UIF Does a Payment Re-Run And Gives Clarity On COVID-19 TERS Benefits Over The Festive Season
The Unemployment Insurance Fund (“UIF”) has shed some light on what will happen to existing and outstanding COVID-19 Temporary Employer-Employee Relief Scheme (“TERS”) applications and payments, particularly over the festive season. We discuss the must-knows for employers below.
COVID-19 TERS payment re-runs for April – 15 September 2020 period
The UIF dedicated this entire week to re-run payments for the period between April to September 2020 and will repeat this for all lockdown periods on 19 December to clear the backlog as far as possible, so that beneficiaries will not suffer during this festive season.
While acting commissioner, Marsha Bronkhorst, said that the UIF has been sporadically re-running claims for the previous months, this time it has “decided to recycle all claims to ensure that those that have been updated, including in respect of the provision of declarations and correction of discrepancies are paid”.
The resubmission process
Employers who submitted COVID-19 TERS claims via CSV files for the April to 15 September 2020 periods, and where "no employees" appear on the online portal, should assume that their CSV files were incorrectly formatted. Applicants who attempted to upload prior to the closing dates, and whose attempts failed due to technical issues, have now been given a further opportunity to resubmit.
The process for an employer to follow to resubmit claim data is:
- Complete the standard Excel template for the relevant lockdown period;
- Email this to Covid19failedCSV@labour.gov.za;
- Ensure that the email subject line reflects the month for which the claim is made;
- Send only one file, per email, with the correct month reflected in the subject line;
- The received Excel template will be checked and converted into the correct CSV format;
- The UIF will conduct a check on the COVID-19 TERS system, and if this audit confirms that the applicant made a submission on or before the closure date, the CSV will be loaded and processed; and
- The processing will only take place from 14 December 2020 onwards.
Applications for 16 September – 15 October 2020
The UIF has started processing and paying COVID-19 TERS claims for the period 16 September 2020 and 15 October 2020. Applications for this period close on 31 December 2020.
Audits
Through the appointed auditing firms, the UIF has begun phase 1 of the "Follow–the-Money" Project to check the authenticity of claims and verify if the money has been paid over to workers. Due to the festive season, the audits will cease on 18 December and resume on 4 January 2021.
TERS payments to foreign nationals
The UIF has started processing and paying COVID-19 TERS claims to foreign nationals who have been verified by the Department of Home Affairs and the South African Revenue Service and who meet all other verification processes. As of 16 December 2020, the UIF revealed that over R2-billion has been paid to 491 410 foreign nationals from 95 834 applications by employers since March 2020.
System enhancements
In a recent interview, Marsha Bronkhorst stated that the UIF has enhanced its systems in terms of bank verifications and to enable employers to declare employees electronically in response to these major hurdles that have hindered the finalisation of various COVID-19 TERS applications and payments. There is also a designated fraud report hotline through which fraud can be reported, and the COVID-19 TERS hotline call centre has increased its capacity.
UIF operational over the festive season
Marsha Bronkhorst has also stated that in order to fast-track the processing and payment of claims, including claims for normal UIF benefits, all key UIF personnel will not be going on leave during the festive season, save for between 24 December 2020 and 1 January 2021. She has promised that all valid outstanding payments will be made. However, she has not provided a date by which this will be done.
UIF funding
The UIF has also indicated that it has enough funds available to honour its commitments and that it has made provision for the anticipated spike resulting from mass retrenchments after the COVID-19 TERS period. R55.6 billion has been disbursed to millions of workers from 1.1-million applications since the first lockdown in March 2020.
Michael’s Magic
Well, the heading is somewhat flattering. So, let’s just agree that there are some tongue-in-cheek comments in that headline.
Some people in the SEIFSA office said I must use my platinum-coloured hair as a marketing strategy and boast of my years of experience in industrial relations and labour law matters. I said okay (actually they didn’t say platinum, but let’s stick with that).
It’s been a very busy year on the IR front, and I’ve been involved with chairing disciplinary hearings, representing and guiding companies during the processes and consultative meetings of retrenchments, short-time, disputes, strikes, leave enhancement pay exemptions, conciliation, and arbitration hearings, not to mention issues arising from the conditions of employment found in the Main Agreement and the BCEA.
I do enjoy assisting companies, helping them do these things right the first time. And, yes, it does happen that I have to help companies fix problems where companies may not have done things as best as they can or should have the first time around. But it’s always best to do things right from the start, and not have to fix things – so keep in touch with us from the start!
Besides the consultancy service, I have presented a lot of training courses over the years and still do that. Some of you may have attended some of them (I hope you enjoyed them!). During the lock-down period, we really got going with the webinars, and at some, there were over 100 people in attendance.
If you haven’t already, please consider coming to one of our workshops, whether on the Main Agreement or Water-tight Dismissals (Chairing Disciplinary Hearings) or Managing Absenteeism and Misconduct or Successfully Implementing Retrenchments, Short-time and Lay-offs. We would love to share that time with you.
Then amongst all of that, there are the numerous queries that come through via the phone and email, where we try and resolve any issues and questions that you may have.
But now we are at the end of 2020; it has been a strange and unusual year, and hopefully, we all got through it well. It’s nearly time for holidays, and hopefully, yours will be just what you need, whether invigorating and exciting or surrounded by calm and peace or a combination of the two, I hope it just blesses, motivates, and inspires you.
So, keep the faith, keep believing (is that a bit like the song from Journey – Don’t stop believing?), keep motivated and inspired. We are all in this together – we can do it.
Have an awesome holiday, a blessed Christmas, and a prosperous 2021.
The Miya Minute
Hello, and welcome to the Miya Minute and our Division’s first-ever digital newsletter.
As you have already gathered from Louwressè, my name is Vuyiswa Miya, and I am also an admitted attorney, with the sole mission of providing you, the SEIFSA member or stakeholder, with the best legal advice so that your business maintains an even keel – even during these disturbing times.
Yes, I am declaring it. The word “unprecedented” has now officially been over-used. The COVID-19 pandemic has thrust upon us almost apocalyptic waves of change. The numbers are cataclysmic – and cannot be compared to any single event. You know this. I know this. So, what is it that we as a collective are supposed to do?
Survive, Focus, Listen, and Comply (SFLC). In that order!
Survive
The industry can’t afford to lose your business’s capacity. So, make sure your business is still around next year and the year after that. This means that you might need to make tough decisions and even tougher choices. You are not alone: SEIFSA can be your guide, specifically with Section 189 processes and procedures.
Focus
Ensure that your stakeholders know what is going on with your business. Talk with your suppliers and customers alike. Keep those relationships strong.
Listen
There will be lots of information and advice coming to you from many sources. Trusted sources, such as SEIFSA, whose mission it is to be of assistance to employers. Attend seminars like its Labour Law Seminar, and keep an eye on its website for updates on legislation, etc.
Comply
Know the law, and apply the law in your business. This is almost a back-to-basics approach. Once again, the IR&LS Division is here to help you with that quest.
I will be using “The Miya Minute” to showcase how you can SFLC over the next few months with SEIFSA’s help.
Talk to me and let me know what your challenges are.
Contact Vuyiswa (vuyiswa@seifsa.co.za).
The View from Louwressè
Greetings from me, Louwressè Specht.
I’m sure some of you would have had the opportunity to see and listen to some of my musings on our Free Webinar Wednesday sessions. If so, I hope you found some of the information useful, and even entertaining. For those that don’t yet know me, well, ek is ‘n meisie van die Vaal (I’m that girl from the Vaal) – straight up, no-nonsense, to the point – and always enthusiastic to help.
It’s coming up to my first anniversary at SEIFSA, and the one thing I can say categorically is that every morning I am inspired by the culture of “wanting to help our members, and the industry overall”, which is on display at SEIFSA every day. The number of times I’ve heard “get them on the phone” or “go and visit them” are just too numerous – and that is the way we do things in my Division, Industrial Relations, and Legal Services, or simply IR&LS.
To have the honour of leading this Division is simply extraordinary as we are at the forefront of change, not only for our members, but for the industry as a whole. This year’s highlight was, of course, the historic wage standstill agreement. However, this SEIFSA Division has had an important legacy, long before I joined, having benefited from people such as Lucio Trentini and Michael Lavender, who are still with SEIFSA to this day.
Today I am pleased that this legacy is carried forward by a team of two admitted attorneys, myself and Ms. Vuyiswa Miya, whom you will hear from in “The Miya Minute”, and then, of course, our stalwart, Michael Lavender. From time to time, I will pull in SEIFSA’s “Jedi Master”, otherwise known as Lucio Trentini, SEIFSA’s Operations Director, and ask him some pointed Industrial Relations questions – to keep him on his toes, of course.
So, welcome to the first edition of The Watch. I do hope you enjoy the content and that it is helpful to you and for the success of your business. My section will be dedicated to keeping you informed of legal happenings.
Over to you, Ms Vuyiswa Miya…
Dip in manufacturing production shows economic recovery will remain bumpy under covid-19 pandemic restrictions, says SEIFSA
JOHANNESBURG, 10 DECEMBER 2020 – The latest dip in the manufacturing production growth rate in October shows that economic recovery will be bumpy under COVID-19 restrictions, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.
Manufacturing production declined by 3.4% year on year in October, while growing by 2.6% month on month from September 2020, down from 2.9% in September, according to the latest data released by Statistics South Africa (Stats SA) today.
SEIFSA Chief Economist Chifipa Mhango said the manufacturing sector remained key to South Africa’s growth and development due to its multiplier effect into other sectors of the economy, such as the construction sector. He said this was especially true of the Metals and Engineering (M&E) industry, which is a supplier of crucial input such as steel.
Mr Mhango said it was encouraging to note that manufactured product sales had been consistently rising, reaching R221-billion in October from R201-billion in September. Of interest to SEIFSA was the continued pick up in basic metals sales from R45-billion to R48-billion over the same period. Mr Mhango said it was important to note that this was 4.7% lower when compared to October 2019.
However, within the M&E industry, sales of electrical machinery showed a year-on-year growth of 5.4%
“There are many factors at play – capacity utilisation across the entire manufacturing industry remains low at around 71%, which means the industry is still producing less than potential production. This is mainly due to the restrictive lockdown measures that the industry was – and still is – operating under at plant level. Coupled with this situation is unsustained demand patterns in both the domestic and international markets, with key markets such as Europe moving back to stricter COVID-19 lockdown measures, thus disrupting supply chains and industrial activities,” Mr Mhango said.
He noted that the M&E sector in South Africa was heavily reliant on the performance of the construction industry. He said although other recent data suggested a pick-up in construction and building material sales from May 2020 to October 2020, the upward trend had slowed. Construction and building material sales declined to R11.8-billion in October 2020, from R13.1-billion in the previous month.
Mr Mhango said historical patterns had demonstrated that during times of massive infrastructure investment into the South African economy, such as 2002-2010 when the construction sector showed growth of above 10%, manufacturing production is correspondingly higher. Between 2002-2010, capacity utilization in the sector was above 85%, while it was over 90% in the M&E industry. He said while the economy has yet to return to those levels, it was good to see a positive month-on-month growth in manufacturing production and an easing decline in the year-on-year percentage change.
Mr Mhango said that several factors were key to recovery in the manufacturing industry: “These include a well-managed approach to COVID-19 pandemic restrictions to ensure that we do not return to level-five-type lockdown measures, a stable labour market environment, a stable monetary policy, low import penetration of manufactured goods into the local economy, stable and low-cost electricity supply, increased investment into the sector, and the steady implementation of the Government’s economic stimulant recovery plan announced in October 2020.”
SEIFSA welcomes announcement of AfCFTA commencement date for trade
JOHANNESBURG, 10 DECEMBER 2020 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the confirmation yesterday that trading under the African Continental Free Trade Area (AfCFTA) agreement will commence from 1 January 2021. The Federation considers this development to be good news for the continent because it is likely to boost inter-African trade.
The AfCFTA journey has been a long one since the signing of the Treaty in 1991 and the establishment of the African Economic Community in March 2018 in Kigali, Rwanda, which was followed by the signing of the Agreement by 44 countries. As of today, 54 countries have so far signed the agreement, with the exception of Eritrea. Of these countries, 34 have ratified the legal instrument on the AfCFTA. SEIFSA expects that more will come on board over the course of its implementation.
SEIFSA Chief Economist Chifipa Mhango said most African economies have grown at rates of 5% on average over the last 10 years, but they remain impoverished in terms of the World Bank classification, with the majority of their populations living below the poverty line. He said it was important for these countries to have an integrated approach to dealing with challenges, if they are to grow economically.
“Africa has a wealth of minerals deposits and a vast fertile land for agricultural production. However, the continent’s trade composition is dominated by exports of unbeneficiated raw materials. For this situation to change, Africa needs to develop its own path towards industrialisation and promote trade among its own countries,” he said.
Mr Mhango said the South African Metals and Engineering (M&E) sector enjoyed a positive trade balance on the continent, with the latest figures suggesting a net trade balance of R22-billion in the first quarter of 2020 (pre-COVID-19 lockdown). The most dominant products were plastic and rubber, iron and steel, machinery, vehicle parts and accessories. He said it was important that the M&E sector takes advantage of the AfCFTA through the adoption of an intensive, market-intelligence approach to identifying market opportunities across the continent.
He said the fact that Africa still lagged behind in terms of infrastructural development means that the trade agreement will open more doors for African-made products, thus limiting competition from other destinations.
Mr Mhango noted that the AfCFTA would be the largest trade agreement as it promised to create a continental trade bloc of 1.3-billion people, with a combined GDP OF $3,4-trillion. Key to the success of AfCFTA would be the development of Africa’s industrial capacity to meet a new growing demand for its goods and services.
“This AfCFTA agreement thus offers tremendous economic growth potential for the continent at large and is likely to drive intra-African trade, promote further industrialisation and contribute to job creation and regional value chain identification,” Mr Mhango concluded.
Concern Over Increased Electricity Tariffs
JOHANNESBURG, 9 DECEMBER 2020 - SEIFSA Chief Economist Chifipa Mhango was on ENCA earlier today, chatting to Jeremy Maggs about the latest GDP figures as well as SEIFSA’s view that any further increases in electricity tariffs will undermine economic recovery in the Metals and Engineering cluster of industries.
Click below to watch the interview:
An Uptick in Economic Activity As Reflected By the GDP Growth Rate In Third Quarter Of 2020 Is Positive News, Says SEIFSA
JOHANNESBURG, 8 DECEMBER 2020 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) is encouraged by the uptick in economic activity, as reflected in the positive GDP growth rates for the third quarter of 2020. However, it should be noted this performance is from a low base, given last quarter’s decline of 51.7%.
SEIFSA Chief Economist Chifipa Mhango said signs of recovery have been evident with the easing of declines in production for key sectors such as the manufacturing and mining sectors, as well as purchasing managers’ index numbers have been in the expansionary trajectory recently, amid the easing of COVID-19 lockdown restrictions.
According to Statistics South Africa (Stats SA), real gross domestic product (measured by production) increased at an annualised rate of 66.1% in the third quarter of 2020. This was mainly attributed to all 10 industries, according to the economic classification of SA, recording positive growth between the second and third quarters of 2020. Of these, the largest positive contributions to GDP in the third quarter were manufacturing, mining, and quarrying, and the trade, catering and accommodation sectors.
“From a Metals and Engineering (M&E) sector perspective, we are encouraged to see the rise in the construction activity to 71.1% in the third quarter. The construction industry is one of the key market segments for M&E industry products and accounts for over 60% of the local steel industry’s sales volumes,” Mr. Mhango said.
He said it was encouraging to see that the Gross Fixed Capital Formation (GFCF) had increased at a rate of 26.5% in the third quarter since this was the key indicator of demand activity for the M&E sector. The positive movement in the GFCF was mainly attributed to the increase in construction works, residential buildings, nonresidential buildings, machinery, and other equipment.
In recent months since the COVID-19 lockdown measures were implemented in March, sales of building and construction material picked up from a low base of R1-billion in April to a moving monthly average of R10-billion to September. A similar pattern was also reflected in the production sales’ improvement from a low base of R18-billion in April, reaching R46-billion in September. Mr. Mhango said this was supportive of the trend in the GFCF numbers released alongside the GDP figures.
Mr. Mhango noted that the M&E sector is heavily reliant on the performance of the mining, construction, and other manufacturing sector segments to survive, as these are the key sectoral markets for steel and related metals products: “For example, the period between 2003 and 2010 saw several major infrastructure projects being implemented in the energy sector in preparation for the 2010 Word Cup. The manufacturing sector, and the M&E sector in particular, correspondingly experienced a boom in production, with capacity utilisation of over 85%. It would be encouraging to experience similar demand for M&E sector products at this time,” Mr. Mhango said.
He cautioned, however, that to guarantee stock availability, the industry would need to move back to higher levels of capacity utilisation than the current COVID-19-driven level of 67% that was the result of working restriction guidelines at the plant level.
Mr. Mhango also noted the positive increase of 201% in the export of goods and services in the third quarter, which was mainly attributable to an increase in vehicle and other transport equipment, precious metals, machinery, and equipment, as well as base metals. He said this was encouraging, as the industry’s competitive advantage on the international market was being eroded by the high costs of doing business, mainly driven by rising electricity and logistical costs.
“As local demand remains relatively weak, export markets offer opportunities for the M&E industry. However, there has to be policy intervention from the Government to address the challenges faced by the M&E sector as presented in the Steel Master Plan in order for the sector to be globally competitive,” he said.
Issued by:
Mpho Lukoto
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: mpho@seifsa.co.za
Web: www.seifsa.co.za
Manufacturers cannot afford further increase in electricity tariffs if the economy is to be revived, says SEIFSA
JOHANNESBURG, 7 DECEMBER 2020 – Manufacturing businesses in South Africa cannot afford a further electricity tariff hike, given the strain the economy is under, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Economist Chifipa Mhango said today.
Commenting after SEIFSA’s presentation to the National Energy Regulator of South Africa (Nersa) on Eskom’s Multi-Year Price Determination Regulatory Clearing Account (RCA) for 2014-2015, 2015-2016 and 2016-2017, Mr Mhango said any tariff increase coming out of this process would scupper any hope of a meaningful business recovery in a sector that has over the past few years struggled amid rising power costs and erratic supply, rising imports and subdued demand, among other challenges.
In 2019 alone, the Metals and Engineering (M&E) industry spent a total of R11.7-billion in electricity costs. Although the level of impact varied across sub-sectors, Mr Mhango said nevertheless SEIFSA had observed a huge impact in the basic precious and non-ferrous metals, with that sub-sector having a significant share of electricity costs in its cost structure.
This rise, he said, could potentially be higher, following the Pretoria High Court’s decision to set aside Nersa’s decision to deduct the Government’s R69bn equity injection received over three years from allowable revenue for 2019/20, 2020/21 and 2021/22.
“Local companies in the M&E sector will have to absorb additional shock in the form of an increased electricity price of at least 10%,” Mr Mhango said. “We remain hopeful that Nersa will be granted leave to appeal that high court decision as any additional cost to the already high cost doing of business in the M&E industry will limit the sector’s economic recovery,” he said.
Mr Mhango said electricity was a crucial component of the M&E cluster of industries, and production processes in some of the high energy-intensive sub-components were heavily dependent on power supply. He said high electricity prices affected not only the productivity of companies in the sector, but also their profit margins since they could not pass these increases onto consumers, who were themselves under considerable financial strain.
Mr Mhango warned that any further increase in the electricity price would also have a negative ripple effect on other sub-industries, further slowing down production and growth in the sector and worsening the country’s unemployment crisis, which currently stands at 30,8%.
“It will also have dire consequences for President Cyril Ramaphosa’s economic recovery plan, which has infrastructure development at its heart. With input costs currently outstripping selling prices in the industry, the local content aspect of this plan will be constrained by a lack of local supply,” Mr Mhango said.
Mr Mhango said while SEIFSA understands that the multi-year application is intended to provide price certainty to customers and investors, enabling them to plan ahead, the Federation took a dim view of repeated, costly RCA applications in a stagnant economy. He said any increases resulting from such applications were bound to compound business and investment uncertainty.
“We continue to implore the Government to place a moratorium on further electricity tariff hikes in order to accommodate struggling businesses and support the economy at this unprecedented time,” Mr Mhango said.
Low Inflation Rate Continues To Support Business Recovery From A Cost Perspective
JOHANNESBURG, 25 NOVEMBER 2020 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) is pleased to see that the inflation rate continues to remain within the monetary policy target range of 3% to 6%. This supports the monetary policy committee’s decision last week to leave the repo rate unchanged at 3.5%, citing challenges in the South African economy and a low inflation rate projection into 2021.
Data from Statistics South Africa shows that inflation in South Africa rose to 3.3% in October from 3% the previous month and well below the 4.6% recorded for February 2020 before the advent of the COVID-19 crisis.
According to SEIFSA Chief Economist Chifipa Mhango, during stable economic times, the South African inflation rate is relatively higher than current levels. “Low inflation can be a signal of economic problems because it may be associated with weakness in the economy,” he explained, adding that when unemployment is high, as is the case currently at 30.8%, consumers spend less and businesses become
reluctant to make investments. “This lower demand keeps prices low and this is what we can expect to see in South Africa at present,” he said.
Mr Mhango said the current global economic slowdown amid COVID-19 lockdown restrictions meant that global producer price inflation and oil prices would remain low, as would local food price inflation. “This is encouraging for the Metals and Engineering Industries as the current low inflation rate environment will help to cushion cost pressures to some extent, particularly on raw materials,” he said.
However, Mr Mhango said, although the current low inflation environment and supportive monetary policy had eased financial conditions and improved the resilience of domestic households and businesses from the negative impact of economic implications of COVID-19, it had not improved the economic growth rate of the local economy, nor had it reduced the risks associated with the fiscal position of South Africa. “More still needs to be done through structural reforms to address the challenges faced by South Africa on the economic front, to lower the costs of doing business in SA and increase investment across all of the sectors of the economy. Rising energy costs and logistical costs remain the biggest business cost challenges
for the Metal and Engineering Industries,” he concluded.
Issued by:
Mpho Lukoto
Communications Manager
Tel: (011) 298 9411 / 082 602 1725
Email: mpho@seifsa.co.za
Web: www.seifsa.co.za