Parliament, Wednesday, 27 May 2026 –The Portfolio Committee on Employment and Labour has welcomed progress made in resolving delayed UIF payments to former workers of the South African Clothing Factory in Qwaqwa, while also expressing support for the proposed unbundling and repositioning of the Unemployment Insurance Fund (UIF) and Compensation Fund (CF), provided the reforms strengthen governance, accountability, service delivery and institutional capacity without undermining job security or worker protections.
The concerns and observations emerged during briefings from the Department of Employment and Labour and the UIF on progress regarding payments to affected factory workers in the Free State, as well as on the unbundling and repositioning of the UIF and CF into standalone Schedule 3A public entities.
The committee welcomed the resolution of payment challenges affecting former employees of the clothing factory, noting that 1 488 workers have now been paid over R17 million following intervention by the department and UIF.
The committee noted that the delays in processing payments were attributed to administrative and technical challenges, including the absence of employee declarations, the collapse of the company payroll system after liquidation and the need to verify worker information before payments could be processed.
Members emphasised the importance of strengthening advocacy and compliance programmes to ensure employers meet their legal obligations in respect of UIF declarations and contributions, in order to avoid similar situations in future. The committee further stressed the need for improved coordination between the UIF and the South African Revenue Service (SARS), particularly regarding employee data management.
On the matter of the unbundling and repositioning of the UIF and CF into standalone Schedule 3A public entities, the committee noted the department’s assurance that the process is not aimed at privatisation, but rather at improving governance, accountability, service delivery and institutional efficiency.
The committee acknowledged the department’s view that the current structure creates operational bottlenecks, governance delays and limitations in responding effectively to service delivery demands. Members further noted that the reforms are intended to modernise systems, improve turnaround times and strengthen oversight and accountability mechanisms within the two entities.
At the same time, members reiterated concerns regarding possible unintended consequences of restructuring processes, particularly with regard to job security and institutional stability. The committee stressed that any transformation process must be consultative, worker-centred and developmental in nature, while ensuring that critical skills are retained within the institutions.
The committee further raised concerns regarding the continued prevalence of acting appointments within the department and entities, especially in senior management and ICT-related positions. Members indicated that stability in leadership and the filling of critical vacancies remain essential for effective service delivery and implementation of reforms.
The committee also expressed concern about delays in strengthening labour inspection capacity, noting that the department must provide clear progress reports on the recruitment of labour inspectors and the filling of critical posts.
Members further emphasised the need for accelerated ICT modernisation within the UIF and CF, particularly in light of recurring service delivery challenges linked to outdated systems and operational dependencies. The committee stressed that reforms within the entities must demonstrate measurable improvements in efficiency and responsiveness.
On broader labour market concerns, the committee reaffirmed the importance of enforcing labour laws fairly and consistently, including in relation to undocumented foreign nationals employed unlawfully. Members emphasised that law enforcement agencies and immigration authorities must work collaboratively to ensure compliance with immigration and labour legislation, while safeguarding the rights of documented workers and maintaining social stability.
Committee Chairperson Mr Boyce Maneli said Parliament must continue to provide leadership that balances the legitimate frustrations of unemployed South Africans with the constitutional obligation to uphold the rule of law. “We must stand firmly with South Africans who are demanding jobs and economic inclusion, but we must equally ensure that lawful processes prevail. The solution lies not in taking the law into our own hands, but in strengthening enforcement, improving legislation and building capable institutions that protect workers and restore public confidence,” said Mr Maneli.
He further stressed that the reforms within the UIF and CF must inspire confidence through visible improvements in governance, ICT systems and service delivery. “Where there are matters within the department’s control, there must be excellence and accountability. That is how confidence in these reforms will be built,” Mr Maneli added.
The committee reiterated that Parliament remains an important platform through which citizens can participate in shaping legislation aimed at addressing unemployment, labour market regulation and economic transformation. Members encouraged South Africans to engage constructively in legislative processes.
The committee will continue exercising oversight over both the UIF payment systems and the unbundling process, including monitoring progress on ICT modernisation, governance reforms and the filling of critical vacancies.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON EMPLOYMENT AND LABOUR, MR BOYCE MANELI
For media enquiries or interviews with the Chairperson, please contact the committee Media Officer:
Mr Temba Gubula
Cell: 081 402 3531
Email: tgubula@parliament.gov.za
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