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Asylum Seekers – do they have to pay UIF?

We often have very interesting questions from our clients, and a recent question was around asylum seekers and their eligibility to claim UIF benefits, since they do not have South African ID’s.

In South Africa there were 184 976 documented active asylum seekers on December 31, 2018.
Let’s go back a step and look at the SARS definition about who should pay UIF
All employees, as well as their employers, are responsible for contributions to the UIF. However, an employee is excluded from contributing to the UIF if :-

  • Employed by the employer for less than 24 hours a month
  • Receives remuneration under a contract of employment as contemplated in section 18(2) of the Skills Development Act, 1998 (Act No.97 of 1998)
  • Employed as an officer or employee in the national or provincial sphere of Government
  • Entered the Republic for the purpose of carrying out a contract of service, apprenticeship or learnership within the Republic. If upon termination, the employer is required by law or by the contract of service, apprenticeship or learnership, or by any other agreement or undertaking, to send home that person, or if that person needs to leave the Republic
  • The President, Deputy President, a Minister, Deputy Minister, a member of the National Assembly, a permanent delegate to the National Council of Provinces, a Premier, a member of an Executive Council or a member of a provincial legislature or
  • A member of a municipal council, a traditional leader, a member of a provincial House of Traditional Leaders and a member of the Council of Traditional Leaders.

For many years, asylum seekers attempting to claim benefits from the Unemployment Insurance Fund (UIF) have routinely been turned away by the Department of Labour, despite having made contributions to the Fund during their employment. Currently, Asylum Seekers do not have ID numbers – they are simply issued with temporary S24 permits, which are usually renewed on a three or six-monthly basis. According to their permit conditions they are usually entitled to seek employment and to study.

However, following a ruling of the High Court of South Africa, Gauteng Division (Pretoria) on 27 February 2019, this will no longer be the case as a result of litigation initiated by Werksmans Attorneys’ pro bono department.

The employer has to make UIF contributions on the employee’s behalf by deducting the relevant portion of their salary. Upon termination of the employment relationship, the contributing employee becomes entitled to benefits from the Fund. To claim these benefits, the employee is required to submit, amongst other things, an identity document, in terms of the Unemployment Insurance Act Regulations.

For an asylum seeker to obtain an identity document, their application for asylum must be successful, at which stage they are formally declared to be a “refugee”, and become entitled to a wider body of rights, including an entitlement to an identity document. The regulations to the Refugees Act specify that the asylum application should take no longer than 180 days. In reality, however, many of these applications take longer than 10 years.

Because asylum seekers do not have identity documents they are excluded from claiming benefits from the Fund, despite many having made contributions to the Fund for years.

Such was the case for 5 asylum seekers represented by Werksmans in an application against the Minister of Labour, the Director-General of the Department of Labour and the Unemployment Insurance Commissioner (the Respondents) to declare certain regulations of the Unemployment Insurance Act unconstitutional to the extent that they exclude asylum seekers from claiming benefits; and to direct that the Department of Labour affect the necessary systemic changes to allow asylum seekers to claim benefits.
The court ruled in favour of the asylum seekers declaring that regulations were unconstitutional!

This judgment is an important endorsement of the principles of social justice in those asylum seekers who have made contributions to the Fund will now be able to claim their benefits if they are in possession of a valid asylum seeker permit.