The Unemployment Act: Much more than a blue card
December 2024
IN THE LABOUR RELATIONS ENVIRONMENT THAT FARMERS OPERATE IN, THERE ARE MANY MYTHS AND MISCONCEPTIONS ABOUT THE LAWS THAT THEY NEED TO COMPLY WITH. ONE EXAMPLE OF SUCH AN ACT IS THE UNEMPLOYMENT INSURANCE ACT (ACT 63 OF 2001). THIS ACT GOVERNS THE UNEMPLOYMENT INSURANCE FUND OR, AS MANY EMPLOYEES REFER TO IT, THE ‘BLUE CARD’.
It is important to mention that the ‘blue card’ is no longer in existence and that it was replaced with a more streamlined and technological system, enabling a faster and more efficient claims process.
UIF? WHAT IS IT AND WHY DO YOU NEED IT?
The Unemployment Insurance Fund’s (UIF’s) main purpose is to provide short-term relief for people who cannot earn a living under certain circumstances. One must note that it is short-term relief and not long-term and/or permanent relief, as is sometimes afforded by SASSA.
Both the employee and the employer contribute to this fund. Employees contribute 1% of their salaries and the employer contributes a further 1% of their salaries. These contributions are paid over to the fund.
There are five different types of benefits payable to employees by the fund:
- Unemployment benefits can be claimed when an employee loses his or her job. If a person is dismissed, retrenched or terminated due to the expiration of a fixed term contract, they will have access to the fund and can claim accrued benefits.
It is very important that farmers and their employees are aware of the fact that they will not be able to claim any of the unemployment benefits if they resign.
However, in order for a person to be able to claim, there are certain prerequisites that you need to comply with. Employees must have been contributing to the fund and money must have been deducted from their salaries for this purpose on a monthly basis.
- Illness benefits can be claimed by employees who are off from work due to illness for a period of longer than two weeks. These benefits are paid from the date that the employee stopped working. Once again, the requirements are that the contributions must have been paid over to the fund. In the event that the employer paid the employee, the benefit payable will be the difference between the available benefit and what the employer paid.
- Maternity benefits can be claimed from the fund when an employee is pregnant. The Basic Conditions of Employment Act states that an employee can take maternity leave at any time from four weeks before the expected date and may not return for six weeks after giving birth. In order for an employee to claim this benefit, the claim must be made no longer that eight weeks before the birth of a child and/or longer that six months after the birth of the child.
Parental benefits are a new claim category that came into effect on 1 January 2020. These amendments now give employees who do not qualify for maternity leave parental leave of ten days. The employer is not liable for this payment and it can be claimed from the UIF for a period of ten days.
- Adoption benefits are another new benefit and enables employees adopting a child younger than two years the opportunity to claim from the fund, if they need to leave work to look after the adopted child. This benefit is, however, only available to one of the adoptive parents. In order to qualify for this, the adoption had to take place in terms of the Children’s Act (Act 38 of 2005).
- Dependent’s benefits are payable to the dependents of the employee in the event that the employee passes away while employed. In terms of the Act a dependent can be:
- The deceased employee’s spouse.
- The deceased employee’s child under the age of 18.
WHAT DO I NEED TO CLAIM THESE BENEFITS?
Application for any of the mentioned benefits must be done at the closest Department of Labour to you and on the specific application form for the benefit claimed. It is also important that the employee must register as a job seeker and be available to work. An unemployment register needs to be signed every four weeks confirming the employment status of the person.
The most important form is the UI19, which is typically the form that is still sometimes referred to as the blue card. It must be completed by the employer and forwarded to the Department of Labour. A copy can be given to the employee.
The UIF is therefore much more than just a fund – it gives employees the opportunity to earn an income whilst looking for alternative employment. Spend time with a newborn and/or look after families in the event of death.
This is the UIF in a nutshell. For any clarity or more information, you are welcome to send your questions to dirk@nvbd.co.za.
Publication: December 2024
Section: Pula/Imvula
Author: Dirk Coetzee, Labour relations specialist
