UNEM PLOYM ENT INSURANCE FUND NA TIONAL SKILLS CONFERENCE 2013 “T ogether, turning every workplace into a training space” October 2013
The Unemployment Fund’s Contribution to Skills Development The 2008/09 global economic meltdown is the genesis of UIF’s contribution to skills development. A framework document titled: Framework for South Africa’s response to the international economic crisis contains the response of organised labour, business, community and government on how South Africa responded to the difficult economic conditions that the country, its people and businesses as a result of the global economic downturn. The framework document prioritised training and skills development. 2
The Unemployment Fund’s Contribution to Skills Development • The Unemployment Insurance Act , 2001 as amended stipulates that the UIF Board must advise the Minister on the creation of schemes to alleviate the harmful effects of unemployment. • The framework response to the global economic crisis and the enabling provisions of the UIF Act gave rise to the funding of the Training Lay-Off Scheme by the Fund. • The scheme was introduced as an option employers would consider for workers who would have ordinarily been retrenched. • Participation in the scheme would keep workers in employment during the economic downturn, but re-skill them as an investment for the future economic recovery 3
The Unemployment Fund’s Contribution to Skills Development • A National Jobs’ Fund, was set up with an allocation of R2.4 billion to fund the Training Lay-Off Scheme. • The funding was sourced from the UIF, R1.2 billion and the National Skills Fund (NSF) R1.2 billion. • The terms and conditions for participating in the scheme were that there must be a temporary suspension of work to be used for training Retention of the employment contract • • Training allowance paid to the worker during training is 75% of employees basic salary to the maximum of R9 358 per month • Employer carries cost of social benefits (UIF contributions, pension, provident funds etc) 4
The Unemployment Fund’s Contribution to Skills Development Synergy with the National Skills Strategy ІІІ • The Training Lay-Off scheme is in line with the National Skills Strategy because it provides that Seta’s will provide funding for the training while UIF provides the necessary stipends to affected workers. • The scheme lasts for a period of six months • The Training Lay-Off scheme is also in line with overall government objectives of saving and creating job opportunities. • The Training Lay-Off schemes aligns itself to the addressing the vocational and artisan needs of the country as identified through National Skills Strategy 3 and as identified in the New Growth Path strategy. 5
Training Lay-Off Scheme Progress • Since inception the scheme has been able to assist 34 companies in distress. • These companies are from a wide range of sectors such as textile, farming, automotive and technology industries. • About 5 792 workers benefited from up-grading their skills. • The same workers benefit from the training allowance provided by the UIF to the value of more than R53 million. 6
Training Lay-Off Implementation Challenges • Late submission of applications by distressed companies • Companies fear to disclose their financial information to the Commission for Conciliation Mediation and Arbitration ( body that assesses the eligibility of companies to participate in scheme) • Some companies are not complaint with UI Act • Lack of proper structure to manage applications • Lack of Seta support as a result of not allocating adequate training budget 7
Suggestions/Recommendations • The Training Lay-Off Scheme must be integrated with the Turn Around Solutions (Productivity South Africa inputs and suggestions of how affected companies can improve their operations in order to be self sustainable) • A inter-organisational communication task team, inclusive of all the stakeholders in the communication sphere must be formed in order to communicate the scheme effectively to stakeholders • Strengthen communication with primary and secondary stakeholder to increase stakeholder buy- in • Training must encourage entrepreneurship in the event that the assisted company does not recover financially so that training beneficiaries can create their own business 8
Thank Y ou… 9
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