An analysis of informal workers and the coverage of South Africa's Covid-19 Temporary Employee/Employer Relief Scheme (TERS)

Abstract

The Covid-19 pandemic required states worldwide to take action to contain it and, as part of this effort, adopt measures to mitigate its socio-economic impacts. In South Africa, these measures include the enactment of lockdown regulations in terms of the Disaster Management Act 53 of 2005. This article focuses on one of the measures, namely the Covid-19 Temporary Employee/Employer Relief Scheme (TERS), a system created in terms of the Unemployment Insurance Act 63 of 2001. TERS aimed to provide support to employers who were in distress at the height of the pandemic and unable to pay their employees. TERS falls under the scope of social security law because it is a measure that finds expression under the unemployment insurance system, which is an element of social insurance. This article argues, however, that temporary schemes such as TERS provide no solution to the long-standing problems of the unemployment insurance system and perpetuate its exclusionary practice of not covering informal workers. This is evident in the definitions of an employee and contributor in terms of the Unemployment Insurance Act (UIA). The two definitions lean towards offering coverage to workers in formal employment but not to informal workers. This leaves such workers destitute and vulnerable, as they have no protection; for instance, they became on furlough owing to the effects of Covid-19. This article proposes that the UIA's definition of employees be amended to include informal workers and thereby afford them unemployment protection as well.