The Department of Labour delegation, led by the Director-General, briefed the Committee on the achievement of key performance targets. Of the ten key performance indicators under Program 1 (Corporate Services), one had been exceeded, four achieved and four not achieved, with the achievement of the tenth unclear. Inspection and enforcement services fell under Program 2. In most cases the targets for inspections had been met. Compliance rates were at a national average of 59% across the economic spectrum. The Western Cape was singled out for criticism for its poor compliance rates in all sectors.
Legislation on Public Employment Services was currently before Parliament. Targets on the registration of work-seekers were close to being met, and targets for providing work-seekers with counselling and employability enhancement had been exceeded. The target for placing work-seekers had not been met, but that for referring work-seekers had been exceeded by a huge margin. More companies were registering their vacancies.
Most of the targets in terms of labour policy and industrial relations had been achieved. There had been some challenges regarding the extension of bargaining council agreements, and these could end up in the Constitutional Court. The majority of applications from new labour organisations had been declined.
Challenges leading to the non-achievement of targets included the low skill levels of work-seekers, a lack of legislative enforcement mechanisms, insufficient funding for learners with disabilities and delays in unemployment insurance fund transfers. There were capacity and resource constraints in some provinces, leading to inefficient inspections. There had been delays in the Parliamentary process. Inputs from branches were often incorrect, leading to delays in processing.
The budget for the 2012/13 financial year was R2.1 billion, of which 82.8% had been spent by the end of January 2013. The largest allocation was to Program 1. There would be increases over the medium term. Members were briefed on the key aspects of the strategic and annual performance plans for the coming year. The Department called on the Committee to provide its support.
Members were concerned about the number of Department of Labour officials in acting positions. The figures provided in the presentation did not match the experience of Members in their interaction with workers. The efficiency of the Department was questioned, especially the inspectorate. It was explained that inspectors bore a heavy workload. There would be no movement on employment equity if there were no consequences for non-compliant companies. Foreign workers were especially vulnerable, while some concern was expressed over problems with a number of Chinese employers. Members felt that targets had been set too low, and that the Department was not able to utilise its electronic systems effectively due to poor training.
The Chairperson welcomed the delegation and noted some apologies.
Briefing by Department of Labour Strategic and Annual Performance Plans 2013
Mr Nkosinathi Nhleko, Director-General (DG), Department of Labour (DoL) gave an outline of the presentation.
Ms Lerato Molebatsi, Deputy DG: Corporate Services, DoL, said that Programme 1 was Corporate Services. Key Performance Indicator (KPI) 1 had a target of providing quarterly strategic risk assessments. Reports had been approved by the National Risk Management Committee and the Audit Committee. The risk appetite framework had been completed. The first report had been submitted. KPI 2 had an annual target of finalising 87% of fraud causes reported. At present 57% of cases had been finalised, namely four out of seven cases reported. She gave a breakdown of the cases for each province. As with other KPI achievements, the figures were provided for each province. KPI 3 was pre-employment screening. The target was 70% completion. A total of 80% of applications had been finalised. There had been 131 requests received.
Ms Molebatsi said that KPI 4 was the percentage of senior management service (SMS) members vetted in DoL. The target was 80%. Eleven Z204 forms had been forwarded to the State Security Agency. Five clearances had been granted and there were 23 requests outstanding. KPI 5 dealt with the percentage of women, youth and persons with disability being employed. The targets were 40% women in SMS, 43% youth and 3% with disability, by 31 March 2013. At present the figures were 39% of women, although this should be achieved by the target date of January 2014, 35% of youth and 2.7% of disabled.
Ms Molebatsi said that KPI 6 was filling vacancies within a certain period of time. The annual target was to reduce the vacancy rate by 7% by the end of March 2013. This had been achieved by the end of the second quarter. KPI 7 was the percentage of staff trained in accordance with an approved workplace skills plan. The target was 82% of which 35% was completed. This might be misleading, as the 35% represented those who had completed training while others would have undergone partial training. KPI 8 was the number of cases of misconduct finalised. The target was finalising 75% of cases reported by 31 March 2013, and the achievement to date was 71%. KPI 9 related to the implementation of a new integrated communications technology (ICT).strategy. The target was to implement 50% of the components. The ICT strategy had been approved, and the transition was 50% complete. KPI 10 was the development of an exit and services transfer plan. The target was the completion of the handover by a public-private partnership (PPP) service provider. The relevant milestones and been achieved and the project was under way. The expected completion date was November 2012.
Mr Virgil Seafield, Chief Director (CD), DoL, briefed the Committee on Program 2, namely Inspection and Enforcement Services. The only KPI under Strategic Objective 2, the promotion of equity in the labour market, in this program was the percentage of employers complying with their employment equity (EE) plans. The target was to have 80% of the 240 employers reviewed complying. Progress to date was that 181 employers had been reviewed, 60 in the public and 121 in the private sector.
Mr Seafield said that Strategic Objective 3 was protecting vulnerable workers. KPI 1 was inspecting workplaces. The target was to have 80% of a database of 87 795 workplaces visited, audited and compliant. By the end of September 2012, 97% of a targeted 33 917 workplaces had been inspected, of which 59% complied with regulations. There had to be a focus on the companies which were non-compliant. There had been a high compliance level in the Free State, at 85%, but in the Western Cape the level was only 29%. There was a high trend of non-compliance in the Western Cape across various economic sectors. Some provinces had exceeded the targets. Complainants could not be turned away.
Mr Seafield tabled the figures for the different economic sectors. In the wholesale and retail sector, 117% of the targeted inspections had taken place and the compliance level nationally was 60%. In the hospitality sector, the number of inspections was 113% of the target and the compliance level was 58%. In the agriculture and forestry sector, 99% of inspections had been conducted, with a compliance rate of 68%. In the iron and steel sector, only 19% of inspections had taken place and the compliance rate was 43%. In the private security sector, inspections were 194% of the target and the compliance level was 54%. In the domestic sector, the number of inspections was 166% of the target. The compliance level was 68%. In the chemical sector, 78% of targeted inspections had been conducted. The compliance rate was 34%. Finally, in the construction sector, 50% of inspections had happened and the compliance rate was 46%.
Mr Seafield said that KPI 2 was resolving labour complaints within a specified time. The target was to settle 70% of complaints within fourteen days. Of 55 484 complaints received, 65% were resolved within the target period. There were more dangerous conditions in the iron and steel sector. The majority of the claims against the Workmen's Compensation Fund had come from these sectors. Before a case went to an inspector, it had to be resolved as quickly as possible.
Mr Seafield said that Objective 5 was strengthening social protection. KPI 1 was exposure to silica dust. In the current year, the Western Cape and KZN had been targeted and the target would move to other provinces in future years. The target was 200 inspections. 63 had been inspected in the Western Cape. KPI 2 dealt with noise induced hearing loss. The target was to conduct a base line study in the iron and steel industry. Research was in progress on hearing loss. KPI 3 was having the Occupational Health and Safety (OHS) Act repealed and its regulations amended. The target was to complete the consultation process and to submit a new Bill to Cabinet and the National Economic Development and Labour Council (Nedlac). The current Act had been referred to the state law advisers.
Mr Sam Morotoba, Deputy DG: Public Employment Services (PES), DoL, presented on Program 3, which was PES. Strategic Objective 1 was contributing to decent employment creation. KPI 1 under this objective was Employment Services (ES) legislation, regulations and guidelines being in place. This was also the target. The ES Bill was currently before Parliament. KPI 2 was increasing the number of work seekers being registered. The target was 450 000 work seekers being registered. Current progress was that 95% of the target had been achieved.
Mr Morotoba said that KPI 3 was the percentage of work-seekers registered on the system being provided with counselling and employment enhancement. The target was to have 60% of registered work-seekers profiled within 60 days of registration. At present, progress in this regard was 94%.
Mr Morotoba said that KPI 4 was the number of work seekers placed or referred to other job opportunities. A number of employers had used the system. The target was to place 18 000 and refer 72 000 work seekers. The achievement on placement was 79% and that on referrals 517%.
Mr Morotoba added that KPI 5 was an increase in the number of employers registering vacancies on Employment Services of South Africa (ESSA). The target was an increase in the number of companies from 2 000 to 3 000 by the end of March 2013. Current progress was that 1 924 companies had registered vacancies.
Mr Themba Mkalipi, Chief Director: DOL, briefed Members on Program 4: Labour Policy and Industrial Relations. He spoke on areas under Strategic Objective 2, the promotion of equity in the labour market. KPI 1 was the amendment of the Basic Conditions of Employment Act. The target was to have engaged with Nedlac on the Employment Equity (EE) Act by November 2012. These engagements had been finalised in July 2012, and the Bill had been approved by Cabinet in September 2012. KPI 2 was the review of the Code of Good Practice and Technical Assistance guidelines on HIV and AIDS. The target was to have these guidelines amended by June 2012. The HIV Code had been gazetted in June 2012. HIV TAG amendments had been signed off in the same month. Fourteen EE awareness workshops had been conducted in all provinces. KPI 3 was the assessment of income differentials to detect disparities based on race and gender. The target was to assess 30 income differentials by March 2013. This target had been met. The DG had issued recommendations and EE plans incorporating affirmative action measures.
Mr Mkalipi said that under Strategic Objective 3: Protecting Vulnerable Workers, KPI 1 was reviewing existing sectoral determinations (SDs). The target was to publish an amended SD for one sector by June 2012. In fact, amended SDs had been published for the hospitality and the taxi sectors by 22 June 2012. Amended SDs for the private security and civil engineering sectors had been published later in 2012.
Mr Mkalipi added that KPI 2 was investigating new areas for setting SDs. The target was to investigate the possibility of SDs in two new sectors. A report had been submitted on private security medical aid. KPI 3 was strengthening civil society. The target was funding ten civil society organisations. Progress was that the Federation of Unions of South Africa (FEDUSA), the National Council of Trade Unions (NACTU), the South African Labour Bulletin and Ditsela had been visited.
Mr Mkalipi said that under Objective 6, the promotion of sound labour relations, KPI 1 was extending collective agreements within 60 days. The extension of nine bargaining council agreements had been promulgated. The average turnaround time was 62 days. There were some challenges which would end up in the Constitutional Court (Concourt). If the Minister lost the right to extend collective bargaining, this process could not continue. He hoped the Concourt would agree on this. KPI 2 was registering new labour organisations. 29 applications had been received, of which only five had been approved and the rest declined.
Mr Morotoba said that in terms of contributing to employment creation, a key challenge was the low skills level. There were no consequences for not registering. Many false promises had been made, with service providers taking money for applications and then disappearing. There had been various discussions with the Department of Higher Education and Training (DHET) on learners with disability. The number of jobs saved in companies was low in December. In protecting vulnerable workers, the key areas were agriculture and forestry. Problems in KwaZulu-Natal (KZN) had led to targets being missed. On strengthening social protection, a number of workplaces had been audited. Here there were also problems in KZN. Training programmes had been instituted to improve the capacity of the inspectorate. Promoting sound labour relations had been hampered by delays in the Parliamentary process. On strengthening the institutional capacity of the DoL, a revised Strategic Plan and Annual Performance Plan (APP) had been submitted to Parliament. Inputs from branches were often late and full of errors, requiring correction. The deadline of 30 March 2013 had been met. There was now a process for 2014/15 to prevent further problems in this regard.
Mr Bheki Maduna, Chief Financial Officer (CFO), DoL, said that DoL had defrayed expenditure of R1.7 billion against a total budget of R2.1 billion. This was 82.8% against a projected total at the end of January of 83%. A high percentage of the budget went to Program 1. The figure was 35% The budget for the current financial year (FY) was R2.4 billion, increasing to R2.6 billion in 2014/15 and R2.75 billion in 2015/16. There had been a reduction of R18.5 million for Program 1 over the medium term expenditure framework (MTEF).
Mr Morotoba reviewed the APP. The reporting cycle for the previous three months had been finalised and prepared to be audited. It was already the second month of the new FY. The challenges had been assessed. The first of five key challenges was unemployment and under-employment. Interventions to address unemployment included support to several institutions such as Nedlac and the provision of interim relief measures. The second challenge was the changing nature of work. Productivity needed to be improved, and changes to the Basic Conditions of Employment Act (BCEA) would address this.
Mr Morotoba said that the third challenge was inequality at the workplace and unfair discrimination. Interventions included amendments to the EE Act, SDs and the systems used by the DoL . The fourth challenge was domestic and cross-border labour migration. All interventions, including interaction with the Department of Home Affairs, were aimed at not compromising the rights of citizens.
Mr Morotoba said that the fifth challenge was the lack of suitable instruments for performance monitoring and policy evaluation. The capacity of DoL staff needed to be boosted. Delivery points at labour centres should be accessible. A seamless delivery model would be developed. A new Strategic Plan had been drafted to meet these challenges.
Mr Morotoba said that the key strategic objective under Program 1 was the approval of an organisational strategic plan and APP. The second was organisational performance monitoring and evaluation. An annual report and four organisational performance information reports would be produced. The KPI would be to have the reports approved within 60 days of the end of the quarter.
Mr Morotoba continued that objective 3 was a service delivery improvement plan. The KPI was to submit an approved plan to the Department of Public Service and Administration (DPSA) within the approved time-frame. Objective 4 was compiling an annual audit plan and executing ad hoc investigations. The baseline was 88% of final reports being issued within the prescribed time-frame The KPI would be the percentage of final reports issued within the time-frames, as indicated in the audit plan.
Mr Morotoba moved on to Program 2. The first objective was ensuring promotion of EE in the labour market. The baseline was 65 Johannesburg Stock Exchange workplaces inspected, 218 designated workplaces inspected and 9 940 procedural inspections conducted. KPIs would be the number of private and public companies reviewed and the percentage of non-compliant workplaces. Objective 2 was the reduction in worker vulnerability through improved compliance and enforcement. The baseline was 172 300 workplaces being inspected, 12 381 non-compliant workplaces dealt with and four seminars being held. The KPIs would be the number of workplaces inspected, the percentage of non-compliant workplaces dealt with and the number of advocacy end educational seminars conducted.
There were four strategic objectives under Program 3. The first was employment services (ES) legislation. This was a new indicator, and the KPI would be the percentage of work completed on the ES Bill and its regulations and guidelines. The second was PES initiatives and interventions communicated through the media. The baseline was four national exhibitions and 99 provincial advocacy campaigns. The KPI would be the number of PES advocacy campaigns conducted. The third objective was the number of work-seekers registered on the system. Working from a baseline of 553 883, the KPI would be the number of work-seekers registered. The final objective under this program was the number of registered work-seekers provided with employment counselling, placement or referral to registered opportunities and other services. The baseline figures were 222 956 work-seekers provided with career counselling and 95 606 placed and referred. The KPIs would be the percentage of workers provided with counselling, the number of work-seekers placed in registered employment opportunities, the number of work-seekers referred to such opportunities, and the number of work-seekers referred to other services.
Mr Morotoba briefed Members on the four strategic objectives under Program 4. The first was EE in the labour market. The baseline was the EE Act of 1998, with 58 income differentials assessed. The KPIs were the EE Act Regulations being amended in line with amendments to the Act, the number of income differentials to determine race and gender disparities, and a new indicator in the number of annual EE reports published. The second was ensuring that the Basic Conditions of Employment Act (BCEA) provisions were ensured. The baseline was consultation on the Bill and its submission to Parliament. The KPI was the finalisation of BCEA regulations by the end of September. Another baseline was one child labour programme being held every five years. The KPI was implementing one such programme. The third objective was SDs being published for residual and emerging vulnerable workers. The baseline was six SDs being published, and the investigation of the possibility of setting a welfare SD. The KPIs were the number of existing SDs reviewed, and the number of new areas for setting SDs being investigated. The final objective was civil society organisations protecting vulnerable workers, being funded. The baseline was ten. The KPI was the number being funded during the year.
Mr Nhleko called on the Committee to support the budget vote, which would be debated on 22 May 2013. The Committee needed to maintain its oversight role. Regarding the proposed amendments, the Committee’s support was needed. The DoL would always be guided by the Committee.
Ms L Makhubela-Mashele (ANC) asked which members of the delegation were acting in which capacity.
Mr Nhleko said that someone was missing and Mr Mkalipi was representing him. The DDG: IES had resigned and was still to be replaced. Mr Morotoba had replaced the former Chief Operations Officer (COO), who had been absent from work for some time and had been dismissed in terms of the Labour Relations Act. Both DDG: IES and COO positions had been advertised.
The Chairperson asked for clarification on the misconduct cases, both on the nature of the offences alleged as well as the seniority of those charged. He asked if any of the accused had been suspended.
Ms Makhubela-Mashele focussed on the Inspectorate. The DoL had targets in place for inspections and enforcement. The figures presented did not correspond with the feedback given to Members. In many places, inspectors had not been seen for a long time. The work should cover certain areas which had not been covered previously. A professor had done research on issues of safety and compliance on construction sites, accusing the DoL of poor performance. She asked if the findings were based on samples. She asked if it was possible for DoL to assess the effectiveness of its inspection system.
Mr S Motau (DA) noted how the DG had considered his words before informing Members of the dismissal of the former COO. He also requested the nature of the problems being faced by the DoL. It seemed that the inspectorate in the Western Cape was not doing its work. Targets for inspections were being missed by a long way, and nothing was being done about the non-compliance.
Mr P Ntsiqela (COPE) said that it was only in terms of inspections that the actual figures were below targets. He asked how these targets were set. The figures for EE were poor. How many companies had been fined? There would be no action if there were no consequences. On the strengthening of civil society, he asked if there was still a South African Labour Bulletin. Were there any conditions to the financial aid granted to organisations? Sub judice rules restricted what could be discussed in Parliament, and he did not know how far he could go on the Concourt case on collective bargaining. He had not seen the court papers. When the majority unions negotiated an agreement, those employers who could not afford the salary awards could apply for an exemption. His experience with farm workers was that foreigners were employed in some cases. The most vulnerable workers were those, such as Zimbabweans, who were thought to have no rights at all. He did not know how successful the inspectors were in this regard. Chinese employers had been singled out as exploitative employers. The inspectors could never seem to find the real owner. The owner of a business was always away at the time of an inspection.
The Chairperson was concerned about the wholesale and retail sector. There had been no targets set for the Northern Cape. There had been 153 inspections of which 76% were regarded as successful. The targets were generally set low, creating a false sense of success. Under PES, there were a number of employees registered, although the system was there to register employers. He asked how many job seekers there were.
Ms Makhubela-Mashele said that there had been problems with job-seekers in terms of training. She asked if there had been any improvement in this regard. On some days, no information at all could be captured.
Mr Nhleko replied that the COO had been dismissed in terms of Section 17 of the Public Service Act. The former COO had not reported for duty for thirty days, and this was sufficient grounds for dismissal. There were capacity constraints with the inspectorate. There was an area in the Northern Cape where there were more than 600 farms, but only three inspectors. There were over 300 farms in the De Doorns area which was also served by only three inspectors. There would never be sufficient inspectors, but a multi-pronged approach was needed to ensure compliance. There should be effective workplace organisations. There was a need to engage with employers to create safe workplaces. This was in the best interests of the country. This was why labour inspectors had never been seen in some areas.
Mr Nhleko said that union representation and collective bargaining reflected the changing face of labour relations. There was a reported rivalry between the different unions, which affronted collective bargaining. This was under attack in South Africa. The current system made institutional sense, and dealt with the current system at the workplace. What happened at the workplace should not be isolated from society generally. The actual dynamics of industrial relations needed to be understood. In recruiting membership, it was not necessary to stab people. There were serious leadership and industrial management issues. It was important that these issues come to light.
Mr Nhleko said that workers’ committees were now re-emerging. These had last been seen before 1979. These were worrying trends.
Ms Molebatsi said that in terms of disciplinary action, she did not have the statistics at hand. The nature of the misconduct related to corruption, nepotism, favouritism, impropriety, the misappropriation of funds, sexual harassment and other offences. This was not limited to those at the lowest levels. The majority of fraud cases happened at labour centres. This was where money was paid to individuals as compensation for injuries or unemployment insurance benefits. Bank accounts could be transferred for the benefit of ghost beneficiaries.
Mr Mkalipi said that a major problem with the EE Act was the law itself. The law required the DG to advise the companies on how to deal with employment equity issues. Only one company had refused to accept the recommendations. That was Comair. On procedural compliance, the law required that an undertaking be made that reporting would be done correctly the next time. Failing that, the DoL would issue a compliance order. It was a cumbersome process. The skills fund had been set up to finance trade union training. Social partners had foreseen a situation where foreign funding for South African trade unions would dwindle. Funding to non-governmental organisations had been reduced significantly. In order to circumvent this, the Ditsela fund had been established. About four years previously, the DoL had realised that other organisations also needed funding. Advice offices across the country were also supported. The bulk of the funding went to Ditsela, the Labour Bulletin and similar institutions. The Free Market Foundation was essentially saying that the law, as it was, outsourced legitimacy. If parties were representative, then the Minister must extend collective bargaining. There was an attack on Section 32 of the Labour Act.
Mr Mkalipi said that the problem lay with migrant workers, who were undocumented. They tended to run away when there was to be an inspection lest they be returned to their home country. It was difficult to enforce legislation.
Mr Morotoba said that targets were difficult to establish. They were something to work towards. Targets were normally negotiated with National Treasury. Baseline information came from the performance in previous years. There were a number of elements determining if targets were met or not. There was no database for the total number of companies in the country, but this information could be drawn from the South African Revenue Service. There was also a list of the employers registered in terms of the Unemployment Insurance Fund. In some big projects one employer created a huge number of opportunities. The Gautrain project was an example. There was an increase from the previous year. There were some challenges in capturing information. There were problems ranging from cable theft, slow systems, unsophisticated software modules and other IT issues. The situation was improving.
Mr Seafield said that the responsibility to comply was fundamentally that of employers. When a company was inspected, the notion of voluntary compliance affected how well targets were reached. An issue arose when a company was not compliant. The research report on the construction industry was known to the DoL. Fundamentally the policy issue emerging from the report was important. There was an accord with the construction industry on how the industry would ensure compliance. The second thing was how the effectiveness of the inspectorate could be measured. The more pertinent question was how the effectiveness of the inspectorate addressed the needs of workers. While there might not be a target for a certain province, this did not mean that there would be no inspections. An inspector could only do so much in a given time period. There was also administrative work to be done, besides the inspections. The average number of inspections was thirteen a month.
Mr Seafield said that some inspections in provinces such as Gauteng dealt mainly with foreign nationals. Often the standard defence was the language barrier. There was no language called Chinese, as different languages were spoken in that country. The BCEA was being translated into Mandarin to address this problem. The DoL found it difficult to enforce the EE Act. It had to predict what the future economic environment would be. Even the experts struggled to do this with any accuracy.
The Chairperson noted that when asking Chinese shopkeepers about their products, there was never a language problem.
Mr F Maserumule (ANC) said that there had been a slowness to commit in certain areas.
Ms Molebatsi responded that there had been a number of meetings with the National Intelligence Agency (NIA). Vetting was their area. Because of the delays in vetting individuals, some people could not be employed immediately. There had been engagement with the Department of Public Service and Administration (DPSA). Currently only the Minister of Intelligence could appoint vetting agents within a department. The DoL could screen for criminal records, but further checks had to be done by the NIA. There was an improvement at present.
The Chairperson noted that internal checks with referees would make the vetting process easier. This would reduce the workload on the NIA. If some qualifications were fraudulent, that person's name could be withdrawn immediately. He felt that the DoL was doing a good job.
The meeting was adjourned.
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