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This contribution examines selected issues from a policy and legal perspective. Against the background of the broader social security reform agenda in South Africa and the vision of a comprehensive social security system, the contribution covers five key areas, namely alignment with international standards; the need to develop synergies with the rest of the social security system and for institutional reform and alignment; addressing certain material deficiencies and inconsistencies in the UIF legislation (with reference to removing the restriction on certain contributors to benefit and redefining the range of dependants); re-aligning the current UIF benefit regime to focus on loss of employment; and improving the UIF benefit regime through the introduction of standardised measures and other reforms (with reference to the indexation of benefits, utilising a minimum wage arrangement as a basis for benefit enhancement, adjusting the contribution rate and developing a streamlined adjudication framework). It is argued that complying with relevant international standards will move South Africa closer to be in a position to ratify these instruments, in particular ILO Convention 102 of 1952 on minimum standards in social security. Ample opportunity exists to introduce streamlined approaches in among others the collection of contributions and shared benefit payment facilities and arrangements, and the harmonisation of benefits. However, particular considerations and substantive constraints define and circumscribe the extent and content of the alignment of the UIF that is currently considered. These relate in particular to the compensation function of the UIF; its role as a labour market instrument; and the need to recognise unemployment insurance as a separate risk category with a ringfenced contribution and benefit regime framework. It should also be considered to separate unemployment insurance benefits in the strict sense of the word (ie benefits accruing to a beneficiary as a result of loss of employment) from unemployment-related benefits such as sickness, maternity and adoption benefits.

The main aim of labour market activation policies is to bring jobless people from unemployment or inactivity into work or, at the very least, to influence the employment prospects of the unemployed positively. Activation schemes typically make benefit receipt conditional upon job search activities, acceptance of available job offers and participation in training activities. This article addresses the appropriate role of the Unemployment Insurance Fund (UIF) in the establishment of activation in South Africa. It focuses on a number of principled and practical considerations and constraints that challenge the use of activation mechanisms, such as the fragmentation of the existing legal and institutional frameworks, the lack of available employment opportunities and human rights considerations. It is argued that the limited and short-term impact of the UIF, its strong labour-market orientation and its inability to appropriately contribute to preventing and combating unemployment or to reintegrate the unemployed into the labour market all point to the urgent need to reform the UIF. The gaps in the current unemployment insurance system are highlighted, as is the need to enhance the relationship between the unemployment insurance system and (appropriate) activation measures. The role of existing social security and employment creation initiatives in this dynamic is also considered. In particular, the absence of a link between those excluded from the UIF and the activation mechanisms introduced by the Skills Development Act 97 of 1998 is underscored. Proposals contained in the Employment Services Bill are also evaluated. It is suggested that an expanded form of employment services provision, incorporating a network of labour centres, ought to receive prioritisation in the South African context. This must be coupled with a move to consolidate the various available governmental databases in terms of which unemployed persons may register as job-seekers. The creation of an enabling framework to achieve such goals would require a variety of legislative changes, some of which are discussed in the article.