Department of Labour on their Strategic Plan

NCOP Public Enterprises and Communication

04 May 2010
Chairperson: Ms M Themba (ANC; Mpumalanga)
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Meeting Summary

The Department of Labour presented its Business/Strategic plan for the 2009-2010 financial year.  Overall, the DoL achieved considerable success in executing their key targets.  Major achievements had included significant job creation and job saving; adoption of alternative strategies to retrenchment packages; amending of certain Acts deemed to contain loopholes, successful blitz inspection campaigns of workers’ conditions, reducing the vacancy rate within the Department, and monitoring the Employment Equity status of select companies. 
It was noted that certain constraints hampered the achievement of targets.  These included the poor operating performance of the Information Technology Systems in the Department, a lack of employment services counsellors as well as the slow uptake of alternative strategies to retrenchment packages by workers.  The expenditure for the previous financial year was 98.7% of the budget, with the rollover granted to the Department of Higher Education and Training as start up capital.

Members asked questions about gender representation within the Department, the disharmony between farm workers and their employers, and the monthly blitz inspections.  The provincial breakdown of figures presented was also questioned, as well as the state of the labour centres around the country.  Other issues covered in the discussion included the location of the pilot projects, and the verification of field figures.

Meeting report

Department of Labour Progress Report: Business Plan/Strategic Plan 2009-10
Mr Jimmy Manyi, Director General, Department of Labour, showed the Committee graphics of the new DoL branded cars. Mr Manyi said the DoL would comment on the progress, constraints and challenges which the DoL had faced in the previous year. The DoL was presenting in order to engage the Committee on issues with which the Committee could be of assistance. The branding of cars allowed the DoL better access to farms in order to carry out unannounced spot-checks on labour conditions.

The DoL had two core functions: employment services, and inspection and enforcement services.  These functions were now carried out through four programmes within the DoL, namely: Administration; Inspection and Enforcement Services; Public Employment Services; and, Labour Policy and Labour Market Programmes.  The performance measure of targets that were decided upon at the beginning of the previous year was considered and the implementation programme, responsible for meeting these specific targets, was noted.  Importantly, the performance measures were measured at the end of quarter three and not quarter four as is usually the case.  This was because the books for the full financial year had not yet been closed.

Programme Three: Public Employment Services (PES) met 94% of their target of creating 6500 permanent registered jobs.  In addition to 21074 short-term job opportunities, 6123 jobs were created and 1904 learning opportunities.  The DoL met their target of at least 65% of employment opportunities being filled on the database within 90 days, as 6845 registered jobs were filled within 90 days.  In addition to this, 41 210 unemployed people were provided with career’s advice, 5937 job seekers were assessed, 13082 job seekers were counselled and 18 self help career counselling information brochures were printed and distributed.  The DoL was successful in creating employment opportunities through partnerships, specifically with the Bombela Municipality and Sasol.  The PES programme was successful in drafting and finalising the Public Employment Services Bill as the draft Bill had been developed before March 2010. 
In response to the economic crises, the DoL set a target of decreasing retrenchment by introducing training lay off schemes.  Performance indicators once again indicated that the DoL was successful, as R2.4 billion was used to assist willing companies to provide alternatives training schemes instead of retrenching workers.  By the end of March 2010, 3286 workers were participating in the scheme.  The CCMA had, through its interventions, saved 16530 jobs in the period January 2009 to 31 March 2010. 
Further successful responses to the economic crisis included a pilot project involving 740 retrenched and unemployed learners in Gauteng, and R29 million allocated to Productivity SA to develop turn- around strategies for companies facing possible closures due to tough competition or the economic crisis.  Constraints that the PES had encountered, however, included the regular crashing of the ESSA system as well as the lack of employment services counsellors to service labour centres.  Mr Manyi said that corrective action had been taken to address these constraints.  A further constraint was the slow uptake as retrenchment packages were preferred to training initiatives.

Programme Four: Labour Productivity and Labour Market Programmes (LP&LMP), had achieved considerable success.  Once again, Mr Manyi said that quarter three indicators were being used as performance measures as quarter four figures were not available.  The DoL set the target of amending the Bill on Employment Equity Act, which was being finalised for approval.  Furthermore, the LP&LMP successfully followed-up on over sixty companies with respect to their employment equity plans.  The DoL met success in submitting an options paper on regulation of labour brokers and draft legal amendments on labour broking were being finalised.  Mr Manyi mentioned, however, that he could not discuss the details surrounding these amendments due to process issues.

Programme Two: Inspection and Enforcement Services (IES) had also been successful in meeting targets set.  Specifically, the Monthly Blitz Campaign had resulted in 122 459 workplaces being inspected and an 80% compliance level recorded.  The constraint met by these inspections was that the DoL had to alert businesses that they were coming and workplaces therefore had prior knowledge of inspection, which often led to artificial compliance. 
The branded cars alluded to earlier were a corrective action for this problem.  The procurement of these branded cars had been finalised and the cars were being branded green at the time of the presentation.  Uniforms for the inspectors had also been procured.  In the hospitality sector, 3741 workplaces were inspected with 44% compliance.  This low level of this compliance was mainly due to the use of foreign labour; without legal documents, employers can exploit workers without recourse.  Another target of the DoL in the IES Programme was to develop an internationally benchmarked organisational design structure.  This was achieved through International Labour Organisation (ILO) assistance.  Mr Manyi was happy to report that the DoL structures were now internationally benchmarked.

Programme One: Administration, successfully transferred the Skills Development Programme to the Department of Higher Education and Training, and successfully established one consolidated provincial office in Gauteng.  The target of reducing audit queries could not however, be measured at this point as the annual report had not been released.  The DoL were successful in reducing the vacancy rate within the department.  Mr Manyi said that the DoL had a 14% vacancy rate, but that this figure dropped to 6.76% when the vacancy rate excluded posts that were in the process of being filled.  Lastly, the DoL Administration Programme successfully put plans in place to accelerate delivery on improved systems and the Deputy Director General’s were championing the implementation of the plans.

Mr Bheki Maduna, Chief Financial Officer, Department of Labour, presented on the still unaudited budget and expenditure up until 31 March 2010.  He said that 98.7% of the budget was spent in the previous financial year, with a 1.3% rollover, mainly due to vacancies.  This rollover figure dropped to 0.6% when the vacancies that were as a result of a lack of skills was taken out.  Furthermore, the variance was mainly due to slow feeding of vacancies and many of these vacancies had, in fact, had appointments that were to take office in the forthcoming months.  Overall, the under expenditure that amounted to R16.3 million was granted a blanket rollover to the Department of Higher Education and Training as start up capital.

Mr Manyi then addressed the challenges the DoL faced as they look forward to the next financial year.  These challenges included the diverse nature of the economy, whereby the DoL is challenged to formulate strategies with one sector of the economy being advanced and industrialised and the other characterised by high levels of poverty and informal work relations.  Additional challenges included high levels of unemployment, domestic and cross border migration.

Mr Manyi said the objectives of the DoL looking at the 2010-2011 financial year were reflected in the strategic plan for 2010-2015.  These included reducing exposure to silica by 20% by 2014; reducing workplace injuries by at least 2% by 2014; reducing unemployment by placing unemployed people in decent work; and, improving the status of vulnerable workers.  He said the DoL would like to meet with the Committee again soon to explain the recent restructuring of the DoL in line with international benchmarks.

Discussion
The Chairperson noted that there were only three women in the DoL delegation. She hoped that in future this representation of women would increase.

Mr Manyi said gender representation was a very serious issue for the DoL and that positions that were open at the time were earmarked for women.  The DoL had taken a strategic decision to headhunt women in positions for which suitable applicants had not been found.

Mr H Groenewald (DA, North West) said he had no problem with appointing women but he said the DoL must make sure that these women have the correct skills.

The Chairperson said Mr Manyi had made it clear that the female employees would meet the skills requirements.

Ms L Mabija (ANC, Limpopo) said that the situation on farms in the country was very bad, with employers being killed and employees being abused.  How did the DoL plan to overcome this disharmony between employee and employer?

Ms Siyanda Zondeki, Deputy Director General: Service Delivery, Department of Labour, said regulations were in place that governed how workers should be treated.  Regular inspections of farms were designed to make sure that these regulations were being met.  She said the police were often sought for assistance in disputes.

Ms Mabija asked how employers were dealt with who were not willing to comply with the DoL.

Mr Lamati responded that one could not force companies to comply, but that they could engage in social dialogue and make use of appropriate laws to encourage companies to comply.

Mr Groenewald asked whether the situation on the farms was really as bad as it is being reported.

Mr Manyi replied “yes”, saying that the conditions on the farms were, by his personal experience, as bad as the media image.

Mr Groenewald said that illegal foreign workers were a major problem, especially in Limpopo and Mpumalanga.  What were the DoL findings with regard to job-taking from South African citizens.

Mr Sam Morotoba, Deputy Director General: Employment and Skills Development, and Human Resources Development, Department of Labour, said the foreign status of employees does not impact on desired worker standards.  The DoL was working with the Department of Home Affairs regarding work permits and that the power of inspectors had been increased to include the provision for inspectors to give spot fines and police assistance.

Mr Thobile Lamati, Chief Inspector, Department of Labour, added that the DoL works closely with the Immigration Office on all cases of migrant labour.

Mr O De Beer (COPE, Western Cape) asked why the monthly blitz inspections were only taking place in convenient areas.  He also asked what the DoL was doing to improve access to rural areas where exploitation on domestic workers and farm workers was rife.

Ms Zondeki said vulnerable, hard to reach areas were definitely on the list of blitz areas. The DoL had a protocol agreement on access to farms.  The improved visibility of inspectors as a result of the branded cars and the uniforms would increase access.

Mr Lamati said the DoL inspected the conditions in some very rural areas.  Sawmills in both KwaZulu Natal and Mpumalanga were examples of such areas.

Mr De Beer asked about the law regulating farm workers, the Extension of Security of Tenure Act,  ESTA, and asked whether a review of the loopholes in the law would be conducted.

Mr Les Kettledas, Deputy Director General: Labour Policy and Labour Market Programmes, Department of Labour, said ESTA referred to the Land Tenure Act, which the department of Agriculture administers.

Mr Manyi said action with regard to ESTA should have been taken already.

Ms Mabija asked if there was any advice or counselling unit that people could utilise whilst considering retrenchment packages.

Mr Lamati said intervention measures were in place to discourage employees to take retrenchment packages.  The specific programme is run by Productivity SA and takes place in three stages.  The first stage involves assisting the company in question with developing turnaround strategies.  The second stage involves counselling and alerting workers to the dangers of retrenchment packages.  The third stage involves trying to find alternative employment for the retrenched workers.

The Chairperson asked for information that was reported, to be broken up by province, specifically the 16 000 jobs that were reportedly created.

Mr Manyi submitted a breakdown of the figures per province to the Chairperson.

The Chairperson asked why the pilot project was started in Gauteng and not in a poorer province.

Mr Lamati said there was no philosophical justification for the pilot project to have taken place in Gauteng.  Over time, the project would be extended to other provinces.

The Chairperson asked what happened when inspectors come across something that was not on their blitz agenda - child labour, for example.

Mr Lamati said issues such as child labour are noted during the inspections and that the DoL had prosecuted cases in the past.  The DoL had worked with the Department of Social Services and the Department of Education on these cases.

Ms Mabija asked if there were any tools to verify whether field figures taken back to the DoL offices are correct.

Mr Lamati said that checklists existed that contained the contact details of employees and employers as well as health and safety representatives.  This ensured strong checks and balances.

Mr Groenewald asked how many vehicles were currently in the inspection fleet.

Mr Bheki Maduna, Chief Financial Officer, Department of Labour, responded that he did not have the number of cars on hand, but that there was at least one 4x4 per province and at least four cars per province.

Mr Groenewald asked if the DoL received any other income besides that from the state.

Mr Maduna said the fiscus is the main source of income but that some other income came from the Unemployment Investment Fund.

Mr Groenewald asked how many offices the DoL had, and what the provincial breakdown of these offices was.

Mr Lamati said there were 125 labour centres countrywide.

Mr Groenewald said that although jobs were being created, many were only as a result of the World Cup.  What happened after the tournament with regards to employment figures?

Mr Kettledas said the construction industry was seasonal by nature and that after the tournament construction workers will work on other projects.  That being said, peaks and lows do happen in construction.

Mr Groenewald asked about the situation at a mine in Groetvlei where workers were striking due to unpaid wages, specifically, what the DoL was doing about restoring harmony.

Mr Lamati said the situation had been reported to the DoL when it first arose.  Subsequently, the DoL sent inspectors to the mine and instructed the mine to pay its workers.  When the mine did not comply with this, the DoL issued a compliance order.  This was not honoured and the matter had been referred to the labour court.

The meeting was adjourned.

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