South Africa: Social dialogue institution presents solutions to the recovery

South African social partners gathered with the government and civil society to present proposals during the crisis.
A temporary Employer/Employee Relief Scheme was developed.
South African social dialogue institution National Economic Development Council (NEDLAC) was called to provide proposals and solutions on the means to mitigate unemployment and assist employees suspended from work.

In South Africa, unemployment benefits are allocated within the framework of the Unemployment Insurance Act (UIA) and the Unemployment Insurance Fund (UIF). Employers and employees must have previously contributed to these funds. However, the Act did not cover the situation of temporary suspension from work or reduction of working time. In order to close this gap, the Government took on board one of the proposals presented by NEDLAC and established a “Temporary Employer/Employee Relief Scheme” (TERS), at the request of employers. The benefits correspond to a percentage of the employee’s salary, ranging from 38% for the highest earners to the 60% for the lowest, from the minimum wage amount (ZAR3500 or USD $185) up to a maximum of ZAR6730 (USD$354) per month. Companies receive the amount to transfer to their employees for a maximum period of three months.

According to the Ministry of Employment and Labour Webpage, on 20 April 2020, UIF “received just over 55,268 applications from employers representing about 1,601,767 employees. In total, the UIF has over 1,800,000 employers registered on its database representing more than 8 million workers”.

In its active participation to the process, Business Unity South Africa (BUSA) together with the Black Business Council (BBC) and other companies and business associations, established a “Project Management Office, to ensure collaboration with government and to use the available business resources and capacity to support public sector initiatives”. This project consists of three task teams to provide data and support on health, economy and labour.

BUSA’s Vice President, Martin Kingston, commented the business participation in this process as follows: “Desperate times demand desperate measures. We have embarked on this major collaboration – among South African businesses and with government – to share best practice, reduce risk wherever possible, and implement practical measures to ease the hardships caused by this global catastrophe. We will see through this pandemic by preparing effectively, adapting where necessary and acting decisively”.