Minister on Public Service Wage Negotiations 2012; Offices of the Premiers: Evaluation by Public Service Commission

Public Service and Administration

21 August 2012
Chairperson: Ms J Moloi-Moropa (ANC)
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Meeting Summary

The Minister of Public Service and Administration led a briefing on the wage negotiations for the public service. This negotiations had resulted in an agreement which would provide for planned salary and benefit increases over the following three years. The state and labour organisations had compromised on the issues and had eventually reached a settlement. By implementing the increases on 1 May instead of the normal date of 1 April, the immediate impact on state coffers would be reduced. Increases would be linked to the Consumer Price Index. Cabinet would still have to find a way of financing the increases. The overall percentage of the public service wage bill had reduced from 38 to 34% of total state expenses. Improvements to the conditions of service included bonuses for qualifications and long service, and adjustments to the leave policy. The hours of operation should be adjusted in order to make services more accessible to members of the public.

Members were concerned about the process of outsourcing. More should be done to utilise resources within the public service as this would lead to cost saving and the reduction in corruption. More certainty would be provided by the long-term agreement while it would also lessen the chance of strikes. Members stressed the need for proper training.

The Public Service Commission had undertaken a study into the general state of the Offices of the Premiers. Their work had been evaluated against the values enshrined in the Constitution. There had been a general improvement in the provinces which had been the subject of an earlier study. In most cases performance was adequate at least. However, achieving compliance was often only in a mechanical way. Greater focus was needed from management to understand the frameworks. It was stressed that this was not a direct assessment of the premiers themselves.

Members asked if there was any correlation between the standards of provincial government and service delivery protests. It was not possible to trace a direct link. The importance of proper oversight was stressed.

Meeting report

The Chairperson gave the Minister a special welcome as she was new to the portfolio. It was difficult for Ministers to make themselves available for Wednesday meetings due to their other commitments, and her presence was especially welcome.

Minister of Public Service and Administration briefing
Ms Lindiwe Sisulu, Minister of Public Service and Administration, was able to attend due to a reshuffle of Cabinet's programme. Government was in mourning for the Marikana tragedy, together with the rest of the country. Mr Mashwahle Diphofe, DPSA Director-General, introduced members of the delegation.

Minister Sisulu said she was proud of the work being done by the bargaining chamber. An historic agreement had been reached for which she was extremely grateful.

Gen Khumbula Ndaba, DPSA Deputy DG, gave an outline of the briefing. Resolution 2 of 2011 of the Public Service Commission Bargaining Council (PSCBC) committed parties to negotiations. After some delays requested by labour bodies, negotiations had started in February 2012. Demands included a 10% increase, a single-term agreement and finalisation of new and outstanding matters such as an increase in the housing allowance from R800 to R1 650.

Gen Ndaba said that on 16 March a multi-year package had been tabled. On 13 June 2012 the State, as the employer, had offered a 6.5% salary increase for 2012/13. Various other benefits were also announced. This was in response to all outstanding issues demanded by labour. Some of these were long-standing, going as far back as 2007. As negotiations proceeded, labour had rejected the offer and DPSA had declared a dispute. On 4 July, the state proposed that labour seek a revised mandate from its members. This was on a salary adjustment of the consumer price index (CPI) plus 1% and an increase in the housing allowance. It was difficult for labour to reach an agreement on the offer. Labour undertook to canvas this position with its members. On 10 July the state requested that the PSCBC reconvene.

Gen Ndaba said that labour did not accept the offer of 6.5%, and made it clear that strike action was possible. A dispute had been declared by the Congress of South African Trade Unions (COSATU). Parties had met on 16 and 17 July to manage the dispute. Adv Luvuyo Bono was named to conciliate the dispute. The declaration of the dispute had take a lot of negotiation. A number of meetings were held from 20 July. By 31 July the parties had reached agreement, and the state as employer signed the agreement on 28 July, followed later by labour. Not all the parties signed the agreement. The COSATU bloc had signed, but only one or two independent unions signed the agreement at a later stage.

Gen Ndaba said that a three year agreement had been concluded. The first year would see an increase of 7% as from 1 May. DPSA had needed to find money to finance the settlement. April 2013 and 2014 would see increases of CPI plus 1%. The qualifying period for new appointments would be extended from twelve to 24 months. Long service recognition had been in the form of a wrist watch in the past. It was clear that labour was unhappy. After ten years service, each employee would now qualify to have annual leave increased from 26 to 30 working days. After twenty years a cash award of R7 500 would be made, R15 000 for thirty and R20 000 for forty years. The night shift allowance would be increased from R2.12 per hour to R2.69 in the first year, and up to R4 per hour from 1 July 2014. This allowance had not been increased for some time. In the absence of a formula, CPI had been used as a guide. The housing allowance would increase from R800 to R900 with effect from 1 April 2012. The demand had been much higher, but would have had serious implications. An increase to the requested figure of R1 600 per month would have added R1.2 billion to the salary bill.

Gen Ndaba said that attention had been given to the recognition of improved qualification. For achieving one qualification related to scope of the work of the person involved, a bonus equal to 10% of the person's annual salary would be awarded. This would not apply to persons who had received a state bursary. In terms of leave, all members would receive five working days leave for family responsibility in terms of births and illnesses, five days for death and five days for pre-natal medical examinations. Fifteen working days would be allowed for shop stewards' leave.

Gen Ndaba said that PSCBC Resolution 3 of 2009 would be amended. All persons appointed as Assistant or Deputy Directors from 1 July 2010 would be on salary levels 9 and 11 respectively. Appointments on levels 10 and 12 would be re-introduced. The parties to the PSCBC were tasked to look at a number of issues, including outsourcing, occupation health and safety, decent work, danger allowances, housing schemes and remuneration policy. On the latter, DPSA had embarked on an expenditure review. All policies in DPSA were being evaluated as to their correct implementation and impact on the salary structure. A remuneration policy should be developed. A technical committee was looking at the housing scheme. The minimum service level agreement was also a challenge. In the case of a strike, essential service workers such as teachers and nurses were taking to the streets. This compromised service delivery. This would be finalised before the end of 2012.

Gen Ndaba said that DPSA had been heavily criticised for not implementing agreements. Workshops would be held on the agreement and to explain the implications to staff. Increases had been implemented on 15 August, and back-pay had been approved. Departments would require adjustment to their budgets. The budgeted figure had only been 5%. To take the increase to 7% would require Departments to find a source for the extra expense.

Gen Ndaba said that the financial implications were that the baseline would grow by R17.1 billion in 2012/13, R18.1 billion in 2013/14 and R17.5 billion in 2014/15. This did not include increases in certain allowances such as that for night shift and housing. The strategy was to contain wage shift. The wage bill had been reduced from 38% of government expenditure to 34%.

Min Sisulu explained the implications of the agreement. When she had first met the unions she had addressed them through a press conference. She had expressed her concerns over the unsustainable increases to the public wage bill. She had been “demonised” in the press and assured unions that this was not so. Lengthy but productive meetings had followed both with independent unions and with COSATU. There would now be three years of certainty in terms of budgeting. Workers would have solid expectations and would not need to wait for protracted negotiations to be completed. The citizens of the country would also have certainty while the prospects of strikes would be reduced. DPSA would have the space to create a productive public service. There was now an accord with labour. A service charter would be developed. Some common targets had been outlined. The people would come first. There was agreement on the need to professionalise the public service. There was an agreement that pay progression would now only be possible after two years. There would be compulsory training. The requirements for joining the public service would be tabled at Cabinet. Compulsory training sessions would start in September. This would apply to everyone up to the level of DG.

Min Sisulu said that Members would be allowed to join the training programmes. A quid pro quo arrangement had been agreed to. It could no longer be a case of labour simply demanding and the state giving. Some concessions had been made by labour. A strategy had been developed which would enable DPSA to work within the budget but maximise the outcomes. The 7% increase would not need an increase in the current budget. Shifting the initiation date to 1 May rather than 1 April made this possible. There was a complete buy-in from all the unions. She thought that the South African Democratic Teachers Union (SADTU) was the first to sign. Not all were completely happy over the outcomes, but negotiations were about finding the middle ground. The tragedy at Marikana illustrated the dangers of a 'winner-takes-all' approach. An implementation clause was part of the agreement. The thorny issue of outsourcing would be addressed. The state could be losing billions of Rand as a result of outsourcing. Government would deal with this matter.

Min Sisulu continued that DPSA would like to develop a housing scheme which would allow employees to buy their own houses. The wage bill needed to be cut. Unions had agreed to look at waste and seepage of state funds. Preliminary findings had been made on the vacancy rate across the country. The unions had agreed to work on a code of conduct. Both parties had gone out of their way to reach a satisfying agreement.

Discussion
Mr A Williams (ANC) thanked DPSA and the Minister. The agreement was good for the country and needed to be applauded. On the subject of outsourcing, it was important to have a detailed investigation. It was not fully necessary and was often a breeding ground for corruption. Another focus area was anti-corruption policies. All parties should work together, not just the employer. Union involvement was needed. The current good relationship with unions should be used.

Ms M Mohale (ANC) also congratulated DPSA. She asked for clarity on the recognition of improved qualifications. She asked if this would apply to all levels of employment. She also asked what PMDS (Performance Management and Development System) meant. She asked what was meant by rearrangement of working hours.

Gen Ndaba replied that this would be a once-off matter. No further qualifications after the first one would be recognised. This would also only apply to staff members at levels 1 to 12. There would not be a situation where one Department would apply legislation differently.

Mr L Ramatlakane (COPE) thanked the Minister. He agreed with Members that multi-year budgeting and agreements were the best ways to plan ahead. Negotiations should be aligned to the financial year (FY). He said that the budget made provision for a 5% increase but this would now be 7%. He asked how the shortfall would be made up. He asked how the reduction of the wage bill from 38 to 34% of government expenses would be achieved. He asked how much the long service benefits would be funded. He asked if qualification bonuses were part of the reduction in the salary bill. It was good to talk about compulsory training, but it would be difficult to implement. The current training institution did not have the capacity to train members of the public service. Finally, the accord on service delivery was an important consideration. Monitoring would be important. He asked what corrective measures would be in place for non-adherence. He asked if there would be further negotiations to decide on this.

Gen Ndaba replied that the original offer of 5.5% was already under budget with the CPI at 5.9%. A mandate had been given for a 6.7% increase. Averaging the two amounts brought it to 6.5%. There were no hidden costs involved.

Mr D du Toit (DA) asked if the 34% of government expenses was the total cost to company payments. It would be good if it was. He had worked out the night shift increase according to the CPI, but the figures did not tally. It was not a huge figure. This was probably why the increase was higher, amounting to about 20%. He understood that shop stewards had to take leave to attend negotiations. He asked if there was a scientific basis to the amount granted of fifteen days. Parties to the PSCBC had been tasked to investigate proposals. This was stated broadly, and he asked if there were set time frames. Training was key. He asked what it would comprise. He asked how the relevance of qualifications to work could be defined. He trusted that the professionals on the Public Service Commission (PSC) would do the right thing. He wished the Minister well in her new portfolio.

Gen Ndaba replied that DPSA was saying that the night shift allowance had not been adjusted for some time. There was no longer a need to negotiate the issue as it would be linked to CPI in the future.

Mr C Msimang (IFP) added his voice to the congratulations to the Minister, DPSA and the bargaining team. The country dreaded the impact of strikes during the wage negotiation process. It was a relief to know that there would be no strike in 2012. He asked if the possibility of strikes in the future would be reduced. Strike action was an important weapon for labour bodies. He was curious about the strategies being put in place. He was grateful that the wage bill had been reduced, but asked what the ideal figure would be. He asked where extra money would be sourced.

Gen Ndaba replied that said that the ideal figure for wages would be about 25%. However, the public service was labour intensive. It was not easy to go below 25%. Efforts were being made to reduce the bill further. A personnel expenditure review had been launched, dealing with bonuses and salaries. There should be recommendations by September 2012. He would like a strike-free public service. The last agreement had also been reached without a strike. That agreement had only not been signed off by one body. The issue of strikes was protected by law. When unions exercised their right to strike, it had often led to violence.

The Chairperson noted the presence of the media. She thanked Members for the support given to DPSA and the Minister. The agreement should be celebrated. The Deputy DG had indicated that there was an implementation plan. This was important. She asked how it would be facilitated. What did the process of joining a dispute entail and what did the fifteen days leave for shop stewards mean? The agreement on a three year implementation was a significant achievement. This demonstrated what could be achieved. She echoed the concerns on outsourcing.

Gen Ndaba said that most issues would be implemented during the lifetime of the agreement, most of them within the following fifteen months. There were plans in place, and he did not see a problem with implementation. The joint process was a legal one where parties had a similar dispute. In this case the common ground was the rejection of the 5.5% proposal. It had been logical to join the disputes even though they had been raised at different times.

Mr Diphofe replied that the fifteen days was for shop stewards in accordance with their duties. Official working hours often did not afford members of the public to access government services at a convenient time. Having flexible hours would obviate the need to pay night shift allowances.

Min Sisulu thanked Members for their contributions. She shared Mr Williams's concern about corruption. Mindful of the other business of the meeting, she would answer questions regarding the service charter more fully on another occasion. The current situation of goodwill should be used to address the issue of corruption. None of the initiatives would succeed without the support of Parliament. Treasury had accepted a 5% budget on the basis of an economic growth of 2%. The CPI had been under-estimated, leading to serious under-budget issues in the provinces. Cabinet would have to address the issue and find the money. A briefing would be given on training. PALAMA (Public Administration Leadership and Management Academy) would become a government institute in September 2013. Partnerships would be forged with institutions able to provide training to government employees. The reduction from 38 to 34% was achieved through the different staff remuneration levels between the various state departments. For example, the staff budget of the South African Police Service in the Western Cape was running at about 80%.

The Chairperson thanked the Minister for a job well done. There was an improvement in the ability of government to negotiate. The Minister was bringing a fresh approach to this Department. The negative perception of government was being slowly transformed. A disaster had been averted. There should be engagement with labour while spirits were still high. Labour organisations were crucial to the success of the country. The Committee would appreciate interaction with the unions.

Public Service Commission (PSC) on the Offices of the Premiers Evaluation 2010/11
Mr Ben Mthemba, PSC Chairperson, said the key objective of the evaluation was to determine the extent to which progress had been made towards realising the vision of the public service as seen in the Constitution. To that end, the PSC had assessed the state of the offices of the premiers during the 2010/11 FY, and to compare that to previous assessments. Factors leading to progress or even regression would have been identified and recommendations put forward.

Mr Richard Levin, PSC Director General, noted that this was the second assessment although not all premier offices had been assessed in the first study. The aim was to provide an overview of the performance of the nine provincial offices. He reminded Members of the constitutional values involved. Key performance indicators had been developed to measure achievement of the values which were: professional ethics, efficiency, economy and effectiveness, development orientation, impartiality and fairness, public participation in policy making, accountability, transparency, good human resource (HR) practices and representivity. Given the nature of the offices, development orientation had not been assessed. They were not involved with programmes at a project level. In terms of public participation, some were open to assessment and others not.

Mr Levin said that all nine offices had been evaluated in the 2010/11, and comparisons made to the state of the four which had been assessed in the earlier study. The study had looked for evidence of adherence to the values, and a score was allocated. Five bands had been identified, ranging from no performance (0 to 20%) to excellent performance (81 to 100%). The presentation would focus on the top and lowest scoring values/principles.

Mr Levin said it was important to evaluate the offices correctly. The media had seen the report as a comparative report on the performance of the premiers, but the assessment was on the back offices which supported the premiers. As an executive authority, the premier had to design and implement policy. The office became a nerve centre of government. Performance of the provincial departments should be evaluated. The offices needed to support the premier and provide background. They played an important role.

Mr Levin said there was a trend in the four previously assessed offices. There was a great improvement in the Western Cape and also in Gauteng. There was a decline in Limpopo, which had not provided the necessary documentation for a fair assessment. There were auditing problems and there was a deficiency on employment equity targets, particularly regarding women and those with disabilities. However, there had been a general improvement from an average of 59% to 68%. This might show that the PSC was playing a role in improving performance and public administration.

Mr Levin added that improvement was linked to the implementation of previous recommendations. In the Western Cape and North West, most first cycle recommendations had been implemented. Most of these had been about accountability and good HR practices. In looking at all the provinces, the average was good. There was general good performance in some areas. Representivity was lagging in most provinces. Cabinet recommendations were not being fully followed. There was room for improvement in other aspects.

P
erformance
Mr Levin said that in terms of performance, five of the aspects were within an acceptable band. Some offices had done work in public participation although they all felt this was not really their role. North West had performed well by having a policy on public participation. Inputs from the community were well done. The highest scoring values across the provinces was accountability (76%) and transparency (71%) while the lowest scoring were fairness (51%) and representivity (49%).

Professional ethics
The indicator was the number of cases of misconduct where a disciplinary hearing had been conducted compliant with the Disciplinary Code and Procedures. All managers should have a knowledge of procedures. Disciplinary action was to be taken timeously. The average performance was good (69%). Time taken to resolve misconduct cases was adequate (53%) There was a variation between provinces. Mpumalanga and Limpopo had not performed well due to a lack of evidence of management reports.

Accountability
Mr Levin said that the indicators were the presence of adequate internal financial control and performance management systems; and fraud prevention plans (FPPs) based on risk assessments were to be in place. The average performance was good (76%). Gauteng (100%) and Western Cape (85%) had delivered excellent performance. The Eastern Cape had also done well. All offices had FPPs. Two offices, namely Free State and Limpopo, had received qualified audit reports. The capacity to investigate fraud was problematic. There was often only superficial compliance, with a score for the implementation of FPPs as low as 37%. One of the key challenges was there was a mechanical compliance but no real change in management practice, which was what was really needed.

T
ransparency
Mr Levin said that the indicators were the provision of information to the public. Departmental annual reports were to be compiled and the departments had to comply with the provisions of the Promotion of Access to Information Act (PAIA). Simplicity and accessibility was needed to make the reports understandable to the public. The content should cover at least 90% of the areas requested by Treasury. There should be at least one officer delegated to ensure compliance with the Promotion of Information Act. The average performance was good (71%). Gauteng, Free State and KwaZulu-Natal (KZN) scored 100%. Annual reports were not comprehensive enough and some offices did not have a PAIA officer. The Eastern Cape was compliant in some cases but not others.

I
mpartiality and fairness
Mr Levin said that in terms of impartiality and fairness, the indicator was that services should be provided without bias. The Promotion of Administrative Justice Act (PAJA) should be followed. All decisions should be justified and fair. This needed departmental compliance, but also community access. Offices of premiers had an important role to act as facilitators when issues were raised. Mpumalanga and the Western Cape were fully compliant. Other provinces had not submitted the required documents. The overall average was adequate (51%). Four of the provinces had not submitted information, while the other five provinces had delivered excellent performance (91%).

R
epresentivity
Mr Levin said the Departments had to be representative of the South African people and had to implement diversity management measures. Past imbalances needed to be addressed. Employment equity plans were needed and targets had to be met. Diversity management was needed. The average was adequate (49%). There was a general problem with feedback. No office had reached the 50% target for women at senior management level, and only two had reached the target for persons with disability. Most had met the target for black people at senior management. Scores were undermined by the lack of an employment equity plan. The Western Cape did have an Employment Equity plan and had met the targets for disability, but not that for black people and women at management level. Achievement of representivity targets had been met poorly and was a concern.

The overall picture emerging was that offices often complied with basic procedures, but the problem was converting this base to a condition of excellence. There were challenges to obtaining compliance. Achieving compliance was often only in a mechanical way. Greater focus was needed from management to understand the frameworks. There were encouraging signs in the improvements since the previous assessment. Systems needed to be implemented and the acceptance of a performance culture.

Discussion
Mr Williams thanked the PSC for the report. There was an assumption that a high score for the office should drizzle down to a high performance in the rest of the province. While the Western Cape had achieved a high score there were service delivery protests on the street. It seemed that the assessment was more of a paper exercise than actual performance.

Mr du Toit took the same angle. The percentage needed to be explained in more detail. There should be a measurable way of assessing this. There was a scientific basis to the assessment. He had extensive experience in service in both ruling and opposition parties at a municipal level. Councils and audit committees should have a tight rein over officials, yet things were still falling through the cracks. At a provincial level, he asked how tight oversight control was. There seemed to be more distance at this level than in local government. He asked how issues of non-compliance could be addressed, and how soon improvement could be expected. It was a slow ladder to climb. If improvement was at a slow incremental rate, it would take years to reach the desired levels. He asked if perceived high profile failures in any province resided in the shortfall or in other factors. He asked if scores of 50% or less coincided with high-profile failures. Monitoring might not go down to ground level.

Mr E Nyekemba (ANC) said that some provinces had not submitted documents or were non-compliant. He asked what the PSC would do to remedy this situation.

Mr Ramatlakane asked about quality compliance as opposed to quality service delivery. He thanked Mr Levin for the report. Against the background of the Constitution, on issues of fairness and representation, he asked if this related to service delivery issues. He asked how this related to the lack of representivity. In terms of the oversight of the premier's office, he asked if oversight was ensuring compliance. Some response levels were as low as 20%. This was a serious level as provinces were not complying with the Constitution. While respecting the different spheres of government, he asked how direct discussion could assist. As a Committee, Members should be thinking about their role particularly regarding oversight. This was a constitutional obligation.

The Chairperson emphasised the complementary role of the Committee.

Mr Mthemba addressed one area of common concern. This was the issue of compliance and the link to service delivery. The report presented was an assessment of the offices of the premier, and the extent to which they were moving towards the vision of section 195 of the Constitution. The Monitoring and Evaluation element of the PSC assessed the movement towards achieving these objectives. He would like to see a public service underpinned by efficiency. The system was only designed in 2002, six years after the DPSA was set up in 1996. When the system was devised in 2002, it looked to assess on how constitutional goals would be achieved. The indicators were therefore compliance driven. This did not in itself translate into efficient service delivery. This had been realised in 2010, prompting a rethink on the system. Both compliance and outcomes such as service delivery and quality of life should be evaluated. It was no longer just about assessing compliance. In the following evaluation this aspect would enjoy closer attention.

Mr Mthemba said that there were various forms of assessment. Democratic values were the ideal. Premiers and Ministers had entered into performance agreements with the President in 2011. This should trickle down to provincial level. Strategic plans were needed. There was a need to separate organisational from individual performance.

Mr Levin said it was important to understand the strengths and limitations of the system. There was a fundamental challenge regarding public administration. The country needed a picture of the basic state of administration. Without the basics in place, service delivery would suffer. There probably were correlations, but service delivery protests might equally have no correlation to performance of the premier's office. All official data should be used, and a comprehensive database was being constructed from various sources. PSC would still be hamstrung in that it would still be information on the basics. Programme evaluations were also done, which gave reliable answers on specific programmes. These would also not give the whole picture. A lot of things were checked in arriving at a score. There were about eighteen aspects to evaluating diversity management, such as the language of advertisements and if it was relevant to that province. Tentative correlations could now be made between high profile failures and successes. The key priority areas such as health and education should be under scrutiny. There were limits to the extent to which PSC could assess the offices. The institution had limited capacity. It was a challenge to meet all commitments. Regional offices were tiny, and PSC would be looking to increase its budget in order to combat some of the challenges.

Mr Levin said that important questions on oversight had been raised. Effective monitoring might give an insight into service delivery protests. Fairness had to be considered. He felt that it was impossible to address issues of previous biased service delivery by an unbiased approach. The PSC was trying to develop principles and practices together with Parliament. The PSC did engage during oversight visits of the Committee. Systems and capabilities were being developed. Parliament could support this process by supplying information.

The Chairperson thanked the PSC for their report. Members had raised issues and there was still work to be done. There was movement.

The meeting was adjourned.

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