Business Unity South Africa (Busa) has made the “difficult but crucial” decision to withdraw from the Unemployment Insurance Fund (UIF) structures at the National Economic Development and Labour Council (Nedlac).
The business organization confirmed this choice in a statement on Wednesday, announcing the withdrawal of its members from the UIF board.
This action follows six years of ongoing dialogue and persistent warnings about alleged mismanagement, along with efforts to implement labor reforms.
“Regrettably, these initiatives have not yielded the anticipated results,” remarked Busa CEO Khulekani Mathe.
“This decision is essential to safeguard the integrity of our representatives, uphold sound governance standards, and clearly convey that the current situation is untenable.”
Since 2020, organized business and labor have engaged in various efforts aimed at reforming the UIF.
Busa has submitted detailed proposals targeting governance, operational efficiency, and improvements in service delivery.
In 2024, major corporations sought the establishment of a task team at Nedlac to create a viable plan for resolving the UIF’s deficiencies.
However, Busa pointed out that the reform process has become stagnant over the past two years, leading to persistent dysfunction, operational failures, and ongoing lack of responsiveness.
“This has diminished confidence in the process and raised concerns that the fund is either unwilling or unable to address its dysfunction,” Mathe elaborated.
Read: You may be sending your UIF claim to a non-functional website
The organization has also highlighted long-standing issues, including the diversion of UIF resources to government-to-government programs that benefit non-contributors, while rightful contributors face delays in their claim submissions.
Busa believes that the UIF-Ters (temporary employer/employee relief scheme) during the Covid-19 pandemic should have emphasized the need for efficient systems and accountability; instead, it exposed critical flaws in the fund’s administration.
The alleged mismanagement of UIF funds has been well-documented.
In 2020, during the Covid-19 Relief Funds Audit, then-Auditor General Kimi Makwetu identified several issues, including payments to deceased individuals, duplicate payments, overpayments, and government officials benefiting from the scheme.
Last year, Parliament’s Select Committee on Economic Development and Trade reported that the UIF disbursed over R800 million in Ters funding, yet more than R200 million was unaccounted for.
Busa calls on Minister of Employment and Labour Nomakhosazana Meth to place the UIF under administration to stabilize its operations, resolve claim backlogs, and address governance concerns.
“A forensic investigation should commence to assess the legality and appropriateness of all fund expenditures,” Mathe stated.
The growing pressure to put the UIF under administration follows recent demands from major trade union federations, including Cosatu, Saftu, and the National Council of Trade Unions.
Meth, in a statement issued in June, welcomed an investigation by the Special Investigating Unit into allegations of maladministration, corruption, and unlawful actions related to training contracts at the agency.
It remains unclear whether she has heeded calls for an independent administrator to intervene.
Moneyweb has reached out to Meth’s office for comments on this matter and will update the story upon receiving a response.
Source: https://economy24.co.za/2026/07/busa-exits-uif-structures-at-nedlac-amid-concerns-of-dysfunction/