Department of Labour on challenges, analysis of working environment, strengths & way forward inclusive of work in progress on improvement of labour centres

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Employment and Labour

14 February 2011
Chairperson: Mr M Nchabeleng (ANC)
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Meeting Summary

The Department of Labour had identified the key challenges in the South African labour market and working environment as unemployment, the growth of atypical employment of which labour brokers were only one aspect, the promotion of equity in the workplace and the building of sound labour relations. The Department presented an overview of unemployment based on statistics from Statistics SA for the second quarter of 2010. These indicated that the national unemployment rare had remained constant. Of concern was the fact that amongst those aged 15-24 it went up by 1.3% and a year on year comparison showed an increase of 3.2% for the same group. Youth (15-34 year olds) constituted 72.4 % of the unemployed in South Africa. Unemployment statistics by population group reflected that unemployment went up for all population groups except for black/Africans in which it remained virtually unchanged at 29.5% and which remained the population group with the highest unemployment rate.

The Department provided statistics on the growth in atypical employment, and noted its implications and the legislation that was pending. Atypical employment had increased from 1.5 million in 2000 to 3.8 million in 2010 accounting for 28% of total employment. Forms of atypical working arrangements, not all of which entailed labour brokers, were fixed term contracts, part-time or temporary work and subcontracting and outsourcing, including outsourcing of 'core functions'. The Department found that atypical employment enabled non-compliance with labour laws and lowered wages as well as affording employers flexibility in staffing arrangements. Workers became more vulnerable and insecure and had less protection against exploitation. It also retarded the achievement of equity in the workplace.

In terms of equity the trends over a ten year period were that there was still white male dominance at managerial level and male dominance in top level management. The representation of Coloureds and especially Africans was still very low. On the promotion of sound labour relations it was noted that the labour market remained weak after the 2009 recession and a million jobs had been lost in this period. The workplace environment had been adversely affected by the recession and atypical employment trends and the relationship between management and unions had become more adversarial. There had been an increase in labour disputes and strikes in 2010.

The Department had undertaken a review of the current service delivery model of Labour Centres which had included their location and physical accessibility. The Department noted that the service was currently largely manually driven due to the shortcoming of the information technology services provided by the Department's contract with Siemens.  What was envisaged was a fully information technology driven system for all their core functions such as the Unemployment Insurance Fund, the Compensation Fund,  the Inspection and Enforcement division and Public Employment Services which was addressing the critical issues of youth unemployment.

The Chairperson felt very strongly that the Committee and the Department should define their roles and answer the question of 'who are we' and to focus on addressing the needs of the labour force and the unemployed who were largely poor and previously disadvantaged. The Committee expressed its concerns and frustrations about the high rate of unemployment especially amongst the youth and called for greater intervention and implementation of programmes to address these issues. The lack of transformation in the workplace and the slow progress made in achieving equity especially at senior management level was found to be unacceptable. It was noted that there was a lot of frustration on the ground and impatience was growing as there was absolutely nothing happening to improve people’s lives in the labour market.

Members differed in their opinions on labour brokers and there was a perception that these brokers provided an opportunity for inexperienced young workers to acquire experience and skills which would enable them to gain permanent employment. This was challenged and the counter argument was that despite their operating for a number of years their existence had not helped alleviate the problems of unemployment. The Department was urged to fill its 515 vacant posts, base its analyses on scientific evidence, ensure that inspectors had access to cars, cell phones and laptops and to enforce compliance with labour legislation more stringently.

The Department presented its response to the recommendations made by the Portfolio Committee on its oversight visit to the fishing industry and sheltered employment factories in the Western Cape. The key issues were seasonal employment contracts, alternative employment during the off season, non-compliance with occupational health and safety legislation, the criteria for qualification for Unemployment Insurance Fund benefits, skills development of seasonal workers and employees’ contribution to the schooling of the children of employees. It was established that seasonal workers were permanently on standby and not entitled to seek alternative employment during the off season. This was in contravention of the spirit of the Basic Conditions of Employment Act. Workers received a subsistence allowance of 17% during the off season and were also entitled to receive Unemployment Insurance Fund. There had been a perception that seasonal workers did not receive Unemployment Insurance Fund and the Department had addressed this issue.

Members requested that a report be compiled on the fishing industry that included other provinces. Workers had to be safe and work in a clean environment and the Department should check on this. Members asked if the Department had followed up on the contravention notices issued in terms of the Occupational Health and Safety Act, if the Department could indicate how bad the accident rate was in the sector, and whether the Department had responded to the Committee’s recommendation on investigating amendments to the Unemployment Insurance Fund Act

Meeting report

Opening remarks
The Chairperson tabled an apology from the Minister and said that Mr Sam Morotoba, the Acting Director-General, Department of Labour (DoL), had been delayed. He informed members that the Department's Strategic Plan would not be presented as he had proposed at the previous Committee meeting. Ms Siyanda Zondeki, Deputy Director-General: Inspection and Enforcement Services, DoL, led the delegation and introduced the speakers.

Challenges facing the workplace environment in South Africa
Mr Thembinkosi Mkalipi, Chief Director, DoL, said that the Department had looked at the challenges in the workplace as a broad topic and related it to the Strategic Plan for 2011-2016 and also to the 'Decent Work Country Programme' agreed to by their social partners at the National Economic Development and Labour Council (NEDLAC). The presentation addressed unemployment, the growth of atypical employment, the promotion of equity in the workplace, the promotion of sound labour relations and the way forward.

Mr Mkalipi indicated that the statistics for unemployment were based on the second quarter of 2010 as the presentation had been compiled before the release of latest figures from Statistics SA.  Statistics for unemployment by province reflected that the smaller, poorer provinces had higher unemployment rates with the exception of Limpopo. The Northern Cape had the highest unemployment rate at 30.1 % followed by Mpumalanga and North West both at 28.1%. The national unemployment rate for the 2nd quarter 2010 remained constant but of concern was the fact that amongst those aged 15-24 it went up by 1.3% and a year on year comparison showed an increase of 3.2% for the same group. Youth (15-34 year olds) constituted 72.4% of the unemployed in South Africa. The lowest rate of unemployment i.e. 2.35 was for the 55-64 years age group.

Statistics for unemployment by population group for the 2nd quarter 2010 reflected that unemployment went up for all population groups except black/Africans where it remained virtually unchanged at 29.5%. Nevertheless black/Africans remained the population group with the highest unemployment rate. The year on year statistics showed that the unemployment rate went up for all population groups except the Indian population where it decreased by 1.2 percentage points. Unemployment increased by 1.6% for Africans, 3.0% for the coloured population and 1.8% among the white population.

Mr Mkalipi referred to the growth in atypical employment which had increased from 1.5 million in 2000 to 3.8 million in 2010 accounting for 28% of total employment. While he did not want to pre-empt debate on the Bill on labour brokers and atypical employment he emphasised that 25.8% of atypical employees were employed through employment agencies on long and short -term placements; the remainder were employed by companies directly and these were often big businesses such as Adcorp. There were many forms of atypical working arrangements, not all of which entailed labour broker, such as fixed term contracts, part-time or temporary work, subcontracted and outsourced arrangements which were made through the use of employment agencies or by direct contract arrangements.

Research findings indicated that atypical employment cut across categories and included people who were employed directly by companies on short term contracts, many for years, which were renewed on a daily or monthly basis precisely so that when the contract was terminated, the employer was not liable for retrenchment pay and other benefits. At the Commission for Conciliation, Mediation and Arbitration (CCMA) the employer's defence was that it was a fixed term contract. Sub contracting and outsourcing of 'non-core functions' had also increased. The reasons for the growth of atypical work was that it afforded employees with flexibility in staffing arrangements, enabled non-compliance with labour laws and lowered the wage bill and benefit entitlements.

The consequences of atypical employment for employees were that they were more vulnerable due to the insecurity of part-time or temporary work. They had difficulty in accessing benefits such as pension and provident funds. The ability of trade unions to exercise their constitutional right to organise workers and the right of workers to union representation and freedom of association was curtailed by atypical working arrangements. The end result was that there was less protection of workers against exploitation. People on fixed term contracts earned different salaries from permanent employees although they did the same job. Mr Mkalipi stated that the DoL intervention had to deal with all of these aspects, not only with labour brokers.
Mr Mkalipi noted that atypical employment retarded progress in achieving equity in the workplace. Transformation of the workplace was slow when measured against the objectives of the Employment Equity Act. The public sector was performing much better than the private sector in the promotion of equity and affirmative action and resistance to change and non-compliance were prevalent. Skills constraints played a role in some sectors.

The representation of Africans and Coloureds in top and senior management was still low. In terms of their percentage of the Economically Active Population (EAP), Africans with an EAP of 73.5% represented 13% of persons in top and senior management in 2001 and this increased to 20.0% in 2009. Coloureds with an EAP of 11.3% represented 6.1% of persons in top management positions in 2009. With an EAP of 12.2%, the representation of whites at senior and top management level was 71.4% in 2001 and 62.3% in 2009.

The trends over a ten year period (2001-2009) were that there was white male dominance at managerial level; male dominance remained a feature of senior management levels and discrimination in remuneration persisted on the basis of race and gender. The representation of disabled persons remained largely unchanged. There were significant obstacles to young persons accessing employment.

On the promotion of sound labour relations and the protection of vulnerable workers, Mr Mkalipi noted that the labour market remained weak after the 2009 recession. There had been an 8% decline in employment between the fourth quarter of 2008 and the second quarter of 2010 with 1 million jobs lost. There had been increased strikes and labour disputes during 2010. Average wage settlements were 8.3% up to September 2010 compared to an average consumer price index (CPI) inflation of 4.7%. The huge income gap between senior management and employees still persisted.

Mr Mkapili presented statistics on the trends in working days lost due to industrial action for 2006-2010 and the reasons for disputes in 2009-2010 (see presentation) and indicated the impact of the public sector strike in 2010.

Mr Mkalipi observed that the workplace environment had been adversely affected by the recession and atypical employment trends in the labour market. The relationship between management and unions had become more conflictual and adversarial than conciliatory as seen at NEDLAC. There had been an increase in non-compliance with agreements and sectoral determinations. There was low commitment and morale in the workplace as a result of insecurity and atypical employment. There was also a poor interface between collective bargaining and productivity and there were few productivity agreements negotiated through collective agreements to ensure that the country kept apace economically.

Indicating the way forward, Mr Mkalipi noted that the proposed labour law amendments would address some of the challenges as would the strengthening of the DoL Inspectorate. Rebuilding public employment services, strategic engagement with social partners and the implementation of the 'Decent Work Country Programme' were part of the DoL's priorities.

Progress Report on the improvement of Labour Centres
Ms Caroline Dudu Mutloane, Chief Operations Officer, DoL, reported on the Department's current footprint, the core functions performed and the staff establishment at the labour centres. The Dol had representation throughout the country with nine provincial offices, 125 Labour centres. and three headquarters i.e. for Labour, the Unemployment Insurance Fund (UIF) and Compensation Fund. This was complemented by satellite offices, mobile offices, visiting points and Thusong Service Centres. The current vacancy rate at Labour Centres nationally was 8.9 % which translated to 515 vacant posts.

The core functions and services offered at Labour Centres were Public Employment Services (PES), Unemployment Insurance Fund (UIF), Compensation Fund (CF) and Inspection and Enforcement Services. Public Employment Services offered at Labour centres included the registration of job seekers, the registration of vacancies from employers, career counselling and guidance and referral to skills development opportunities or learning programmes. The functions of the Inspection and Enforcement Services was to ensure compliance with labour legislation through regular inspections and compliance audits and to register all complaints of labour legislation breaches and to investigate them.

In 2009 a review of the current service delivery model was undertaken with the objective of reviewing the location of labour centres to ensure accessibility in terms of the distance norms which were being discussed currently under Outcome 12. This included looking at the physical accessibility to DoL buildings. The other objective was to ensure an effective one stop service. Improvements to services at Labour Centres included the full processing of Unemployment Insurance and a fully information technology (IT) driven registration service and front desk.

Ms Muthloane referred to the DoL's recent presentation to the committee on the Siemens IT contract and its negative impact on the delivery of IT services at Labour Centres. Currently applications were handled manually which resulted in long queues and one of the objectives was to have a fully IT driven, functional registration system and a single and fully integrated data basis of workers and employers. At present the systems were stand alone and did not talk to each other and one had to look at one data base and then another to do the matching and placing.

Complaints received by the Inspection and Enforcement Service (IES) were also handled manually and case management was predominantly manually driven and an effective IT driven IES was needed. It was also envisaged that Inspectors would be provided with virtual offices that would allow them to spend more time in the field rather than in the office. Self help and off-site service options such as the Internet were earmarked and SMS and e-mail options would be used to reduce the number of repeat clients. Clients would be updated on where in the system their application had progressed without having to visit the office. Labour Centres would also be re-designed to make them user friendly and habitable to both clients and staff.

Benchmarking exercises on the objectives were undertaken with the South African Revenue Services (SARS) and Old Mutual as both organisations had well developed IT systems and the skills and resources in-house to develop and support their systems. Service delivery was well supported by their IT systems, call centres and product specialists and she referred to the proficiency of SARS in these areas.

Ms Muthloane referred to the DoL's strategic plans for future IT delivery. A service delivery model framework had been developed for Labour Centres and a proposed implementation programme had been presented. The professionalisation of inspectors was in progress. They had been provided with the tools of the trade such as laptops and cell phones and 60 green branded inspection cars had been acquired to improve their mobility. Accessibility and accommodation challenges had been addressed at meetings with the Department of Public Works.

Training of staff on Batho Pele Principles was continuing especially for frontline staff. There had been a pilot project using a roving bus for self registration by computer literate job seekers. Strategic partnerships supporting programmes for job seekers had been established with Eskom at the Medupi Power Station in Limpopo and Sasol 1 in Mpumalanga and Sasol 2 in the Free State. The UIF was initiating a virtual office project whereby accredited clients could execute UI functions online including the submission of claims. The Compensation Fund had piloted the decentralization of claim functions to three provincial offices and they were now able to receive, adjudicate, process and pay claims.

Mr F Maserumule (ANC) advocated that the Department should go back to the basics and sharpen its tools of analysis. In the context of the South African labour market there was no need for workers to go on strike as the country was 'filthy' rich. He postulated that job creation and employment became problematic when the private sector negotiated in bad faith.

The Chairperson commented on the restitution of land rights to people who had lost their land and giving land to the landless where the bias was towards the dispossessed. He posed several questions such as whose side the DoL was on and how it defined itself, what was the focus of inspectors, were they biased towards workers or were they helping management. He urged the Members of the Committee to bear the questions 'who are we ' and 'whose side are we on' in mind in their discussions.

Mr G Boinamo (DA) referred to the 515 vacant posts reported by Ms Mutloane and asked why those posts could not be filled. He noted that the National Compensation Office in Pretoria was totally inaccessible by phone. He had received complaints from people who had been injured at work who could not access the office by phone. As a result they had not received the money they were entitled to and their families were suffering. He had tried to intercede on behalf of these people but his telephonic calls to Pretoria had been unsuccessful as well. He had only received a response from the provincial office in Pretoria. He asked where the principle of Batho Pele was when people were injured at work and they could not access their money to pay their debts and feed their children.

Mr Boinamo noted that Mr Mkalipi had said the statistics indicated in his presentation were not accurate as it had been completed before Statistics SA released their latest statistics on unemployment and he said they should have been updated the figures before they were presented to the Committee so that they were accurate.

Mr Boinamo observed that people between the ages of 55-64 tended to get employment more than younger people who were first time employment seekers. This he thought was clearly because when young people finished school and entered the job market they were rejected for not having work experience. He stated that this was going to worsen if the Government put a ban on labour brokers because they provided people with short term work to get experience and training. From the statistics provided he observed that the rate of unemployment amongst the Indians was low compared to other population groups. His interpretation of this was that many were traders and employed their families and relatives and created jobs themselves.

The Chairperson commented that there were many Indians who were unemployed and were very poor and they too needed to be helped as job seekers.

Mr A Williams (ANC) noted that there had been many incidents of non-compliance, in particular in terms of equity and other areas in the presentation and he wanted to know what the Department was doing about this. Was this related to the fact that there were not enough inspectors and if so why were more inspectors not appointed?

Mr Williams referred to the 515 vacant posts and asked at which level these posts were. He noted that in the President's State of the Nation Address there was a call for all vacant posts in Government departments to be filled. He wanted to know what the Department's plans were regarding this and when the posts would be filled.

Mr Williams asked for more detail on the progress in the review of the current service delivery model for labour centres as no measurables had been indicated for the proposed outcomes. He also wanted more information about the support to job seekers at Eskom and Sasol. What support were these big companies giving and were they giving training that was needed?

Dr A Luthuli (ANC) noted that there was an urgent need for delivery and that the Committee should move forward. She commented that in the area from which she came there was a great need for inspectors but she did not see them. This advantaged employers and there was no recourse for workers as there was no-one looking after their interests. The major supermarkets used the labour of the youth over the weekends and holidays to assist shoppers with their trolleys and they were not being paid but were dependent on tips.

She observed that when she was young inspectors were a problem because they were unsupervised and they had a bad reputation for not doing their work and this had to be addressed. There also had to be an adequate number of inspectors. She said that parliamentarians had to recognise that there was a lot of frustration that people were feeling on the ground and impatience was growing by the day because there was absolutely nothing happening to improve their lives in the labour market.

Mr W Madisha (ANC) said his colleagues had raised most of the pertinent issues. There were problems relating to labour brokers and workers feeling unsafe and not having access to UIF and other benefits. In many industries workers were from outside the country and this was growing. He asked the DoL whether its research had been scientific and if its analysis had been based on scientific evidence. This was important as Committee wanted to engage with the report and did not want to encounter contradictions in the positives and negatives; he wanted to be sure of the empirical evidence on which it was based. He asked if the evidence was based on two or three factories or if the Department had gone to the majority of factories throughout the country and whether it had taken into consideration that many workers came from outside South Africa. There were people, for example, from Zimbabwe who were terrified and would not admit to not receiving UIF. Unless the Committee had that assurance they could not enter into proper discussion to identify the problems and decide on the action to be taken.

Ms H Line (ANC) said she was new to the Committee and said she was from the Northern Cape. She noted that the Northern Cape and Eastern Cape had been identified as the very poor provinces in the country but the limited resources given to them contradicted this. She asked Ms Mutloane to give a breakdown of the type of posts that were vacant and where those posts were. The Northern Cape was a vast area and her constituency was the Carnarvon area and the only Labour office she was aware of was the regional office in De Aar and Carnarvon was 400 kilometres from De Aar. As a result, the services of DoL did not reach those people and the administrator of her constituency office functioned more as an inspector in that area. All the complaints were directed at her office and the administrator did not have the experience and expertise to deal with it. The situation was critical as most of the workers were seasonal workers and farm workers who never received benefits and were always marginalised. She wanted to know the breakdown of the vacant posts and where the satellite offices that Ms Mutloane had mentioned were located, especially in that region.

The Chairperson said that when the Committee were presented with the Department's Strategic Plan, the question that he had asked i.e.' Who are we and whose side are we on?' should come out clearly so that when one read a report from the Department it would reflect words such as the infringements of workers rights and contraventions of the Labour Relations Act (LRA) and also indicate improvements and lesser contraventions. He commented that there were companies who had contravened every aspect of the LRA which was criminal. Inspectors did not have the power to make arrest but referred the matter to the relevant bodies and fines were the resultant penalty. He urged that the Committee and the Department open a new page of working together as their goals were the same and they were driven by one motive and that was to serve the previously disadvantaged. He added that when they referred to the previously disadvantaged they were talking about South African workers and the majority of South African workers were black people and the Africans were the ones who were the most downtrodden section of South African workers. He urged that more be done to improve the plight of the disadvantaged.

Mr Maserumule recounted thoughts shared with other political figures in the past advocating leaving all modes of transport, getting out of the office and taking a walk on the streets to conduct a 'skirmish' to investigate the environment. His worry was about timelines and he agreed with Dr Luthuli that one could not be seen to be moving two steps forward and two steps back. He said that the Department was capable of coming up with solutions; if it went out practically hand in hand and not in flashy cars it would witness the conditions and would want to do something about it.

The Chairperson enquired about the acquisition of 60 green branded cars and he was concerned about the cell phones bought for regional managers to improve their accessibility. What about the inspectors? Managers were office bound and they should be contacted via the landline. The inspectors were the fieldworkers and they required cell phones as 80% of their work was outside the office. On the issuing of laptops and the preference expressed for laptops instead of desktops,  the Chairperson stated that the Department had spent over a billion rand on IT as had emerged in the discussion on the Siemens contract at the previous meeting with DoL. He said it was difficult not being confrontational as there was also the IT skills problem.

The Chairperson referred to farm workers and mentioned that they would be intimidated by the sophistication of computers. He said it was necessary to think outside of the box and there were people who were willing to help without the Department’s paying a single cent. There were students who wanted experiential placement in the DoL who were doing IT. Why was it not possible to use them to do data capturing of information as there were piles of files. The Department had lost all their IT staff to Siemens and he asked what was being done to ensure that it got other people. The use of students could be factored in when the Department did its budget.

The Chairperson queried the distribution of the 60 green cars and asked who used the cars as he feared that managers would be using the cars. He said the Department should ensure that all inspectors had access to cars, laptops and cell phones as their jobs were mobile.

Dr Luthuli directed the meeting’s attention to domestic workers as she felt strongly that they were a sector of the workforce that played a fundamental role in South African society. She stated that they came largely from one sector of the population i.e. African women who were poor and had been exploited more than anyone else. They were paid anything and did not receive a decent salary despite their competencies as they had no certificates or papers. They were women coming from the poorest of the poor and if they were paid a decent salary they could improve the lot of their families in their own homes. If they were paid better it would cut across a large sector of society and implement the objective of improving the lives of the people. If this premise was accepted then Members, as lawmakers, had to make the laws that would give domestic workers a better, decent wage that was above the minimum.

Mr B Manamela (ANC) noted that there was a lot of discussion and debate around the role of inspectors and the Committee needed to get into specifics, what were the deliverables and what was expected from them on a daily basis and performance benchmarks. It was also necessary to see how workers had access to inspectors, the offices and infrastructure to review the role of labour inspectors. On the issue of unemployment, he commented that he had not been early enough to hear the explanation on why the latest statistics from Statistics SA were not given. He said the updated figures would have been helpful and on members own initiative they could access the updated information.

Mr Manamela commented that obviously the worrying factor country-wide was the 73% plus unemployment amongst young people. He referred to the solution that had been suggested - that labour brokers should be allowed to continue to operate as they were the only viable solution for youth employment. He stated that labour brokers were free to operate at the present moment and they had not resolved the labour crisis amongst young people. The argument for retaining them was nullified by the fact that their existence had not really alleviated the problem. The crisis that was being faced was the availability of jobs and the capacity of the economy to open up job opportunities for young people. The other crisis linked to that was the crisis of skills development and a lot of effort was being made to ensure job creation and skill young people. Skills were critical for creating sustainability of work and in building the economy and in ensuring a continuous cycle of sustainable livelihoods.

Mr Manamela said that linked to this was the issue of reducing the costs of looking for a job for young people. He noted the services the DoL was offering at present and said there were other considerations that needed attention such as the transport costs for job seekers to go to interviews and also the need for appropriate clothes. Solutions and interventions had to be looked at to reduce the cost and burden on young people to look for a job. The intervention needed was short term as the crisis really was about the major urbanisation that was taking place. Job creation might not, in this instance, be the responsibility of the DoL but because there was this exodus to the cities there was the need.

On the information presented on the outsourcing of non-core functions, Mr Manamela commented that even mines were doing this and labour brokers were involved in mining as well. Personally he felt that any function linked to the work of any institution or company should be regarded as core functions as they created the conditions for the company to function such as the cleaning function. There were Government departments that regarded this as non-core and they had outsourced it and even Government departments used labour brokers. He hoped this was not the case with the DoL as it would be difficult to justify this.

Mr Manamela raised the issue of inequalities and the wage gap and referred to the statistics on top and senior management per population group and the percentage they represented of the economically active population (EAP). He contrasted the statistics for Africans who constituted 73.5% of the EAP and constituted 20% of top and senior management to that of whites who occupied 62.3% of top and senior management posts while constituting only 12.2% of the EAP. He felt strongly that this was unacceptable and said the situation should not be allowed to persist and it was something that the equity boards should be looking at and it should even be the basis for closing down some companies. Private companies should start taking responsibility as some were deliberately not transforming and the economy was still in white hands.

Mr Manamela said that, in the State of the Nation Address, the President had said that some things were the consequences of apartheid but gradually that explanation would not be acceptable to people and they would take matters into their own hands. Before that happened institutions that were created to ensure that the law was applied had to act. This reflected on discussions the Committee should have in the future on equal work and equal pay and on the ownership of the economy. Those who owned the companies determined who worked for them and the top management structures of all the companies had to change. He said it should be one of the responsibilities of the DoL to take up the issue of equity in the top management structures.

The Chairperson noted that there had been more comments than questions from the Committee and reiterated the question 'Who are we' that he had posed earlier before he handed over to Ms Zondeki to lead the response from the Department.

Ms Zondeki said the comment of going back to the basics and sharpening their tools of analysis had been taken aboard by the Department. She said that with the promulgation of legislation over a decade there had been many implementation challenges. The analysis the Department had undertaken had looked at the demands of the labour market and its challenges. It then had to look at the capacity challenges within the Department to respond to the labour market challenges. A legislative review process was currently underway and Mr Mkalipi had spoken briefly about the upcoming legislation. The DoL had been receiving criticism for the weak enforcement of legislation and it was now trying to criminalise non-compliance with legislation. It hoped that non-compliance would become an offence. It was also looking at increasing the powers of inspectors as it had picked up loopholes in the legislation over the years and it wanted the power to issue fines on the spot to non-compliant employers.

With regard to the question of who we are, Ms Zondeki said that the Department had a mandate that it would outline in the presentation of the Strategic Plan in the near future. She assured the Committee that the Department sought to uphold labour standards, ensuring that the rights of workers were respected, that vulnerable workers were protected and that workers operated in a healthy and safe environment. The other target group was the unemployed and the DoL had to ensure that it created an environment where they could enter the labour market and promote their employability. It also assisted people when they experienced temporary loss of employment in terms of the benefits offered by UIF and also in the rehabilitation of those who were injured at work and ensured their speedy re-entry to the labour market through the compensation fund.

With regard to comments made on the number of inspectors, the Department acknowledged that it did not have enough inspectors. There were about 1,000 inspectors across the country. Spread over nine provinces there were an average of 100 inspectors for each province. This was inadequate hence the Department had made a request for funds and she thanked the Committee for its assistance in support of the funding request as it had been allocated funds for the appointment of more inspectors in the outer years of the Medium Term Expenditure Framework (MTEF) i.e. 2012/13 and 2013/14.

Ms Zondeki said that in terms of trying to improve visibility of inspectors the Department had adopted a programme where it embarked on blitz inspections on a monthly basis of identified high risk and problematic sectors. These were the domestic sector, private security, the hospitality industry and wholesale and retail. The Department had recognised that it had to do more with its limited resources and it had put together a roving team of experienced and knowledgeable inspectors with different areas of focus to do the inspections and audits throughout the country. These were interventions to augment the limited resources and in the coming years it was hoped that the situation would improve due to more staff and skills.

Ms Zondeki responded to the comments of Mr Manamele on assistance to young job seekers and said the Department was looking at reducing the costs of job seeking by the unemployed. The intention of the Public Employment Services Bill was to ensure that there were job portals and self help areas in the labour centres so that unemployed people could just come inside and go through the web and match their skills to the jobs available in the market themselves. If they needed assistance they were assisted by staff. The Department was also establishing resource centres within labour centres and had appointed career counsellors who provided life skills and conducted workshops with unemployed people. It provided training to develop the skills for job hunting, interviews, compiling curriculum vitae (CV) and also held career exhibitions.

Mr Mkalipi said that he had taken aboard the comments of the statistics not been up to date and said that the presentation was actually supposed to have been presented at the previous meeting with the Committee and the Department would forward the updated information to the Secretary. He agreed with the perspectives expressed by the Committee on labour brokers and the alarmingly high rate of youth unemployment.

He agreed that there was poor compliance with equity regulations and stated that the private sector had been party to the negotiations and the collective agreements signed at NEDLAC and Parliament had made no major changes in the legislation. It was thought that the collective agreements would ensure a buy-in from business but this had not happened in the past ten years and therefore there was the need for increased inspections.

On the position of the attendants at malls raised by Dr Luthuli, Mr Mkalipi said that they were not employed by the mall or by anybody really and in fact they were making payments to somebody who was not there. It was difficult to determine who the employer was and the amendments would deal with this type of situation.

On the matter of domestic workers, Mr Mkalipi said that Parliament had already introduced legislation governing their employment under the Basic Conditions of Employment Act and the Minister had issued a sectoral determination. At present the setting up of a Provident Fund for domestic workers was being investigated by the Minister. Whether the wages was good enough was not an issue as the mechanism was there to deal with the employment of domestic workers and if Parliament was of the view that the conditions and wages were not good enough then that was an intervention that Parliament should make.

On the issues of youth employment Mr Mkalipi said that the Public Employment Services Bill would assist in this respect and this could include things such as transport costs. He said the Department agreed with the sentiments expressed by the Committee and the labour market review that was being undertaken would answer some of the questions and this could be debated when the Department engaged with the Committee again.

Mr Kenny Fick, Chief Director: Gauteng, DoL, responded to questions on the labour centre model and operational aspects of the provinces. In response to the question of the distribution of the green cars he said the cars for the use of inspectors and no manager would have access to the cars unless they were on inspection visits. All inspectors had been issued with cell phones for the past five years. Laptops were issued to labour centre managers in order for them to provide a better service at the visiting points and to go into communities and do information dissemination and fieldwork. It was not for their exclusive use but for projects conducted outside the office and laptops could be used by team leaders and career counsellors

With regard to the labour centre model and how progress had been measured, Mr Fick said that the process of doing the review as outlined in the presentation was 100 % complete and what lie ahead was the process of putting the information together and this was earmarked for April 2011. A pilot phase was envisaged for the next financial year and implementation was expected to take three to five years as relocation of labour centres was dependent on lease agreements and public works and available property. The Department did not see the process as a quick fix and in the next financial year it would be piloted in rural and urban areas. The technology had to be available to respond to clients quicker and cheaper as the Department was not likely to get a whole lot of money going forward and it needed to do more with what it had.

On the question of the vacant posts, Mr Fick said that there were 515 posts in provinces. In the Northern Cape there were only ten vacant posts and all the posts were at a lower level which included client services officers and inspectors. The challenge was that the Department constantly had to replace people who received intensive training and then left. He said there were challenges of verification that delayed the process of appointments.

Ms Mutloane said that the Department would forward a breakdown of the vacancies to the Committee Secretary and she acknowledged that the Northern Cape was a vast province with long distances between labour centres. For this reason there were Thusong Centres and three mobile labour centres but she could not be more specific. She said she would supply the Committee with the location of all the labour centres on the following day.

Mr Fick responded to the question of the relationship between the Department and Eskom and the Medupi Power station and also Sasol and said it was based on the Public Employment Services Bill. Instead of waiting for the promulgation of the Act the Department had approached them with what the Department envisaged and asked them to become partners as it would reduce the costs of recruitment and selection. It was also a test for the Department to improve their efficiency.

Ms Zondeki noted the complaints about the inability to get through to the Compensation Fund Head office in Pretoria and said that the Compensation Commissioner was addressing this issue and the other challenges at the Pretoria office. She reiterated the fact that a process of decentralisation was being undertaken.

The Chairperson commented that decentralisation was a good thing but the Head of the Department and sectional heads still needed to take responsibility. He said this responsibility was critical as there were no MECs for Labour.

Mr Maserumule said he wanted to hear a commitment from the Department on timelines and deliverables.

The Chairperson alluded to the challenges within the Department and asked how 1 000 people shared 60 cars in the nine provinces; there were the problems of communications, bureaucratization and with public works where the buildings and work environment were not habitable.

Mr Williams requested more detailed information on the types of problems experienced by inspectors in terms of compliance and resources and also what their ethical conduct was like and if there was a high level of corruption. Were there statistics on reported cases and the ones that had been followed up on and what action had been taken so that one could see if they were effective or not?

The Chairperson said there were many cases of unscrupulous inspectors and he enquired about corrective action taken by the Department. The Committee would have to take action against management if it did not take action against people who were not doing their work. He called for more reports about what was happening. He said there would be a meeting of the management committee to assign Members to the various divisions within the DoL so that there would be teams who would hone their skills around specific aspects such as safety and law enforcement to ensure that the Committee had a greater impact.

Oversight visit to the fishing industry and sheltered employment
Mr Thobile Lamati, Chief Inspector, DoL, reported on the Portfolio Committee's findings on its oversight visit to the fishing industry and sheltered employment and presented the responses from the Department. The key issues were seasonal employment contracts, alternative employment during off season, non-compliance with Occupational Health and Safety legislation, criteria for qualification for UIF benefits, skills development for the further development of seasonal workers and employers’ contribution to the schooling of employees’ children. The presentation included a general overview of the fishing sector in South Africa and its legislative context (see presentation).

The DoL had conducted follow-up visits and had met with employers, employees and union representatives of the Food and Allied Workers Union (FAWU). Contracts and collective agreements had been collected and Employment and Equity Reports and plans perused. Occupational Health and Safety Assessments were done.

The findings on seasonal employment contracts were that employment conditions were governed by a collective agreement between organised employers represented by the South African Pelagic Fish Processors Association and organised labour represented by FAWU. This collective agreement allowed for seasonal contract of employment whereby employees were paid for actual hours worked and were not entitled to payment if there was no production. While some employers concluded employment contracts with workers which ran for a period of 12 months most concluded contracts for the harvesting season only.

It was established that seasonal workers were required to be readily available all the time for the processing of fish.

This implied that workers were permanently on standby even though they were not remunerated. This practice was in contravention of the spirit of the Basic Conditions of Employment Act (BCEA) relating to the regulating of hours of work. Workers were also not being compensated for being off sick even if they produced a valid sick certificate. The DoL had informed employers that they would be recovering these monies illegally deducted from employees.

The Department had investigated the issue of alternative employment during the off season which had been raised by the Portfolio Committee in its interaction with the workers. It emerged that employees were not entitled to seek alternative employment due to the unpredictability of the availability of fish. The collective agreement stipulated that the employer would provide an off-season subsistence allowance whereby workers received 17% of their annual gross salary to supplement UIF benefits. The Department also engaged with the unions and employers on how seasonal workers could undertake alternative work such as painting, gardening or general maintenance in order for them to generate an income during the off season.

All the companies had submitted their employment equity reports and they had plans to redress inequalities experienced by previously disadvantaged individuals. However none had actually achieved the employment equity targets as per their plans. One company, Oceana Brands, had been placed under review.

The Department discovered that there was a widespread perception that seasonal workers did not qualify for UIF during the off season. This perception had been corrected and the DoL office in Vredenburg was working closely with employers to ensure that workers got their benefits.

In order to ensure compliance with the Occupational Health and Safety Act (OHSA) contravention notices had been issued for ventilation, the non-availability of first aid and first aiders, bad housekeeping and to enforce the use of personal protective equipment. Emergency and evacuation plans and procedures were checked.

With regards to skills development it was established that training was being provided and certificates were issued on completion. There were companies that had learnerships that enabled seasonal workers to become qualified artisans such as boilermakers. Most companies provided assistance to the children of seasonal workers to further their education in the form of an interest free loan payable within 12 months. Companies also provided funding for the transportation of school children.

Mr Lamati reported on the strengthening of the Inspection and Enforcement Services based on the recommendations of the portfolio committee. The Department had adopted a plan for the professionalization of inspectors which would include the appointment of specialists and a competence based programme was being developed for all inspectors. Discussions with the University of South Africa (UNISA) and the University of Pretoria were underway to look at short learning programmes and also a long term programme towards a qualification.

On the recommendation by the Portfolio Committee that the DoL investigate amendments to the UIF Act to cater for seasonal workers in the fishing sector, Mr Lamati stated that the UIF Act provided for all workers working more than 24 hours a month, irrespective of how they were defined, seasonal or part time. The Department would also strengthen compliance to these provisions in the Act through its inspectorate division and UIF pay roll auditors had recently been appointed.

Mr Lamati responded to Mr W Madisha (COPE)’s request for empirical evidence with regard to the information that had been supplied and that the whole fishing industry should be looked at. He said that the Department would undertake to look at other provinces as well.

Mr I Ollis (DA) said that the Committee had visited five factories in Saldanha and two sheltered employment factories. He said there had been allegations of racism and lack of transformation by a particular company and he detected that there had been some emotional hype but there was some real problems in one instance. He asked whether the Department had investigated it further.

Mr Ollis said that there had been many complaints from workers in terms of occupational health and safety about not having the right gloves or boots. Older factories were older and standards were lower in terms of equipment and cleanliness and there were problems with fire extinguishers. The concern was that workers had to be safe and work in a clean environment and the DoL should check on this.

Mr Ollis referred to the 17% off season subsistence allowance and he asked whether the workers were receiving this and also the UIF benefits as the Committee could not go back but the DoL could.

Mr Williams asked if the Department had followed up on the contravention notices issued in terms of the OHSA. He asked how many accidents had occurred since the inspection and if the Department could indicate how bad the accident rate was in the sector at a future date.

He asked whether the DoL had responded to the Committee’s recommendation on investigating amendments to the UIF Act. He also wanted clarity on contradictions he perceived on issues relating to maritime legislation.

The Chairperson asked about reports that certificates of workers were being withheld by management and this prevented them from getting work in the off season. The reasons given by management were that management was not denying the workers their certificates but was retaining them for safekeeping purposes.

Mr Boinamo stated that he thought the training had been to enable workers to obtain jobs during the off season.

The Chairperson said that on the contrary the employers did not want the training used somewhere else.
He commented that this was another form of slavery as the workers were on standby and could not take on alternative employment. He expressed his concern with the 17% allowance and said people could not live on that and something should be done about it.

Ms Line referred to the complaints about the unsafe conditions in the jetty area and she asked whether the inspectors had gone back to verify if the workers had been telling the truth. She echoed the Chairperson's question and asked who they were serving as the workers had not been satisfied and that is why they had complained to the Committee.

The Chairperson implied that there might have been some confusion and that the persons who had been in the jetty area were maintenance workers.

Mr Madisha welcomed the response to his earlier question about the scientific evidence. He said the same kind of investigation should be done in the fishing sectors of KZN and the Eastern Cape. He observed that seasonal workers were not being given the rights in terms of the BCEA as although they were seasonal workers they were permanent employees. He asked whether it was possible to link their situation to agriculture. He wanted the provisions of the BCEA and the contracts of seasonal workers to be reviewed. He commented that there were contradictions that were being indicated in respect of UIF and that not all workers were accessing it. He asked for concrete examples of the things that were supposedly being done such as the further development of workers and the assistance in the form of interest free loans to the workers children who wanted to further their studies. He said there were many challenges and not enough work had been done. He noted that there were many workers from outside the country. He asked if those people were allowed to talk. He did not think so.

The Chairperson asked for clarity on the 17% subsistence allowance and the interest free loan.

Mr Lamati replied that the interest free loan had been introduced to assist workers with the education of their children and it was based on their ability to repay the loan within a period of 12 months. The 17% was an off season allowance and he commented that FAWU had done a good thing in achieving it but he was not saying it was enough. The nature of the business was seasonal and workers opted to take the money in December.

Mr Lamati stated that he was unable to respond to the issue of migrant workers in the fishing industry as the Department had not looked at it.

On contradictions in the entitlement to UIF he said there had been a misperception that seasonal workers did not qualify for benefits during the off season but this had been clarified and they did qualify and the DoL office in Vredenburg was assisting people with problems.

Regarding compliance with the BCEA, Mr Lamati said there was a collective agreement that was signed by the employers association and FAWU. When it came to putting people on permanent standby, there was an understanding, even by the unions, that it was in the nature of the industry to allow workers to be on standby.

On linking the issues of seasonal workers in the fishing industry and in agriculture, Mr Lamati said that could be done and the Department would include the Eastern Cape and KwaZulu-Natal.

Mr Lamati responded to the question of whether the Department went back to the workers and whose side it was on and said that it was guided by the legislation for the specific sector and it checked whether it was being applied according to the law. There were instances where, although workers had complained, things were contrary to what they were saying. Most of the time the Department found faults as had been reported by the workers. Whether there was enough provision in the law to cover workers was another issue and needed to be looked at.

With regard to the certificates that had been held back, the Department was told that workers did get their certificates. Workers did not understand their contracts and the Department had informed the employers and the union that they should ensure that workers understood their contracts.
Mr Lamati noted that there were no contradictions as implied by Mr Williams as the latter instance referred   specifically to the Occupational Health and Safety legislation.

On the follow up process once contravention notices had been served, Mr Lamati said that companies were told that they had 60 days to attend to the issues. After the 60 days there was a follow up inspection and if matters had not been rectified, prosecution followed.

There were no available statistics on incidents in the fishing industry due to the way statistics were collected but a way would be found to get the information to the committee.

In response to the query from Mr Ollis, Mr Lamati said workers were receiving their 17% allowance but it was not enough. They were also issued with protective clothing but there were still concerns about the enforcement of personal safety equipment.

There had been one incident of racism that had been confirmed by management and the unions but it had been dealt with and the person had been disciplined and the union had been happy with the outcome of the process.

Mr Virgil Seafield, Director, DoL expanded on perceived contradictions raised by Mr Williams. He said there were no contradictions as Chapter 4 of the Merchant Shipping Act dealt with the conditions of employment in the merchant shipping industry. By definition all vessels going to sea had to be registered in terms of the Merchant Shipping Act and that section of the labour legislation had not kept abreast with the new developments in terms of the enforcement paradigms in the current legislation and the conditions that exist on vessels. There was a Bill that was currently being drafted by the Department of Transport that sought to modernise Chapter 4 in line with the international instruments that existed.

Mr Seafield responded to Mr Madisha's reference to workers in the agricultural sector and said there was a sectoral determination for agricultural workers. On the question of seasonal workers and whether they qualified for UIF in the off season he said they qualified as long as they had been employed for more than 24 hours per month and it applied across the board whether fisheries or agriculture. On the issue of migrant workers in the fishing industry, Mr Seafield said it was an accepted norm in the industry. Fishing was a truly international occupation cutting through borders and territories and there was a preponderance of migrants in the industry. On the question of whether the Department should do a country wide investigation into the industry, Mr Seafield said an anomalous situation existed within the industry which made negotiations difficult. There was onshore fishing and the canning industry and in sea fishing and they were covered by different pieces of legislation. A sectoral determination could not be made in the Eastern Cape as they had a Statutory Council. In the Western Cape there was a Bargaining Council that covered some sectors but not all of the industry.

Mr Madisha said that there must be proper implementation and the Department should go to all the provinces with fishing industries and compile a report for the next meeting. He said that when talking about unemployment in South Africa, South Africans should come first. He reiterated that proper scientific evidence was necessary and this would be actualised by going to all the areas.

The Chairperson said that the Committee would be receiving all the details when the Department presented its Strategic Plan and implementation programme.

The meeting was adjourned. 



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