1 July 2026

BUSA Withdraws From UIF Structures At Nedlac

Johannesburg, Wednesday, 1 July 2026 ― BUSA has today taken the difficult but necessary decision to withdraw from the Unemployment Insurance Fund (UIF) structures at Nedlac and to remove its representatives from the UIF Board. This step is essential to safeguard the reputation of our representatives, uphold sound governance principles, and send an unequivocal message that the current situation is unsustainable.

This decision follows six years of sustained engagement, repeated warnings of maladministration, and ongoing efforts to support reform for the benefit of workers, employers, and the stability of South Africa’s labour market. Regrettably, these efforts have not yielded the required results.

Since 2020, organised business and organised labour have participated in multiple processes aimed at reforming the UIF. Detailed proposals have been submitted, addressing governance, operational effectiveness, service delivery, and the need to place contributors at the centre of the system. In 2024, we called for the establishment of a Nedlac task team to develop a credible reform pathway for the UIF. However, progress has stalled over the past two years, with no clear commitment to ensuring the effectiveness of this task team. This has undermined confidence in the process and reinforced concerns that the Fund is either unwilling or unable to confront the extent of its dysfunction.

The UIF remains deeply dysfunctional, characterised by persistent operational failures, governance weaknesses, delays, unresponsiveness, and a drift away from its core mandate. The Fund’s purpose is clear: to collect contributions from employers and employees and provide eligible contributors with income support during periods of unemployment, maternity, illness, adoption, parental leave, reduced working time, or other qualifying income loss. It is unacceptable that contributors are left without support while funds are redirected, delayed, or absorbed into programmes that do not directly address their statutory entitlements.

The continued expansion of Labour Activation Programmes (LAPs)—in ways that appear to overlap with the mandates of the Department of Higher Education and Training and the Sector Education and Training Authorities—is of serious concern. Equally troubling are efforts to redirect UIF resources towards government-to-government programmes that primarily benefit non-contributors, while contributors themselves face delays, exclusion, and administrative barriers. Although LAPs are positioned as interventions to support access to employment opportunities and skills development, their current performance raises significant concerns.

The UIF-TERS (Temporary Employer/Employee Relief Scheme) experience during the COVID-19 pandemic should have underscored the importance of efficient systems, robust oversight, timely payments, and clear accountability. While UIF-TERS provided critical support to many workers and businesses, it also exposed serious weaknesses in the Fund’s administration. Employers continue to report applications pending for more than 12 months. Furthermore, the UIF’s rigid requirement for distressed employers to rectify up to 20 years of compliance data is impractical and demonstrates a lack of responsiveness to stakeholders.

There is a growing impression that proper governance systems have been deliberately undermined. UIF Board meetings have frequently been scheduled or rescheduled at short notice, making it difficult for members to adequately prepare or adjust their commitments. These disruptions have contributed to repeated failures to achieve quorum—not due to a lack of willingness to participate, but because of impractical and ad hoc arrangements.

BUSA calls on the Minister of Employment and Labour to urgently place the UIF under administration. An independent administrator should be appointed with a clear mandate to stabilise operations, clear claims backlogs, and address governance failures. As part of this process, a forensic investigation should be undertaken to assess the legality and appropriateness of all Fund expenditures.

Business remains committed to constructive engagement with government and labour to build a functional and credible social security system that protects vulnerable workers. However, such engagement must be grounded in accountability, urgency, and a genuine commitment to reform. Workers and employers cannot be expected to continue funding a system that fails them when they need it most.