The Unemployment Insurance Fund (UIF) has opened a case of fraud against a non-profit organisation in the Western Cape.
The Uniondale Integrated Empowerment Project (UNIEP) applied illegally for the UIF Temporary Employer/Employee Relief Scheme (TERS). This led to the organisation receiving close to R5 million from the UIF TERS.
"Not only did the Uniondale Integrated Empowerment Project (UNIEP) apply illegally for the funds but they also kept part of the proceeds in the name of bank charges which meant that the employer benefitted illegally to the tune of R96 000.00" said the Department of Labour & Employment in a statement.
UNIEP was claiming funds on behalf of employers, despite having terminated their employment contracts in March 2020.
More than 500 employees who worked for UNIEP had their contracts terminated, making the organisation illegible to receive funds from the UIF.
"The business is a non-profit organization contracted by the Department of Public Works to perform Expanded Public Works Programme (EPWP) projects in the area ranging from classroom assistants, vegetable gardens, home-based cares, Early Childhood Development sector, HIV and AIDS awareness programmes and cleaners at government departments and institutions." said the Department of Labour & Employment.
The employer received a total of R4 771 837.83 from the UIF during the period of March and September. The Department of Labour is still waiting for the employees to confirm whether the employer paid out the money when he received it.
"The matter will now be registered with the Oudtshoorn Police Service as a fraud matter because the employer declared that the employees are receiving reduced salaries and are still employed although the Department can confirm that the contracts of the employees were terminated on 25 March 2020." read the statement.
The UIF recently announced that it will not be extending UIF TERS. This came as a shock to some unions and organisations who have called for the relief scheme to be reinstated.
The relief scheme was established as a temporary response to help businesses and workers most affected by the economic impact of the Covid-19 lockdown.
The UIF has vowed to continue cracking down on cases of fraud by tracing all funds that have been paid out during the lockdown period.