Department of Labour on its 2013 Strategic Plan

NCOP Public Enterprises and Communication

07 May 2013
Chairperson: Ms M Themba (ANC, Mpumalanga)
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Meeting Summary

The onus was on employers and labour to resolve strikes, and for this they needed to perfect their ability to manage industrial relations issues, according to the Department of Labour (DoL). Responding to Members’ concerns at the current wave of strikes, and their impact on the economy, the Director General said it was apparent there were serious weaknesses at a management level. This contrasted with the situation in the 1980s, when there were huge industrial relations issues and racial polarization, but the key then had been that there were skilled people on both sides who could sit down and resolve matters. Today, it was possible for a national strike to be called over a difference of 1% in wage demands. For this reason, the Department would be hosting a labour relations indaba later this year.

A multi-pronged approach was needed to deal with employment equity compliance issues, and the best form of advocacy was for workers to be organized under unions. This did not mean the DoL should abdicate its role, but rather that the people at the forefront of compliance should be at the workplace, with their efforts supported by the Department.

Another social political issue was the fragmentation of labour. The Department did not have a role to play in minimizing the proliferation of unions. When people belonging to unions had differences, they tended to pursue their own ideologies. It also had to be taken into account that there was money to be made in breaking away. It was up to social policy makers to investigate ways of dealing with this situation. The season of collective bargaining was just getting under way, and the system was coming under attack.

The Department had played a major role in the supply of labour from the surrounding areas to both the Medupi and Kusile power stations, which would employ around 30 000 people at their peak. However, a number of agencies had also been used, and Eskom was now reviewing its relationship with them in the light of the issues arising from the agencies’ involvement. It was finding it difficult to work with third parties in a strike situation. Legislation was before Parliament which sought to regularize the labour broking industry and to curtail any malpractices.

The DoL delegation provided Members with a broad overview of the Department’s achievements and targets for the coming year. This covered aspects such as the finalizing of fraud cases, pre-employment screening, employment equity inspections and compliance, the registration of work-seekers, the proliferation of trade unions, income differentials, unemployment statistics, training challenges and the impact of cross-border labour migration.
 

Meeting report

The Chairperson welcomed the Department of Labour (DoL) delegation, led by the Director General, Mr Nkosinathi Nhleko, who introduced them to the Committee and gave a brief outline of the presentation.

Briefing by Department of Labour
Ms Lerato Molebatsi, Deputy Director General: Corporate Services, said the DoL had targeted finalising 87% of all the fraud cases received and detected, but of the seven received, only four had been finalised (57%). In order to strengthen the institutional capacity of the organization, pre-employment screening was conducted, and 81% of Public Service Commission (PSC) requests had been finalized, against a 70% target. The number of women, youths and people with disabilities employed, in line with the Employment Equity plan, was close to its targets, and the vacancy rate had been reduced to the desired 7% level. Progress had been made with the implementation of the new Information and Communication Technology (ICT) strategy.

Mr Thobile Lamati, Acting Deputy Director General: Inspection and Enforcement Services, said 240 employers had been reviewed to establish whether their employment equity plans reflected the country’s demographics in all occupational categories, and 80% had been found to be compliant. A similar proportion (80%) of 87 795 workplaces in “problematic sectors” had been targeted to be compliant with labour legislation within 90 days of being inspected and audited, but the compliance level by September 2012 was only 59%. The sectors attracting the greatest attention were hospitality, agriculture and forestry, and iron and steel. The Department had resolved 65% of complaints relating to issues involving matters such as non-payment of wages or overtime, or not providing protective clothing. In the Western Cape, 62 workplaces had been inspected as part of the programme to reduce workers’ exposure to silica dust by 2%, while research had recently been completed into the extent of noise-induced hearing loss in the iron and steel industry.

Mr Sam Morotoba, Deputy Director General: Public Employment Services, said the DoL’s objective had been to increase the number of work seekers registered in different categories to 337 625, and by the end of last year, it had reached 427 349. The provision of career counselling and employment enhancement was being improved through increased use of IT facilities, as well as by inviting employers to the Department’s offices. The challenge now was to improve the quality and accessibility of the DoL’s labour market services and to encourage more employers to register vacancies on the Employment Services of South Africa (ESSA) database.

Mr Les Kettledas, Deputy Director General: Labour Policy and Industrial Relations, said 30 income differentials had been assessed to determine salary disparities influenced by gender and race, and employment equity plans incorporating affirmative action plans to address these differentials had been approved by the DG for implementation. Existing sectoral determinations had been reviewed and amended for the hospitality, private security, taxi and civil engineering sectors. Ten civil society organizations involved in the world of work were being funded by the Department. A total of 29 new labour organizations had applied for registration and of these, only five had been approved. Grounds for refusal were mainly due to the organisations’ constitutions not complying with the law, or the fact that they were not genuine trade unions.

Mr Morotoba said a number of areas were posing challenges for the Department. These included the low skills level of registered workers and insufficient job opportunities, leading to limitations on the number of job-seekers placed; insufficient funding for training programmes for learners with disabilities; delays in the finalization of the Nedlac engagements on the Employment Equity Amendment Bill; the need to revitalize sectoral discussion forums in order to address issues in problematic sectors such as agriculture and forestry (particularly in the Western Cape and KwaZulu-Natal); delays in the implementation of the Basic Conditions of Employment Act; and the development of a structured training programme to build capacity in the inspectorate of the DoL.

Mr Bheki Maduna, Chief Financial Officer: DoL, reported that the Department was on target with its expenditure up to the end of January, 2013. The Medium Term Expenditure Framework allocations were R2.42bn for 2013/14, R2.63bn for 2014/15, and R2.79bn for 2015/16. A breakdown by the main division of the vote, and by economic classification, was presented (see presentation).

Mr Morotoba highlighted five key challenges confronting the DoL. These were:

•           Unemployment and under-employment. This would be tackled through the Department’s contribution to employment creation initiatives, the amendment of current legislation and the introduction of new legislation, such as the Employment Services Bill, and the establishment of strategic partnerships.

•           The changing nature of work. This would be dealt with through amendments to current legislation, such as the Basic Conditions of Employment Act.

•           Inequalities and unfair discrimination in the workplace. Interventions would include amendments to current legislation, such as the Employment Equity Act, through sectoral determinations, and through the Employment Services system, Inspection and Enforcement system, and Integrated Client Database system.

•           Domestic and cross-border migration. This was becoming a major problem, as recent events at De Doorns had illustrated, and this was why sectoral determinations were necessary to protect both local and foreign workers. Managing the migration of workers involved the Department of Home Affairs, but while dealing with people with high-level skills was an orderly process, it was a very complex matter when it came to people with lower levels of skill.

•           Inadequate instruments for constant performance monitoring and the evaluation of labour market policies and programmes, to determine their impact on the economy. This would be addressed through various interventions aimed at improving service quality and responsiveness to citizens’ needs and expectations.

The DG, Mr Nhleko, concluded the presentation by asking the Committee to support the Department’s budget vote, to continue to monitor the performance of the Department and its entities, support the proposed amendments to existing legislation and the new Bill tabled in Parliament, and to continue providing advice and guidance.

Discussion
Mr H Groenewald (DA, North West) asked how the Department was improving labour efficiency and productivity in South Africa. How closely was its strategy related to the National Development Plan (NDP)? There was a lot of money available, waiting to be used to create jobs, particularly for young people. A massive number of qualified people were sitting without jobs.

Referring to strikes, he criticized the role played by unions, and cited the example of the current bus drivers’ strike, which was hurting South Africa in the long term. Could the Department help through intervening in these situations?

It had just been reported that thousands of jobs had been lost in the last quarter. What was needed was sustainable jobs, as temporary jobs meant nothing. The country could not grow if people were not secure, without permanent employment.

What was Madupi’s role in the big strike at the Madupi power station? The problem of a lack of local welders had been raised three years ago, and was again a factor. There was an urgent need to train local welders, rather than to import foreigners.

Mr Z Mlenzana (COPE, Eastern Cape) said the DoL’s strategy seemed to be well aligned with the NDP. The applications for registration by new labour organizations had resulted in many being rejected – was this because they were not really “new”, but merely a change of faces?
The Department should give advice to these organizations to reduce the number of rejections.
He also queried whether the DoL had the capacity to monitor the implementation of its strategies and identify the challenges which arose.

Mr R Tau (ANC, Northern Cape) asked if the Department could explain why there was a mushrooming of labour unions, typified by the fragmentation of labour and the emergence of new organizations. Was there an element of conspiracy involved? Could the DoL put systems in place to make it more difficult for “splinter” unions to spring up? News reports were putting the unemployment figure at above 35% -- could the Department provide its own best assessment, with a breakdown in terms of the effect on young people?

Mr M Jacobs (ANC, Free State) asked what the Department’s contribution at Nedlac had been with regard to youth unemployment.

Mr O de Beer (COPE, Western Cape) referred to the problem of a lack of compliance reported at workplaces visited, particularly in the Eastern Cape’s hospitality sector. However, there was a perception at a national level that South Africa was well organized in terms of workers’ rights, even though the figures for non-compliance were over 50%. As the country had the tools, the institutions and the legislation, something had to be wrong if the workers were still being exploited.

Mr M Sibande (ANC, Mpumalanga) said that labour brokers contributed to the high rate of non-compliance, and urged the Department to consider ways to get rid of them. In the case of De Doorns, the perception had been given by some political parties or people that the strikes were being instigated by members of a certain union. What, then, was the strength of the monitoring of the situation in the Western Cape? He was concerned at the lack of funding for the training of learners with disabilities.

The Chairperson said she had heard there was a joint venture between the DoL and the Department of Education for the provision of school desks, and if this could be confirmed, it would be good news.

Mr Nhleko confirmed that there was indeed a joint venture in the Eastern Cape which had started just over a year ago, and had resulted in the supply of desks to 49 schools.

Some of the questions which had been raised dealt with social policy issues. A case in point was the level of inspections, where the Department had admitted it did not have sufficient capacity. It was an issue which needed to be confronted. A multi-pronged approach was needed to deal with compliance, and the best form of advocacy was for workers to be organized under unions. This did not mean the DoL should abdicate its role, but rather that the people at the forefront of compliance should be at the workplace, with their efforts supported by the Department.

Another social political issue was the fragmentation of labour. The Department did not have a role to play in minimizing the proliferation of unions. When people belonging to unions had differences, they tended to pursue their own ideologies. It also had to be taken into account that there was money to be made in breaking away. It was up to social policy makers to investigate ways of dealing with this situation. The season of collective bargaining was just getting under way, and the system was coming under attack.

Currently, the Department became involved in strikes only when asked to do so. The onus was on employers and labour to resolve strikes, and for this they needed to perfect their ability to manage industrial relations issues. In this regard, it was apparent there were serious weaknesses at a management level. This contrasted with the situation in the 1980s, when there were huge industrial relations issues and racial polarization, but the key was that there were skilled people on both sides who could sit down and resolve matters. Today, it was possible for a national strike to be called over a difference of 1% in wage demands. For this reason, the Department would be hosting a labour relations indaba later this year.

Referring to the unrest at the Medupi and Kusile power stations, he said it was right to be worried about the need to import welders from overseas, and this posed a challenge to address the lack of workplace skills.

Legislation was before Parliament which sought to regularize the labour broking industry and to curtail any malpractices. It was important for the Department to become more accessible to the workforce.

Mr Morotoba said the Department had played a major role in the supply of labour from the surrounding areas to both the Medupi and Kusile power stations, which would employ around 30 000 people at their peak. However, a number of agencies had also been used, and Eskom was now reviewing its relationship with them in the light of the issues arising from the agencies’ involvement. It was finding it difficult to work with third parties in a strike situation. One of the issues Eskom was trying to address was the finding that the level of training for some imported workers was below that of locally-trained workers.

The challenge of finding placements for job seekers came down to funding. The Department had only 84 career councillors, and research showed that in relation to size of population, South Africa ranked behind Zimbabwe. Additional funding from National Treasury to redress the situation had not been forthcoming.

Mr Kettledas said the planned labour relations indaba would include discussion on the current labour unrest, and would address ways to ensure that it did not repeat itself in the future.

The source of unemployment figures was Statistics SA, which conducted a quarterly survey of 30 000 households to reach its conclusions. The DoL was bound to use these figures, which indicated that unemployment had increased by about 0.9% in the past quarter, to 25.2%. The role of the Department was to interpret these figures, analyzing where growth was taking place, for instance, so that appropriate work-seekers could be directed there. He pointed out that transport costs often disabled work-seekers, with the result that there was now talk of introducing a transport or placement subsidy to help them get to where job opportunities existed..

In the past, South Africa had more than 500 unions, and this had now dropped to just over 200. A “splinter” gave rise to a new union, and was generally the result of poor leadership or a lack of servicing of members. Breakaways also provided new employment opportunities and income.

Ms Molebatsi said the Department was working on resolving transport problems highlighted during recent visits to the provinces, where members of the inspectorate claimed vehicles were often not fit for their intended purpose, or that there were insufficient vehicles to cope with vast distances. The biggest challenge, however, was to develop a capacity for self-management, and staff needed to be assessed to determine whether they possessed the skills to do what they were supposed to be doing.

The Chairperson thanked the DG and his team for the responses to Members’ questions, and commented that the lack of questions directed to the CFO indicated the Committee would be supporting the Department’s budget vote.

The meeting was adjourned.
 

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