Unemployment Insurance Act

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Published: 2002-01-28

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Unemployment Insurance Act [No. 63 of 2001]


Government Gazette

REPUBLIC OF SOUTH AFRICA
Vol. 439 Cape Town 28 January 2002 No. 23064
THE PRESIDENCY
No. 88 28 January 2002
It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–
No. 63 of 2001: Unemployment Insurance Act, 2001


(English text signed by the President.) (Assented to 13 January 2002.)
ACT To establish the Unemployment Insurance Fund; to provide for the payment from the Fund of unemployment benefits to certain employees, and for the payment of illness, maternity, adoption and dependant’s benefits related to the unemployment of such employees; to provide for the establishment of the Unemployment Insurance Board, the functions of the Board and the designation of the Unemployment Insurance Commissioner; and to provide for matters connected therewith.
B E IT ENACTED by the Parliament of the Republic of South Africa, as follows:- TABLE OF CONTENTS
Sections
1. 2. 3.
4. 5. 6. 7. 8. 9. 10. 11.
12. 13. 14.
CHAPTER 1
INTRODUCTORY PROVISIONS
Definitions Purpose of this Act Application of this Act
CHAPTER 2
UNEMPLOYMENT INSURANCE FUND
Establishment of Unemployment Insurance Fund Application of Fund Raising of funds, loans and obtaining bank overdraft facilities Investment of money of Fund Donations and bequests to Fund Appointment of and annual review by actuary Surplus and deficit in Fund Accounting, auditing and financial reporting
CHAPTER 3
CLAIMING BENEFITS
Part A: Right to benejits
Right to benefits Calculation of benefits Contributor not entitled to benefits under certain circumstances
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Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, 2001
15. 16. 17. 18.
19. 20. 21. 22. 23.
24. 25. 26.
21. 28. 29.
30. 31. 32.
33. 34. 35. 36. 31.
38. 39. 40. 41. 42.
43. 44. 45. 46.
Part B: Unemployment benefits
Calculation of period of unemployment under this Part Right to unemployment benefits Application for unemployment benefits Payment of unemployment benefits
Part C: Illness benefits
Determination of period of illness under this Part Rght to illness benefits Calculation of illness benefits Application for illness benefits Payment of illness benefits
Part D: Maternity benefits
Right to maternity benefits Application for maternity benefits Payment of maternity benefits
Part E: Adoption benefits
Right to adoption benefits Application for adoption benefits Payment of adoption benefits
Part F: Dependant’s benefits
Right to dependant’s benefits Application for dependant’s benefits Payment of dependant’s benefits
Part G: General provisions relating to claiming benefits
Benefits not to be assigned, attached or set off Benefits not subject to taxation Recovery of benefits paid in error Suspension of contributor’s right to benefits Disputes relating to payment or non-payment of benefits
CHAPTER 4
ENFORCEMENT
Securing undertakings Compliance order Objections to compliance order Compliance order may be made an order of Labour Court Duty of employer
CHAPTER 5
COMMISSIONER AND CLAIMS OFFICERS
Designation of Unemployment InSUranCe C O d s s i o n e r Report of Commissioner, and delegation and assignment of powers and duties 40 Commissioner may deem person to be contributor Appointment of claims officers
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Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, 2001
CHAPTER 6
UNEMPLOYMENT INSURANCE BOARD
47. Establishment of Unemployment Insurance Board 48. Powers and duties of Unemployment Insurance Board 49. Composition of Unemployment Insurance Board 5 50. Constitution of Unemployment Insurance Board 5 1. Administration and provision of resources to Unemployment Insurance Board 52. Remuneration and allowances to members of Unemployment Insurance Board 53. Indemnification of members of Unemployment Insurance Board
CHAPTER 7 10
REGULATIONS
54. Regulations 55. Procedure when issuing regulations
CHAPTER 8
GENERAL
56. Information to be supplied by employer 57. Creation and maintenance of database 58. Powers and duties of Director-General 59. Certain instruments exempt from stamp duty 60. Recovery of losses caused by employees of Fund 61. Recovery of loss generally 62. Evidence 63. Disclosure of information 64. General prohibited conduct 65. Penalties 66. Jurisdiction of Labour Court 67. Stating of case to Labour Court 68. Delegation and assignment by Minister 69. Persons regarded as contributors for purposes of Act 70. Repeal of laws 7 1. Transitional arrangements 72. Act binds State 73. Short title and commencement
SCHEDULE 1
TRANSITIONAL ARRANGEMENTS 35
SCHEDULE 2
MATHEMATICAL CALCULATION OF CONTRIBUTOR’S ENTITLEMENT
SCHEDULE 3
SCALE OF CONTRIBUTOR’S ENTITLEMENT TO BENEFITS
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Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT. 2001
CHAPTER 1
INTRODUCTORY PROVISIONS
Definitions
1. (1) In this Act unless the context indicates otherwise- “actuary” means a person appointed in terms of section 9( 1); “agent” means any person appointed under section 58(9); “benefits” means benefits contemplated in section 12; “Board” means the Unemployment Insurance Board established in terms of section 47; “CCMA” means the Commission for Conciliation, Mediation and Arbitratior? established by section 112 of the Labour Relations Act, 1995 (Act No. 66 of 1995); “claims officer” means any claims officer appointed in terms of section 46; “child” means a person as contemplated in section 30(2) who is under the age of 21 years and includes any person under the age of 25 who is a learner and who is wholly or mainly dependent on the deceased; “Commissioner” means the Unemployment Insurance Commissioner designated as such under section 43; “contribution” means the amount payable by the employer or a contributor in terms of the Unemployment Insurance Contributions Act; “contributor” means a natural person- (a) who is or was employed; (b) to whom this Act, in terms of section 3, applies; and (c) who can satisfy the Commissioner that he or she has made contributions for
“Director-General’’ means the Director-General of the Department of Labour and any officer in the Department of Labour to whom the Director-General has delegated any function in terms of section 58(3); “domestic worker” means an employee who performs domestic work in the home of his or her employer, and includes a- (a ) gardener; (b) person employed by a household as a driver of a motor vehicle; and (c) person who takes care of any person in that home, but does not include a farm worker. “employee” means any natural person who receives remuneration or to whom remuneration accrues in respect of services rendered or to be rendered by that person, but excludes any independent contractor; “employee’s contribution” means the amount prescribed in terms of the Unemployment Insurance Contributions Act; “employer” means any person, including a person acting in a fiduciary capacity, who pays or is liable to pay to any person any amount by way of remuneration, and any person responsible for the payment of any amount by way of remuneration to any person under the provisions of any law or out of public funds, excluding any person who is not acting as a principal; “employment office” means any office of the Department of Labour or any agency designated for this purpose by the Director-General in terms of section 58(9); “financial year” means the period between the first day of April in any year and the thirty-first day of March in the next year, both dates included; “Fund” means the Unemployment Insurance Fund established by section 4; “labour inspector” means- (a) an inspector appointed under section 63 of the Basic Conditions of
(b) any person designated by the Minister under that section to perform any
“Minister” means the Minister of Labour; “month” means the period extending from a day in one month to a day preceding the day corresponding numerically to that day in the following month, both days included’;
purposes of this Act;
Employment Act, 1997 (Act No. 75 of 1997); or
function of a labour inspector;
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1. For example 10 March to 9 April
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“NEDLAC” means the National Economic, Development and Labour Council established by section 2 of the National Economic, Development and Labour Council Act, 1994 (Act No. 35 of 1994); “officer” means an officer as defined in section 1 of the Public Service Act, 1994 (Proclamation No. 103 of 1994); 5 “prescribed” means prescribed by regulation; “public service” means the public service as contemplated in section 197 of the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996); “regulation” means a regulation made under this Act; “remuneration” means “remuneration” as defined in section 1 of the Unemploy- 10 ment Insurance Contributions Act; “seasonal worker” means any person who is employed by an employer for an aggregate period of at least three months over a 12 month period with the same employer and whose work is interrupted by reason of a seasonal variation in the availability of work; 15 “this Act” includes any regulation made in terms of this Act; “Unemployment Insurance Contributions Act” means an Act passed by Parliament after this Act, providing for unemployment contributions; “week” means any period of seven consecutive days.
Purpose of this Act 20
2. The purpose of this Act is to establish an unemployment insurance fund to which employers and employees contribute and from which employees who become unemployed or their beneficiaries, as the case may be, are entitled to benefits and in so doing to alleviate the harmful economic and social effects of unemployment.
Application of this Act 25
3. (1) This Act applies to all employers and employees, other than- (a) employees employed for less than 24 hours a month with a particular
(b) employees who receive remuneration under a learnership agreement regis- employer, and their employers;
tered in terms of the Skills Development Act, 1998 (Act NO. 97 of 1998), and 30 their employers;
(c) employers and employees in the national and provincial spheres of govern- ment;
(d) persons who enter the Republic for the purpose of carrying out a contract of service, apprenticeship or learnership within the Republic if upon the 35 termination thereof the employer is required by law or by the contract of service, apprenticeship or learnership, as the case may be, or by any other agreement or undertaking, to repatriate that person, or that person is so required to leave the Republic, and their employers.
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( 2 ) Despite subsection (l), this Act will only apply to domestic and seasonal workers and their employers 12 months after this Act takes effect.
(3) (a) The Minister must, as soon as possible after this Act takes effect, designate or appoint a body which must seek to investigate and make recommendations regarding the administration of this Act to domestic and seasonal workers. 5
(b) The investigation must be concluded within 12 months from the date that this section takes effect.
( c ) The Minister must consult the Board on the outcome of the investigation.
CHAPTER 2
UNEMPLOYMENT INSURANCE FUND 10
Establishment of Unemployment Insurance Fund
4. (1) The Unemployment Insurance Fund is hereby established. (2) The Fund consists of-
(a) the contributions made by employers and employees and collected by the Commissioner of the South African Revenue Service in terms of the 15 Unemployment Insurance Contributions Act;
(6) the contributions made by employers and employees and collected by the Commissioner in terms of the Unemployment Insurance Contributions Act;
(c) money appropriated by Parliament; (d) any penalties and fines imposed in terms of this Act other than by a court of 20
( e ) any interest or return on investment made by the Fund; cf) any money paid erroneously to the Fund which: in the opinion of the
(g) any bequest or donation received by the Fund; 25 (h) any movable or immovable property purchased or otherwise acquired by the
(i) any other money to which the Fund may become entitled.
law;
Director-General, cannot be refunded;
Fund; and
Application of Fund
5. The Fund must be used for the- 30 (a) payment of benefits in terms of this Act; (6) reimbursement of excess contributions to employers; (c) payment of-
(i) remuneration and allowances to members of the Unemployment
(ii) any other expenditure reasonably incurred and relating to the application Insurance Board and its committees; and 35
of this Act.
Raising of funds, loans and obtaining bank overdraft facilities
6. The raising of funds by way of loans and bank overdraft facilities in respect of the Fund must be done in terms of the Public Finance Management Act, 1999 (Act No. 1 of 40 1999).
Investment of money of Fund
7. (1) The money of the Fund other than money required to meet the current expenditure of the Fund may be deposited on behalf of the Fund by the Director-General with the Public Investment Commissioners to be invested in terms of the Public 45 Investment Commissioners Act, 1984 (Act No. 45 of 1984).
Fund. (2) Any profit on investments accrues to the Fund and any loss must be borne by the
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Donations and bequests to Fund
8. (1 1 Any person. body, corporation, organisation or financial or other institution may
( 2 ) The Director-General may accept donations or bequests for and on behalf of the make a donation or bequest to the Fund.
Fund.
Appointment of and annual review by actuary
9. (1) The Director-General must appoint an actuary who is a member of the Actuarial Society of South Africa or who is supervised by a member of that Society to perform the functions assigned to the actuary in this Act.
(2) Within two months after the end of each financial year, the actuary must review the financial soundness of the Fund for that financial year, and provide an actuarial valuation report to the Director-General.
(a) a statement- (3) The actuarial valuation report must contain-
(i) reflecting the actuarial value of the assets and liabilities of the Fund; (ii) on the financial soundness of the Fund; and
(iii) on whether or not there was a surplus or deficit in the Fund in the financial year in question;
(bj an indication of- (i) the basis and method used to value the assets and liabilities of the Fund;
(ii) any changes to the basis and method used to value the Fund as compared with the actuarial valuation report of the previous year; and
(iii) any special consideration or restriction that the Director-General brought to the attention of or made applicable to the actuary in performing the functions in terms of this section;
(c) an explanatory note on any matter relevant to obtaining a true and meaningful
(d) recommendations for the maintenance or improvement of the financial statement of the financial position of the Fund;
soundness of the Fund.
Surplus and deficit in Fund
10. (1) Subject to subsection (2), the Director-General must report and make recommendations to the Minister if the difference between income and expenditure of the Fund is-
(a) greater than is required to meet payments for benefits; or (b) insufficient or not increasing at a sufficient rate to meet payments for benefits
(2) The Director-General may only submit the report contemplated in subsection (1) after having consulted with the Board and the actuary on the contents of the report.
(3) In respect of a report contemplated in subsection (l)(a), the Minister, after consultation with the Board, may utilise the surplus to give effect to the purposes of this Act, including-
(a) improving the administrative efficiency and capacity of the Board and Fund;
(bj establishing a reserve fund.
that may reasonably be anticipated.
and
(4) In respect of a report contemplated in subsection (l)(b), the Minister may request the Minister of Finance to adjust the national budget in the manner contemplated in sections 16 and 30 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), in order to cover any deficit in the Fund.
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Accounting, auditing and financial reporting
11. (1) Despite section 49(2) to ( 5 ) of the Public Finance Management Act, 1999 (Act No. 1 of 1999), the Director-General is the accounting authority for the Fund.
(2) (a) At the beginning of each financial year, the Commissioner must file a business plan with the National Treasury. 5
(h) The Minister must compile the business plan with the concurrence of the Director-General and the Commissioner, and they are to be assisted by the actuary and the Board.
(3) In addition to the matters which must be included in the annual report and financial statements referred to in section 55 of the Public Finance Management Act, 1999 (Act 10 No. 1 of 1999), the annual report must set out and contain a statement showing-
(a) the total number of persons who received benefits in terms of this Act; (b) the total number of employers who paid contributions in terms of the
(c) the total number of contributors who paid contributions in terms of the 15
(d) the total number of persons deemed to be contributors under section 45; ( e ) the total monetary value of benefits provided in respect of each category of
cf) a statement setting out the loans, overdrafts, advances and financial 20
(g) the particulars of all donations and bequests received by the Fund; (h ) the actuarial valuation report contemplated in section 9; (i) particulars of the use of all immovable and movable property acquired by the
( j ) any amount written off in terms of section 58(8); and (kj any other matter determined by the Minister.
Unemployment Insurance Contributions Act;
Unemployment Insurance Contributions Act;
benefit;
commitments of the Fund;
Fund for p rposes contemplated in section 58(6) and (7); 25
CHAPTER 3
CLAIMING BENEFITS
Part A: Right to benefits 30
Right to benefits
12. (1) Subject to the provisions of this Act, a contributor or a dependant, as the case may be, is entitled to the following benefits:
(a) Unemployment benefits contemplated in Part B of this Chapter; (b) illness benefits contemplated in Part C of this Chapter; 35 (c) maternity benefits contemplated in Part D of this Chapter; (d) adoption benefits contemplated in Part E of this Chapter; and ( e ) dependant’s benefits contemplated in Part F of this Chapter.
(2) An example of the scale of benefits to which a contributor is entitled is contained in Schedule 3, as calculated from Schedule 2. 40
(3) (a) The Minister may, with the concurrence of the Minister of Finance, by notice in the Gazette and subject to subsection (4), amend the scale of benefits contained in Schedule 3 in accordance with a maximum monthly rate of remuneration of a skilled manual labourer as determined by the Social Security (Minimum Standards) Conven- tion, 1953 (Convention No. 102), of the International Labour Organisation. 45
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(b) The scale of benefits contemplated in paragraph (a) may vary between a maximum rate of 60% of remuneration for lower income contributors and a lower rate of remuneration for higher income contributors as will be determined by thresholds as set out in Schedule 3.
(4) When acting in accordance with subsection (3), the Minister must-
(i) contribution and investment income from the Fund; (ii) payment of benefits;
(iii) provision to meet expenses related to administering this Act; and (iv) provision for contingency reserves; and
the context.
(a) consult with the Board and must have regard to budgeted-
(b) comply with the procedure set out in section 55, with the changes required by
Calculation of benefits
13. (1) Subject to subsection (2), for purposes of calculating the benefits payable to a contributor, the daily rate of remuneration of a contributor, subject to the prescribed maximum, must be determined-
(a) if paid monthly, by multiplying the monthly remuneration by 12 and dividing
(b) if paid weekly, by multiplying the weekly remuneration by 52 and dividing it
(2) If the contributor’s remuneration fluctuates significantly from period to period, the calculation must be based on the average remuneration of that contributor over the previous six months.
(3) Subject to subsection ( 5 ) , a contributor’s entitlement to benefits in terms of this Chapter accrues at a rate of one day’s benefit for every completed six days of employment as a contributor subject to a maximum accrual of 238 days benefit in the four year period immediately preceding the date of application for benefits in terms of this Chapter, less any days of benefit received by the contributor during this period.
(4) For purposes of determining completed days of employment as contemplated in subsection (3), the period includes-
(a) the day that a contributor commenced employment and runs up to and
(b) any period in respect of which-
it by 365;
by 365.
including the day on which employment was terminated; and
(i) an employee was paid remuneration in lieu of notice; (ii) a merchant seaman received remuneration in terms of section 140 of the
( 5 ) The days of benefits that a contributor is entitled to in terms of subsection (3) may not be reduced by the payment of maternity benefits in terms of Part D of this Chapter.*
Merchant Shipping Act, 1951 (Act NO. 57 of 1951).
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2. Method of calculating days of benefits that a contributor is entitled to: Step 1 - Determine total number of days that an employee was employed as a contributor in the
four-year period immediately preceding the date of application for benefits in terms of this Chapter.
Step 2 - Divide total number of days by 52 multiplied by seven and disregard any fraction of the resultant figure.
Step 3 - Subtract from this amount any days benefits (excluding maternity benefits) received in the four-year period immediately preceding the date of application for benefits in terms of this Chapter.
Step 4 - The resultant figure determines the days of benefits that a contributor is entitled to.
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Contributor not entitled to benefits under certain circumstances
14. A contributor is not entitled to benefits for any period that the contributor- ( a ) was in receipt of-
(i) a monthly pension from the State; (ii) any benefit from the Compensation Fund established under the Compen- 5
sation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993), as a result of an occupational injury or disease, which injury or disease caused the total or temporary unemployment of that contributor;
(iii) benefits from any unemployment fund or scheme established by a council under section 28(gj or 43( l)(c) of the Labour Relations Act, 1995 10 (Act No. 66 of 1995);
(bi fails to comply with any provision of this Act or any other law relating to
(c ) is suspended from receiving benefits in terms of section 36( 1). unemployment; or
Part B: Unemployment benefits 15
Calculation of period of unemployment under this Part
15. (1) For purposes of this Part, any period of unemployment must be calculated
(2) The date contemplated in subsection (1) may be moved to a date prior to the from the date of unemployment.
application if the claims officer is satisfied that any delay in making the application was 20 caused by circumstances beyond the control of the contributor.
Right to unemployment benefits
16. (1) Subject to section 14, an unemployed contributor is entitled to unemployment benefits contemplated in this Part for any period of unemployment lasting more than 14 days, if- 25
(a ) the reason for the unemployment is- (i) the termination of the contributor’s contract of employment by the
employer of that contributor or the ending of a fixed term contract, (ii) the dismissal of the contributor, as defined by section 186 of the Labour
Relations Act, 1995 (Act No. 66 of 1995), or 30 (iii) insolvency in terms of the provisions of the Insolvency Act, 1936 (Act
No. 24 of 1936); (b) application is made in accordance with the prescribed requirements and the
(c) the contributor is registered as a work-seeker with a labour centre established 35
(d) subject to subsection (3), the contributor is capable of and available for work. 1(2) An unemployed contributor is not entitled to the benefits referred to in subsection
provisions of this Part;
under the Skills Development Act, 1998 (Act No. 97 of 1998); and
(1) if- (a) the contributor fails to report at the times and dates stipulated by the claims 40
officer in terms of section 17(4)(d); or (b) the contributor refuses without just reason to undergo training and vocational
counselling for employment under any scheme approved by the Director- General in terms of this Act or any other law.
(3) Despite subsection (l)(d) and subject to section 20(l)(a), a contributor who 45 becomes ill while in receipt of unemployment benefits, remains entitled to unemploy-
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ment benefits if the claims officer is satisfied that the illness is not likely to prejudice the contributor's chance of securing employment.
Application for unemployment benefits
17. (1) Application for unemployment benefits must be made in the prescribed form at an employment office. 5
(2) The application must be made within six months of the termination of the contract of employment, but the Commissioner may accept an application made after the six- month time limit has expired on just cause shown.
(3) The claims officer must investigate the application and, if necessary, request further information regarding the applicant's continued nemployment. 10
(4) If the application complies with the provisions of this Chapter, the claims officer must-
(a) approve the application; (b) determine-
(i) the amount of benefits for purposes of section 13(3); 15 (ii) the benefits the applicant is entitled to in terms of section 13(4);
(c) authorise the payment of the benefits; and (d) stipulate when the applicant must report to the employment office for purposes
of confirming that the contributor- (i) has been unemployed for the period in respect of which the unemploy- 20
(ii) is capable of and available for work. ment benefit has been claimed; and
(5) If the application does not comply with the provisions of this Chapter, the claims officer must advise the applicant in writing that the application is defective and of the reasons why it is defective. 25
Payment of unemployment benefits
18. (1) The Director-General must pay the unemployment benefits to the contributor at the employment office at which the application was made or any other employment office determined by the applicant at the time of application.
to accept appropriate, available work, or to undergo appropriate training or vocational counselling, the claims officer may impose a penalty of up to a maximum of thirteen weeks during which no benefits may be paid to the contributor.
(2) If the contributor receives unemployment benefits and without just reason refuses 30
Part C: Illness benefits
Determination of period of illness under this Par 35
19. (1) For purposes of this Part, the period of illness must be determined from the date the contributor ceases to work as a result of the illness.
(2) Subsection (1) applies with the necessary changes in respect of the determination of the periods of maternity and adoption benefits contemplated in sections 24(2) and 27(3), respectively. 40
Right to illness benefits
20. (1) Subject to section 14, a contributor is entitled to the illness benefits contemplated in this Part for any period of illness if-
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(a,! the contributor is unable to perform work on account of illness; (b) the contributor fulfils any prescribed requirements in respect of any specified
(c) application is made for illness benefits in accordance with the prescribed illness: and
requirements and the provisions of this Part. 5 (2) A contributor is not entitled to illness benefits-
(a) if the period of illness is less than 14 days; and (b) for any period during which the contributor-
(i) is entitled to unemployment benefits in terms of Part B of this Chapter or adoption benefits in terms of Part E of this Chapter; or 10
(ii) without just reason, refuses or fails to undergo medical treatment or to cany out the instructions of a medical practitioner, chiropractor or homeopath.
Calculation of illness benefits
21. (1) Subject to subsection (2) , the contributor must be paid the difference between 15 any sick leave paid to that contributor in terms of any other law, collective agreement or contract of employment for the period contemplated in section 19, and the maximum benefit payable in terms of section 12(2).
(2) When taking into account any sick leave paid to the contributor in terms of any other law, or any collective agreement or contract of employment, the illness benefit 20 may not be more than the remuneration the contributor would have received if the contributor had not been ill.
Application for illness benefits
22. (1) (a) Application for illness benefits must be made personally in the prescribed form at an employment office. 25
(b) If the contributor cannot lodge the application personally, the claims officer may authorise any other person to lodge the application on behalf of the applicant.
(2) The application for illness benefits must be made within six months of the commencement of the period of illness, but the Commissioner may accept an application made after the six-month time limit has expired on good cause shown. 30
(3) The claims officer must investigate the application and, if necessary, request any further information regarding the period that the applicant was not working or received reduced remuneration as a result of the illness.
(4) If the application complies with the provisions of this Chapter, the claims officer must- 35
(a) approve the application; (b) determine-
(i) the amount of benefits for purposes of section 13(3); (ii) the benefits the applicant is entitled to in terms of section 13(4);
(c) authorise the payment of the benefits;and 40 (d) stipulate how the benefits are to be paid.
( 5 ) If the application does not comply with the provisions of this Chapter, the claims officer must advise the applicant in writing that the application is defective and of the reasons why it is defective.
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Payment of illness benefits
23. The Director-General must pay the illness benefits- (a) at the employment office at which the application was made or any other
employment office determined by the applicant at the time of application; and (b) to the contributor or any other person authorised by the contributor who is 5
accepted by the claims officer to be so authorised.
Part D: Maternity beneJits
Right to maternity benefits
24. (1) Subject to section 14, a contributor who is pregnant is entitled to the maternity benefits contemplated in this Part for any period of pregnancy or delivery and the period 10 thereafter, if application is made in accordance with prescribed requirements and the provisions of this Part.
(2) Subject to subsection (3), the contributor must be paid the difference between any maternity benefit paid to that contributor in terms of any other law or any collective agreement or contract of employment for the period contemplated in section 19(2), and 15 the maximum benefit payable in terms of section 12(2).
(3) When taking into account any maternity leave paid to the contributor in terms of any other law or any collective agreement or contract of employment, the maternity benefit may not be more than the remuneration the contributor would have received if the contributor had not been on maternity leave.
(4) For purposes of this section the maximum period of maternity leave is 17,32 weeks.
(5 ) A contributor who has a miscamage during the third trimester or bears a still-born child is entitled to a maximum maternity benefit of six weeks after the miscarriage or stillbirth. 25
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Application for maternity benefits
25. (1) An application for maternity benefits must be made in the prescribed form at
(7) The Commissioner may on good cause shown- an employment office at least eight weeks before childbirth.
(a) accept an application after the period of eight weeks referred to in subsection 30
(b) extend the period of submission of the application up to a period of six months
(3) The claims officer must investigate the application and, if necessary, request
(4) If the application complies with the provisions of this Chapter, the claims officer
(1);
after the date of childbirth.
further information. 35
must- (a) approve the application; (b) determine-
(i) the amount of the benefits for purposes of section 13(3); 40 (ii) the benefits the applicant is entitled to in terms of section 13(4); and
(c) stipulate how the benefits are to be paid. ( 5 ) If the application does not comply with the provisions of this Chapter, the claims
officer must advise the applicant in writing that the application is defective and of the reasons why it is defective. 4s
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Act No. 63,2001 UNEMPLOYMENT WSURANCE ACT, 2001
Payment of maternity benefits
26. The Director-General must pay the maternity benefits to the contributor at the employment office at which the application was made or any other employment office determined by the applicant at the time of application.
Part E: Adoption benefits 5
Right to adoption benefits
27. (1 j Subject to section 14, only one contributor of the adopting parties is entitled to the adoption benefits contemplated in this Part in respect of each adopted child and only if-
(a ) the child has been adopted in terms of the Child Care Act, 1983 (Act No. 74 10
(b) the period that the contributor was not working was spent caring for the child; (c) the adopted child is below the age of two; and ( d j the application is made in accordance with the prescribed requirements and
(2) The entitlement contemplated in subsection (1) commences on the date that a competent court grants an order for adoption in terms of the Child Care Act, 1983 (Act No. 74 of 1983).
(3) Subject to subsection (4), the contributor must be paid the difference, if any, between any adoption benefit paid to that contributor in terms of any other law or any 20 collective agreement or contract of employment for the period contemplated in section 19(2) and the maximum benefit payable in terms of section 12(2).
(4) When taking into account any leave paid to the contributor in terms of any other law or any collective agreement or contract of employment, the benefit may not be more than the remuneration the employer would have paid the contributor if the contributor 25 had been at work.
of 1983);
the provisions of this Part. 15
Application for adoption benefits
28. (1) An application for adoption benefits must be made in the prescribed form at an
( 2 ) The application must be made within six months after the date of the order for 30 employment office.
adoption. but the Commissioner may accept an application after the six-month period on good cause shown.
(3) The claims officer must investigate the application and, if necessary, request further information regarding the period the applicant was not working in order to care for the adopted child. 35
(4) If the application complies with the provisions of this Chapter, the claims officer must-
(a) approve the application; (b ) determine-
(i) the amount of the b nefits for purposes of section 13(3); 40 (ii) the benefits the applicant is entitled to in terms of section 13(4);
(c) authorise the payment of the benefits; and ( d ) stipulate how the benefits are to be paid.
( 5 ) If the application does not comply with the provisions of this Chapter, the claims officer must advise the applicant in writing that the application is defective and of the 45 reasons why it is defective.
30 No. 23064 GOVERNMENT GAZETTE, 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT. 2001
Payment of adoption benefits
29. The Director-General must pay the adoption benefits to the contributor at the employment office at which the application was made or any other employment office determined by the applicant at the time of application.
Part F: Dependant’s benejits 5
Right to dependant’s benefits
30. (1) The surviving spouse or a life partner of a deceased contributor is entitled to
(a) in accordance with prescribed requirements and the provisions of this Part; and 10
(b) within six months of the death of the contributor except that, on just cause shown, the Commissioner may accept an application after the six-month period.
(2) Any dependent child of a deceased contributor is entitled to the dependant’s
the dependant’s benefits contemplated in this Part, if application is made-
benefits contemplated in this Part if application is made in accordance with the 15 provisions of this Part and-
(a) there is no surviving spouse or life partner; or (b) the surviving spouse or life partner has not made application for the benefits
within six months of the contributor’s death. (3) The benefit payable to the dependant is the unemployment benefit referred to in 20
Part B of this Chapter that would have been payable to the deceased contributor if the contributor had been alive.
Application for dependant’s benefits
31. (1) An application for dependant’s benefits must be made in the prescribed form
(2) The application must be made within the period referred to in section 30( l)(b) or
(3) The claims officer must investigate the application and, if necessary, request
(4) If the application complies with the provisions of this Chapter, the claims officer 30
at an employment office. 25
within 14 days after the period referred to in section 30(2)(b), as the case may be.
further information relevant to processing the application.
must- (a) approve the application; (b) determine-
(i) the amount of the benefits for purposes of section 13(3); (ii) the benefits the applicant is entitled to in terms of section 13(4); and 35
(iii) to whom it must be paid; ( e ) authorise the payment of the benefits; and (d) stipulate how the benefits are to be paid.
(5) If the application does not comply with the provisions of this Chapter, the claims officer must advise the applicant in writing that the application is defective and of the 40 reasons why it is defective.
Payment of dependant’s benefits
32. The Director-General must pay the dependant’s benefits to the dependant at the employment office at which the application was made or any other employment office determined by the applicant a the time of application. 45
32 No. 23064 GOVERNMENT GAZETTE, 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, zoo1
Part G: General provisions relating to claiming benejits
Benefits not to be assigned, attached or set off
33. (1) Benefits may not be- (a) assigned; (b) attached by the order of any court, except by any court order relating to
maintenance of the dependants, including a former spouse, of that contributor; or
(c) set off against any debt; (2) For purposes of subsection (l), “debt” does not include a debt arising from
benefits paid in error under the provisions of this Act.
Benefits not subject to taxation
34. Benefits payable to contributors and dependants in terms of this Act are not subject to taxation in terms of the Income Tax Act, 1962 (Act No. 58 of 1962).
Recovery of benefits paid in error
35. (1) Contributors or dependants who have been paid benefits that they are not entitled to in terms of this Act or paid benefits in excess of their entitlement must repay such benefits to the Fund.
(2) If the Commissioner determines that a person contemplated in subsection (1) has been paid benefits in error or in excess of the person’s entitlement, the Commissioner must, within eighteen months of the date of the determination, make a written demand for repayment from that person.
(3) A written demand contemplated in subsection (2) must include- (a) a statement of the amount paid in error; (b) an explanation as to why that person was ineligible to receive the funds; and (c) evidence that the person to whom the demand is addressed actually received
(4) The persons contemplated in subsection (1) must refund the amount within 90 the funds.
days of the written demand.
Suspension of contributor’s right to benefits
36. (1) After giving a contributor or a dependant an opportunity to make written representations, the Commissioner may, on written notice with reasons provided, suspend a contributor or dependant for a period of up to five years from receiving benefits in terms of this Act if the contributor or dependant-
(a) made a false statement in an application for benefits; (b) submitted a fraudulent application for benefits; (c) failed to inform a claims officer of the resumption of work during the period
(dj failed to comply with a written demand issued in terms of section 35(2). (2) The period of suspension may be imposed irrespective of whether or not actual
in respect of which benefits were being paid; or
payment was made to the contributor or dependant.
5
10
15
20
25
30
35
40
34 No. 23064 GOVERNMENT GAZETTE. 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, 2001
(,3) The decision to suspend a contributor from receiving payments does not- (a ) absolve an employer from that employer’s duty to contribute to the Fund; or (b) limit an employer’s right to be reimbursed for any contribution paid on behalf
of the suspended contributor.
Disputes relating to payment or non-payment of benefits 5
37. (1) A person who is entitled to benefits in terms of this Act may appeal to the appeals committee of the Board if that person is aggrieved by a decision of-
(a ) the Commissioner to suspend such person’s right to benefits; or (b) a claims officer relating to the payment or non-payment of benefits.
(2) A person who is dissatisfied with the decision of the appeals committee may refer 10 the matter for arbitration to the CCMA.
CHAPTER 4
ENFORCEMENT
Securing undertakings
38. (1 ) A labour inspector who has reasonable grounds to believe that an employer has 15 not complied with any provision of this Act or has committed an offence in terms of this Act, must endeavour to secure a written undertaking by the employer to comply with the relevant provision.
(2) In endeavouring to secure the undertaking, the labour inspector- (a ) may seek to obtain an agreement from the employer as to any step that the 20
( b ) may seek to obtain an agreement from the employer as to any amount owed to
(e) must provide a receipt for any payment received.
employer must take in terms of this Act;
the Fund in terms of the Unemployment Insurance Contributions Act; and
Compliance order 25
39. (1) A labour inspector may issue a compliance order if the labour inspector has reasonable grounds to believe that an employer has not complied with-
( a ) an undertaking obtained in terms of section 38; (b) an order given in terms of subsection (2); or ( e ) any provision of this Act. 30
( a ) the name of the employer, and the location of every workplace to which the compliance order applies;
jb} any provision of this Act that the employer has not complied with and details of the conduct constituting non-compliance; 35
(c) any amount that the employer is required to pay to the Fund in terms of the Unemployment Insurance Contributions Act;
(d) any written undertaking by the employer in terms of section 38 and any failure by the employer to comply with a written undertakmg;
( e ) any steps that the employer is required to take including, if necessary, the 40 cessation of the contravention in question and the period within which those steps must be taken; and
(fi the maximum fine that may be imposed upon the employer for a failure to comply with a provision of this Act.
(2) A compliance order must set out-
36 No. 23064 GOVERNMENT GAZETTE, 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, 2001
( 3 ) A labour inspector must deliver a copy of the compliance order to the employer. (4) An employer must comply with the compliance order within the period stated in
the order unless the employer objects in terms of section 40.
Objections to compliance order
40. An employer may object to a compliance order by referring the dispute for 5 resolution to the Director-General in the prescribed manner.
Compliance order may be made an order of Labour Court
41. The Director-General may apply to the Labour Court for a compliance order to be made an order of the Labour Court if the employer has not complied with the order.
Duty of employer 10
42. An employer must ensure that every statement or other information which must be kept and submitted in terms of this Act is correct.
CHAPTER 5
COMMISSIONER AND CLAIMS OFFICERS
Designation of Unemployment Insurance C m issioner 15
43. The Minister must designate an employee of the Department of Labour as the Unemployment Insurance Commissioner.
Report of Commissioner, and delegation and assignment of powers and duties
44. (1) The Commissioner must furnish the Director-General with a report on the activities of the Fund during the preceding financial year within six months of the end of 20 each financial year or as soon as it is practical thereafter.
(2) The Commissioner may not delegate any power or assign any duty conferred or imposed on the Commissioner in terms of this Act, unless the Director-General consents to the delegation or assignment.
assignment contemplated in subsection (1) must be regarded as having been exercised or performed by the Commissioner.
(4’) A delegation or assignment in terms of this section does not limit the Commissioner’s authority to exercise or perform the delegated power or assigned duty.
(3) Any power exercised or duty performed by or under a delegation or in terms of an 25
Commissioner may dee person to be con ri utor 30
45. The Commissioner may deem a person to be a contributor for purposes of this Act if it appears that the person should have received benefits in terms of this Act but, because of circumstances beyond the control of that person, is not entitled to benefits.
Appointment of claims officers
46. Subject to the laws governing the Public Service, the Director-General must 35 appoint claims officers to assist the Commissioner to process applications of claims made in terms of this Act.
,
38 No. 23064 GOVERNMENT GAZETTE, 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT WSURANCE ACT, 2001
CHAPTER 6
UNEMPLOYMENT INSURANCE BOARD
Establishment of Unemployment Insurance Board
47. The Minister must establish the Unemployment Insurance Board.
Powers and duties of Unemployment Insurance Board 5
48. (1) The Board must- (a) advise the Minister on-
(i) unemployment insurance policy; and (ii) policies arising out of the application of this Act;
(iii) policies for minimising unemployment; a d 10 (iv) the creation of schemes to alleviate the effects of unemployment;
(b) make recommendations to the Minister on changes to legislation in so far as it impacts on policy on unemployment or policy on unemployment insurance; and
(c) perform any other function which may be requested by the Minister for 15 purposes of giving effect to this Act.
( 2 ) The powers and duties of the Board must be exercised and performed subject t- (a ) the provisions of this Act and its constitution contemplated in section 50; (b) any directions issued by the Minister; and (c) any guidelines termined by th Director-General. 20
Composition of Unemployment Insurance Board
49. (1) The Unemployment Insurance Board consists of- (a) a chairperson, who has a deliberative vote in addition to a casting vote and is
(b) twelve voting m mbers appointed by the Minister; an 25 (c) the Commissioner, who has a vote.
(a) three members must be nominated by NEDLAC to represent organised
(6) three members must be nominated by NEDLAC to represent organised 30
(c) three members must be nominated by NEDLAC to represent organisations of
(d) three members must be appointed by the Minister to represent the interests of
appointed by the Minister;
(2) Of the members referred to in subsection (l)(b)-
labour;
business;
community and development interests; and
the State. 35 (3) A member of the Board contemplated in-
la) subsection (l)(a) and (b) holds office for a period of three years and is eligible
f b ) subsection ( l ) (c ) is in an official capacity a member of the Board.
(a) is removed from office by the Minister as contemplated in subsection (5) ; or (b) resigns by written notice addressed to the Minister.
(5 ) The Minister may remove a member from the Board- (a) in the case of any member contemplated in subsection (2)(a), (b) or (c), on the
(b) for serious misconduct; (c) for permanent incapacity; (d) for being absent from three meetings of the Board without prior permission of
(e) for engaging in any activity that might undermine the functions of the Board. 50
for reappointment; and
(4) A member vacates office if that member- 40
request of NEDLAC; 45
the Board unless just cause is shown by the member; or
40 No. 23064 GOVERNMENT GAZETTE, 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, 2001
(6) If a member of the Board vacates office before the expiry of his or her period of office, the Minister must fill the vacancy in accordance with subsections (1) and (2) for the unexpired portion of that period.
Constitution of Unemployment Insurance Board
50. (1) The Board must as soon as possible after the appointment of its members, 5
(2) The constitution of the Board- prepare and adopt a constitution subject to approval by the Minister.
(a) must provide for- (ij the establishment and functions of committees of the Board, which must
include an appeals committ e; 10 (iij subject to subsection (3), the rules for convening and conducting
meetings of the Board and its committees, including the quorum required, and for the keeping of minutes;
(iii) subject to section 49(1), the voting rights of the different members of, and the manner in which decisions are to be taken by, the Board and its 15 committees;
(iv) a code of conduct for Board members; (v) the determination through arbitration of any dispute concerning the
(vi) subject to subsection (4), a procedure for amending the constitution; and 20 interpretation and application of the constitution;
(b ) may provide for- (i) the delegation and assignment of powers and duties of the Board to its
members, committees and employees: Provided that the Board may- (aa) impose conditions for any delegation or assignment; (bb) not be divested of any power or duty by virtue of the delegation of 25
(cc) may vary or set aside any decision made under any delegation or
(iij any other matter necessary for the performance of the functions of the
(3) At least thirty days’ notice must be given for a meeting of the Board at which a
(4) A supporting vote of at least two thirds of the members of the Board and the
that power or assignment of that duty; and
assignment; and
Board. 30
proposed amendment of the constitution is to be considered.
approval of the Minister is required for an amendment of the constitution.
Administration and provision of resources to Unemployment Insurance Board 35
51. (1) The Commissioner is responsible for administering the affairs of the Board. (2) In order to enable the Board to perform its functions effectively the Director-
General must provide the Board with the necessary financial and administrative resources and, subject to the laws governing the Public Service, with the necessary personnel. 40
(3) As soon as it is practicable after the end of every month, the Commissioner must, after consultation with the Board-
(a) determine the value of the service and resources provided by the Unemploy-
(b) pay for the utilisation of these services and resources out of the Unemploy- 45 ment Insurance Fund to the Board; and
ment Insurance Fund.
Remuneration and allowances to members of Unemployment Insurance Board
52. A member of the Board or its committees who is not in the full-time employment of the State must be paid remuneration and allowances determined by the Minister in terms of the Tr asury Instructions issued by the National Treasury. 50
Indemnification of members of Unemployment Insurance Board
53. A member of the Board is indemnified in respect of all proceedings, costs and expenses incurred by such member when defending or opposing legal proceedings arising out of bona $de acts of such member in terms of this Act.
42 No. 23064 GOVERNMENT GAZETTE, 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, 2001
CHAPTER 7
REGULATIONS
Regulations
54. The Minister, after consultation with the Board, may make regulations regarding any matter- 5
(a) arising from, or consequential to, the transitional provisions contemplated in
(b) which it is necessary or expedient to prescribe in order to give effect to the Schedule 1 ; or
purpose and provisions of this Act.
Procedure when issuing regulations 10
55. (1) Unless public interest requires a regulation to be issued without delay, the Minister must comply with the following procedure when intending o issue regulations:
(a) The intention to issue the regulation must be announced by notice in the Gazette and at least one other means of communication circulated throughout the Republic; 1s
(i) that a draft regulation has been developed for comment; (ii) the nature of the draft regulation;
(iii) where a copy of the draft regulation may be obtained; and (iv) where comments are to be returned to: 20
allowed for interested parties to comment on the regulation; and
must be considered before issuing or amending the regulation.
(b) the notice must state-
( c ) a period of at least one month from the date of the announcement must be
(d) the comments received and the content of all discussions and consultations
( 2 ) Subsection (1) does not apply- 25 (a) to any regulation correcting a textual error; or (b) when the Minister withdraws any regulation or notice made or issued under
the Unemployment Insurance Act, 1966 (Act No. 30 of 1966), as contem- plated in item 2 of Schedule 1.
(3) Any regulation affecting State revenue or expenditure may only be issued or 30 amended with the concurrence of the Minister of Finance.
CHAPTER 8
GENERAL
Information to be supplied by employer
56. (1) Every employer must, as soon as it commences activities as an employer, 35 provide the information referred to in subsection (2) regarding its employees to the Commissioner, irrespective of the earnings of such employees.
(2) The information contemplated in subsection (1) must- ( a ) include the street address of the business, and any of its branches, of the
employer; 40 (b) if the employer is not resident in the Republic, or is a body corporate not
registered in the Republic, include the particulars of the authorised person who is required to carry out the duties of the employer in terms of this Act: and
(c ) include the names, identification numbers and monthly remuneration of each of its employees, and must state the address at which the employee is 45 employed.
(3) Every employer must, before the seventh day of each month, inform the Commissioner of any change during the previous month in any information furnished in terms of subsection (1).
p&culars as may reasonably be required to give effect to the purpose of this Act within 30 days of the request, or within such extended period as the Commissioner may allow.
(4) The Commissioner may request he mployer to provide such additional 50
44 No. 23063 GOVERNMENT GAZETTE. 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT. 2001
Creation and maintenance of database
57. (1) The Commissioner must create and maintain a database of contributors.
(2) Payment of any benefit in terms of this Act must be based on the information beneficiaries and employers.
contained in the database and provided- (a) by the contributor or dependant; (b) in terms of section 56 of this Act; and (e) in terms of the Unemployment Insurance Contributions Act.
5
(3) (a) In order to determine the payment of benefits in terms of this Act, the Commissioner may access any information on a database of the State that contains 10 information regarding social security.
institutions to link their respective databases. (6 ) For purposes of paragraph (a) the Commissioner must co-operate with other State
Powers and duties of Director-General
58. (1) The powers and duties conferred or imposed on the Director-General in terms 1 j of this Act are in addition to the powers and duties conferred or imposed on the Director-General as head of the Department of Labour.
( 2 ) The Director-General must perform the fiduciary duties in respect of the Fund in terms of the Public Finance Management Act, 1999 (Act No. 1 of 1999).
( 3 ) Subject to such conditions as the Director-General may determine, the 20 Director-General may delegate any power or assign any duty conferred or imposed on the Director-General in terms of this Act to any officer of the Fund.
(4) Any power exercised or duty performed under a delegation or assignment in erms of this section must be regarded as having been exercised or performed by the Director- General. 25
(5) A delegation or assignment in terms of this ection does not limit he Director-General’s authority to exercise the delegated power or perform the assigned duty.
(6) The Director-General may, after consultation with the Board- (a) purchase or otherwise acquire immovable property required for purposes of 30
(b) alienate or let any immovable property so acquired; or ( e ) permit the use of any immovable property so acquired to give effect to any
this Act;
other law on such terms as the Director-General may determine. (7) The Director-General may purchase or otherwise acquire any movable property 35
required for purposes of giving effect to this Act, and may- (a) sell or otherwise write off losses and deficiencies in respect of this property; or (b) permit the use of any movable property so acquired to give effect to any other
law on such terms as the Director-General may determine. (8) Whenever the Director-General is of the opinion that any amount due to the Fund, 40
or any amount paid by the Fund including moneys obtained fraudulently from the Fund, cannot or should not be recovered, the Director-General may direct that such amount be written off.
(9) The Director-General may- (a) appoint agents or designate agency offices to serve as employment offices as 45
may be necessary to assist the Director-General, Commissioner, Board or Fund in properly administering this Act; and
(b) confer on the agents or the officers of such offices such functions as may be necessary to give effect to this objective.
(10) Notwithstanding section 1 O( l), if the Director-General is of the opinion that the 50 income of the Fund is insufficient or is not increasing at the rate required to meet the expenditure of the Fund or to meet reasonably anticipated future applications for benefits, the Director-General must-
(a) inform the Minister, the actuary and the Board of this fact; and (b ) after consulting with the Board make recommendations to the Minister on this 55
matter.
46 No. 23064 GOVERNMENT GAZETTE, 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, 2001
(1 1) The Director-General may borrow money on behalf of the Fund in terms of section 66(3)(b) of the Public Finance Management Act, 1999 (Act No. 1 of 1999).
(12) Notwithstanding section 11, the Director-General must within six months of the end of each financial year or as soon as practicable thereafter, submit a written report to the Minister regarding- 5
(a) the manner in which the Board and the committees are performing their functions;
(6) the number of unemployed contributors to whom benefits have been paid and the total amount of such benefits;
(c) the number of contributors to whom illness, maternity and adoption benefits, 10 respectively, have been paid and the total amount of such payments; and
(d) the number of deceased contributors in respect of whom dependant’s benefits were paid and the total amount of such payments.
(13) The report contemplated in subsection (12) together with the statement of income and expenditure and the balance sheet of the Fund, must be tabled in the 15 National Assembly within 30 days after its receipt by the Minister if Parliament is then sitting and, if Parliament is not sitting, within fourteen days of the commencement of the next sitting.
Certain instruments exempt from stamp duty
59. Any instrument issued in terms of this Act is exempt from stamp duty, if that duty 20 is legally payable by the Fund.
Recovery of losses caused by employees of Fund
60. (1) For purposes of this section, causing loss or damage to the Fund includes- (a) the making or authorising of-
(i) an irregular payment of Fund moneys; 25 (ii) a payment without a proper supporting voucher;
moneys;
potential value, or Fu d property; 30
(6) the failure to cany out a duty leading to a fruitless expenditure of Fund
(c) a deficiency in any Fund moneys, stamps, securities, documents with face or
(d) damage to any Fund property; and (e} an act or omission leading to a court claim against the Fund.
(2) If an employee of the Fund causes any loss or damage to the Fund, the Director-General may-
(a) institute an enquiry i to the loss or damag ; 35 (b) determine whether the employee is liable for the loss or damage; (c) if the employee is found to be liable for the loss or damage, determine-
(i) the amount of the loss or damage; and (ii) how and when the amount is to be paid by the employee; and
subsection. (dl notify the employee in writing of any determination made in terms of this 40
(3) If, at the termination of an employee’s employment, there remains any amount outstanding in respect of a determination made in terms of subsection (2), that outstanding amount may be deducted from any moneys due to the employee.
may, within 30 days of the date of notification in terms of subsection (2)(d}, appeal to the Minister in accordance with the grievance procedure applicable to state employees.
(4) Any employee who is aggrieved by a determination made by the Director-General 45
48 No. 23064 GOVERNMENT GAZETTE. 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT. 2001
( 5 ) Nothing in this section prevents the Director-General from- (a) instituting proceedings in a competent court to recover any loss or damage
(b ) instituting disciplinary proceedings against an employee contemplated in
(c) instituting proceedings contemplated in both paragraphs (a) and (b).
caused by an employee who is or was in the public service; or
paragraph (a); or 5
Recovery of loss generally
61. (1) For purposes of this section, loss or damage to the Fund means- (a) an employer’s irregular payment or failure to pay moneys due to the
Commissioner in terms of this Act or the Unemployment Insurance 10 Contributions Act;
during the period in respect of which benefits were being paid; (b) a contributor’s failure to inform the claims officer of the resumption of work
(c) payment of Fund moneys as a result of a false statement or fraudulent claim; (d) any failure to comply with a duty imposed by the provisions of this Act 15
leading to loss or damage to the Fund. (2) Any person who causes any loss or damage to the Fund, is guilty of an offence. (3) A court may, on convicting a person for the commission of an offence
contemplated in subsection (2), determine the amount of the loss or damage caused to the Fund. 20
(4) Any person found guilty of an offence as contemplated in subsection ( 2 ) must refund the loss to the Fund on such terms and conditions as the Director-General may determine.
( 5 ) The Director-General may permit payment of the amount in instalments. (6) If the loss to the Fund is due to a fraudulent benefit claim, the loss may be 25
recovered from any outstanding benefit payments due to be made to the contributor or dependant under the provisions of this Act.
(7) Nothing in this section prevents the Director-General from instituting legal proceedings in any competent court to recover any loss or damage caused to the Fund by any person. 30
Evidence
62. ( I ) If any of the following documents are produced in a court of law, they are presumed to be certified by their author without proof of the author’s signature unless evidence is led to the contrary:
committee;
Director-General, the Board or any committee; or
(a) A record of a decision made by the Director-General, the Board or any 35
( 6 ) a copy of or extract from an entry in any book or record kept by the
(c) any document filed with the Director-General, the Board or any committee. (2) In any proceedings under this Act, an affidavit purporting to be made by the 40
Director-General is evidence of any of the following facts stated in the affidavit: (a) That any person or body of persons is an employer or a contributor under this
Act;
50 No. 23064 GOVERNMENT GAZETTE, 28 JANUARY 2002
Act No. 63,2001 UNEMPLOYMENT INSURANCE ACT, 2001
(b) that any person is or was lawfully required under this Act to pay any amount
(c) that any amount referred to in paragraph (b) or any portion thereof had or had
(3) (a ) A presiding officer at the proceedings in which any affidavit referred to in subsection (2) is presented in evidence, may of his or her own accord, or must at the request of any party to the proceedings, require the deponent under subpoena to give oral evidence, or answer any written question submitted to the presiding officer under oath.
(b) Any question and answer from that deponent is admissible as evidence in the proceedings.
(4) A contributor is presumed, unless the contrary is proved, to remain in the employ of an employer until that employer has notified the Director-General that the contributor is no longer employed with that employer.
(5) In any proceedings under this Act, any of the following documents are admissible in evidence against an employer and constitute an admission of the facts contained in the document unless it is proved that the statement was not made by the employer:
(a ) A statement or entry contained in any book, record or document kept by any
(b) any such statement or entry found on any premises occupied by the employer; (c) any such statement or entry found on any vehicle used in the business of the
employer; and (d) any copy or reproduction of any such statement or entry, certified by a
commissioner of oath to be a true copy or reproduction of the original statement.
(6) No answer to any question put by a person in the course of an enquiry in terms of section 60(2)(a) or by a labour inspector may be used against that person in any criminal proceedings except proceedings in respect of a charge of perjury or making a false statement.
Disclosure of information
to the Director-General; or
not been paid on a date specified in the ailidavit.
employer;
63. (1) Subject to the provisions of the Promotion of Access to Information Act, 2000 (Act No. 2 of 2000), no person may disclose any information obtained by that person in the performance of functions contemplated in this Act, except-
(a ) to the extent to which it may be necessary for the proper administration of a
(b) for purposes of the administration of justice; or (c) at the request of the Minister, the Director-General or any other person entitled
provision of this Act;
to the information. (2) Any person who contravenes subsection (1) is guilty of an offence.
General prohibited conduct
64. (1) No person may- (a) knowingly make a statement or cause a statement to be made which is
materially false or which results in an incorrect payment of benefits in an application for benefits in terms of this Act;
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(b) wilfully make any false entry on a contributor’s record card or any other book, record or document relating to either a contributor’s employment history or to a contributor’s claim for benefits; or
(c) contravene, or refuse or fail to fully comply with any provision of this Act or of any regulation or notice issued in terms of this Act.
( 2 ) Any person who contravenes subsection (l)(a), (b) or (c) is guilty of an offence.
Penalties
65. Any person convicted of an offence in terms of this Act is liable to a fine or to imprisonment, or to both a fine and imprisonment.
Jurisdiction of Labour Court
66. Unless this Act provides otherwise, the Labour Court has jurisdiction in respect of all matters in terms of this Act, except in respect of an offence in terms of this Act.
Stating of case to Labour Court
67. (1) If any question of law arises concerning the application of this Act, the Director-General may of his or her own initiative, or at the request of a party with sufficient interest in this matter, state a case for decision by the Labour Court.
(2) The Director-General must set out in the stated case- (a) the facts that were found to be proved; and (b) the view of the law which was adopted in relation to those facts.
(3) If the Director-General has any doubt as to the correctness of a decision given by the Labour Court regarding a question of law concerning the application of this Act, the Director-General may submit such decision to the Labour Appeal Court.
Delegation and assignment by Minister
68. (1) The Minister may in writing delegate or assign to the Director-General or any employee in the public service, any power or duty conferred or imposed upon the Minister in terms of this Act, except the Minister’s powers in terms of sections 43, 47, 48(2)(b), 50(1) and (4), 52, this section, section 69 and the Minister’s power to make regulations or to issue notices.
(2) A delegation or assignment in terms of subsection (1) does not limit or restrict the Minister’s authority to exercise or perform the delegated power or assigned duty.
(3) Any person to whom a power is delegated or a duty is assigned in terms of subsection (1) must exercise or perform that power or duty subject to the direction of the Minister.
(4) The Minister may at any time- (a) withdraw a delegation or assignment made in terms of subsection (1); and (b) withdraw or amend any decision made by a person exercising or performing
a power or duty delegated or assigned in terms of subsection (1).
Persons regarded as contributors for purposes of Act
69. (1) The Minister may, after receipt of an application in a prescribed form and with the concurrence of the Board, by notice in the Gazette, declare that as from a date specified in the notice any specified class of persons, or any person employed in any specified business or section of a business or in any specified area, must be regarded as contributors for purposes of this Act.
( 2 ) The procedure referred to in section 55(1) applies with the necessary changes to a notice issued under subsection (1).
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Repeal of laws
70. The Unemployment Insurance Act, 1966 (Act No. 30 of 1966), is hereby repealed except to the extent mentioned in Schedule 1.
Transitional arrangements
71. The provisions of Schedule 1 apply to the transition from other laws to this Act. 5
Act binds State
72. This Act binds the State.
Short title and commencement
73. (1) This Act is called the Unemployment Insurance Act, 2001, and takes effect on
( 2 ) Different dates may be fixed under subsection (1) in respect of different provisions a date to be fixed by the President by proclamation in the Gazette. 10
of this Act.
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SCHEDULE 1
TRANSITIONAL ARRANGEMENTS
Definitions
1. In this Schedule “Unemployment Insurance Act, 1966” means the Unemployment Insurance Act, 1966 (Act No. 30 of 1966). 5
Regulations
2. Any regulation made under the Unemployment Insurance Act, 1966, which is in force immediately before the commencement of this item, remains in force until withdrawn by the Minister by notice in the Gazette.
Transferral of assets, liabilities, rights and obligations of Unemployment Insurance 10 Fund
3. All assets, liabilities, rights and obligations of the Unemployment Insurance Fund established under the Unemployment Insurance Act, 1966, are hereby transferred to the Fund established by section 4.
Continuity of Unemployment Insurance Board 15
4. (1) The Board and its subcommittees, established under the Unemployment Insurance Act, 1966, continue to exist until the Minister establishes the Board in terms of section 47.
(2) The members of the Board appointed under the Unemployment Insurance Act, 1966, remain in office until the Minister has appointed the members of the Board in 20 terms of section 49.
Claims against Unemployment Insurance Fund
5. All claims against the Fund made under the Unemployment Insurance Act, 1966, remain in force and must be finalised in terms of that Act.
Appeals against decisions of claims officers 25
6 . (1) Any appeal in terms of the Unemployment Insurance Act, 1966, against a decision of claims officers remains in force and must be finalised in terms of that Act.
(2) For purposes of subitem (l), the Benefit Appeals Committees established under the Unemployment Insurance Act, 1966, continue to exist until all appeals have been dealt with. 30
Investigations and prosecutions
7. (1) Any investigation undertaken in terms of the Unemployment Insurance Act, 1966, which is not completed at the commencement of this Act, must be finalised in terms of that Act.
which is not completed at the commencement of this Act, must be finalised in terms of that Act.
Duty of employer to provide particulars of employees at commencement of this item
(2) Any prosecution instituted in terms of the Unemployment Insurance Act, 1966, 35
8. (1) Within seven days after the commencement of this item, every employer must 40 provide the information specified in section 56(2) of all employees employed with it o the Commissioner, irrespective of the earnings of such employees.
(2) The Commissioner may request the employer to provide, within 30 days of the request, or within an extended period as the Commissioner may allow, such additional particulars as may be reasonably required to give effect to the purpose of this Act. 45
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SCHEDULE 2
MATHEMATlCAL CALCULATION OF CONTRIBUTOR’S ENTITLEMENT
The benefit to which a contributor is entitled is calculated in one of two ways, depending on a contributor’s income prior to becoming unemployed:
1. Contributors who earned less than a particular amount (known as the “benefit 5 transition income level”) are entitled to a percentage of their previous pay.
2. Contributors who earned more than the benefit transition income level are entitled to a flat benefit, equal to the entitlement of a contributor who was previously paid at the benefit transition income level.
The benefit transition income level 10
The 1953 International Labour Organisation Convention (Convention No. 102) stipulates that the wage of a skilled manual worker should determine the appropriate income level at which to set a ceiling for membership of a social insurance scheme. Over the years, South Africa’s Unemployment Insurance scheme has roughly kept pace with this guideline. The benefit transition income level is therefore linked to this rate. 15
The current income ceiling is R8 099 per month. This will become the initial benefit transition income level for the purposes of this Act. However, in terms of section 12(3)(a), the Minister may change the benefit transition income level from time to time to reflect changing patterns of income.
Contributors who previously earned less than the benefit transition income level 20
For contributors who earned less than the benefit transition income level, entitlement to benefit is earnings-related. A contributor’s entitlement is calculated according to the following formula:
Benefit = Daily Income * IRR where IRR is the Income Replacement Rate corresponding to the contributor’s daily 25 income.
Daily Income
If a contributor was paid weekly, daily income is the weekly rate of pay divided by 7. If a contributor was paid fortnightly, daily income is the fortnightly rate of pay
If a contributor was paid monthly, daily income is ihe monthly rate of pay multiplied divided by 14. 30
by 12, then divided by 365.
Income Replacement Rate
The Income Replacement Rate (IRR) determines the percentage of a contributor’s previous income to which the contributor is entitled in the form of benefits. The IRR is 35 a variable, so it defines a sliding scale. A contributor who previously earned a low wage is entitled to receive benefits representing a larger proportion of her or his previous income than a contributor who previously earned a higher wage.
The IRR is at its maximum when income equals zero, and it reaches its minimum where income is equal to the benefit transition income level. The maximum IRR is fixed 40 at 60%. The minimum IRR is currently set at 38%. However, the Minister may vary the minimum IRR in terms of section 12(3)jb).
Using current values, the IRR can be calculated according to the following formula:
IRR = 29.2 + (99779.68 / (3239.6 + Yi))
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where Yi represents a contributor’s monthly rate of income. (Consistency of units is essential. To calculate IRR from daily or weekly rates of pay, please refer to the more detailed explanation of the IRR formula in the technical note below.)
Contributors who previously earned more than the benefit transition income level
Contributors who earned more than the benefit transition income level are entitled to a flat benefit equal to the benefit transition income level multiplied by the minimum IRR.
At the current benefit transition income level of R8 099 per month, this works out to R101.18 per day:
Daily income = (8099 * 12) / 365) = 266.2685 IRR = 38% or 0.38 Benefit = 266.2685 * 0.38 = 101.18
Duration of benefits
In terms of section 13(3), a contributor is eligible to receive one day’s benefit for every six completed days of employment, up to a maximum of 238 days (34 weeks). A contributor will therefore be eligible to claim benefits for the maximum duration after being continuously employed for four years. If a contributor has already drawn benefits (other than maternity benefits) in terms of this Act in the preceding four years, the number of days for which the contributor is eligible to claim benefits will be reduced accordingly.
To calculate the number of days of benefits to which a contributor is entitled: 1. Determine the total number of days that the contributor was employed (and
contributing) in the four-year period immediately preceding the date of application for benefits.
2. Divide the total number of days by 6, disregarding any remainder or fractional portion of the result.
3. Subtract the number of days (if any) for which the contributor claimed benefits (other than maternity benefits) in terms of this Act during the preceding four years.
Amount of benefit payment
The benefit payment to which a contributor is entitled in any given period shall be the amount of the benefit entitlement multiplied by the number of days for which the contributor is eligible to receive benefits during the payment period.
Technical note on the Calculation of IRR
The sliding scale for the Income Replacement Rate (IRR) is represented by a portion of the curve (rectangular hyperbola) produced by a graph of the function y = l/x, where the y axis represents the IRR and the x axis represents income. However, in order to associate this curve with values that are meaningful for this purpose, it is necessary to apply adjusting formulae.
Calculating the IRR associated with any given level of income below the benefit transition income level can be done in three steps:
1. The rate of income is transformed into a corresponding value on the x axis (xi). The formula for this is:
Yi (Xi - XI) YLRR / (x2 - XI) (1) where: Yi is the contributor’s rate of income; Y, is the benefit transition income level; and x1 and x2 are constants that determine the portion of the curve that is used to calculate IRR.
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The current values of the parameters Y,, x1 and x2 are: Y, = R8 099 per month x1 = 2 x2 = 7
Using these values, expression (1) can be simplified to: 5 xi = 2 + (Yi/1619.8) (la)
where Yi is expressed as a monthly rate of income. [It is important to ensure that both the contributor's rate of income (Yi) and the benefit transition income level (YLRR) are expressed in the same units-monthly, weekly, or daily.] 10
2. The y values corresponding to the x values are calculated using the general formula:
y = l / x ( 2 )
y1 = 1 / x , 15 y2 = I / x , yi = 1 /x;
thus:
3. The yi value is then converted to the corresponding IRR. The formula for this is:
IRR = LRR + (yi - y2) (URR - LRR) / ('1 - y2) (3) 20 where: IRR is the income replacement rate; LRR is the lower (minimum) income replacement rate; and URR is the upper (maximum) income replacement rate. The current values of the parameters LRR, URR, y1 and y2 are: LRR = 38% URR = 60%
y2 = 117
Using these values, expression (3) can be simplified to:
y1 = 112
IRR = 6 1 . 6 ~ ; + 29.2 (3a)
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SCHEDULE 3
SCALE OF CONTRIBUTOR’S ENTITLEMENT TO BENEFITS
(Section 12(2))
(1) Table One is the scale of benefits to which a contributor may be entitled. A contributor’s monthly rate of remuneration is set out in column 1. The percentage of the 5 contributor’s monthly income that will be paid as a benefit is set out in column 2. The actual benefit payable in Rand terms is set out in column 3.
(2) Benefits below the transitional income level are earnings-related and fall as a proportion of income as income rises.
(3) Contributors and employers of contributors earning above the income threshold of 10 R97 188 per annum shall contribute 1 % of the threshold and such income contributors shall receive benefits payable at this threshold level. Tables to illustrate benefits at various earnings levels Based on a transition income of R97 188 Der annum The various amounts on these tables are calculated in terms of the equation in Schedule 2 IRR = Income replacement rate Approximate benefits payable on monthly basis
Income
150.00 300.00 500.00 700.00
1 000.00 1 500.00 2 000.00 3 000.00 3 075.57 4 000.00 5 000.00 6 000.00 7 410.00 8 099.00
10 000.00
Approximate benefits payable on weekly basis
Income 34.62 69.23
115.38 161.54 230.77 346.15 461.54 692.3 1 709.75 923.08
1 153.85 1 384.62 1 710.00 1 869.00 2 307.69
IRR = UI benefit 58.64 87.96 57.39 172.17 55.88 279.41 54.53 381.69 52.74 527.3 50.25 753.79 48.24 964.87 45.19 1355.74 45.00 1 384. 1 42.98 1719.30 41.3 1 2 065.49 40.00 2 399.95 38.57 2 857.99 38.00 3 077.62 30.78 3 07 .62
IRR = UI benefit 58.64 20.30 57.39 39.73 55.88 64.48 54.53 88.08 52.74 121.70 50.25 173.95 48.24 222.66 45.19 3 2.86 45.00 319.39 42.98 396.76 41.31 476.65 40.00 553.83 38.57 659.54 38.00 710.22 30.78 710.22
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Approximate benefits payable on daily basis
Income 4.93 9.86
16.44 23.01 32.88 49.32 65.75 98.63
101.11 131.51 164.38 197.26 243.62 266.27 328.77
The UI benefits payable in the tables will be paid for the duration of benefit days that have been accrued by a contributor.
IRR = UI benefit 58.64 2.8 57.39 5.66 55.88 9.19 54.53 12.55 52.74 17.34 50.25 24.78 48.24 3 1.72 45.19 44.57 45 .oo 45.50 42.98 56.52 41.31 67.91 40.00 78.90 38.57 93.96 38.00 101.18 30.78 101.18
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