Article by Lavery Modise and Carolyn McKechnie

The purpose of the Unemployment Insurance Act 63 of 2001 is to provide financial assistance to employees who find themselves jobless. The act also provides for financial assistance to unemployed persons due to illness, maternity and adoption.

An employee must be a contributor, able to prove to the unemployment insurance commissioner that he and his employer have contributed to the UIF on a monthly basis.

Such contributions amount to 1% of the employee's monthly remuneration. Proof of contributions will be reflected on an employee's payslip.

The act does not apply to the following employees:

  • Those working less than 24 hours in a month.
  • Those employed in terms of section 18(2) of the Skills Development Act, 97 of 1998.
  • Those in national and provincial spheres of government.
  • Persons who enter the republic for the purpose of carrying out a contract service apprenticeship or learnership.
  • Persons who receive a monthly state pension.

An employee, who falls within the ambit of the act, will qualify for unemployment insurance should he be employed on a fixed term contract; or should his employer go bankrupt; or should he be fired; or in the case of a domestic worker, the termination of the contract of employment is due to the death of the employer. But where an employee already receives a benefit from the compensation commission or resigns, he will not be entitled to unemployment insurance.

In a recent CCMA decision, it was decided that where an employee absconds and a disciplinary enquiry is held in his absence, he is not entitled to any unemployment benefits, as he ended the employment relationship.

An employee must apply for unemployment insurance within six months of the termination of his contract of employment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.