Employers often initiated TERS funding corruption — report

1 Feb 2021

A Corruption Watch report released on Monday reveals the culprits in the mismanagement of Covid-19 Temporary Employer / Employee Relief Scheme funds, after receiving over 100 reports of alleged corruption relating to TERS.

On Monday, 1 February, Corruption Watch (CW) released its report titled Covid-19 TERS Corruption at Work. The report supports the findings presented in the Auditor General of South Africa’s (AGSA) second special Covid-19 audit report, released on 9 December, and is based on over 100 personal allegations of TERS corruption put before CW.

TERS Corruption-Watch

Using information contained in “126 whistle-blower reports”, collected from April to the end of November 2020, the report reveals how corruption manifested in the Covid-19 TERS, and the failures in the administration of these funds.

The most whistleblower reports (88%) CW received were from employees, whose salaries had been significantly reduced, despite the funds reflecting on the Department of Labour website in some cases, according to the report.

“In most cases, their income had dried up or been drastically reduced and they were desperately trying to follow up about when their TERS claims would be paid out,” the report stated.

In regard to reports of alleged corruption in the public and private sectors, the report said that from the information CW received it is evident that both the public and private sector are involved in corruption. “In most cases, the allegation was that the employer (private sector) had been the initiator of the corrupt act, for example, bribing inspectors and Department of Employment and Labour officials (public sector),” stated the report.

In 77 out of 126 reports, employees suspected that their employers had pocketed the TERS funds instead of paying it over to them, according to CW’s report.

In nine cases, the employer paid employees less TERS than received from the Department of Labour, according to the report.

No employer names were divulged.

The report stated that in many cases “administrative justice was the crux of the matter”, noting that there were often delays in the time from application to receiving TERS benefit. In numerous instances, there were “significant” delays in administration and payment on behalf of the Department of Labour, according to the report.

According to the 126 reported cases of alleged TERS corruption identified in the report, 57 of those reports came from Gauteng, 15 from the Western Cape, followed by KwaZulu-Natal at 12 — the province with the least reported corruption cases was Eastern Cape at 5.

TERS has supported many South Africans since its introduction in March 2020, the report states. According to the AGSA Second Covid-19 report, by 31 July 2020, R37.1-billion in Unemployment Insurance Fund (UIF) funds had been disbursed through the TERS benefit.

In the AGSA’s first special Covid-19 report, the auditor-general Tsakani Maluleke noted the AGSA had received reports of TERS corruption of a similar nature. In the first report, the AGSA reported various incorrect TERS payments made and flagged a high number of payments that required further investigation. Maluleke said the AGSA identified system weaknesses within the government, such as a lack of validations and incorrect calculations, according to the AGSA Second Covid-19 report media release.

Intended not to be an ongoing benefit but rather a temporary form of relief, TERS came to an end in January 2021, as was announced by the Department of Labour on Twitter on 29 January 2021.

The #COVID19TERS scheme has now been stopped, with the shutdown ending 15 October 2020 as the final payment period.
UIF beneficiaries who are still affected by closures due to Covid19 will now be compensated through the normal UIF benefits as per the UI Act 63 of 2003 as amended. pic.twitter.com/VMlP6EtXVN

— Department of Employment and Labour (@deptoflabour) January 29, 2021

CW’s report makes a number of recommendations that, if implemented, will bring employees the relief many were promised and never received. For example, the report concludes that law enforcement must investigate employers who are not paying UIF contributions to the South African Revenue Service and cases of bribery of Department of Labour officials by employers. DM

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