The Congress of South African Trade Unions (COSATU) welcomes the progressive gazette empowering labour inspectors to enforce compliance with regard to payment of employees’ pension fund contributions.
The gazette signed by Minister of Employment and Labour, Ms. Nomakhosazana Meth, empowers labour inspectors to enforce the payment of any contributions deducted from workers’ salaries to the relevant fund within seven days along with the employers’ contribution.
This is a key part of the labour law reforms that COSATU has fought tirelessly for and secured at Nedlac as the number of employers who deduct pension fund contributions from workers’ salaries but neglect to pay the money over to the relevant funds has more than doubled in the last three years.
According to the report released annually by the Financial Services Conduct Authority (FSCA), the number of defaulting employers went from 4 000 in 2023 to 7 700 in 2024. Last year saw the figure more than double to 15 521 employers, robbing almost 600 000 workers of the compounding effect of their monthly contributions.
The prime culprits according to the FSCA are the security sector, municipalities as well as the automotive industry. The FSCA put the total outstanding contributions at R7.26 billion at the time. However, National Treasury’s stance to withhold equitable share transfers to municipalities defaulting on third party payments has improved compliance by some delinquent municipalities.
The security sector is an area of extreme concern. Last year former employees of Mafoko Security tasted victory as the court ruled, they could attach the company’s assets to recover contributions that had been outstanding for more than five years. At its Central Executive Committee meeting in November, COSATU urged its Affiliates to hold errant employers who withhold workers’ pension contributions to account and take legal action where necessary. The Federation will provide support to Affiliates to ensure this happens.
COSATU commends Minister Meth for this bold move and looks forward to working with labour inspectors to ensure enforcement and put paid to employers gambling with workers’ retirement benefits. It is criminal that employees who worked hard all their lives risk retiring in poverty through no fault of their own.
It is critical that the Department continue to ramp up its inspections of high-risk sectors in defence of vulnerable employees, to work closely with the Federation in this struggle and to ensure that its commitment to hire 20 000 additional labour inspectors is finalised.
Issued by COSATU
Zanele Sabela (COSATU Spokesperson)
Mobile: 079 287 5788 / 077 600 6639
Email: zaneles@cosatu.org.za
