Loubser Bulk Services in UIF relief fund fraud scandal

Loubser Bulk Services in UIF relief fund fraud scandal

  • Loubser Bulk Services received Covid-19 UIF Ters for truck drivers, paid them and later deducted the money
  • Truck drivers get only two days off per month
  • Company deducts provident funds of a little over R1 000 but fail to transfer it to the fund itself
  • Truck drivers forced to pay up to R15 000 as excess payments in case of an accident
  • R5 000 deductions for high fuel consumption

Loubser Bulk Services, a long-distance and cross border trucking company based in Mahikeng, North West is in the thick of a Covid-19 UIF Ters fraud scandal after it emerged that the company received the funds – paid its truck drivers then later deducted and kept the money.

The revelations were contained in a report by City Press which detailed the drivers’ suspicion of fraud when the company withheld the funds.

In the report, Loubser truck drivers have also complained about bad industry practice by the company.

Loubser has admitted to deducting the UIF Ters funds from its truck drivers’ salaries on the basis that the company had already paid their salaries in full and that the employees did not qualify for the funds as the lockdown did not affect them.

The Covid-19 UIF relief fund – known as the temporary employee/employer relief scheme (Ters) – was introduced to mitigate the impact of the lockdown. The benefit was made available to employees who lost their income owing to the lockdown regulations which forced many to stay at home and was to be applied for by employers on their employees’ behalf. The same relief scheme was also made available to employers whose businesses were affected by the lockdown.

In the Loubser case, truck drivers who received Ters benefits have been working throughout the lockdown, which automatically disqualifies them from benefiting from the scheme.

 

The truck drivers said they thought Christmas had come early for them when they got paid around R5 000 more at the end of April. They alleged that the extra money carried the reference “UIF”.

“Nothing was explained to us by the company and we all thought it was our lucky day, but little did we know that trouble was coming when the same amount got deducted from our salaries at the end of May.

“We later learnt that the company had applied for some money from the UIF, which was paid to us, and we are now left baffled as to why they later took it back,” said one driver who requested not to be identified.

Workers have told City Press that they did not personally apply for the benefit.

An audit by the UIF is set to reveal answers as to who applied for the benefits to be paid to workers who were never affected by the lockdown. The audit is also set to reveal under what circumstances they were paid and if it was justifiable for the employer to deduct money and keep it.

Company entitled to fund not truck drivers

Loubser appears to find its actions justifiable, arguing that the company had already paid the workers’ salaries in full and that “whatever government gives to them, we’re entitled to keep”.

Loubser spokesperson Ganson Govender said the company never applied for Ters benefits for the employees.

“All drivers were paid their full salaries for March, April and May, and the company applied to the UIF for Ters for its own benefit. The compensation was paid to the employees when it should have been paid to the employer,” he said.

However, in an earlier response, which appeared to be in a slightly different tune, Govender had said: “All our employees were paid their full salaries by the company for April as we did not want any employees to be out of pocket by waiting for the UIF Ters benefits.

“The UIF paid the employees rather than the employer [and], basically, this means that the employees got paid twice.”

Govender later explained in a telephonic interview that “whatever government gives to them, we’re entitled to keep it”.

Regarding what entitled Loubser to Ters benefits, Govender said the company trucks may have been on the road but they were not loaded at all times.

“Yes, we have been running, but not on full capacity where, for instance, our trucks would travel to Durban empty whereas they would usually be loaded with mining products.

“[They would] then come back with supplies declared essentials, such as agricultural products destined for Botswana… For us, running empty oneway [trips] has been a loss,” he said.

Provident deductions not being deposited to the fund

Most workers, however, suspected that something was amiss with the payments from the UIF.

“This is the same company that has been deducting [a little more than] R1 000 monthly from our salaries as our provident fund contributions, but failing to pass on that money to the relevant people.

Here we are thinking that we’re contributing to the provident fund because it is cited in our payslips, but the money is not reaching the fund… “Would anyone blame us for suspecting dishonesty with our employer who does this with our money?” another employee asked.

“We ask ourselves why any UIF benefit would be paid out to a company which has been running fully? If they qualify for that money, it means we also qualify for it. And if we do not, because we have been working throughout the lockdown, then they also do not qualify for a cent.”

Govender admitted that Loubser had not been consistent in transferring provident fund contributions to the relevant administrators.

“With economic challenges, we are behind with contributions,” he said.

He added that arrangements had been made for payment of the outstanding contributions.

The UIF unit at the labour department said it would be “fraudulent” for any employer to apply for Ters on behalf of employees and then keep the money for itself.

“We view this as fraudulent, and we are in the process of appointing a team of auditors to perform a post-payment audit for all the employers we have paid. Companies which are found to have not adhered to the agreement in terms of payments will be forced to pay the money back to the fund or taken to court,” said UIF spokesperson Makhosonke Buthelezi.

“We are deeply concerned with this unscrupulous behaviour from companies who take advantage of the fund’s attempts to help vulnerable workers by applying for workers who are not under lockdown, only to pocket the money. Strong action will be taken by the fund once our auditors point to wrongdoing by employers.”

Bad industry practice

Truck drivers complained of Loubser allowing them only a two-day break per month and that they were only allowed six days off after three months behind the wheel for long hours per day on long-haul trips.

However, Govender said they were operating as per collective agreement with the bargaining council and that many drivers preferred to accumulate their days off and take them later. He did not deny that the drivers were only allowed two days off per month.

Govender further denied any unjustifiable fines imposed on drivers for repairs of company trucks as well as excess payments of up to R15 000 if a truck had been in an accident, saying those were part of the collective agreement.

Drivers alleged that they were required to pay up to R5 000 for a tyre puncture and that the company was using retreaded tyres and “appeared not to anticipate punctures on heavily loaded and long-haul trucks”.

They also alleged that they were fined R5 000 for high fuel consumption.

Govender justified: “There is a penalty system as per employment conditions in place for negligent damages. Each incident is investigated for liability and negligence.”

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