On 27 November 2018, the President of the Republic of South Africa signed the Labour Laws Amendment Act, 10 of 2018 (“LLAA”) into law. The LLAA contains amendments to both the Basic Conditions of Employment Act, 75 of 1997 (“BCEA”) and the Unemployment Insurance Act, 63 of 2001 (“UIA”).
Until 1 November 2019, none of the provisions of the LLAA had commenced into operation.
While the amendments to the BCEA relating to parental, adoption and commissioning parental leave are yet to come into effect, the amendments to the UIA relating to parental benefits commenced with effect from 1 November 2019.
The operational provisions are summarized below.
Section 8(a)(cA) of the LLAA amends section 12 of the UIA to include parental benefits in addition to the benefits already provided for in this section namely unemployment, illness and dependent’s benefits.
Similarly, the purpose of the UIA has been amended by section 16 of the LLAA to include the payment from the Unemployment Insurance Fund (“UIF”) of parental benefits to certain employees. Parental benefits must now be paid at a rate of 66% of a beneficiary’s earning at the date of application.
Right to parental benefits
The new section 26A of the UIA provides that a contributor (subject to section 14 of the UIA) who is the parent of a child is entitled to parental benefits if the application is made in accordance with the prescribed requirements and the provisions of the UIA, if the contributor–
- has been registered as the father of the child in terms of the Births and Deaths Registration Act, 51 of 1992;
- is the parent of a child below the age of two in an adoption order;
- is the prospective adoptive parent of a child below the age of two, in terms of a court order that placed the child in the care of the prospective adoptive parent, pending the finalisation of the adoption order in respect of that child; or
- is the parent of a child who has been born as a result of a surrogate motherhood agreement referred to in the Children’s Act, 38 of 2005.
The contributor must also not have claimed adoption benefits in terms of section 27 of the UIA or the commissioning parental benefits referred to in section 29A of the UIA (both sections of which are yet to come into effect).
Section 26A(3) of the UIA now provides that when taking into into account any parental leave paid to the contributor in terms of any other law or any collective agreement or contract of employment, the parental benefit may not be more than the remuneration the contributor would have received if the contributor had not been on parental leave.
In terms of section 26A(4) of the UIA, the maximum period of parental leave is ten consecutive days and in terms of section 26A(5) of the UIA, a contributor is not entitled to benefits unless he or she was in employment, whether as a contributor or not, for at least 13 weeks before the date of application for parental benefits.
Application for Parental Benefits
In terms of the new section 26B of the UIA, an application for parental benefits must be made in the prescribed form, at an employment office, and within 12 months after –
- the date of childbirth;
- the date that a competent court grants the adoption order; or
- the date that a child is placed in the care of a prospective adoptive parent by a competent court, pending the finalization of an adoption order in respect of that child.
The application for parental benefits will thereafter be investigated by the claims officer and, if necessary, he/she can request further information regarding the period the applicant was not working in order to care for the child.
If the application complies with the requirements the claim officer must approve the application, determine the amount of benefits and the benefits the applicant is entitled to, authorize the payment of the benefits and stipulate how the benefits are to be paid.
Payment of Parental Benefits
Section 26C of the UIA stipulates that the Director-General must pay the parental benefits to the contributor at the employment office at which the application was made or any other employment office determined by the applicant at the time of the application.
What does this mean for employers?
The parental benefit amendments to the UIA may be indicative of the imminent enforcement of the much anticipated amendments to the BCEA regarding parental, adoption and commissioning parental leave.
The UIF is now ‘gearing up’ for the enforcement of these provisions and employers should take the opportunity to also do so. It would be prudent and best practice for employers to educate its employees on how they can utilise and access parental leave benefits from the UIF in terms of the UIA amendments.
The parental benefits and imminent parental leave entitlements should also be taken into account when employers update employees’ template contracts of employments and applicable policies.