Conduct during Municipal Workers' Strike: SALGA proposals; Department of Labour on its 2010/2011 Annual Report

NCOP Public Enterprises and Communication

25 October 2011
Chairperson: Ms M Themba (ANC, Mpumalanga)
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Meeting Summary

The Department of Labour noted that the presentation would reflect on how it had contributed to Government’s services delivery outcomes for Outcomes 4 (Decent work), 11 (Better, safer South Africa), and 12 (Efficient, effective, development orientated public service). It reviewed each of its strategic objectives which were: to contribute to employment creation, promote equity in the labour market, protect vulnerable workers, strengthen social protection and promote sound labour relations, strengthen multilateral and bilateral relations and to strengthen the capacity of labour market institutions and the department. The review entailed listing the key performance indicators and providing actual achievement against its targets.

Some achievement highlights was registering 438 038 (74%) jobseekers on the departments’ Employment Services for South Africa (ESSA) system. Of these people, 12 801 were successfully placed. A total of 19 companies and 6 183 workers were assisted to the value of R40.2 million through the training lay-off schemes. The Unemployment Insurance Fund (UIF) allocated R48.5 million to Productivity SA to save 15 000 jobs through turn-around strategies in 130 companies in the agriculture, steel manufacturing, construction and printing sectors. The Commission for Conciliation Mediation and Arbitration (CCMA) saved a total of 9 207 jobs from possible large scale retrenchments.

Some of the challenges the department had faced were a lack of legislation to compel employers to register opportunities and report on filled vacancies; the department had targeted to create special employment opportunities for Persons with Disabilities but no new employment opportunities were provided since there was insufficient collaboration with placement agencies to place PwD in the open labour market.

The Department of Labour had published important labour law amendments to the Employment Equity Act, Basic Conditions of Employment Act and Labour Relations Act for public comment. The Bills were currently being discussed at the National Economic, Development and Labour Council (NEDLAC). The department aimed to review the employment equity at 200 companies, but overall 266 companies were reviewed, with 96 of those companies listed on the Johannesburg Stock Exchange (JSE). A total of 243 companies received recommendations. A total of 9 468 employment equity procedural inspections were conducted and a compliance rate of 79% was achieved. A target of 200 000 workplaces were to be inspected for compliance to ensure 80% compliance to labour legislation. Overall 192 129 workplaces were inspected and audited. Of these, 77% achieved compliance. A total of 1021 shop stewards were also trained on the Employment Equity Act (EEA), Occupational Health and Safety Act (OHSA) and the Basic Conditions of Employment Act (BCEA). The department targeted to investigate complaints and settle them within 90 days of receipt. A total of 75% of complaints received were dealt within 90 days.

Overall, the department had a variance of 0.5% of underspending on their final appropriation, which amounted to R9,5 million. They highlighted their strategic objectives for 2011/12 and requested that the Committee provide support in advocating its programmes and give feedback on its service delivery.

SALGA gave a presentation about conduct during municipal worker strikes and proposed:
▪ the amendment of Section 68(1)(a)(ii) of the LRA to provide for the compensation for damages not only during unlawful strikes, but also lawful strikes;
▪ all refuse be designated, in law, as essential services (and not only after 14 days).
▪ Local Government be represented directly at NEDLAC and in the RSA delegation to International Labour Organisation (ILO)
▪ revision of the commissioner selection process at the SALGA Bargaining Council.

Members proposed that SALGA submit its proposals formally to Parliament. Members asked why DOL training lay-off schemes were happening only in certain provinces. The number for job seekers registered compared to job seekers placed successfully was low so did this reflect a skills shortage in the country. They commented that the department had a lot of pressure on it to create jobs as the President had made many promises to people. Members were concerned about the high rate of child labour in the country and also the treatment of more vulnerable workers such as domestic and farm workers.

Members asked questions around wage subsidies and whether it was possible for job seekers registered on the ESSA system to be placed in a job outside their province of residence. Members felt that the target of getting 50% of all unemployed youth employed was unrealistic as the department did not have the capacity to get this done. They also wanted to know whether inspections were successful.


Meeting report

Department of Labour (DOL) Annual Report presentation
Mr Nkosinathi Nhleko, Director General: Department of Labour, said its missions was to regulate the South African labour market for a sustainable economy through appropriate legislation and regulations, inspections, social dialogue, and provision of Employment Services, amongst other things. In the presentation, the department focused on year two of the Medium Term Strategic Framework (MTSF) 2009-2014 with its focus on the following Government service delivery outcomes:
Outcome 4: Decent employment through inclusive economic growth, and two other outcomes
Outcome 11: Create a better South Africa and contribute to a better and safer Africa and World; and
Outcome 12: An efficient, effective and development orientated public service and an empowered and inclusive citizenship

Mr Nhleko presented the service delivery outcomes and outputs versus the departments’ strategic objectives (slide 5). For strategic objective 1 (contribution to employment creation), the first key performance indicator was an approved Public Employment Services Policy, Employment Services Act and related regulations and guidelines. The department had the target of finalising the Draft Public Employment Services Policy Bill for submission to Cabinet by September 2010. The achievement was: the Employment Equity, the Basic Conditions of Employment, and Labour Relations Amendment Bills were approved by Cabinet and were under consideration in NEDLAC. The second indicator was to have jobseekers registered in different categories. The target was to have 100% of reporting job-seekers on the system. The department had 652 611 jobseekers reporting for registration in different categories. Of these 483 038 (74%) were captured and registered on the
Employment Services for South Africa (ESSA) system. A total number of 12 801 registered job seekers had been successfully placed. It provided a provincial breakdown of this as well.

The third key performance area and target was to have within 30 days, 70% of registered job seekers referred to counselling/guidance, skills development, registered vacancies, workplace opportunities, UIF and Compensation Fund benefits. The achievements were that 65 347 job seekers were provided with career counselling/guidance, 25 814 job seekers were referred for work placement and 12 801 were successfully placed. A total of 451 950 job seekers were referred for UIF benefits and 8 732 workers injured in the course of employment were referred to the Compensation Commission for benefits. Also, 7 217 job seekers were referred for skills development opportunities. It provided a provincial breakdown of this.

The fourth key performance indicator was to have the number of companies and workers in distressed sectors provided with assistance. The target was to complete the application process within 5 working days from application. The achievements were 19 companies and 6 183 workers were assisted to the value of R40.2 million through the training lay-off scheme. It was important to note that the funding for the lay-off scheme was based on retrenchment and application by companies. UIF allocated R48.5 million to Productivity SA to save 15 000 jobs through turnaround strategies in 130 companies in agriculture, steel and manufacturing sectors, construction and printing. The CCMA also saved a total of 9 027 jobs from retrenchments and the UIF and Compensation Fund invested R35 billion and R27 billion respectively in commercial and social responsible investment portfolios. The UIF invested an additional R2 billion in private placement bond through the Industrial Development Corporation. A total of 76 transactions with a value of R1 546 145 935 were approved and was expected to create 10 047 new permanent UIF paying jobs and save 7 186 existing permanent UIF paying jobs.

The fifth key performance indicator and target was assisting 120 companies through a Workplace Challenge programme to become world class competitive. They achieved involving a total of 230 companies and 105 future forums were established to facilitate the implementation of turnaround strategies.

The sixth key performance indicator and target was to have 3 000 Small Medium and Micro Enterprises (SMME) managers assisted to manage matters related to intellectual property. A total of 2 707 SMME managers were trained to sustain and grow their enterprises.

Mr Nhleko gave an overview of the key challenges and remedial actions taken for performance indicators (slide 14 and 15). The reason for the small percentage of registered work seekers placed in vacancies and work placement opportunities (performance indicator 2) was due to a lack of legislation to compel employers to register opportunities and report on filled vacancies as well as inadequate human and IT resources. The action taken to resolve this problem was the conclusion of the Employment Services Bill negotiations at NEDLAC. The Bill was being tabled in Parliament for debate and finalization and the integration of SIYAYA and Employment Services Systems to register jobseekers and placement was to be integrated.

Another challenge was that no new employment opportunities were provided for people with disabilities from all racial groups. The reasons were that there was insufficient income generated and no approved policy and legal framework for Sheltered Employment Factories. There was insufficient collaboration with placement agencies to place disabled people in the open labour market. The actions to resolve this included developing a business case and proposing a legal framework to be included in the Employment Services Bill being discussed at NEDLAC.

Mr Nhleko continued presenting the department’s strategic objectives targets and performance. For strategic objective 2 (promote equity in the labour market), key performance indicator 1 was to have the Employment Equity Act and its regulations amended. The target for the year under review was to have the Employment Equity Act Amendment Bill published for public comment. The department had achieved this as the Bill was approved by Cabinet in December 2010 and was published for public comment and it was currently being discussed at NEDLAC.

The next key performance indicator was to implement employment equity and have enforcement mechanisms strengthened. The department targeted to subject 200 companies (60 JSE and 140 designated employers) to Director General review by March 2011. Overall, the department achieved reviewing 266 companies as follows:
- 96 JSE listed companies were reviewed and 87 recommendations were served
- 170 designated companies were reviewed and 156 recommendations were served
- 9 468 Employment Equity Act procedural inspections conducted and 7 449 (79%) compliance was found.
Slide 18 showed a breakdown of these statistics per province.

Mr Nheko noted Strategic Objective 3: Protect Vulnerable Workers. One of the key performance indicators was to amend the Basic Conditions of Employment Act (BCEA) and to investigate wage differentials. The department’s target was to publish the BCEA Amendment Bill for public comment and the Bill was approved by Cabinet, published for public comment and was currently being discussed at NEDLAC. Another key performance indicator was to inspect 200 000 workplaces for compliance to ensure 80% compliance to labour legislation. The department had achieved inspecting and auditing 192 129 workplaces. 378 of these were conducted in high risk sectors to ensure compliance with the Occupational Health and Safety Act (OHS) Act. A compliance rate of 77% was achieved. Provincial statistics were provided.

The department planned on targeting SMME’s to ensure 80% compliance through advocacy campaigns by holding seminars in the Iron and Steel, Hospitality, Forestry and Construction sectors. By 31 March 2011 the department had held an Iron and Steel Seminar in Port Elizabeth and 176 attendees participated. A Forestry Sector Seminar was held in Pietermaritzburg and 96 attendees participated and in Gauteng a Construction Seminar was held with 356 attendees. A total of 1 021 shop stewards were also trained on the Employment Equity Act (EEA), OHSA and BCEA. With regards to complaints and investigations, the department had aimed to investigate and settle 80% of complaints within 90 days. They had achieved settling 75% of complaints received within 90 days. Provincial statistics were provided.

Other key performance indicators (KPIs) for protecting vulnerable workers was to promote the level of knowledge of the OHS Act to employers and workers in the agriculture sector and to reduce the prevalence of silicosis in the non-mining industry. The concept of Roving Safety Representative inspectors was launched in Limpopo and Mpumalanga and was now ready to be rolled out to other provinces. A baseline study on silicosis was conducted and a report was available; the extent of exposure to silica dust for 200 companies operating in Gauteng had been established. With regards to the next objective which was monitoring the impact of legislation, the department had aimed to implement a research, monitoring and evaluation agenda. Based on that, four reports were developed:
- The Industrial Action and Annual Labour market reports were produced
- UIF client satisfaction survey and non-compliance studies for taxi, domestic sector and catering industries
- Bulletin and Job Opportunity and Unemployment in the South African labour market
- The Client Satisfaction survey for medical doctors was also conducted and reported

On DOL’s Strategic Objective: Strengthening the institutional capacity of the department, the KPIs were 90% compliance with the Auditor General; 90% of all funbded posts filled within 6 months and 40% women, 50% youth and 5% of People with Disabilities (PwD). The department had achieved an unqualified audit opinion, 91.40% of posts were filled against a target of 90%. Women at senior management were 34.6% against the target of 40% and youth was as 42.84% against the target of 50%. The national target for PwD in the public service was 2%. Currently 2.7% PwD were employed against a departmental goal of 5%.

Mr Nhleko presented budget allocations and utilisation which showed that the department had a variance of R9,513 million or less than 0.5%. The department had spent R1,826,310 billion against an allocation of R1,835,832 billion. Mr Nhleko then spoke around the key aspects of the 2011/12 strategic plan. He concluded that the department expected support from the Committee to help with advocating the DOL programmes and providing feedback on how they viewed the department’s service delivery. The department wanted the Committee to continue participating in and supporting the departments’ international relations work and study visits. They also asked for the Chairperson to continue participating in campaigns such as the Services Imbizo and marketing interventions.

South African Local Government Association (SALGA) on Conduct during Municipal Workers’ Strike
Mr Speedy Mashilo, Councillor: SALGA, said that the purpose of the presentation was made for balancing the rights of Unions to strike with the attendant responsibilities and obligations they had to have to government and private property. They also had to consider the rights of ordinary people including hawkers, members of the public and non-striking workers as well as health and environmental issues arising during strikes. The presentation was to propose:

▪ the amendment of Section 68(1)(a)(ii) of the LRA to provide for the compensation for damages during a lawful strike;
▪ all refuse be designated, in law, as essential services.
▪ Local Government be represented directly at NEDLAC and in the RSA delegation to International Labour Organisation (ILO), and revision of commissioner selection process at SALGA Bargaining Council.

Mr Mashilo spoke about the emptying of rubbish bins during strikes. Refuse removal only became an essential service once 14 days of continuous non-collection had occurred. During the press conference at the signing of the current local government wage and salary agreement in July 2009, members of the press asked the question around the acceptability of damage to property and trashing of rubbish bins. A union leader responded by asking, “Is there a law that prohibits it?” This was despite municipal by-laws prohibiting littering. The unacceptable levels of crime in the exercise of legitimate democratic and constitutional rights continued to threaten peace and stability and undermined economic growth by tarnishing the image of the country. Responsibility had to be assigned by law to act responsibly in the context of lawful activity.

Mr Mashilo said that the Constitution and LRA guaranteed workers the right to strike. The definition of a strike in the LRA was an act of “withdrawal, withholding of one’s labour”. However, in some instances, actual acts of striking, as a physical act, have seen people being thrown out of trains, trucks and drivers/occupants burnt, dustbins and dirt emptied in streets, libraries and property damaged, streets barricaded, councillors and members of public and non-striking workers killed. There were instances where employees were lawfully barred from striking such as essential service workers, but they had participated in municipal strikes illegally. This despite the LRA specifying “lawful” activities when it states that every worker had a right to participate in “the lawful activities” of its union and every union had a right to plan and organise “lawful activities”. Section 68(1)(a)(ii) of the LRA presently only makes a union liable for damage to property or to pay compensation if the strike was unlawful and unprotected.

Mr Mashilo highlighted that SALGA advocated the amendment of Section 68(1)(b) of the LRA to make provision for compensatory damages even in strikes that complied with the requirements of the Act (lawful strike actions). International Labour Organisation Conventions on this permits countries to make laws to provide for criminal and civil damages sanction for abuse of the right to strike.

Mr Mashilo gave a legal exposition on refuse management. The tendency was to empty rubbish into the streets thereby attracting the 14 day period. This was subverting the law and safety standards and was an unlawful act. It was submitted that the 14 day period should be done away with and all refuse removal be designated as essential services. Section 74 of LRA required that disputes involving essential service employees be resolved through arbitration. The Essential Services Committee designated Municipal Traffic, Municipal Health, Supply and Distribution of Electricity, Fire Fighting and Maintenance operation of sewerage purification amongst those being Essential Services.

Mr Mashilo continued by explaining Minimum Service Agreements, and NEDLAC, ILO and SALGA Bargaining Council agreements. The proposed solution with regards to damage to property was to amend Section 68(1)(b) of the LRA and the terminology of the amendment, based on context, may well simply carry over the tone of Section 11(2) of the Regulation of Public Gatherings Act 1996, to the LRA.

SALGA’s proposed solution was:
▪ With regards to refuse management, SALGA proposed that in law all refuse be designated as essential services and removable not after 14 days, as some is, per the current provision.
▪ With regards to representation to NEDLAC and ILO, SALGA to have a seat and represent Local Government directly on NEDLAC and the RSA delegation to ILO.
▪ With regards to SALGA Bargaining Council functions, change present commissioner selection model by SALGBC parties to one where selection is done by independent bodies to the SALGBC parties. (The Judicial Services Commission model was a possible route or simply to use CCMA accredited Commissioners appointed by the CCMA Governing Body).
 
Discussion
Mr R Tau (ANC, Northern Cape) proposed that SALGA submit a formal proposal through Parliament. These decisions needed NEDLAC as well; the Minister should also be made aware.

Mr M Sibande (ANC, Mpumalanga) referred to slide 12 of the DOL presentation which spoke about training lay-off schemes. He noted that in the Free State, Limpopo and Northern Cape there were no applicant companies. However, in the Free State he knew there were a lot of mines which had shut down. Was the information on this slide accurate?

Mr Nhleko replied that the training lay-off schemes worked according to applications. If the DOL did not receive an application from a company, the company would not be included. However, the department did have to make much more of an effort to market these services.

Mr M Jacobs (ANC, Free State) noted slide 7 on total number of job seekers. He was concerned about the number of job opportunities versus the number of actual placements. Did this reflect that the country did not have enough skilled workers?

Mr Sam Morotoba, Deputy Director General: Public Employment Services, DOL, replied that the criteria some employers set for job placements were problematic. For example, in some General Labourer vacancies, it was required for applicants to speak Chinese or sometimes Malawian. This made it difficult for actual placements to happen.

Mr H Groenewald (DA, North West) thanked the department for their presentation. He felt there were a lot of challenges to overcome as people were suffering without work. The President had made many promises about job creation and the pressure was now on the department to make it happen. The management of Labour Centres across the country was of a concern to him.

Mr O De Beer (COPE, Western Cape) said that the rate of child labour in the Western Cape was overwhelming. The old “dop system” had been overtaken by the child labour system. He was aware of the CCMA working on some cases but they did not have the capacity to deal with all instances.

Mr Nhleko agreed that children, domestic workers, and farm labourers were being exposed to abuse. The law in South Africa was very clear but part of the problem was making people use their rights after they were already aware of them. It related to a degree of social consciousness and adherence to the law.

The Chairperson said that she would have liked to have seen a breakdown on youth, women, and PwD on slide 7 on how many of these were placed. Domestic workers also needed their own separate report.

Mr Tau wanted more information about the wage subsidies.

Mr Morotoba replied that the legality around wage subsidies was contained in the Basic Conditions of Employment Act. The payment for apprentices and learners in learnerships was set up by the Minimum Wage Commission. There was currently a debate about this new wage system. Some stakeholders felt that there was a possibility that younger people may take over older people’s jobs because they would get used to working for less money.

Mr Jacobs asked if it was possible for a person registered as a job seeker in one province to go to another province and be placed there if a suitable job was found.

Mr Morotoba replied that there were no measures currently in place to allow for the movement of people across provinces. They had to be placed in their home provinces.

Mr Groenewald noted that the department had targeted on getting 50% of unemployed youth employed. This was unrealistic as the department did not have any structures to reach this target.

The DG agreed that this target was too high considering that 74% of South African youth were unemployed. It would take a long time to get all youth employed but the department was trying to plan new initiatives to address this.

The Chairperson wanted to know how inspections were done in the provincial departments to check for compliance and whether the number of inspections was adequate.

Mr Morotoba replied that the capacity located at the department to carry out these inspections was problematic, and thus inspections were very limited.

The meeting was adjourned.



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