Southern Africa Tourism Services Association on its activities in respect of job creation & sustainable livelihoods; further briefing by Department of Labour on: conditions of employment in the tourism sector

Committee: Tourism

Chairperson: Mr D Gumede (ANC)

Date of Meeting: 30 Aug 2010

Summary

The Southern Africa Tourism Services Association briefed the Committee about its role in the South African tourism sector. The presentation focused on tourism statistics during the current global situation and tourism’s contribution to both GDP and job creation. The impact of the 2010 FIFA World Cup and the opportunities for South Africa to host subsequent events were also discussed.

Members enquired about the Association’s view on the Airports Company of South Africa, challenges of mentoring new businesses in rural areas, what challenges had the organisation faced in assisting the previously-disadvantaged and what challenges were occurring that had not occurred prior to 1994.

The Department of Labour outlined the conditions of employment in the tourism sector as well as its findings and recommendations in terms of building the tourism sector in South Africa.
The Department had conducted inspections of 2 622 establishments in the hospitality sector in the 2010/11 financial year. Out of this, it was found that 1 493 complied with legislation while 56% did not comply. The Department identified the hospitality sector as one of the high risk and problematic sectors for the 2010/2011 financial year. During inspections, the Department had discovered that many of the businesses had contravened the Unemployment Insurance Act and the Occupational Health and Safety Act. Most had also not registered for the Compensation for Occupational Injuries and Diseases Act (COIDA). A joint inspection with relevant enforcement agencies to promote an integrated approach was recommended.

Members criticised the Department for using a political party slogan in its presentation. They also questioned the Department about how it would make it easier for new businesses to comply with its current legislation and how non-compliance on legislation was enforced. Members felt that the laws should be enforced more harshly as employers were unintentionally encouraged to employ non-South Africans as they could pay lower wages and these workers generally did not belong to any trade unions.



Minutes

Briefing by Southern Africa Tourism Services Association (SATSA)
Mr Michael Tatalias, Chief Executive Officer, SATSA, briefed the Committee on the organisation’s role in the South African tourism industry. SATSA was a member of the Tourism Business Council of South Africa (TBCSA) and served as an endorsement of good business practices in the Southern Africa tourism industry. SATSA provided domestic and international buyers with advice on options when they booked their travels in Southern Africa. SATSA members had to qualify for this endorsement. All members of SATSA had to provide a financial guarantee and this insurance fund refunded the deposits by tourists if the company was liquidated. This insurance fund was the first of its kind and proved invaluable during the credit crunch. SATSA had initiated the Tourism Mentorship Programme (TMP) in 2003. This project partnered emerging businesses with established businesses in order to share skills.

Mr Tatalias also explained the current global economic situation and the slow down in the growth of arrivals. Various graphs were outlined to show tourism’s contribution to both GDP and job creation. He concluded that the success of the 2010 FIFA World Cup should drive South Africa to bid for the 2020 Olympic Games in Durban.

Briefing by the Department of Labour
Ms Siyanda Zondeki, Deputy Director-General: Service Delivery, Department of Labour, presented the Committee with an assessment of the conditions of employment in the tourism sector during the 2010 FIFA World Cup and its recommendations to build the tourism sector in South Africa. The Department had conducted inspections of 2 622 establishments in the hospitality sector in the 2010/11 financial year. Out of this, it was found that 1 493 complied with legislation while 56% did not comply.

The Department identified the hospitality sector as one of the high risk and problematic sectors for the 2010/2011 financial year. During the inspections, the Department learnt that employers were not aware of the annual increases in terms of minimum wages and this would lead to underpayment of salaries. Observations were also made concerning the calculation of wages, information concerning pay, deductions and other actions concerning remuneration, written particulars of employment, compressed working week, work on Sundays, night work and daily and rest period.

It was discovered that many of the businesses also contravened the Unemployment Insurance Act and the Occupational Health and Safety Act. Many had also not registered for the Compensation for Occupational Injuries and Diseases Act (COIDA). The Department recommended joint inspections with relevant enforcement agencies to promote an integrated approach.

Discussion
Mr G Krumbock (DA) criticised the Department’s presentation for lecturing employers on not following laws during the ongoing nationwide labour strike. Furthermore, the Department’s use of a political party’s election slogan was described as offensive and had no place in a multi-party committee. Lastly, he asked whether the Department could make it easier for new businesses to comply with its current legislation.

Ms Zondeki acknowledged that it was a difficult time to present the report. She accepted that sometimes it was difficult for the Small, Medium and Micro Enterprises (SMMEs) to comply with existing legislation. The Department was aware of this challenge and had undertaken to educate and advise both employers and workers on the legislation.

Mr Krumbock asked Mr Tatalias to comment on his experiences concerning the Airports Company of South Africa (ACSA). In his view, ACSA was one of the worst run entities and that the debacle of flights before the World Cup semi-final in Durban was inevitable. The debacle could also be blamed on low staff morale and the 30% absenteeism of ACSA employees on the weekends.

Mr Tatalias replied that the main issue with ACSA was the lack of skills. At the same time, he acknowledged that ACSA’s construction of buildings was impressive and that it had managed to reduce baggage theft.

In addition, Mr Tatalias commented that if it was easier to go through a disciplinary process, more companies would do this. He felt that the key problem at King Shaka International Airport in Durban was the parking on the tarmac. Lastly, he agreed that absenteeism was a massive problem and felt that to a certain extent the shortage of staff was dangerous.

Mr L Khorai (ANC) stated that the Department of Labour should encourage the enforcement of regulations. He used the example of his sister who had spent three months without seeing her family due to her working hours. He also agreed with his colleague that presentations should include party slogans; however he did not think that it was inappropriate in this instance.

Ms M A Njobe (COPE) agreed with Mr Krumbock that the slogan was unacceptable. She asked SATSA about its partnerships with emerging businesses. What challenges had the organisation faced in assisting the previously-disadvantaged? And what challenges were occurring that had not occurred prior to 1994?

Mr Tatalias replied that there was often misinformation that tourism was an easy industry to implement in rural areas. Often SATSA was only involved after a business was set up and not all areas had the potential to compete in South Africa’s tourism industry. The customer was often not matched to the potential experience, and advice was needed for those setting up businesses. One of the challenges SATSA faced when setting up a programme in the Northern Cape was the lack of mentors for emerging businesses. SATSA had found that SMMEs in the TMP could graduate to become good mentors for emerging businesses. Other challenges included the funding for the training, red tape for starting new businesses, inadequate education, the dominance of Cape Town and Johannesburg in the tourism industry, and the inefficiency of government departments.

Ms Njobe asked the Department of Labour about the inspections it carried out. Where the employers were at fault, what was the Department doing to ensure that the changes were made? Would there be follow-ups? She also asked why there was such a bias in the hospitality industry that locals were not employed in favour of non-South Africans. She thought that perhaps the regulations on non-South Africans should be enforced more harshly as employers were unintentionally encouraged to employ non-South Africans as they could pay lower wages and these workers generally did not belong to any trade unions.

Ms Zondeki acknowledged that some foreigners were employed illegally; however he pointed out that all employees in South Africa were entitled to fair labour practises. The Department thus had to work with the Department of Home Affairs to ensure that foreigners had work permits. However, the Department was planning to introduce a new bill, named the Public Employment Services Bill, which would ensure that employers reported all vacancies to the Department so that the Department could match the skilled unemployed workers in its database to these jobs. Only if there were no available South Africans would employers be able to source the skilled workers outside the country. This bill would not be limited to the public service.

Ms J Manganye (ANC) was concerned about Occupational Health and Safety in South Africa and felt that most people who got injured in the hospitality industry could blame the non-compliance on their employers. She encouraged the Department to investigate and put pressure on those who did not comply. How often did these inspections occur? Were the joint inspections successful?

Ms Zondeki replied that non-compliance of laws in regards to Health and Safety had been taken note of. The weakness of the Department was the enforcement of its laws. Joint inspections shared the duty of enforcement across departments and encouraged cooperation. The Department had requested additional funding for more inspections. The Department had about 800 inspectors across the country. According to the International Labour Organisation, there should be one inspector per 30 000 enterprises. However, in South Africa there was one inspector per 100 000 enterprises and more. Joint Inspections were conducted with Home Affairs, Police, Agriculture and other government departments.

Mr Molawa Mogoatlhe, Executive Manager: Inspection and Enforcement Services, Department of Labour, informed Members that the Department had inspectors in each province. Inspections occurred when complaints were received by members of the public. The inspections were successful as the Department partnered with law enforcement agencies and other relevant departments.

Ms M Maluleke (ANC) asked the Department to elaborate further about the 56% non-compliance rate. Were the non-compliant businesses given a time-frame to comply with the timeframe?

Ms Zondeki replied that employers were given 60 days in which to comply with the legislation and follow-ups occurred once this period had passed. When compliance orders were issued, employers wee given 21 days to comply before a follow-up visit occurred. The Department prosecuted employers if they had not complied within the timeframe granted. Businesses were prosecuted through the courts of law.

Ms Manganye complained that Ms Zondeki did not answer the questions clearly.

The Chairperson stated that the government should not have funded vacancies. He felt that the issue of foreign nationals could be managed better. South Africans needed to know their labour rights. The main issue was collaboration, and tourism required an ongoing national dialogue as problems could be solved only by different stakeholders working together. He advocated collaboration with the Department of Trade and Industry, and with local government. The issue of red tape in tourism was a concern. There needed to be a balance between the Department and businesses. Sound labour relations were good for sustainable tourism. Compliance with laws was better if individuals understood the laws.

On behalf of the Committee, the Chairperson expressed condolences to the Minister of Tourism whose mother had recently passed away. It was decided that the Committee would send a card to the Minister.

The Chairperson explained that the submissions that had been received for the business plan would be considered at a management meeting and that a new draft would be circulated on 7 September.

The meeting was adjourned.