Director-General request for R1 billion additional funding for Department of Labour

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Employment and Labour

19 April 2010
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

The Director-General in the Department of Labour met with the Committee to motivate why the Department should be allocated an additional R1 billion. The presentation gave a breakdown of the total funding the Department would need for each programme. Administration accounted for R215 million, Inspection and Enforcement Services R250 million, Public Employment Services R135 million and Labour Policy and Labour Market Programmes R300 million. The bulk of the Administration programme, R192 million, went on additional human resources and to secure stand alone Labour Centres. The Public Employment Service programme intended to implement a virtual labour market matching employers and job seekers on a single database. The Inspection and Enforcement Services intended to increase the amount of inspectors and their level of skills and know how. The Department had decreased the levels of non-compliance in occupational safety and health matters as well as recorded a decrease in the number of fatalities on construction sites. The Commission for Conciliation Mediation and Arbitration was seen as important but was technically insolvent and had already been bailed out with R62 million. It needed R150 million and the National Economic Development Labour Council needed R15 million. The Department foresaw dire consequences should the Department not be adequately staffed and funded.

Members asked questions about the Siemens contract, building inspections, the capacity of inspectors and the Department’s security arrangements. They also asked the Department to provide the Committee with a scorecard and timeframes so that the Committee could oversee its progress.

Meeting report

The Chairperson noted there was only one item on the agenda- Mr Jimmy Manyi, Director General in the Department of Labour (DoL) would brief the Committee about his request for an additional R1 billion to be allocated to the Department.

Presentation by DoL
Mr Manyi gave a summarised breakdown of the budget, which totalled R900 million. Administration accounted for R215 million, Inspection and Enforcement Services R250 million, Public Employment Services R135 million and Labour Policy and Labour Market Programmes R300 million.

Programme 1: Administration
R192 million would be assigned for additional human resources, R17 million for the acquisition and implementation of an electronic document management system and R6 million for IT equipment.

Programme 2: Inspection and Enforcement Services
For this programme, the additional funding would be used to upgrade the skills of the Inspectorate as there was a need for specialist level employees. The decrease in levels of non-compliance in occupational health and safety had reduced the level of fatalities on construction sites. If the Department did not get the money to improve the skills of its Inspectorate it would remain a “toothless bulldog”. 

Programme 3: Public Employment Services (PES)
The Department had recently returned from Germany where it had studied the German model of a government agency that kept a record of all employers and employees on one database. This would be a “virtual labour market” and match the needs of employers and job seekers. This was the vision for PES. The current IT system was implemented years ago and was inadequate for the scope of this project.

Programme 4: Labour Policy and Labour Market Programmes
Mr Manyi informed the Committee that the Commission for Conciliation, Mediation and Arbitration (CCMA) was technically insolvent. It was bleeding badly and had already been bailed out to the tune of R62 million. It was constantly in trouble. The Department had had to re-prioritise its own budget because of the importance of the CCMA, which needed R150 million. The National Economic Development Labour Council (Nedlac) was widely recognised as an important structure for social dialogue in the country. The Department continued to fund its operations and in the current financial year it needed R15 million. The balance of the amount needed for this programme was to generate and maintain the up to date information necessary to run a labour market service.

Lastly, Mr Manyi cautioned that there would be dire consequences for the Department if it was not properly staffed or resourced.


The Chairperson invited Members to engage with the DG. At the same time, she cautioned that all questions should be restricted to the Department’s request for additional funding.

Mr I Ollis (DA) addressed several issues. Firstly, he noted that the amount allocated for IT was quite small. Secondly, he said that the Compensation Fund was not using the existing Siemens software as it did not cater to its needs. As a result, could the savings on software licensing fees not be used to fund the IT portion of the additional budget requirements? Thirdly, he wanted to know why DoL was responsible for building safety. Finally, he asked the DG to comment on what the Minister had said in his budget speech.


The Chairperson reiterated that she would not entertain any questions that had nothing to do with the presentation.

Mr Manyi explained that the Department paid a unitary fee to Siemens every quarter, irrespective whether the software was used or not.

Mr A Louw (DA) sought clarity as to whether the 500 people intended for the security of DoL premises was the figure for all the centres.


Mr Manyi replied in the affirmative. The Department wanted security for its premises in all the provinces and was focused on stand-alone labour centres rather than the ones found in malls that had existing security arrangements.


Mr Louw noted that many of the inspectors lacked the competency and “know how” when it came to dealing with the mining industry. Often mines hid things and the inspectors were only shown what the mines wanted them, thus hindering any investigation.

Mr Manyi agreed that there was a need for more inspectors who were fully competent and able to handle any situation.

Ms L Makhubela-Mashele (ANC) welcomed the PES initiative for bringing a much-needed service to the people.

Mr Ollis asked if the DoL, in their building inspections, were not duplicating the job of town planners and inspectors at local government level.

Mr Manyi replied that it was part of Department’s mandate to ensure that workers were protected.


A member of the Department’s delegation added that it was a requirement for incidents to be reported and that a health and safety pre-inspection of a site be done. The Department became involved when fatalities occurred. Metropolitan areas might have building inspectors but the Department still needed qualified inspectors.

Ms D Tsotetsi (ANC) asked if the Department had received a second opinion on the budget and were they convinced that this was enough.

Mr Manyi assured Members that the R1 billion request was no “thumb suck”. Also, he indicated that he was happy with the budget.

Ms A Rantsolase (ANC) wanted to know if the amount of R 794 281 on page 2 of the presentation was for the current or previous year. Why was the Department underspending on capital assets? She wanted the Department to draw up a scorecard with time frames to afford the Committee to oversee the budget.

Mr Manyi disputed reports, which indicated that the Department had returned R50 million unspent money to the National Treasury. The items were a work in progress and the unspent portion had been around 1%. He undertook to provide a scorecard with timeframes to the Committee.

Ms Rantsolase asked how long the Siemens contract still had to run.

Mr Phineas Motiba, Acting Chief Information Officer, DoL, replied that the contract ended in November 2012. As of 1 May 2010, it still had 13 months to run.


The Chairperson thanked the Department for outlining their proposal and expressed her support for the Department.


The meeting was adjourned.



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