The Congress of South African Trade Unions (Cosatu) has warned that the appointment of Thulani Tshefuta as acting commissioner of the Unemployment Insurance Fund (UIF) risks ushering in “state capture 2.0” at one of the country’s biggest worker-funded institutions.
In a letter written by Cosatu general secretary Solly Phetoe to President Cyril Ramaphosa and Labour Minister Nomakhosazana Meth on Thursday, the federation demanded that Tshefuta’s appointment be reversed.
The controversy follows the recent withdrawal of Business Unity South Africa from the UIF board.
The Department of Employment and Labour this week welcomed Tshefuta’s appointment in a statement issued by acting director-general Jacky Molisane.
Molisane said Tshefuta had been entrusted with “a critical mandate to lead and strengthen the UIF in delivering meaningful and efficient services to the people of South Africa”.
The UIF is funded through compulsory monthly contributions from employers and employees, not tax revenue. It pays benefits to workers who lose their jobs, go on maternity leave, become ill, adopt children, or die. It also funds projects through its Labour Activation Programme (LAP). The fund handles tens of billions of rand annually, making its governance critical to millions of contributors and beneficiaries.
Phetoe said the appointment came weeks after organised labour publicly raised allegations of corruption involving the UIF. He said workers and employers finance the fund, yet neither constituency was consulted before the appointment.
“The government does not contribute a cent towards it… yet neither organised labour nor organised business was consulted about this appointment. We were left to read about it on the UIF’s social media,” Phetoe said.
He also said the UIF board was bypassed and informed only after the decision had already been taken.
Cosatu questioned whether the appointment complied with public service rules, saying acting public service appointments must be made from “a similar position within the public service or public sector”, and Tshefuta was “neither an employee within the public service nor the public sector”.
The federation further questioned Tshefuta’s multiple leadership roles, saying he sat on several state-linked boards, including as chairperson of the retail sector Seta.
Phetoe said the fund and its LAP had been “bedevilled by serious instances of state capture and corruption amounting to billions of rand for many years”.
He said appointing a leader of a constituency that had sought participation in LAP projects threatened any effort to clean up the fund. “We fear that it signals a state capture 2.0 of the UIF.”
The federation demanded a temporary appointment of an acting commissioner from within the UIF, the department or the public service. “Cosatu is extremely angry, shocked and disappointed by it. We strongly feel that this is a shameful betrayal of workers,” Phetoe said.
Cosatu also renewed its call for the UIF to be placed under administration and warned that it reserved the right to challenge the appointment.
- Cosatu warns that appointing Thulani Tshefuta as acting UIF commissioner risks "state capture 2.0" at the worker-funded Unemployment Insurance Fund.
- The appointment was made without consulting workers or employers, who finance the UIF, and bypassed the UIF board.
- Cosatu questions the legality of Tshefuta’s appointment, noting he is not from the public service or sector and holds multiple state-related leadership roles.
- The UIF, handling tens of billions annually, has faced corruption allegations, and Cosatu fears Tshefuta’s appointment threatens efforts to clean up the fund.
- Cosatu demands a temporary commissioner be appointed from within the UIF or public service, calls for UIF to be placed under administration, and may legally challenge the appointment.
