1. Introduction and Background

The National Progressive Primary Health Care Network(NPPHCN) is a national non-governmental organisation, established in 1987 to promote primary health care (PHC) and to develop a national PHC strategy for South Africa. NPPHCN promotes collaboration, appropriate training, organisational development, participatory research and policy formulation. Essential aspects of our work are to help communities understand, interpret and promote their health and human rights; and to analyse and interpret legislation in terms of the impact it will have on primary health care.

South African economy is characterised by high levels of unemployment and prevalent job losses, which have resulted in high poverty levels. The UIF legislation is a welcomed relief in helping to ease the unemployment scourge. Recent literature has shown a high correlation between high poverty levels and ill health.This is particularly important as the Bill seeks to repeal the archaic Unemployment Insurance Act 30 of 1966 which was not only financially unviable but characterised by discriminatory practices.

COSATU notes that restructuring of the UIF must be seen as an aspect of the broader restructuring of the social security system. Short-term relief will only be provided to those who were recently employed and therefore entitled to UIF, the large numbers of unemployed people who had never had work opportunities before will remain vulnerable to poverty. The increasing number of applicants for UIF indicates the high levels of unemployment rates in the country. Hence, an urgent provision for a comprehensive social security system is essential, which will also take into cognisance of the mooted basic income grant and the social health insurance.

2. Issues supported in the Bill by NPPHCN

2.1 NPPHCN supports the separation of the maternity benefits and unemployment benefits. This policy had a strong gender discrimination as it is only women who go on maternity leave . Clearly, for women to draw on their unemployment leave when they go to maternity has negative effects on their future savings. The erosion of these savings could have an impact on women's utilisation rates of health services as research has shown that women are more frequent visitors to health care professionals.

2.2 We support the intended inclusion of domestic and farm workers, it is these workers who face the most brutal forms of exploitation and who are more vulnerable to financial security after employment. The UIF coverage of these type of workers must be taken as part and parcel of broader reforms aimed at protecting these workers.

2.3 We furthermore support the inclusion of high income earners, as this will serve to assist these workers during periods of unemployment. The inclusion of these workers will also help in improving the financial sustainibility of the fund. The outcry from certain sections of the society that the inclusion of the high income earners will disincentivise the employment creation opportunities must be rejected as this run against the redistributive element inherent in this inclusion.

2.4 We also support the graduated benefit schedule to be introduced as it will replace the current inequitable measure whereby all the beneficiaries of the UIF receive the a benefit of 45% of their earning rate. The proposed benefits on income replacements ranging from 60% for low-income earners to 38% for the middle and high income earners has strong equity elements and is progressive in nature.

2.5 We further support the creation of a database of contributors. This will protect the contributors against fraudulent use and protect hard earned wages and salaries. The elimination of the paper-based operations including the Blue Card system will act as a deterrent for those employers who are alleged to be withholding the workers blue cards and making it difficult for workers to gain access to their unemployment benefits.

2.6 We also support the provision in the Bill that benefits may not be attached by the order of any court, but may be attached by any court order relating to maintenance of dependants including ex-spouses , of that contributor. This step will help in achieving compliance towards maintenance of dependants. However, we are concerned that the Bill does not define dependants and spouses.

2.7 Our support also goes to the proposed representation in the constitution of the Unemployment Insurance Board. The nomination by NEDLAC of its constituencies will promote accountability and legitimacy of the structure . The democratic representation in the board from labour, business, community and the state will be of significant importance in minimising unemployment.

3.1 We are concerned on the role of government in UIF. The Bill does not go far in clarifying the critical role which government can play in stabilising and extending the UIF. We therefore recommend that government investigates whether it can=t act the role of the guarantor of the fund. This must be seen within the broader role that government must play in providing the safety net for its citizens.

3.2 We are also concerned over the extensive powers given to the executive arm of government. Whilst the state will be represented in the board, the Bill also gives much powers to the Director-General and limited powers are given to the UIF board. This can be a source of conflict in future as there is much contestation over labour market policies.

3.3 We would also caution on Section 48(2) of the Bill which provides that any profit on investments must accrue to the Fund and any loss must be borne by the Fund. Whilst we recognise that the fund must be made financially viable and innovative measures like investments must be pursued in this regard. We would be wary of speculative investments which will put the fund's viability at risk.

3.4 We are also concerned on Section 27(c) of the Bill which stipulates that the Commissioner may absolve a person from repayment of the whole amount if it would be just and equitable to do so. In the absence of any test to prove whether the action taken is just and fair, this section might open cracks for abuse as expectations and precedents might be created.

The National Progressive Primary Health Care Network (NPPHCN) appreciates the opportunity to respond on the Unemployment Insurance Bill. We believe that the Bill is one of the landmark labour legislations aimed at protecting the unemployed people in South Africa. The importance of this legislation clearly evidenced by the Labour Minister's remark that it (UIF) contributes towards the improvement of the social safety net to mitigate the economic hardships of unemployment.

We believe that the Bill in general will improve the plight of the unemployed and recently employed people. The Bill has numerous provisions aimed at achieving equity and social justice which are laudable. We hope that these provisions will translate into improvement of life for the beneficiaries.

1. See Friedman on 1999 SA Health Review

2. See COSATU's response to the Ministerial Task Team Report on AUnemployment Insurance and related coverage issues

3. See Minister of Labour's oral reply to the questions on Wednesday, 22 September 1999 in the National Assembly

4. Statement by the Minister of Labour at the release of the new Unemployment Insurance Bill, 2 March 2000.

PHILA

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