Department of Labour Strategic Plan & Budget Vote 2009-2012

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Labour

08 June 2009
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

The Department of Labour briefed the Committee on its strategic plan and budget vote for 2009-2012. It discussed its vision and explained how it would play a significant role in reducing unemployment, poverty and inequality. The Department looked at and spoke of how it would contribute to the government’s strategic priorities. These included employment creation, amendment of labour legislation, review of the Department’s organisational structure and contributing to the anti-poverty strategy.

The budget vote showed the increases and decreases in the Medium Term Expenditure Framework allocations for 2009/2010. The vote showed an increase in allocations for service delivery as well as employment and skills development services. These increases were explained as including increased allocations to the Umsobomvu Youth Fund, and improvement to service delivery by employing career counselors.

Members asked for clarity on the merger of the Umsobomvu Youth Fund and the National Youth Commission, including the transfer of assets, the transfer of skills development functions to the education sector, and the intention to amend various pieces of labour legislation. The Department explained that the merger between the Fund and the Commission came about because there was a need to have a coherent programme, centered on the youth, that would be coordinated in the Office of the Presidency. In terms of transfer of skills, the Department was informed that the Sector Education Training Authorities and the implementation of the Skills Development Act would be transferred to the Education sector. It was explained that the objective of all labour legislation was to prohibit abusive practices, and to this end the Department intended to amend labour legislation. Further discussions addressed joint ventures with the education sector, people with disabilities who did not have sheltered employment, the source of the Department’s figures for unemployment
, the exploitation of workers and the role the Department played in giving motivational talks at high schools.

Members further questioned what would be the Department’s plan for the creation of 500 000 jobs by the end of the year, which the President had promised in his State of the Nation Address, to which the Department responded that there were a number of elements to be considered regarding job creation
. The Committee understood that all government departments needed to be involved in job creation, but noted that the government would be judged by the amount of jobs it created. Members observed that there was a lack of coordination and cooperation between this Department and other government departments. They expressed concern that the Department was not in a position to provide the Committee with ideas for new programmes that would create jobs, and noted that since no new programmes were in place, this implied that the Department would merely try to improve existing programmes that were already in place.

The Chairperson reminded Members that the presentation was only been given to the Committee that morning. Members did not have time to look over the presentation before the meeting, which had placed them in a very invidious position. She asked Members to give the Department some leeway for the time being, and suggested that the Department should meet with stakeholders and devise a plan to meet the target for job creation.

Meeting report

Department of Labour (DoL) Strategic Plan for 2009-2012
Mr Sam Morotoba, Acting Director-General, Department of Labour, discussed the Department’s strategic plan. The DoL would strive for a labour market conducive to economic growth, investment and employment creation. It would play a significant role in reducing unemployment, poverty and inequality through a set of defined policies and programmes. Some of these included improving economic efficiency and productivity, skills development and employment creation and sound labour relations.

The Department noted that the National Government’s mandate underscored the need to create a democratic, non-racial, non-sexist and prosperous society through certain strategic priorities. The DoL would contribute to these strategic priorities through projects such as the Decent Work Country Programme (DWCP), employment creation, as well as inspection and enforcement of labour legislation. Labour Market Review Projects meant that that DoL intended to amend legislation such as the Labour Relations Act, Basic Conditions of Employment Act, Skills Development Act, the Unemployment Insurance Act and the Occupational Health and Safety Act. The Department would also contribute to the government’s priorities by reviewing its organisational structure. It would also develop and deploy information technology applications in order to improve its processes and efficiencies and would contribute towards poverty eradication and halving unemployment by 2014. [see attached document]

Mr Morotoba discussed the budget vote. He briefed the Committee on the Department’s Medium Term Expenditure Framework (MTEF) allocations. Service delivery, employment and skills development services received the highest increases in allocations for 2009/2010. Major increases to the vote were attributed to an allocation of R303 million during 2009/2010 to the Umsobomvu Youth Fund (UYF) and an allocation of R45 million to service delivery in order to employ career counsellors to strengthen employment services and the Inspectorate. Reductions in allocations that would occur from 2009 to 2012 would arise as a result of the global economic condition. [see attached presentation]

The Department stated that its strategic plan was to be used as a basis for measuring its performance in the next three years.     

Discussion
Mr I Ollis (DA) asked the Department for clarity on the merger between the Umsobomvu Youth Fund (UYF) and the National Youth Commission (NYC). He wanted to know what the new entity’s agenda would be as it had quite a large budget. He stated that he did not need a detailed response because he knew that the entity was going to be transferred out of the DoL.

Mr Morotoba stated that Parliament had recently passed the National Youth Development Agency Act. The merger came about because there was a need to have a coherent programme, centred on the youth, that would be coordinated in the Office of the Presidency. Therefore, the NYC, which originally had oversight over youth policy, and the UYF, which had originally implemented the policies, were merged. The NYC and the UYF were now working together under the leadership of the Chairperson of the National Youth Development Agency (NYDA). A Chief Executive Officer was yet to be appointed.  

Mr Ollis noted that skills development functions were being transferred to the Education sector, and wanted to know if this included the Sector Education Training Authorities (SETAs) or a cluster of the SETAs. He wondered if there were any other skills development functions that were going to be transferred.

Mr Morotoba responded that the Department was informed that the SETAs and the Skills Development Act would be transferred to the Education sector. During discussions, the DoL had pointed out that the SETAs were entities that were established as part of the Skills Development Act. It was further clarified that there would be a transfer of the Skills Development Act to the Ministry of Higher Education and Training. The Department was assisting in the transfer to prevent any disruptions and loss in momentum.

Mr Ollis noted that the Department had mentioned that the Labour Relations Act and the Basic Conditions of Employment Act would be amended. He asked if the intention was to prohibit labour broking altogether, or if the DoL would write regulations to prevent the exploitation of people whilst allowing labour broking to continue in a different form.

Mr Les Kettledas, Deputy Director-General: Labour Policy and Labour Worker Programmes, DoL, stated that there was a much broader issue of temporary employment services, as labour broking formed a part of this. The DoL recently commissioned research to look at this broader issue. However, the broad objective of all labour legislation was to prohibit abusive practices. The nature of the interventions would depend on the research that was being undertaken. The DoL was currently looking at the legislation to see what should be amended. The Minister would address this issue more broadly the following week. Some of the interventions might be in the form of amendments to legislation, others could be non-legislative. 

Ms R Tsotetsi (ANC) asked if the DoL had any joint projects with the Department of Higher Education and Training and the Department of Basic Education that would help to reduce the number of learners who were graduating from high school without knowing which career to follow.

Mr Morotoba stated that the DoL had worked very closely with the Education sector on certain projects. An example was the Adult Basic Education and Training (ABET) Programme, which was very important in various workplaces where a majority of adults could not make use of new training opportunities, due to adult illiteracy. There were learnership, internship and apprenticeship programmes. People were sent to universities to learn the theoretical component of the work and would come back to apply their knowledge. 

Ms W Newhoudt-Druchen (ANC) asked if the DoL was going to give the Committee a briefing on the transfer of the Umsobomvu Youth Fund’s assets. She noted that there were people with disabilities who did not have the benefit of sheltered employment and asked what the Department was doing to assist people with disabilities, as no mention had been made of this aspect in the Strategic Plan.

Mr Morotoba stated that all assets, liabilities and obligations of the UYF and the NYC would become the responsibility of the NYDA. UYF would be coming to brief the Committee the following day and could elaborate on questions regarding asset transfers.

Mr Morotoba stated that there were targets that were set under the National Skills Development Strategy for 2005-2010. Currently, this strategy was under review. The strategy stated that anyone who was involved in skills development interventions, and received funding from the DoL, was expected to show that 85% of the beneficiaries of those programmes were black, and 4% of the beneficiaries were people were disabilities.

Mr Kettledas added that the DoL promulgated a Code of Good Practices for the employment of people with disabilities. This Code was supplemented with technical assistance guidelines that would assist employers and workers for managing the employment of people with disabilities. At least 4% of employees in skills development had to be people with disabilities.

Mr W Madisha (COPE) asked for the source of the DoL’s figures on unemployment.

Mr Kettledas stated that the Department received its unemployment figures from Statistics SA., which did labour surveys every six months. The latest report was released in September 2008. The DoL used only the official statistics.

Mr Madisha expressed his appreciation that the Department would be amending the Labour Relations Act and the Basic Conditions of Employment Act to prohibit the exploitation of workers. He felt that this was a step in the right direction, but cautioned that most exploitation occurred “underground”, so that simply amending the Acts would not fix the problem. The issue had to be looked at more closely.

Ms Tsotetsi wanted to know what role the Department played in giving motivational talks at high school, as this was important for providing guidance to what skills were needed in the country.

Ms Siyanda Zondeki, Deputy Director-General: Service Delivery Labour Policy and Labour Market Programmes, DoL, stated that there were career counselors who worked in provinces. They provided guidance for unemployed youth. The DoL established partnerships with higher education institutions, where both would provide youth with career guidance and information. There were also individual and group sessions provided by the counsellors who focused on life skills, job seeking, and writing a curriculum vitae.

Mr Morotoba added that there were exhibitions conducted at the same time as imbizos. SETAs then provided career information. The DoL also produced a publication, The Scarce and Critical Skills List, that showed various skills needed by developing businesses. This was compiled into a sector skills plan, which was then supplemented with information from the Human Sciences Research Council (HSRC). The Scarce and Critical Skills List was used by the Joint Initiative on Priority Skills Acquisition (JIPSA), as it identified areas where there was a need for skills. 

The Chairperson stated that during the election campaign, job creation had been one of the focus areas. She wanted to know what the DoL was going to do to create jobs, as the President had promised the creation of 500 000 jobs by the end of the year.

Mr Morotoba stated that there were a number of elements to consider regarding job creation. There were a number of interventions that could be done to ensure that those who were already employed would not become unemployed. There were jobs that were social-security orientated, which meant that when people became injured during employment or if they were about be retrenched, the Department would intervene in the form of the Unemployment Insurance Fund (UIF). This would provide for an interim income for those in need. The DoL was also proactive in terms of skills development interventions. Inmates from correctional service centres, who were about to be released, were trained in various skills such as plumbing, roofing and construction. The intention was to link these people with various companies that required those skills. This would help to break the crime cycle.

The Chairperson understood that all government departments needed to be involved in job creation. She asked how many people the DoL had trained, and whether the Department thought that the target set out by the President regarding job creation was achievable. The Department had to change its plans to suit the priorities set out in the State of the Nation Address. The government would be judged by the number of jobs created. The Committee needed to hear exactly what the DoL had to offer. She asked what specifically the DoL would do to speed up job creation.

Mr Morotoba stated that the Department had realigned its presentation to suit the priorities in the State of the Nation Address. Many meetings had been set up to discuss job creation, and the DoL would be tabling the presentation made to the Committee so it could become the basis of the Department’s commitment to Parliament. He stated that there were areas under serious discussion, such as training. A political decision had been taken to transfer the training component to the education sector. There was ongoing discussion about the training of unemployed people. Some people involved in the Higher Education sector did not believe that this fell in their area. These discussions would have an impact on the Department’s plans.

Mr Madisha observed that there was a lack of coordination and cooperation between the DoL and other departments. He stated that the DoL needed to look into what happened to people after they were trained. The DoL also needed to specify what it was doing for vulnerable workers such as domestic workers and farm labourers.

Mr Kettledas stated that the Department had sectoral determinations for vulnerable workers, which set out their basic rights and minimum wages. Enforcement of these rights should be done through trade unions and Inspectors from the DoL. He stated that it was important to expose instances of non-compliance.  

Mr A Louw (DA) wondered if the DoL had monitoring processes in place when it assisted in the completion of certain programmes and projects. He noted that there were many programmes that were left incomplete. He also expressed concern that many companies could become insolvent for various reasons, and asked how employees would be protected and what systems were in place to protect job losses. 

Mr Morotoba noted that there were incomplete projects in municipalities, but noted that there were various complications around tenders and supplies of material. There was a need to understand where the Department’s role is and where it started and ended.

Mr Kettledas noted that the issue of insolvent businesses and their employees was covered in the Insolvency Act, which fell under the Department of Justice. A few years ago, amendments were made to protect the rights of workers in cases of insolvency. The Commission for Conciliation, Mediation and Arbitration (CCMA) ensured that there was meaningful engagement between employees and employers and tried to find ways to resist retrenchment. The DoL was trying to get businesses to register their vacancies with the Department, so it could match job seekers with jobs that were available.

Mr Ollis stated that it was worrying that the DoL was not in the position to provide the Committee with ideas for new programmes that would create jobs. In the absence of new programmes, there was the implication that the Department was merely trying to improve existing programmes already in place. He did not think that this was realistic. The government had a target of creating 500 000 jobs by the end of the year. If the Committee did not get answers, Members would need to revisit the issue.

Mr Morotoba stated that job creation depended on a number of factors. He did not think that the DoL could succeed in creating 500 000 jobs all on its own. The DoL had to partner with various departments to focus on skills development and job creation. If there was not coordination and cooperation, projects would collapse.

The Chairperson reminded Members that the presentation had only been given to the Committee that morning, but since Members did not have time to look over the presentation before the meeting, this had placed them in a very disadvantageous position. Some answers might still be found in the detailed document. She told the Department that in the future, documents had to be given to Members five days in advance.

Ms Tsotetsi asked the Department for a list of factors that determined the creation of jobs.

The Chairperson asked Members to grant some leeway to the Department for the time being. The Committee would give the Department a chance to meet with stakeholders and determine a plan to meet the target for job creation. She did not think that the Department would be able to answer the question today.   

The Chairperson asked what labour inspectors did when they went in to factories. She noted that she had found that there were many workers who complained about working conditions.

Ms Zondeki stated that DoL inspectors checked if businesses were implementing the proper laws. Where there were issues of non-compliance, the business would be issued a notice and the employer was given time to correct the situation. If there were instances of injury or death a prohibition notice would be issued, or the operation or the business would be closed. She stated that proactive inspections meant that the DoL should be going out to educate workers about their rights. However, due to capacity constraints within the Department, the number of inspections that could be conducted was limited. Inspectors were also poached by other departments who would offer them better remuneration. The Department also tried to do “blitz” inspections where certain sectors that were seen to be high risk were targeted. 

Ms Newhoudt-Druchen asked how unskilled workers would be informed of how to contact the DoL inspectors.

Ms Zondeki stated that there were information sessions that were conducted by inspectors for workers. They informed workers about their rights. Businesses could also invite the DoL to talk to workers.

Ms Newhoudt-Druchen asked how the DoL ensured that foreign businesses complied with South African laws for employees.

Ms Zondeki stated that if a business was set up in South Africa it would have to go through certain processes with the Department of Home Affairs. If a work permit was issued and the business was set up, it would have to comply with South African laws.

The Chairperson noted that the DoL had many constraints, specifically the lack of inspectors. The ANC’s manifesto promised people decent jobs. This also meant decent working conditions. She stated that the DoL had to be proactive in detecting improper working conditions. In the Committee’s next meeting with the Department, she asked that the Department inform Members how it was intending to resolve the issue concerning the lack of inspectors. The Department also had to give the Committee a plan showing basic working conditions and a revised programme.

The meeting was adjourned.

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