IT firm in Gauteng allegedly defrauds employees of TERS benefits

More than 300 employees at a telecommunications company in Gauteng downed tools this week after their employer allegedly defrauded them of their Covid-19 Temporary Employee/Employer Relief Scheme (TERS) benefits claimed from the government.

They accused Premium Ideas of withholding part of their TERS monies even though it successfully claimed the full amount from the Covid-19 social protection scheme managed by the Department of Employment and Labour.

The Midrand-based company produces SIM cards and prints airtime vouchers for various cellphone network providers.

The strike comes amid concerns expressed by the UIF this week about reports that some companies had failed to disburse TERS benefits to the employees, saying it would demand payment evidence henceforth.

It also follows Cosatu’s urgent request to Finance Minister Tito Mboweni to allow workers access to part of their retirement funds as income replacement during the national lockdown.

Premium ideas

Announcing the government’s R500billion stimulus package aimed at mitigating the impact of Covid-19, President Cyril Ramaphosa set aside R40bn for income support payments for workers whose employers were not able to pay their wages.

Speaking to the Sunday Independent outside Premium Ideas’ offices in Midrand this week, the temporary workers, who spoke on condition of anonymity for fear of victimisation, said they downed tools on Monday because the company cheated them out of their TERS benefits.

One of them said Premium Ideas paid him R156 despite claiming more than R4000 in TERS benefits on his behalf.

“My salary was cut from the normal R2800 to R1500, we were told that UIF would then pay later.

I was shocked when we were given R156, I then found out later when I checked on the website using the ID number that I was supposed to get R4027,” said the employee.

Another one said: “I would have been able to buy enough food and saved some money for the dark days ahead. It will go to work next week despite my UIF not having been paid because I am desperate.”

It’s unclear how much the employees’ salaries were, but the UIF’s TERS reimburses workers for lost income limited to their maximum monthly salaries.


Premium Ideas legal representative Alex Evans dismissed the allegations by employees, “the Company has not defrauded any staff. In effect, if the company were to accede to the employees request, then in effect, the employees are requesting the company to perpetrate fraud due to misinformation provided to them by a naive UIF call centre clerk. The result would be employees being paid in full by the company as well as receiving more than 100% in excess thereof due to the overpayment by the UIF which is an employer reimbursement,” Evans said.

“It is not completely correct that employees received R156. Employees were paid in full for the month of April. No worker should claim more than what they earn,” Evans added. UIF spokesperson Makhosonke Buthelezi said the fund was aware of reports of wrong-doing by some companies relating to TERS benefits.

angry employees

“We are worried about reports and complaints of wrongdoing, we are going to demand evidence from employers to show that they have given the money to the employees,” Buthelezi said.

However, he said the UIF would continue to pay TERS benefits into the accounts of employers rather than those of employees for logistical reasons.

According to Buthelezi, the UIF received 311964 valid applications as of Monday this week. At least 216253 employers have been paid TERS benefits on behalf of 2.9 million workers.

“We have about 2767 employers who failed bank verification.

“They are supposed to divide a tune of R144million amongst 30 027 workers,” Buthelezi added.

About 92544 employers could not be traced, he said, hence they were never paid the R2.5bn on behalf of their 633654 employees.

The unions have expressed mixed feelings about the government’s handling of the TERS benefits.

Cosatu spokesperson Sizwe Pamla said the labour federation recommended that the UIF and the Commission for Conciliation, Mediation and Arbitration take charge and ensure that the TERS monies were paid directly into employees’ accounts.

“We have also urged President Ramaphosa to sign a proclamation that allows the Special Investigative Unit (SIU) to get into the bottom of this. There has to be an audit process to check if employees did receive their money,” Pamla said.

Narius Moloto, general secretary of the National Council of Trade Union (Nactu), said the UIF’s decision to pay TERS benefits belatedly contributed to the problem.

“There are so many factors involved. Some employers took their money and paid employees in advance with the hope that they will take the money once the UIF has made the payment,” Moloto said.

Fedusa general secretary Riefdah Ajam said while the TERS system was initially marred by problems, it has since improved.

“Yes, the problems have been alarming but the UIF has attended to such. We are hoping that the pressure would be augmented as we enter level3 as more workers will continue to contribute towards the UIF easing the pressure,” Ajam said.

The three unions met with both Employment and Labour Minister Thulas Nxesi as well as UIF commissioner Teboho Maruping to discuss their concerns about the TERS.

Teboho Thejane, the spokesperson for the Department of Employment and Labour failed to respond to a request for comment.

According to a statement posted on the department’s website, however, the UIF experienced a “remarkable spike” in the number of applications resulting from loss of income and employment due to Covid-19 related trading restrictions. To date, it has paid in excess of R15bn to benefit three million employees.

The statement said a departmental delegation was scheduled to meet with stakeholders at the National Economic Development and Labour Council on Thursday to discuss the UIF’s “technical and financial capacity to continue to pay out TERS benefits in the long run”.

“Retrenchments must be the last resort out of all the available remedies to the challenges we face.

“We also expect employers to fully co-operate with labour inspectors who continue to enforce workplace regulations to protect the welfare of workers”, said Nxesi, adding that his department needed to guarantee the sustainability of funds beyond June.

The TERS applications for May opened this week.

Sunday Independent

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