National Minimum Wage Hotline. The Hotline enables employees to report cases of non-compliance with the national minimum wage without incurring any cost themselves. No data, airtime or smartphone is necessary to make a complaint. The Hotline is one of the mechanisms put in place by the Department to enforce compliance and accountability of employers. This is in line with its commitment to offer protection to vulnerable, isolated employees and create accessible channels. The Hotline will drive enforcement by tracking troublesome sectors. Inspectors will be deployed to investigate complaints within 14 days of a complaint having been lodged. The Director of the CCMA noted that the CCMA is confronted by challenging questions relating to domestic work and the national minimum wage. It is anticipated that the national minimum wage and questions of affordability will result in an unfortunate increase in the retrenchment of domestic workers. 

The concerning and significant strain on the CCMA’s resources following budget cuts and amongst other factors, the increase in retrenchment related cases, was discussed. The budget cuts have prevented the much-needed appointment of additional full-time commissioners.

Despite the challenges which the CCMA faced and continues to face it performed well in various respects in quarter two. Of approximately 22,500 employees who were on the brink of losing their jobs, the intervention of the CCMA resulted in about 9,500 jobs being saved. Improved resources could improve this figure. A further example of positive performance was the roughly 78% of strikes having been settled by the CCMA (36 out of 46 was intervened in and resolved by the CCMA). Whist these examples are to be commended, the prospect of continued and improved performance is questionable. A concern was raised in the meeting that a worst-case scenario may see the increased pressure on the limited resources of the CCMA resulting in the CCMA having to turn away cases.  

The Deputy Minister of Employment and Labour noted that South Africa is on the verge of despair as it faces the simultaneous challenges associated with the Coronavirus and the economic crisis. However, she encouraged citizens to meet the challenge saying that “the best economy is achieved by teamwork”. It is hoped that this can indeed be achieved and that all South Africans can work together to avoid debilitating despair in these challenging times.   

DISCLAIMER:

The Employment Survival Guide is an informative guide covering a number of topics, which is being published purely for information purposes and is not intended to provide our readers with legal advice. Our specialist legal guidance should always be sought in relation to any situation. This version of the survival guide reflects our experts’ views as of 25 March 2020. It is important to note that this is a developing issue and that our team of specialists will endeavour to provide updated information as and when it becomes effective. Please contact our employment team should you require legal advice amidst the COVID-19 pandemic

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