Minister Nxesi notes positive role played by UIF through TERS and CCMA in mitigating the worst effects of the jobs bloodbat
24 February 2021

The intervention by the Department of Employment and Labour through the cash injections into the economy via the Unemployment Insurance Fund's Covid19 TERS benefits programme helped mitigate the worst of the jobs bloodbath.

This is the view of the Minister of Employment and Labour, Thulas Nxesi, in response to the Quarterly Labour Force Survey (QLFS) statistics issued yesterday reflecting a worrying labour market situation.

“The cash injections saw workers being funded during lockdown and provided welcome relief to companies which were not able to pay salaries. A lot more people would have been in jeopardy had it not been for this timely and welcome intervention by the UIF. To date we have disbursed R60-billion and this has helped companies and individual workers through the worst of the pandemic which has been one of the main drivers of this jobs bloodbath," said Minister Nxesi.

Another intervention that has mitigated the scale of unemployment has been the work of the CCMA (Council for Conciliation, Mediation and Arbitration) where they have been involved in helping to save jobs in negotiations with companies applying to make retrenchments.

“The Department is encouraged by this intervention. In analysing the results of Section 189 forms received through the CCMA which showed a total of 17 397 employees likely to be retrenched in quarter four of 2020, 9 765 of these jobs at risk were saved, representing 56% of the jobs for which retrenchment had been planned," said Minister Nxesi.

Just like other emerging economies, the South African labour market is struggling to recover from an unprecedented health crisis related to the Covid-19 pandemic. Statistics reveal that we are still trapped in a cycle of high inequality, high unemployment, high poverty rates and slow economic growth and job creation.

According to Statistics South Africa, South Africa's official unemployment rate increased by 1.7 percentage points to 32.5% in the fourth quarter of 2020 compared with the third quarter of 2020 at 30.8%. In December 2020, more than 7.2 million individuals were unemployed that represents an additional 701 000 unemployed from 6.2 million unemployed in September 2020.

The QLFS report stressed that a large number of persons moved from the "other not economically active" category to "employed" and "unemployed" status (i.e. moved into the labour force) between the two quarters. The movement was proportionately more into the unemployed category rather than into the employed category.

This remains a challenge since the most vulnerable in our society with insufficient skills - the young people (15-34 years) and African women - could not easily find jobs and constitute the majority of those with long-term unemployment prospects. Regrettably, there were 10.3 million young people aged 15–24 years in quarter four of 2020, of which 29.8% were not in employment, education or training (NEET). This represents 2.2 percentage points lower than in quarter four of 2019. By sex, the NEET rate for females was higher than that of their male counterparts in both years.

“We note the positive results in terms of employment gains of 333 000 that was created in quarter four of 2020. Total employment stood at 15.1 million in December 2020 compared to 14.6 million in September 2020. Unfortunately, in the bigger scheme of massive unemployment and slow economic growth, this is cold comfort. We have lost more than 1.3 million jobs, which represents about 8.5% of all jobs between the quarters four of 2019 and 2020 – a reflection of the low labour absorption rate that decreased by 4.2 percentage points from 37.5% to 38.2% over this period.

While most of industries have shown some employment gains between the quarters three and four of 2020, the Finance and Mining industries lost 123 000 and 33 000 jobs, respectively over this period. On the other hand, the results reflect high numbers of jobs created for the Craft and related trades (up by 85 000) occupational category followed by Sales and services (up by 76 000) and Clerical (up by 52 000) between the quarters three and four of 2020.

The QLFS results further highlight that there were 11.7 million persons who were expected to work by their companies during the national lockdown restrictions in quarter four of 2020.

In relation to labour under-utilization, the QLFS results indicate a fall in total hours of work, year on year. This captures both the change in the number of people at work, as well as a reduction in working hours per week for those workers still at work. As such, the fall in total hours (year on year) gives an idea of the total impact of the pandemic on employment in 2020.


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Issued by: Department of Employment and Labour