UI-19 certificate: Changing the reason for termination

It is a common occurrence for employers to alter the reason for termination on an employee’s UI-19 certificate in order for them to qualify to claim Unemployment Insurance Fund (UIF) benefits, but is it legal?

The UI-19 certificate is a crucial requirement for any unemployed person to enable them to claim benefits from the UIF. The reason for termination on the certificate assists the fund to identify and categorise an employee’s right to claim benefits. However, more and more employers are being requested (and complying) to change the reason for termination on former employees’ UI-19 certificates. The reasons for these requests are mainly due to the employees being refused to claim from the fund as the termination reason on their UI-19 certificates disqualifies them from claiming benefits.

Disqualification

Employees are generally disqualified to claim benefits from the fund if they have resigned, retired, are dismissed due to abscondment, or if they have been barred from claiming benefits in terms of the Unemployment Insurance Act 63 of 2001 (UIA). When employees are refused, they turn to employers to change the reason on the certificate to enable them to claim benefits.

Case study – UI-19 certificate changes

Changing the reason for termination on the UI-19 certificate has been discussed in the recent case of Swanepoel v KPMG Services (Pty) Ltd (J494/19) [2021] ZALCJHB 457 whereby the Applicant sought an order compelling the Respondent to change the reason for his termination from ‘involuntary resignation’ to ‘retrenchment’, in order for him to claim UIF benefits.

The court ruled as follows:

[13] There are two hurdles confronting the applicant. Firstly, the jurisdiction of the Labour Court is regulated by Section 66 of the UIA which provides that: ‘Unless this Act provides otherwise, the Labour Court has jurisdiction in respect of all matters in terms of this Act, except in respect of an offence in terms of this Act’.

While Section 64 of UIA provides that:

‘(1) No person may-

• knowingly make a statement or cause a statement to be made which is materially false or which results in an incorrect payment of benefits in an application for benefits in terms of this Act;
• wilfully make any false entry on a contributor’s record card or any other book, record or document relating to either a contributor’s employment history or to a contributor’s claim for benefits; or
• contravene, or refuse or fail to fully comply with any provision of this Act or of any regulation or notice issued in terms of this Act.

(2) Any person who contravenes Subsection (l)(a), (b) or (c) is guilty of an offence.

[14] Given my finding that the applicant’s contract of employment terminated on mutual basis in terms of the settlement agreement, the recordal of ‘involuntary resignation’ in the UI-19 form obviously constitutes a false entry in terms of Section 64(1)(b) and a criminal offence in terms of section 64(2) of UIA. As mentioned above, this Court lacks jurisdiction to deal with criminal offences in terms UIA. 

Fine and/or imprisonment

As seen from the court’s ruling, such false entries made by employers will not only constitute an offence in terms of the UIA but will also constitute a criminal offence. Section 65 of the UIA states that “Any person convicted of an offence in terms of this Act is liable to a fine or imprisonment, or to both a fine and imprisonment.”

Employers should thus be wary of the risks involved when changing the reason for termination in order to assist an employee to claim UIF benefits, as any such actions could lead to severe consequences.

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