CCMA on how it is contributing to job creation and poverty alleviation

NCOP Public Enterprises and Communication

29 November 2011
Chairperson: Ms P Themba (ANC, Mpumalanga)
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Meeting Summary

The CCMA expressed concern at the general state of labour relations in South Africa at present, when it briefed the Committee on its operations. Labour relations had been improving until recently, and the CCMA had definitely left its mark on the labour market landscape. For the first 12 years of its existence, the CCMA could claim to have played a part in bringing industrial peace. However, South Africa was seeing a rise in violence and strikes, with more youths protesting in the streets over issues that were not necessarily work-related. The collective bargaining process was presenting challenges, which was a reflection of the broader society, and required harder work in that regard. The growing gap highlighted by executive pay levels was leading to increased frustration among individual workers on the street.

The CCMA had in the past year developed a multi-pronged job saving strategy, actively promoting business health and job security and, where this was not possible, ensuring that no retrenched worker would have to “walk into the sunset” without being provided with survival and support mechanisms. During the period January 2009 to October 2011, large scale retrenchment statistics indicated that 31 103 employees had been retrenched, but 28 325 jobs had been saved through the formal facilitation process. Unfortunately, with the small scale conciliation process, the parties became involved only after retrenchments had taken place, and this posed problems, as job losses were equal to, or larger, than those in large scale businesses. This was an area where the CCMA was having little success. The CCMA would not be able to intervene unless the parties came to the CCMA before the negotiation, and this presented a legal challenge.

An important aspect of the CCMA’s job saving initiatives was the Training Layoff Scheme (TLS). There had been a “torrid” bedding down stage, following its introduction in September 2009, one of the main problems being that it was a multiple-partner arrangement. However, the scheme had been successfully kept afloat and to date, 76 companies had been actively involved, along with the associated trade unions, and 11 066 workers had participated. In a number of cases, companies had withdrawn from the scheme, but this was not always for negative reasons. For instance, some businesses were not really in distress, and should not have been talking about job losses or training layoffs, while another reason was a lack of an employment relationship. Although the overall concept was regarded as sound and had huge potential, it was still too bureaucratic, complex to administer and involved too many partners, including three Ministries, in the process. For this reason, the scheme was not being “driven” through a clearly defined central structure. The TLS should be seen as a permanent feature, but it needed to be streamlined.

During discussion, it was agreed that the CCMA needed to make its services more accessible in the rural areas, and to make sure its communications were reaching communities outside the more densely populated parts of the country.

Meeting report

Ms Nerine Kahn, Director of the Commission for Conciliation, Mediation and Arbitration (CCMA), said one of the purposes of the presentation was to give new members of the Committee an understanding of the nature of the CCMA’s operations, as well as to respond to questions which had been raised by members.

The CCMA’s vision was to be the premier dispute prevention, management and dispute resolution organisation in South Africa. Its mission was to promote social justice and economic development in the world of work and to be the best dispute management and resolution organisation, trusted by its social partners. Its operating principles incorporated the values of integrity, diversity, transparency, excellence, accountability and respect. The organisation’s specific mandates were to conciliate in workplace disputes, arbitrate unresolved disputes, facilitate the establishment of workplace forums and statutory councils, compile and publish information about its activities, consider applications for accreditation and subsidy from bargaining councils and private agencies, supervise ballots for unions and employer organisations, and to provide training and advice on the establishment of collective bargaining structures, workplace restructuring, consultation processes, termination of employment, employment equity programmes and dispute prevention. The CCMA had also been designated as part of the implementing agency for the Training Layoff Scheme (TLS).

In the past financial year, the organisation had adopted the Siyaphambili (“We are moving forward”) strategic plan, which was designed to build on the achievements of the previous plan, and to set out goals, objectives, key performance areas and measurable outcomes for the next five years. The plan would determine the allocation of resources and would drive the performance management system. The strategic goals were to position the CCMA to impartially promote social justice and economic development in the work environment, to deliver professional, user-friendly and fast quality service, and to maintain organisational effectiveness while striving for continuous improvement. This would involve enriching the role of the CCMA in the labour market, building skills to achieve professionalism, delivering excellent service rooted in social justice, enhancing internal processes and systems, aligning the structure for optimal strategy implementation, and entrenching an organisational culture that supported the delivery of its mandate.

Describing the governance structure of the Board, Ms Kahn said it was important to note that the law stated specifically that the CCMA had to operate independent of the state, any political party, trade union, employer, employers’ organisation, federation of trade unions or federation of employers’ organisation. The manner in which complaints were handled, was illustrated in a flow chart, from the receipt and registration of a complaint through to the communication of the decision and closure.

During the 2009/10 financial year, the Auditor-General (AG) had found that in the main the CCMA’s supply chain management (SCM) policies did not comply with certain legal prescripts. In August 2010, these policies were suspended, followed by the drafting, in consultation with the National Treasury and AG of a new SCM policy. This was approved by the governing body in April this year, and led to the establishment of three governance structures – a bid specification committee, a bid evaluation committee, and a bid adjudication committee. The process included the separation of the adjudication and awarding authorities. There had been a marked improvement and significant decrease in the number of SCM deviation processes, and the AG had commended the organisation in its 2010-11 audit report.

Mr Jeremy Daphne, National Senior Commissioner (NSC), Capacity Building and Outreach, described the CCMA’s activities in the field of job creation and poverty alleviation as a mixture of “agony and ecstasy” – ecstasy resulting from some wonderful successes, and agony from the frustration of trying to make meaningful contributions. The organisation made both a direct and indirect contribution to job creation and poverty alleviation through its dispute resolution services, which were delivered on a daily basis. Another indirect contribution was achieved through assisting in the maintenance of economic and industrial stability in the affected sectors, along with maintaining a base on which to create jobs. Mr Daphne quoted the Minister of Economic Development, the Hon Ebrahim Patel, as saying the South African economy’s most important task was to maintain its industrial base, and the CCMA played a role in establishing this base.

The CCMA had in the past year developed a multi-pronged job saving strategy, actively promoting business health and job security and, where this was not possible, ensuring that no retrenched worker would have to “walk into the sunset” without being provided with survival and support mechanisms. During the period January 2009 to October 2011, large scale retrenchment statistics indicated that 31 103 employees had been retrenched, but 28 325 jobs had been saved through the formal facilitation process. Unfortunately, with the small-scale conciliation process, the parties became involved only after retrenchments had taken place, and this posed problems, as job losses were equal to, or larger, than those in large-scale businesses. This was an area where the CCMA was having little success. Ms Kahn added that the CCMA would not be able to intervene unless the parties came to the CCMA before the negotiation, and this presented a legal challenge.

Mr Daphne said an important aspect of the CCMA’s job-saving initiatives was the Training Layoff Scheme (TLS), which he described as one of the most valuable services in the labour market, but also one of the most misunderstood. There had been a “torrid” bedding down stage, following its introduction in September 2009, one of the main problems being that it was a multiple-partner arrangement. However, the scheme had been successfully kept afloat and to date, 76 companies had been actively involved, along with the associated trade unions, and 11 066 workers had participated. However, there had been a lack of analysis on the impact of the scheme, once it had been fully implemented. In a number of cases, companies had withdrawn from the scheme, but this was not always for negative reasons. For instance, some businesses were not really in distress, and should not have been talking about job losses or training layoffs, while another reason was a lack of an employment relationship. In fact, an indirect benefit of the TLS initiative had been that in the process of engaging with companies, a more rigorous inquiry into the business distress and job loss had resulted. Although the overall concept was regarded as sound and had huge potential, it was still too bureaucratic, complex to administer and involved too many partners, including three Ministries, in the process. For this reason, the scheme was not been “driven” through a clearly defined central structure. The TLS should be seen as a permanent feature, but needed to be streamlined.

Mr Hilton Mudau, Manager: Capacity Building and Outreach, said the CCMA’s Dispute Management & Prevention (DMP) Department offered a range of support services to trade unionists, advice officers, managers and workers. From small beginnings, involving a few workshops, it was now a big department reaching out to most, if not all, rural areas of the country. The focus of the services was on capacity building, information sharing, awareness raising and problem solving. A key aspect was delivering the organisation’s social justice mandate through ensuring accessibility to the law, to all. Priority was given to empowering vulnerable sectors and communities. Communities in rural areas were reached mainly through the CCMA’s user forums, community radio programmes, Izimbizo meetings and road shows. At Izimbizo meetings, the organisation’s DVD, “Trouble at Work”, in four languages, might be shown to members of the local community. A breakdown, by province, showed that a total of 1 123 activities had been conducted among the country’s “most vulnerable” people.

Mr Nersan Govender, General Manager, Operations, said the CCMA had started with nine offices in 1996, and now had 12 regional and six satellite offices. There were over 480 on-site hearing rooms, and more than 250 off-site hearing venues. To avoid investing in bricks and mortar, the organisation was “piggy-backing” on the Department of Labour’s more than 130 offices where, from the fourth quarter of next year, people would be able to register cases without visiting a CCMA office. This would save time and travelling costs.

Mr Mudau said the DMP operational plan for the coming year included a number of interventions intended to improve and make its services in rural areas more accessible. There would be an improved focus on vulnerable sectors with high unemployment, such as agriculture and fisheries, and new communication and information sharing measures would be explored.

Mr Govender showed how the organisation’s case load had grown from under 70 000 cases a year in 1998, to over 154 000 in the 2010-11 financial year. This worked out at 591 cases each working day.

Mr Ronald Bernickow, National Senior Commissioner, Operations, commented that the organisation had the large number of cases under control, with conciliations handled within 30 days and arbitrations usually dealt with inside of 90 days. The challenge for the coming year was to implement qualitative improvements.

Mr Afzul Soobedaar, National Senior Commissioner, Mediation and Collective Bargaining, referred to the CCMA’s role in promoting industrial peace, pointing out that South Africa had been highly rated in this area during the run-up to, and during, the 2010 Fifa World Cup. He disclosed that the organisation had been working since 2007 behind the scenes with various stakeholders, with specialist intelligence-gathering units being set up in each province to identify the parties where industrial action or conflict could have adversely impacted on the event. This enabled experienced senior commissioners to react quickly to deal with potential problem areas. In addition, the CCMA was instrumental in resolving almost all the major strikes in the country in the past two years, the most recent one being the chemical industry strike.

Ms Kahn said the organisation was proud of the public sector excellence awards which it had received during the past two years. However, it still faced several challenges, such as finding ways to increase accessibility in the rural areas, and the need to find ways to better promote the orderly exercise of the right to strike, which had been on the increase and had often been marred by violence involving loss of life and damage to property. A strategy needed to be developed that would enable the CCMA to place job preservation and creation at the centre of its work in collective bargaining in order to promote social contracts between business, government and labour at a national sector level.

She said it would assist the organisation if it could make use of constituency offices for “road shows”, as would the participation of Committee members in Izimbizos and other outreach programmes.

Discussion
Mr M Sibande (ANC, Mpumalanga), said that while the CCMA was theoretically represented in all the provinces, a scrutiny of the map revealed that some offices listed as being in Mpumalanga were in fact in Limpopo. This meant that offices in these areas were often far away from where they were needed, and the coverage was nowhere near as good as, for instance, the Western Cape.

He was supported by Mr Z Mlenzana (ANC,Eastern Cape), who referred to the difficulties of those who had to travel from Matatiele to East London to engage with the CCMA, Mr H Groenwald (DA, North West), who also said the coverage in North West compared unfavourably with the Western Cape, and Mr O de Beer (COPE, Western Cape), who agreed that accessibility was a problem.

Ms Kahn conceded that accessibility posed a challenge. The CCMA’s footprint had increased tremendously as a result of a major accessibility drive during the past five years, but there was still room for improvement. This would require lobbying at National Treasury for additional funds. It should also be borne in mind that the more offices established, the more cases would need to be handled, and this would also require additional funding. This was an area where the Committee might be able to assist.

Mr Sibande said the CCMA had described the Training Layoff Scheme as “needing more work”, “more streamlining” and “not being driven.” He asked why such a scheme should be retained.

Ms Kahn said the CCMA believed the TLS was a very constructive and useful tool, but there were so many departments that had to work on it that bureaucracy posed difficulties. The scheme had been reported around the world as an achievement in the economic crisis, and was regarded by the organisation as a success. Rather than abandoning the scheme, the CCMA saw the need for support from parliamentary committees and the legislature to streamline operations and get departments working together in order to make it work better.

Mr Sibande expressed concern that the CCMA considered community radio “talk shops” as a prime medium for communication in rural areas, as many stations did not provide adequate coverage, particularly in Mpumalanga and the Northern Cape. He also criticised the fact that not all languages were given coverage.

Mr Mudau said the CCMA had to rely on community radio stations, as it did not have the budget to pay for air time, and it was not always easy to retain a slot on these stations once the initial listenership had been achieved. The “Trouble at Work” DVD was available in English, Afrikaans, isiZulu and Sesotho.

Mr Daphne added that the DVD had begun as an externally-funded project seven years ago, with the intention that it would be produced in all official languages. However, the funding had since ceased.

Mr Sibande said the Auditor General had criticised the CCMA for lack of leadership in its oversight of supply chain management issues involving irregular expenditure and compliance with NT regulations.

The outgoing Chief Financial Officer, Mr Ngoako Sekgololo, said the AG’s comments were related to irregular expenditure of R58 million in the 2009/10 financial year. Following discussions with NT, the CCMA had streamlined its processes and also addressed issues related to its SCM policy. In the latest audit, only minor deviations were recorded. However, to meet the requirement for improved SCM leadership, three new committees were established to deal with specifications, evaluation and adjudication.

Mr Mlenzana asked how the seniority of the CCMA officials was spread among the three committees, as there could be a tendency for one committee to undermine another.

Mr Sekgololo said that previously, the lack of senior officials heading up the committees had caused problems in the approval process. Now, the head of legal services was in charge of the specification committee, a senior manager headed up the evaluation committee, and a national senior commissioner looked after the adjudication committee. Other oversight measures had also been put in place.

Mr Sibande asked what the CCMA was doing in the provinces in terms of skills development.

Ms Kahn explained that the CCMA was not involved in the skills development mandate, but was very proud of its training programme for commissioners. The organisation had a bursary scheme and a training scheme, and made sure that all employees had access to relevant training opportunities. Its contribution to skills development was, therefore, as an employer.

Mr Mlenzama asked the Director for her views on the general state of labour relations in South Africa, now that the CCMA had been in existence for 15 years.

Ms Kahn said labour relations had been improving, and the CCMA had definitely left its mark on the labour market landscape. Many more workers today knew that they had the right to complain and to be heard. For the first 12 years of its existence, the CCMA could claim to have played a part in bringing industrial peace. She was concerned the South Africa was seeing a rise in violence and strikes, with more youths protesting in the streets over issues that were not necessarily work-related. The collective bargaining process was presenting challenges, which was a reflection of the broader society, and required harder work in that regard. The growing gap highlighted by executive pay levels was leading to increased frustration among individual workers on the street. So while the CCMA had achieved much, it realised it could do more.

Mr Mlenzama and Mr De Beer both raised the issue of the CCMA’s capacity to implement its decisions, as it seemed the organisation had “no teeth” and implementation seemed to be at the discretion of the employer. Could it, during the retrenchment process, direct an employer not to carry out the retrenchment.

Ms Kahn said the CCMA was merely a facilitating body, and had no legal right to enforce its decisions. This was an area which needed consideration, and she appealed to the Committee to use its influence to assist in negotiations which were currently under way.

Mr Groenwald asked what the CCMA was doing to deal with the problem of illegal immigrants taking jobs in South Africa.

Ms Kahn said the CCMA could make decisions in relation to law, and these had to be implemented by its oversight body, the Labour Court. The Constitution of South Africa provided that, in terms of Section 23, an illegal immigrant had the right to bring a case against an employer to the CCMA, even if both the employee and the employer know about the illegality. The CCMA faced a challenge on this issue on a daily basis.

Mr Groenewald asked if the CCMA provided any direction in regard to the type of training to be carried out when companies embarked on the Training Layoff Scheme.

Ms Kahn said the CCMA could play only an advisory role, and would refer participants to the various training sectors where they would jointly discuss the issues and decide on the appropriate training programme.

Mr De Beer asked whether the organisation, with its workload having almost doubled in the past 15 years, had a case flow management system to enable it to cope with case backlogs.

Mr Govender said the CCMA had no control over the growth in its case load, which was influenced by factors such as the state of the economy and the amount of publicity it received. The statutory requirements were to deal with conciliations within 30 days, and arbitrations within 90 days, and up until 2007 there had been a backlog situation. Since then, its performance had been carefully tracked, and conciliations were now taking an average of 26 days, and arbitrations were being completed well within 90 days.

The Chairperson thanked the delegation for its presentation, and said she would be inviting the CCMA, along with its board, to attend a meeting with the Committee in 2012.

The meeting was closed.



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