Department of Labour (DoL), Commission for Conciliation Mediation and Arbitration (CCMA), Unemployment Insurance Fund (UIF), NEDLAC and Productivity SA 2012 Strategic Plans: Briefing

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Labour

17 April 2012
Chairperson: Mr E Nchabeleng (ANC)
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Meeting Summary

The Department of Labour and its entities presented their Strategic Plans  in the presence of the Minister. 
The National Economic Development and Labour Council Strategic Plan presentation outlined the origins and mandate of NEDLAC, the importance of social dialogue, external and organisational challenges, strategic goals and priorities, current chamber and task team activities and a financial report. NEDLAC was established in 1994 as a vehicle for social dialogue on which social partners, Government, business, labour and the community had representation.  Its brief was to ensure economic stability in South Africa. Sixteen years into democracy, the political, labour and economic landscape had changed. Globally there was a threat of a recession and a sovereign debt crisis, South Africa experienced slow economic growth, and the country suffered high levels of unemployment, poverty and inequality, especially amongst the youth. There were high levels of tension and mistrust amongst the social partners. The credibility of the social partners and their commitment to dialogue was questionable. Questions were being asked about the relevance of NEDLAC within the current economic climate.The Minister of Labour and NEDLAC Executive Director felt that NEDLAC was still relevant and necessary. However, it needed to be strengthened and restructured internally and it needed to reposition itself in the economic landscape, in order to be effective within the current economic climate.

The Commission for Conciliation, Mediation and Arbitration Strategic Plan was crafted on previous plans as the basis for business continuity, and included input from all key stakeholder groups. It set out the goals and strategic objectives, key performance areas and targets for the organisation for 2011 to 2015. This presentation concentrated on the 2012/13 financial year, the third year of the Strategic Plan. There were six strategic objectives: enrich the role of the Commission in the labour market; build skills to achieve professionalism; deliver excellent service rooted in social justice ensuring a balance between quality and quantity; enhance and entrench internal processes and systems for optimal deployment of resources; align the structure that would enable optimal implementation of the strategy; and entrench an organisational culture that supported the delivery of the Commission’s mandate. The Commission supported the economy in various ways. Firstly, it promoted the training layoff scheme whereby workers, instead of being retrenched, could be re-skilled and kept in employment during the economic downturn. Since its inception in 2009, the Commission had processed applications for 153 businesses involving 18 057 employees. Secondly it supported the economy by saving jobs. Since 2009 it had saved 43 274 jobs. Thirdly, it supported the economy by promoting industrial peace. It established a voluntary bargaining structure in the Private Security Sector (2009) and was close to doing the same in the legislative sector (Provincial Legislatures and Parliament). It further intervened in several major national disputes and maintained relative industrial peace in the run-up to and during the 2010 FIFA World Cup. It showed improved user confidence by a 94% increase in acceptance of offers of assistance in public interest disputes from 2007 to 2011.The Commission reported a R7 million surplus at the date of reporting.

Productivity SA Strategic Plan' s presentation outlined the strategic thrust of the organisation, its programmes, its strategic priorities, 2012/13 Strategic Plan, highlights of 2011/12 and challenges. The strategic thrust of Productivity SA was enterprise productivity and competitiveness, cooperatives and micro enterprises productivity capabilities, public sector efficiency and effectiveness, knowledge management and research and productivity awareness. One of its main strategic programmes was Turnaround Solutions, which delivered turnaround and contingency plans for companies that were faced with the risk of financial ruin, extensive job loss, and sustainability challenges. It was funded by the Department of Labour, managed by Productivity SA and its aim was to save jobs. This programme aimed to impact on 27 500 jobs in the 2012/13 financial year. Other programmes were Productivity Organisational Solutions, Value Chain Competitiveness and Marketing and Communication. The objective of the Marketing and Communication Programme is to lift the public profile of Productivity SA and to popularise its work through print and electronic campaigns, media articles, electronic newsletters, magazines and the Annual Productivity Award events. Challenges to Productivity SA were funding for its Turnaround Solutions programme specifically and its limited resources to market, fund and implement Productivity SA’s programmes to the masses.

The Unemployment Insurance Fund Strategic Plan presentation outlined background planning, budgeting, reporting cycle and key planning concepts, a summary of the five year Strategic Plan 2011/12-2015/16, a performance report against the 2011-12 Annual performance Plan, Annual performance plan 2012-13 and a summary of the Budget 2012/13 – 2014/15. The Unemployment Insurance Fund was established in terms of Section 4(1) of the Unemployment Insurance Act 2001 (Act 63 of 2001) as amended. The Act empowered the Fund to register all employers and employees in South Africa and to collect contributions. The Strategic Plan for the five year period 2011/12-2015/16 was to: fund poverty alleviation schemes; improve governance; strengthen the institutional capacity of the fund; encourage compliance through enhanced service delivery; and improve stakeholder relations. The Fund exceeded its target of having 50% of its senior management services positions occupied by women by March 2012. It had 55% female representation at senior management services level. This was part of Strategic Objective three. It was not part of the written presentation, but the Fund reported that it had a reserve fund of R65 billion.

The Department of Labour Strategic Plan outlined the programmes or branches, the key result areas, and medium term strategic framework priorities. It focused on the four programmes namely Administration, Inspection and Enforcement, Public Employment Services, and Labour Policy and Industrial Relations, and further outlined Planned Policy Initiatives and Director-General Policy Projects. The Department's brief was to regulate the South Africa labour market for a sustainable economy. It was responsible for the Occupational Health and Safety Act (No. 85 of 1993), the Compensation for Occupational Injuries and Diseases Act (No. 130 of 1993), the National Economic Development and Labour Council Act (No.35 of 1994), the Labour Relations Act (No. 66 of 1995) as amended, Basic Conditions of Employment Act (No. 75 of 1997) as amended, the Employment Equity Act (No. 55 of 1998), the Unemployment Insurance Act (No. 63 of 2001) as amended, and the Unemployment Insurance Contributions Act (No. 4 of 2002).The Strategic plan consisted of the following Key Result Areas: contribution to employment creation; promote equity in the labour market; protecting vulnerable workers; strengthening multilateral and bilateral relations; strengthening social protection; promoting sound labour relations; monitoring the impact of legislation; and strengthening the institutional capacity of the Department. The Director-General had priority projects amongst which were the turnaround of the Sheltered Employment factories to make them more viable and a turnaround of the Financial Management System to a value-for-money approach.

Members asked why the Unemployment Insurance Fund had a R56 billion reserve fund and whether it was not costing the country jobs. Members asked whether NEDLAC was still relevant in the current economic climate and whether it was not time to close shop. Members asked how the Commission for Conciliation, Mediation and Arbitration achieved a 94% user confidence rate and what lessons there were for other entities in terms of satisfying their constituencies. Members asked what Productivity SA was doing to assist small, medium, and micro enterprises to stay liquid. Members also asked what consequences there were for entities under the Department of Labour that did not meet their targets. Members asked whether the Labour Inspectorate had sufficient capacity to enforce adherence to labour legislation.

Meeting report

National Economic Development and Labour Council (NEDLAC) 2012 Strategic Plan
Mr Alistair Smith, Executive Director, NEDLAC presented. The presentation outlined  the origins and mandate of NEDLAC, the importance of social dialogue, external and organisational challenges, strategic goals and priorities, current chamber and task team activities and a financial report.

NEDLAC was established in terms of the National Economic Development and Labour Council Act (No.35 of 1994) as a vehicle for social dialogue on which social partners Government, business, labour and the community had representation. (See the presentation for details on its constitution).  Its brief was to ensure economic stability in South Africa (SA).

Sixteen years into democracy, the political, labour and economic landscape had changed from what it had been when the NEDLAC Act was passed. Globally there was a threat of a recession and a sovereign debt crisis, SA experienced slow economic growth, the country suffered high levels of unemployment, poverty and inequality, especially amongst the youth. There were high levels of tension and mistrust amongst the social partners; the credibility of social partners and the commitment of the social partners to dialogue was questionable.

Questions were being asked about the relevance of NEDLAC within the current economic climate.

Mr Smith as well as Minister Mildred Oliphant felt that NEDLAC was still relevant and necessary. However, it needed to be strengthened and restructured internally and it needed to reposition itself in the economic landscape, in order to be effective within the current economic climate.

Its strategic goals and priorities as set out in the strategic plan was to execute effective leadership and governance, to deliver on its core mandate effectively, to promote social dialogue and organisational renewal for high performance. (See document for full details)

The Commission for Conciliation, Mediation and Arbitration (CCMA) 2012 Strategic Plan
Ms Tanya Cohen, Chairperson of the Governing Body and Ms Nerine Kahn, Director, CCMA presented. The  Strategic Plan was crafted on previous plans as the basis for business continuity, and included input from all key stakeholder groups. It set out the Goals and Strategic Objectives, key performance areas and targets for the organisation for 2011 to 2015. This presentation concentrated on the 2012/13 financial year, the third year of the Strategic Plan. There were six Strategic Objectives.

Enrich the role of the CCMA in the Labour Market.

Build skills to achieve professionalism.

Deliver excellent service rooted in social justice ensuring a balance between quality and quantity.

Enhance and entrench internal processes and systems for optimal deployment of resources.

Align the structure that will enable optimal implementation of the strategy.

Entrench an organisational culture that supported the delivery of CCMA’s mandate.

CCMA supported the economy in various ways. Firstly, it promoted the training layoff scheme. It was a scheme whereby workers, instead of being retrenched, could be re-skilled and kept in employment during the economic downturn. Since its inception in 2009, CCMA had processed applications for  153 businesses involving 18 057 employees. Secondly it supported the economy by saving jobs. Since 2009 it had saved 43 274 jobs. Thirdly, it supported the economy by promoting industrial peace. It established a voluntary bargaining structure in the Private Security Sector (2009) and was close to doing the same in the legislative sector (Provincial Legislatures and Parliament). It further intervened in several major national disputes and maintained relative industrial peace in the run-up to and during the 2010 FIFA World Cup. It showed improved user confidence by a 94% increase in acceptance of offers of assistance in public interest disputes from 2007 to 2011.

The CCMA reported a R7 million surplus at the date of reporting.

The CCMA received awards for Public Sector Excellence in the category ‘Best Reputation: Legal Sector’ three years in a row. It was also nominated as one of the top three organisations in the Legal Sector by the citizens of SA. (See document for further details)

Productivity SA 2012 Strategic Plan
Mr Alwyn Nel, Chairperson and Mr Bongani Coka, CEO, Productivity SA presented. The presentation outlined the Strategic Thrust of the organisation, its Programmes,its Strategic priorities, 2012/13 Strategic plan, highlights of 2011/12 and Challenges.

The strategic thrust of Productivity SA was enterprise productivity and competitiveness, cooperatives and micro enterprises productivity capabilities, public sector efficiency and effectiveness, knowledge management and research and productivity awareness.

One of its main strategic programmes was Turnaround Solutions. It was an intervention which delivered turnaround and contingency plans for companies that were faced with the risk of financial ruin, extensive job loss, and sustainability challenges. It was funded by the DoL, managed by Productivity SA and its aim was to save jobs. This programme aimed to impact on 27 500 jobs in the 2012/13 financial year.

Other programmes were Productivity Organisational Solutions, Value Chain Competitiveness and Marketing and Communication.

The Objective of the Marketing and Communication Programme was to lift the public profile of Productivity SA and to popularise its work through print and electronic campaigns, media articles, electronic newsletters, magazines and the Annual Productivity Award events.

Productivity SA had many highlights during the year 2011/12 including the expansion of the Productivity awards to the North West Province, a successful partnership with the International Labour Office (ILO) and raising its public profile by being in media discussions on productivity discourse, resulting in significant media coverage.

Challenges to Productivity SA was funding for its Turnaround Solutions programme specifically and its limited resources to market, fund and implement Productivity SA’s programmes to the masses. (See document for full details)

Unemployment Insurance Fund (UIF) 2012 Strategic Plan
Mr Boas Seruwe, Commissioner, Unemployment Insurance Fund (UIF), presented.  The presentation outlined background planning, budgeting, reporting cycle and key planning concepts, a summary of the five year Strategic Plan 2011/12-2015/16, a performance report against the 2011-12 Annual performance Plan, Annual performance plan 2012-13 and a summary of the Budget 2012/13 – 2014/15.

The Unemployment Insurance Fund (UIF) was established in terms of Section 4(1) of the Unemployment Insurance Act (No. 63 of 2001) as amended. The Act empowered the UIF to register all employers and employees in South Africa and to collect contributions.

The Strategic Plan for the UIF over the five year period 2011/12-2015/16 was to:

Fund poverty alleviation schemes

Improve governance

Strengthen the institutional capacity of the fund

Encourage compliance through enhanced service delivery

Improve stakeholder relations

The UIF exceeded its target of having 50% of its senior management services positions occupied by women by March 2012. It had 55% female representation at senior management services level. This was part of Strategic Objective three.

It was not part of the written presentation, but Mr Seruwe reported that the UIF had a reserve fund of R65 billion.

Department of Labour (DoL) 2012 Strategic Plan
Mr Nkosinathi Nhleko, Director-General (DG), DoL, presented. The presentation outlined the Programmes or Branches, the Key Result Areas, and Medium Term Strategic Framework (MTSF) Priorities. It focused on the four Programmes, namely Administration, Inspection and Enforcement, Public Employment Services and Labour Policy and Industrial relations, and further outlined Planned Policy Initiatives and DG Policy Projects.

The Department's brief was to regulate the SA Labour Market for a sustainable economy. It was responsible for the Occupational Health and Safety Act (No. 85 of 1993), the Compensation for Occupational Injuries and Diseases Act (No. 130 of 1993), the NEDLAC Act 1994, the Labour Relations Act (No. 66 of 1995) as amended, Basic Conditions of Employment Act (No. 75 of 1997) as amended, the Employment Equity Act (No. 55 of 1998), the Unemployment Insurance Act (No. 63 of 2001) as amended, and the Unemployment Insurance Contributions Act (No. 4 of 2002).

The Strategic plan (2012-2017) consisted of the following Key Result Areas (KRAs):

Contribution to Employment Creation.

Promote Equity in the Labour Market

Protecting Vulnerable Workers

Strengthening Multilateral and Bilateral relations

Strengthening Social Protection

Promoting Sound Labour Relations

Monitoring the Impact of Legislation

Strengthening the Institutional Capacity of the Department

Planned policy initiatives were the amendment of the Unemployed Insurance Act (No 63 of 2001) and the Compensation for Occupational Injuries and Diseases Act, the promulgation of the Employment Services Act, and the repealing of the Occupational Health and Safety Act (No. 85 of 1993). The Employment Equity Act, Basic Conditions of Employment Act and Labour Relations Act would also be amended.

The DG had priority projects amongst which were the turn-around of the Sheltered Employment factories to be more viable and a turn-around of the Financial Management System to a value-for-money approach. (See document for full details)

Discussion
Mr A van der Westhuizen (DA) said that legislation was being develop which would increase the powers of the CCMA and make it possible for it to make speedier decisions. Was the CCMA ready for this new role and was its budget sufficient?

Ms Nerine Kahn, Director, CCMA replied that the CCMA was working with its social partners as well as the DoL and National Treasury and would continue to do so in order to fulfil its more demanding brief that would come along with the passing of the proposed legislation.

The Chairperson said that the CCMA talked about a surplus of R7 million. Where did it come from?

Ms Kahn replied the CCMA deliberately included this bit of financial reporting in the Strategic Plan presentation, because its status as a going concern was an issue of public concern and the Portfolio Committee had asked about it in the past. The report as it stood reported to the end of February. The financial year had not ended yet. It expected more money to come in before the end of the financial year and it had reduced its deficit. It was in a much healthier position financially than it had been for the past three to four years. It did not anticipate having a surplus at the end of the financial year. It expected to break even.

The Chairperson said that the CCMA had said that it had extended its services to the community. How many new offices were there and how many new ones were planned for this year?

Ms Kahn replied that the CCMA recently opened an office in Rustenburg. It did not have any plans directly to open any bricks-and-mortar offices. The CCMA had worked towards making its case management system available at all Labour Centres and DoL offices so that workers could follow the progress of their cases there. It was available currently. Commissioners went to rural areas, to do their cases and they made time to take new cases on board while they were there. The CCMA but it did not see its reach only being extended in the form of physical offices. It also worked with the DoL and gave talks at Imbizos, etc. It looked at employing mainly innovative information technology (IT)-related solutions to make itself known and available to clients, wherever in the country they found themselves.

The Chairperson asked whether it was easy to refer cases and was it done to lessen the workload of the CCMA? Some cases were referred to the justice cluster, for example the Industrial Court.

Ms Kahn replied that cases could not be referred away from the CCMA. It always accepted cases. The only situation in which as case would be referred away from the CCMA was where the law prescribed that a case had to be referred to the Labour Court.

The Chairperson asked what role the CCMA was playing in creating peace between employers and employees and whether it was possible to intervene between business and labour before the strike season started in order to avoid strikes. Were there mechanisms to arrange peaceful negotiations and wage agreements?

Ms Kahn replied that the CCMA was there to manage the negativity and it believed that it was playing a very important role to ensure that there was a managed process between capital and labour. It had a strong dispute management and prevention department working with both business and labour, training, giving advice and generally supporting parties in order to avoid disputes before it came to the CCMA.  The security industry was a case in point.

Mr Afzul Soobedaar, National Senior Commissioner: Mediation and Collective Bargaining, CCMA explained what the CCMA did to prepare the social partners for s strike season/collective bargaining season. He said that the CCMA had since 2007 capacitated Commissioners to deal with the collective bargaining season. Commissioners were briefed by a labour economist who took them through the economic landscape in which bargaining would take place. They were also briefed by the social partners, especially business and labour, giving their perceptions of what the issues would be during the collective bargaining season, so that Commissioners could better understand the demands and the responses to the demands. This briefing would happen on 15 May 2012.

During the course of the collective bargaining season the CCMA actively used Section 150 to make offers of assistance to parties. Whereas it used to have a wait-and-see approach before, it had become a lot more pro-active. One of the CCMA’s key performance areas was 1.7 under Strategic Objective 1. That was to assist, support and promote collective bargaining. This went beyond purely dispute resolution, and the kind of work the CCMA did in the security sector and which it hoped to do in the legislative sector bore testimony to that. During the course of the collective bargaining season, the CCMA had a very intensive intelligence gathering system on the ground and it deployed commissioners very quickly into situations where there was escalating conflict. Once the collective bargaining season was over, the CCMA held a debriefing session to reflect on the learnings from the season. This was what the CCMA did in terms of supporting the economy by supporting collective bargaining.

Mr Van der Westhuizen asked whether the DoL was involved in the big strike at Implats in the North West where 17 000 mine workers were retrenched and millions of rands lost. What went wrong? It was most damaging to the SA economy.

Ms Kahn replied that the CCMA played a significant role during the Implats strike. It tried to assist in many ways in the strike. It was still dealing with the dismissals that arose out of it. The CCMA made offers of attempts to intervene. As the law stood, these offers had to be accepted by social partners, business and labour. The two parties did not accept any of the three offers made during the strike.  That was all the CCMA could do.

A positive outcome of the situation was that the board of the organisation commissioned a report and it asked the CCMA to be part of the team which would investigate what went wrong. The CCMA’s view of the situation was that it was a case where the employee-employer relationship went wrong because the labour representatives and the management knew each other very well and the labour representatives forgot about the people they were representing. Hopefully good learnings could be gleaned from that experience.

Mr S Motau (DA) wished the CCMA well with breaking even. The CCMA presentation stated that there was a 94% user confidence in the system, which was remarkable. The CCMA was a success story. How did the management get it right and what lessons were there for other departments?

Ms Cohen replied the CCMA had been on a steep learning curve. It was only 15 years old. For the first few years it focused on keeping going. The next period was a period of formation. It then went through a period of embedding itself in the labour landscape. The current period was about looking at its performance.

Both horizontally and vertically through the organisation, there was a constant pressure on its capacity and commitment. CCMA was blessed with a governing body, management team, directors and commissioners who were fundamentally committed to the organisation and what it did. The governing body consisted of people from very diverse sectors and backgrounds, but had they had the ability to put differences aside and put the interest of the CCMA first, when the situation required it. This was the fundamental starting point. After this there were all the good practices like adherence to the Public Finance Management Act (PFMA) and other practises that all businesses had like setting targets, managing targets, monitoring, evaluating and adjusting. It came fundamentally down to commit to the institution and good solid leadership. The leadership also acknowledged the work done by the other layers of staff.

Mr Van der Westhuizen asked the UIF representative to explain the phase “collect overpayment” in its presentation.

Mr Boas Seruwe, Commissioner, Unemployment Insurance Fund (UIF), DoL replied that overpayment was also known as work-and-draw. This happened when a worker had started working, but was still drawing UI. The worker involved had to repay the money not due to him. It was a debt to the UIF that it had to collect.

The Chairperson asked whether the UIF would get its money back.

Mr Seruwe replied that fraud cases counted 286. They were mostly work-and-draw cases. Also employers sometimes collect from workers, but do not pay it over to the UIF.

There were also cases of collusion between employees of the UIF and people from outside. People sometimes falsely claimed to have worked for a certain company.  The information in the database was compared with the information the person gave. For this category, in KwaZulu-Natal (KZN) four officials were arrested and the Asset Forfeiture Unit was pursuing them in order to recover the money, in the Eastern Cape (EC) two employees were dismissed and in the Northern Cape (NC), one person was dismissed. Prevention was better than cure. To pre-empt fraud, the UIF instituted an automatic fraud detection system. 

Mr Van der Westhuizen said that the reserve fund of the UIF was costing the country jobs. The presentation said that the reserve fund was going to be spent on improving the benefits to claimants. What was necessary to improve the benefits - new legislation or regulations?

Mr Seruwe replied that the reserves were allocations made to ensure future liabilities. If the fund anticipated a lot of claims, the reserves had to grow. Because the UIF expected a lot of claims and it had to have funds in reserve to honour it, actuaries made predictions and projections as to what the UIF could expect in the future. He did not believe the reserve fund cost the country jobs. The UIF had R65 billion in reserve. It invested the money in asset instruments like Government bonds, which the Government used to build hospitals, creating jobs. It was also invested in parastatals like the Land Bank. It also invested in banks in the form of bonds. It was, thus, involved in job creation.

If the UIF had more money, it could improve the benefits. This would need the legislation to be adopted. The process would come to Parliament in due course. The state law adviser had scrutinised the Bill and found it to be constitutional.  The Bill would thus proceed.

Mr Van der Westhuizen disagreed with Mr Seruwe’s statement that the reserve fund of the UIF contributed to job creation in the country. He said that taxing people did not create jobs. The money had to be kept in the economy so that entrepreneurs could create the jobs for the country. He wanted a discussion with Mr Seruwe on the economics of the country.

Mr Seruwe replied that he did not want to engage in the debate with Mr Van der Westhuizen about the economics of the UIF reserve fund.

Mr Motau quoted the presentation where it said that the vacancy rate was 7.7%. How many vacancies were there in the inspectorate area?

Mr Jacob Malatsi, Acting Chief inspector, Inspection and Enforcement Services, DoL replied that since the 1st March 2012, the total posts were 1 098, of which 1 011 were filled and 84 were vacant.  The vacancy rate was thus 7.67%. 

Ms L Makhubele-Mashele (ANC) congratulated the UIF on exceeding its target for employing women in senior management positions.

Mr Seruwe appreciated the positive remark.

Mr Motau said that Inspection and Enforcement in the DoL did not happen as it should. Was it a capacity issue?

Mr Malatsi replied that the inspectorate was recruiting inspectors with diplomas and degrees in Labour Law, Natural science and Engineering. The Inspectorate had already started with a six month induction programme last year. New recruits were inducted into the processes of the Department. Function training was also conducted where recruits were trained in the legislation and regulations, as well as the technical, electrical, mechanical and hygiene South African Bureau of Standards (SABS) standards they would be enforcing.  The Inspectorate managed the training and when recruits completed their training, they were deployed to the relevant Labour Centres.

Mr Motau asked whether employers could not be inspected properly in order to make sure that they were registered for UIF.

Mr Seruwe replied that formal business was fairly compliant in terms of registering for UIF. The biggest challenge was getting small businesses in the informal sector to register. These included the taxi industry, people employing domestic workers, spaza shops and small informal businesses. Some forms of farm work can also be seen as informal because it was seasonal. There had been an increase in compliance in the farming sector after the Minister did her inspections.

The strategies employed to resolve the problem were the following. Firstly there was the enforcement and inspection process. It yielded positive results. The second strategy was advocacy.  He indicated in the UIF Strategic Plan that the UIF wanted to reach 20 million people. This was where workers were educated about their rights. They were given information about the call centre, and if they gave their identity document (ID) numbers, the UIF staff checked them against its database to make sure that the workers were registered for UIF. The third strategy was technology. The UIF wanted to make it easy for employers to register their workers for UIF using information and communications technology (ICT). The fourth strategy was advertisements in the media.

Ms Makhubele-Mashele said from the oversight visits by the Portfolio Committee to three provinces, she learnt that the Inspectorate did not break new ground. It did not go and find workplaces in remote areas to inspect. When the Portfolio Committee went to the farms, workplaces had never seen an inspector. The Inspectorate’s rate was good, but this was only according to the existing database. There were many workplaces that were not registered on the database. The Portfolio Committee suggested too that the Labour Inspectorate in the Free State (FS) went to Stats SA which had the whole of SA mapped. In the Western Cape the Van Loveren Brothers (producers of Four Cousins Wines) had never seen an inspector in five years.

Ms Makhubele-Mashele said that there were cases where there were only one Occupational Health and Safety (OHS) inspector in a province. How did the DoL expect to cover all the workplaces it needed to cover?

The DG replied that one of the things that the DoL was interrogating through a project approach was the desired levels of capacity in the Inspectorate. When dealing with capacity, the Department had to look at a segmented approach. There not only had to be an increase in numbers, but also an increased capacity in specialisation in order to make sure that one could dispense this kind of a service from a knowledgeable angle.

Increasing capacity also meant activating other role players who had to be able  to augment the work, for instance advocacy was one of those areas. Maintaining standards and adherence to legislation was the responsibility of all the stakeholders involved like employers, employees, labour unions etc.

One had to try to veer away from the view that increasing inspector numbers would solve the problem.

Mr Malatsi replied that it was true that the Inspectorate was not physically present everywhere in SA, because of a lack of capacity.  As the DG had said, even if the numbers were there, the inspectorate could not reach everywhere; It had to use other tactics.

The Inspectorate had different inspection modes. The first type of inspection was a routine inspection. The second type happened in problematic and high risk sectors, which were the sectors with high incidence rates. There was a special strategy for those sectors. For the problematic sector, there were also special inspections called blitz inspections.

In 2010, the Inspectorate started with Roving Health and Safety Representatives (RHR). The RHR was a worker, working on a designated group of farms, doing inspections. The Inspectorate and the farm managements agreed that this particular worker became a health and safety inspector, trained by the DoL. This program was in action in Limpopo and Mpumalanga provinces. It was being rolled out in the NC and the Western Cape. These were some of the strategies the Inspectorate embarked on to ensure that its reach expanded to include even remote areas.

Another strategy was Communications. The Inspectorate was doing seminars, road shows , training shop stewards and doing workshops with other stakeholders.

Mr Van der Westhuizen asked whether the improvement in capacity at NEDLAC would be measurable in terms of shortened turnaround times. What was the background to the slow responses from NEDLAC. Was it an indication of how deep it was in trouble?

Mr F Maserumule (ANC) said that NEDLAC either had to sort out its problems or quit. There were basic things that made it work well. What happened to the basic things that made it to work so well in the beginning?

Mr Motau thanked Mr Smith for being candid about the situation at NEDLAC. NEDLAC either had to be abandoned or rehabilitated. One of the key partners walked out of NEDLAC and an official of the DoL said in response that consensus was not essential at NEDLAC. It was self-defeating. What was to be done about the situation?

Mr Motau said that there was a complaint that the key stakeholders sent representatives to NEDLAC which was not at the appropriate level of authority for decision making. They had no mandates and could not make decisions retarding the work at NEDLAC.

The DG replied that the issue of NEDLAC was a sensitive one which had to be handled with care. The relevance of NEDLAC could not be determined by a strategic plan, because NEDLAC’s existence was not brought about by a strategic plan. The overall assessment of a set of conditions in the country led to the birth of NEDLAC. Before NEDLAC there was the National Economic Forum (NEF) whose function was to promote the issue of a social dialogue. The policy debates still remained and the questions asked took the debate back to those primary questions.  Many countries grappled with the same question before and after World War I. Some countries upheld the idea of a social parliament and some abandoned it. He thought that there had to be a broader policy discussion on the issue of making NEDLAC relevant. Why did South African society think that social challenges were not relevant, and that social dialogue did not have a role in reconstructing and developing the country?  It was a broad policy question and needed to be discussed and debated at a broader level.

The DG said that Mr Smith could attest to some of the concerns raised. The appropriateness of the level of representation sent to NEDLAC by the social partners was an indication that the social partners did not take NEDLAC seriously. The social partners needed to consider what it needed to do to demonstrate that it took NEDLAC seriously.

Mr Smith replied that it was important to guard against doom and gloom. There was a lot of opportunity and scope for NEDLAC in the current year. It was not a question of relevance. It was going through a difficult period or conjuncture which impacted heavily on its various constituencies and the social partners. This uncertainty reflected itself on the pressure that was loaded onto a number of institutions, including NEDLAC which was at the forefront of social dialogue. It tried to channel and absorb social conflicts and deal with it in a constructive way. Before doing away with NEDLAC, people had to think about what the alternatives were, and they were quite bleak. NEDLAC was more relevant than ever. It needed to reposition itself. All needed to accept that a decade and a half into democracy, things had changed in society and institutions like NEDLAC also needed to evolve accordingly. It needed to go through a natural period of adaptation and change, which could not happen overnight. This was why there were Strategic Frameworks and Strategic Plans - to enable the institution to focus on the issues it had to prioritise in the short term as well as to have clear objectives in the medium term in order to effect these changes. The Strategic Plan was not the be-all and end all in terms of interpreting the situation. It was an attempt to set a foundation to deal with the very complex challenges which faced NEDLAC and the process of social dialogue. It also reflected the complex challenges faced by SA society.

Stakeholder capacity and commitment in NEDLAC was crucial. The capacity of NEDLAC was crucial. It was part of a dynamic process which changed constantly. In the short term, the capacity of the secretariat needed to be upgraded. NEDLAC was locating the Protocol Document at the centre of its short term approach so that all social partners were clear about the rules of engagement. Over the years the rules had been blurred. The proposed document had clear timeframes. This would build accountability and adherence to the procedures of NEDLAC in the short term.

In the short term, improving the quality of the administration and the facilitation in NEDLAC would make a difference. Tensions between social partners would come and go. In the current period there was turbulence. This was why leadership was important. All involved needed to tightened their seatbelts and keep cool heads and focus on the basics as Mr Maserumule said. The turbulence would pass.

The Minister had her reasons for her reactions and utterances. She had indicated her frustration in the past, but there was no point in exaggerating it. It was a reality, but the issue would be addressed.

Mr Motau emphasised that NEDLAC had to be the Tripartite Alliance. He asked the DG of the DoL where the social partners within NEDLAC lost their common vision.

The DG replied that NEDLAC was informed by a concept in the world, namely, a social parliament. It was a political formation. It did not mean that the social partners  were in alliance. The different role players, business, labour, Government and the community all had different points of view. These views had to be contested at NEDLAC in a way that would best serve the interest of the country. The Tripartite Alliance, as suggested by Mr Motau, sounded too political. NEDLAC could not be a political institution. It was correct that the role and positioning of NEDLAC needed a broader discussion, in order to ensure that NEDLAC played the role that it was supposed to play.

Mr Maserumule said that Productivity SA had to market itself more effectively so that people became aware of what it was and what it was doing.

Mr Coka agreed that Productivity SA was not visible in the rural areas. He referred to the presentation which said that the salary bill of Productivity SA was R36 million as was the grant funding. As the funding grew, more people could be employed. In the medium term Productivity SA worked with the Labour Centres of the DoL to promote itself. In the long term it planned to set up offices, but it felt that, with the means at its disposal, its current approach had a good impact. Partnerships helped to increase its footprint, especially in the rural areas.  It would increase its partnerships in order to reach more areas and thus increase its level of visibility.

The Chairperson asked how many small, medium, and micro enterprises (SMMEs) Productivity SA had helped. The Chairperson asked how many jobs had been saved in this sector.

Mr Coka replied that, for the year ending March 2012, Productivity SA assisted over 3 700 SMMEs.

The Chairperson asked what support had been given to SMMEs  to make sure they could sustain themselves.

Mr Coka replied that Productivity SA had an incubation programme with the Small Enterprise Development Agency (SEDA). It assisted in capacity building in SMMEs in order to increase productivity. It assisted SMMEs to install early warning systems to warn it about getting into trouble, before it was actually in trouble. It assisted SMMEs to help measure and eliminate wastage, which meant savings for the company, which in turn helped it to grow.

The Chairperson asked what were the challenges facing SMMEs?

Mr Sello Mosai, Executive Manager, Productivity SA, replied that the issues that confronted SMMEs were access to capital investment and location in the market.  What was relevant to Productivity SA and what was lacking in the field was business process improvement support. Most SMMEs were not able to access Government support or support from local Government. Business process improvement support related to efficiency, understanding the market, being able to read the standards in terms of quality and time, managing the inventory, managing cash flow, understanding basic business operations such as the five Ps: people, products, etc. These were the broad issues facing SMMEs.

The Chairperson asked regarding Programme Four, Outcome 11 where the presentation stated that brief documents for the African Regional Labour Administration Centre (ARLAC) and the Southern African Development Community (SADC) Employment and Labour Sector (ELS) had to be developed. Something had to be wrong. How far were these documents?

Mr Les Kettledas, DDG: Labour Policy, Industrial Relations, DoL explained that the briefing documents were the SA Government’s position on the issues to be discussed at the African Regional Labour Administration Centre (ARLAC). SA was part of the body together with 18 other English speaking African countries. There were two meetings a year; one in February and one in June. The June meeting would coincide with the International Labour Organisation (ILO) conference (and would be held in Zimbabwe). After the DoL had received the documentation for that meeting it had to prepare SA’s position on the items to be discussed. The briefing documents had to be prepared by May 2012 for the Minister and her delegation so that they could participate in that meeting. This line function responsibility was with Programme 4 of the DoL and it was work that needed to be done.

The second part of the question dealt with the Southern African Development Community (SADC) Employment and Labour Sector (ELS) briefing documents. These documents had been drafted. This meeting would start on Monday 23 April 2012 and end on 27 April 2012 in Angola. The Minister would be attending this meeting as well. The issues to be discussed there would be: Entrepreneurship in the SADC Economy, the SADC Decent Work programme as well as a draft Employment and Labour Protocol, which was a legal instrument where the DoL had to work with the Department of Justice and Constitutional Development as well as the legal section of the Department of International Relations and Cooperation on whether this legal instrument was consistent with the SA domestic legislation. There would also be a discussion on SADC members’ participation in the governing body. There would be a report. The ILO would elect a new Director General (DG) on the 28thMay 2012 and the SADC members would be briefed on the candidates assessed for this position at the previous governing body meeting. SADC had to discuss what its position would be when it came to the election of the new ILO DG.

SA needed to be thoroughly prepared in order to participate meaningfully in these meetings. This work had to be done by Programme 4 as it was its line function responsibilities.

Ms Makhubele-Mashele  said that the presentation, in the Public Employment Service section, stated that it targeted 18 000 or 19 000 people.  What percentage was this of the official unemployment rate of the country or of the number of people who approached the DoL for work? She wanted to compare the competitiveness of the DoL with the private companies which rendered a similar service.

Mr Sam Morotoba, DDG Public Employment Services, DoL replied that levels of unemployment were high. Many players addressed unemployment amongst the youth. DoL targets were based on annual trends. The reason why the targets changed were:  one did find a high number of companies registering jobs which required high-end skills, but found that the majority of jobseekers were people with low skills levels and low experience which did not match the jobs advertised. Most of these people required further education and training and the DoL, through its career counselling and referral services, referred them to the Department of  Higher Education and Training. The National Skills Fund and the Msobomvu Youth Fund no longer existed, where these large numbers of unemployed youth used to be referred to. The Department relied on the National Youth Development Agency (NYDA) and the Department of Higher Education and Training, with which it had partnership agreements, to take on these people. The second layer of unemployed consists of young graduates without experience. They were referred to learnerships and internships. The majority of them were fortunate enough to get formal employment. The Department had capacity constraints and IT challenges. If the rates of capturing of the applications and the job registration could be increased, the numbers of applicants placed in jobs would increase, because the system of matching was automated.

How did the Public Employment Service compare to other agencies? The other agencies were private or commercial. The job seekers coming to labour centres were not commercially interesting to private agencies, because the agencies could not make money off them.  Private commercial agencies concentrated on the high end market. The only private agencies which focused on the low end job market were labour brokers. In this environment, the relationships were different.  The long term vision was that the Employment Services Bill would contain provisions for a funding arrangement. It would allow the Public Employment Service to extend its scope. It would be able to work with temporary employment agencies as well. It would be able to move towards the same level as agencies which offered similar services in other countries.

Mr Motau  asked the DG of the DoL whether there were consequences when the Department did not meet its targets. It went to the heart of performance.

The DG replied that targets were linked to performance. Performance had to be subjected to evaluation and assessment. If targets were not met, the DoL owed itself an explanation as to why it happened. It had to establish whether it was simply because of underperformance, or environmental questions of operating issues. This in itself was subjected to a decision regarding the issue of performance management.

Mr Motau said that the Portfolio Committee had a presentation on the bad state of ICT in the DoL. In the information age it was critical to stay abreast of new technological developments in order to be effective. How far was the Public Private Partnership (PPP) with Siemens?

The DG replied that there was a concern about the development of an ICT strategy. The second phase of the exit-and-transfer approach was the development of an ICT strategy. He agreed that it should have been in place, but it was not, so it had to be done and the work on it had started. The current contract on ICT was still valid until November 2012. The exit-and-transfer plan was in place so that by the time the current contract would terminate, it would be clear how to proceed.

Mr Van der Westhuizen said he attended a briefing by the DoL the previous day 17 April 2012 on the bills that were currently before Parliament. What troubled him was that the presentation, to a large extent, dealt with the Bills as if they had been legislated already. He requested the DoL to let part of the public participation process happen at Parliament. He asked that the Department give the telephone number of the Committee Secretary as part of the presentation, in order to make it easy for people who wanted to make submissions to do so. He asked that the DoL work with Parliament to allow more people to interact with the process of formulating the Bill.

The meeting was adjourned.

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