A report by Corruption Watch into the payment of TERS benefits has exposed maladministration and corruption in the UIF, highlighting that the department of employment and labour needs to improve its systems
The Department of Employment and Labour (DEL) recently confirmed that the Covid-19 TERS Scheme will not be extended. The last TERS application period (16 September - 15 October 2020) closed on 31 December 2020. This is despite submissions made by business and labour to extend the scheme to cover the lockdown periods after 15 October 2020. Instead, the DEL has stated that it will continue to provide financial relief to employees affected by the lockdown through the UIF's Reduced Work Time Benefit.
At the same time as these announcements, Corruption Watch (an anti-corruption non-profit organisation) released a new report entitled 'Covid-19 TERS Corruption at Work'. The report highlights the trends contained in 126 whistleblower reports received by Corruption Watch around TERS. It concludes that mismanagement of the scheme and corruption are behind non-payment to all eligible employees.
- Since the introduction of the scheme in March 2020, TERS has supported millions of employees and, to date, the scheme has disbursed approximately 57.3 billion ZAR.
- TERS was never intended to be an ongoing benefit for employees. It was designed as a temporary form of social and economic relief for employees unable to work during the lockdown periods.
- The administration of TERS has revealed various weaknesses in the internal control environment of the UIF.
- Individuals most commonly implicated in TERS corruption are payroll officers, finance personnel and managers of employers, labour inspectors who receive bribes to ignore labour rights breaches, and third parties who offer support to access benefits.
- The most common corruption-related allegations against employers include employers who received TERS benefits but did not pay them to employees, employers who claimed TERS benefits for employees who are working and employers who paid employees less than the amount received in TERS benefits.
- In various instances, administrative justice was the key issue. The report acknowledges extensive delays from the time that a TERS application was made to the actual payment of TERS benefits. This meant that, at the time when employees were most in need of financial relief, they did not receive TERS benefits. The report also acknowledged that maladministration and mismanagement seemed to be an entrenched culture at the UIF.
- Where there was sufficient evidence of corruption, these cases were taken further by Corruption Watch. They have been referred to the relevant law enforcement agencies (including the Special Investigating Unit) for investigation.
- The whistleblower reports also revealed other contraventions of South African labour laws, including employers not paying their employees, employers paying employees below the national minimum wage, employers underpaying foreign employees and employers attempting to force employees to resign.
- Law enforcement agencies must investigate cases of corruption and bribery and compliance with labour laws by employers. They must recover any TERS benefits paid erroneously by the UIF or benefits paid because of misrepresentation or corruption.
- The DEL and UIF need to work together to improve responsiveness and application management processes through the use of technology.
- The DEL needs to implement safeguards and improved controls in their systems to ensure that UIF claims are processed in an efficient, safe and secure manner.