Job savings; job creation; training lay-off scheme; youth employment; saving distressed companies: Department of Labour, CCMA, UIF & Productivity SA

NCOP Public Enterprises and Communication

14 August 2013
Chairperson: Ms P Themba (ANC) (Mpumalanga)
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Meeting Summary

The Department of Labour (DoL) provided a detailed progress report on how it and its entities were providing job saving and job creation initiatives and the impact that they were making. The entities accompanying the Department were the Unemployment Insurance Fund (UIF), Productivity SA, and the Commission for Conciliation, Mediation and Arbitration (CCMA).

The wide-ranging discussion between the Committee, Department and the entities was on matters such as the Sheltered Employment Factories (SEFs), particularly, their conditions, employee wages and privatisation, interaction between the Department and trade unions, collective bargaining, investments and beneficiaries, the training lay-off scheme, job creation and skills especially in relation to private companies and agricultural projects. Members were unhappy that the entities and Department did not give a provincial breakdown on information provided, that there was not enough focus on rural areas and that much of the information would not be easily understood by ordinary people in their constituencies.

Meeting report

The Chairperson explained that the Department would provide a briefing followed by a response from each entity. She hoped they presented on their challenges and provided provincial information.

Department of Labour (DoL) presentation on job savings and job creation
Mr Sam Morotoba, Deputy Deputy Director-General: Public Employment Services and Acting Chief Operations Officer, said the presentation was to be on consolidated information at their disposal over the four years of the current term of government. He had tried to the best of his ability to break down the information per province. The Commission for Conciliation Mediation and Arbitration did have information ready which they could present after the departmental briefing or during the discussion.

The presentation covered three broad areas: jobs and employment debates, mandate, the DoL’s contribution towards job creation and employment.

Mr Morotoba began by looking at the jobs and employment debate noting that everybody understood the importance of jobs and what they did for society and their contribution to income but employment went beyond jobs - jobs tended to be vacancies within a particular area while employment was broader.

He provided a problem analysis per province highlighting Gauteng which had a population of 5.2 million while the unemployment rate was 12.2% (1.3 million). The second province noted was the economic hub, Kwazulu-Natal, which had a population of about 10.5 million and the unemployment rate stood at 21.1%. The third province was the Western Cape with an unemployment rate of 23.3%. The three provinces were the main economic hubs. Other provinces were worst affected in unemployment rates. The highest unemployment rate was in the Free State with 31.1% followed by the Eastern Cape and Mpumalanga. The Department worked regularly with Statistics South Africa to check if there were changes.

Over the last four years, employment levels had increased between 2008 and 2013. The main sectors which were contributing to employment levels were the manufacturing and finance services sector, community services and trade. In terms of the actual areas where jobs currently resided, these were clerks, managers and in elementary areas. It was in these areas where they had seen significant growth. The Department noted that people without Matric were the most affected by unemployment compared to people with tertiary education.

Mr Morotoba noted that all government documents on the job creation mandate agreed that youth unemployment should be the key focus area. The Department of Labour (DoL) had a framework where all its entities (Commission for Conciliation, Mediation & Arbitration; National Economic, Development and Labour Council; Productivity SA; Unemployment Insurance Fund; Compensation Fund ) needed to align their mission statement with the Department’s. The key challenges were unemployment and under employment, the changing nature of work, inequalities and unfair discrimination in workplace, domestic as well as cross border labour migration and inadequate instruments to consistently monitor the performance of the labour market especially with the issue of inspectorates.

The DoL’s initiatives towards job creation included Public Employment Services programme as a core focus with a R240 million budget per annum; the Sheltered Employment Factories which employed people with disabilities with a R109.2 million budget; Productivity SA with a R75 million budget (which included the R39 million allocation from the Unemployment Insurance Fund) for productivity promotion, turnaround solutions and social plan interventions. The Unemployment Insurance Fund set aside 5% of its reserves towards social responsibility investment (R8.2 billion) in connection with Industrial Development Corporation (IDC). The Compensation Fund set aside 5% of its reserves towards social responsibility investment (R34 billion) while the Commission for Conciliation Mediation and Arbitration (CCMA) had a budget of R594 million to save jobs.

One of the key contributions of the DoL was to reduce youth unemployment. In 2009 the President through a Proclamation transferred skills development functions to DHET and left DOL with Employment Services provisions. To deal with the legislative vacuum, the Employment Services Bill was developed and the Bill was currently before the Labour Portfolio Committee and would then come to the Select Committee.

During the last year of Skills Development under DOL which was 2009/10:
- Percentage of work-seekers placed in registered opportunities: 41% (20 003)
- Number of unemployed people trained and placed: 12 802 trained, 7 008 (48%) placed.
- Number of artisans registered for training: 18 693
- Number of learners registered for ABET: 56 669
- Entrants into scarce and critical skills programmes: 111 831
- Youth supported through New Venture Creation programmes: 3 412

The Electronic System South Africa (ESSA) was an electronic platform which the DoL used through its Public Employment Services branch to link job seekers and employers. Mr Morotoba provided the statistics for the past three years (see document). He said more companies were beginning to register their vacancies with the Department. He noted that a more detailed breakdown of the information was in the Department’s annual report.

In terms of other DoL interventions, it had coordinated SA's participation in the International Labour Organisation (ILO’s) Youth Unemployment discussions and conclusions during 2011; held youth fairs; contributed towards G20 Employment Task Team and the Economic Development Department's Youth Pact development.

Mr Morotoba said sheltered employment factories (SEF) were another intervention and it had a SEF Business Case and Implementation plan strategy has been finalized and approved. Pilots currently underway included the development of a product costing model currently being piloted in 3 of the 12 SEF factories to ensure that SEF prices their products to make adequate revenue. He thanked the Committee for raising awareness about this. Improvement of working conditions for the factory workers. The payment to workers had significantly increased because of the orders received where people with disabilities were willing to forsake their social grants to come and work for SEFs. Many factories were manufacturing school furniture sometimes in the region of 35 000 desks per month to try to reach deliveries of at least two schools per month. Currently there was pressure to increase the number of schools to six which meant the Department would be expanding the employment capacity of SEFs to at least twice the current capacity. The only concern was that the positions would be based on contract and if there were no orders employees might lose their jobs but DoL was discussing with the Department of Social Development about this. The alternative was to have the factories open over the weekend which was not ideal because these were people with disabilities. Another point to remember was that the desks were assembled on site so the DoL was in talks with the Department of Higher Education to recruit local people with disabilities to actually learn to assemble the desks on site and to be given contracts with the Department of Basic Education for maintenance.

Mr Morotoba provided detail about the UIF/IDC relationship, noting a pilot project was started in 2010 to try and respond to job losses where, in the process, the UIF was given a R2 billion bond and companies would then apply through the IDC for money which could then be used to save the companies. During 2012/13 that bond was increased to R4 billion and to date, 21 000 new jobs had been created and 20 000 jobs had been saved. Investment was part of the UIF’s social responsibility. The way the UIF investment worked was that R84 million in reserves was normally invested with the Public Investment Corporation (PIC) who then invested it in a number of projects like the R21 road, the revamping of airports, Gautrain etc. Since inception, there have been 199 approved deals with a total value of R3,3 billion.

On the training of unemployed UIF beneficiaries, this was a response for UIF beneficiaries who had already lost jobs and required re-skilling for re-integration into the labour market. It was implemented through collaboration with various government training institutions to train beneficiaries on critical and scarce skills required in the economy. The project began with a pilot in 2010 where 774 youths and unemployed UIF beneficiaries where trained as artisans in collaboration with MERSETA. During the 2010/2011 financial year, 1976 youths and unemployed UIF beneficiaries were trained in various artisan disciplines within the mining sector. In 2012/13 the UIF invested with the IT SETA where 1000 learners were part of the programme, another 1000 learners were part of the mining SETA and other learners were involved in artisan trades.

Looking at the funding for turnaround solutions, an three-year agreement was signed between the UIF and Productivity SA which would run the turnaround programme. The UIF had agreed to fund Productivity SA in the region of R39 million for 2012/13, R45 million for 2013/14 and R58 million in 2014/15 for turnaround solutions for companies in distress. A number of companies had been helped through this programme and thousands of jobs had been saved.

Mr Morotoba explained that for the technical layoff scheme, R1.2 billion had been allocated by the UIF but the uptake had been slow. In the last three years, the amount used from this fund amounted to only about R59 million and the total number of jobs that had been saved through this process was 5 400. He said the CCMA could speak to some of these challenges after his presentation.

Turning to support for small business, specifically Productivity SA job creation initiatives, he said in 2009/10, 2100 businesses had been supported increasing to 2700 in 2011/12 and 3800 in 2012/13. For the Small, Medium and Micro Enterprises (SMMEs), in 2011/12 between 71 and 112 had been assisted. A big factor in this area was using SMMEs for procurement for government and paying them timeously. It was agreed that if government procured from small businesses and paid them within 30 days, that employment could be increased in this area. DoL had been challenged in compiling information for the presentation within this area given the time limits. They had requested the Chief Financial Officers (CFOs) of government entities get put this information together.

Other job creation initiatives of Productivity SA were its graduate programme. Many of the learners participating in this programme were recruited into Productivity SA’s headquarters and these numbers were increasing. Many of the learners were working in the companies which were part of the Workplace Challenge Initiative. He noted lots needed to be done to highlight the initiatives and efforts of the Department of Labour and make these known to the public. He asked if the CCMA could present their sections.

The Chairperson said Members would be afforded the opportunity to raise questions now and then the CCMA could come in during responses to the questions. If she gave them the time to present then she would have to do the same with all the other entities. She thought Productivity SA still did not understand how the Committee worked as she did not see a breakdown per province in their sections of the presentation.

Mr H Groenewald (DA, North West) was happy with the positive things highlighted in the presentation. He wanted elaboration on the domestic and international challenges of cross border immigration and the Department’s place to deal with this issue. He asked about the status of the President’s announcement of a R4 billion grant for youths and two years later nothing had happened - even though the money is available - what could the Department do to help this? He was very happy that the Department was looking into the conditions at SEFs. He noted the Committee had visited a couple of these factories in different provinces and their conditions were alarming. These factories needed to be invested into and needed to be privatised so that the furniture manufactured could be sold to the public. He thanked the Department for its positivity in trying to better the lives of disabled people. He questioned what the Department was doing in terms of trained work seekers sitting without jobs as he was very worried about that. Lastly, he asked about the Department’s interaction with trade unions and strikes, particularly thinking about Marikana – could the Department make a difference in decisions made by the unions around demands for higher salaries which often resulted in job losses.

The Chairperson said it was up to the Department whether to respond to the last question or not, as it was not on the agenda.

Mr M Sibande (ANC, Mpumalanga) stated the Committee was responsible for the provinces and even though the Department did touch on some things relating to the provinces during the presentation, it was not sufficient. Labour Offices needed to pull up their socks because if the systems did not talk to each other there would be problems. He was worried the Department was concentrating on the economic developed provinces but not catering for provinces which were disadvantaged in the past. On the SEFs, he noted the Committee had visited some but asked what sort of monitoring mechanisms the DoL had in place for these factories. He felt their wages needed to be adjusted. He asked what the role of the DoL was to ensure other departments bought the products coming out of the SEFs. He was worried that investments of the IDC/PIC were not going to the relevant people for whom the money was meant. He asked in which provinces were the training of UIF beneficiaries occurring as he felt all provinces must be accommodated. Lastly, he was concerned that the CCMA was not visible enough. People needed to travel far with their problems –something needed to be done. If there was a problem with budgets to open new offices, they needed to come to the Portfolio Committee with these issues.

Ms L Mabija (ANC, Limpopo) thought the number of jobs saved during the layoff scheme seemed to be very low. She wanted an explanation for this.

Mr Z Mlenzana (COPE, Eastern Cape) asked how the DoL went about collecting data in the very rural areas. He was not contesting the authenticity of the unemployment analysis information but he wanted to know how deep into the rural areas they had gone to collect the information. He encouraged the initiatives to save companies for the sake of saving jobs - but for how long would this continue? How sustainable was this? He was concerned because of the huge budgets which were allocated for these initiatives. He asked how they ensured that companies were committed to ensuring they were self-reliant going forward.

Mr M Jacobs (ANC, Free State) focused on private companies and asked how the DoL liaised with them on job creation and skills. With skills training, government was always trying to provide skills but what was the role of private companies in providing skills to the unemployed, for instance for in-service to graduates. He wanted to know if these private companies were running to government for assistance if they were in distress but they did not come to the party for the provision of skills. How were SMMEs assisted to graduate and become companies standing on their own? He wondered whether some of the DoL initiatives were practical when it came to implementing them on the ground. He would love to know which companies were helped in which provinces as the Members needed to make reference in their constituencies and relay what government was doing.

Mr Sibande felt there was an allegation which needed to be clarified which was the relationship between the DoL and labour brokers as it was alleged that most of the labour brokers used the labour centres when recruiting. This made it seem as if the labour centres were related to labour brokers.

The Chairperson commented that when the CCMA presented to the Committee in 2011, it spoke about challenges with the Training Layoff Scheme funding. She asked if this was now resolved. She said it was imperative to see the figures for placements in each province as it was very important information which Members could relay to their constituencies and support the work of the DoL. Although it may be outside their terrain, she wanted to hear more about agricultural projects especially in rural areas and how people were trained to start their own farms. She echoed the sentiments of the other Members in that they represented provinces and so the entities needed to highlight the information per province and the rural areas which would show they understood SA.

Ms Mudzunga Mashamba, Productivity SA Executive Manager, said job saving was based on a model used by Productivity SA and the document they had brought along would show the provincial breakdown and geographic spread. The process followed via collective bargaining was so that the first step was the acquisition or signing off of companies after which a Future Forum was created. In the forum, the members were capacitated to understand basic business principles and issues of sustainability. Collective bargaining was not about increasing or negotiating wages but more about talking to management and labour around issues of job retention.

Ms Mashamba said there were many success stories such as their work in the Eastern Cape.

For saving jobs, the approach was to capacitate, train and make use of the early warning system to look at the reasons that companies declined. There was also an emphasis on the importance of measurement to ensure sustainability and for companies to identify when things were not going well. The productivity angle helped sustainable turnaround.

Ms Mabija commented that she understood the explanation but for the Members, as delegates of the provinces, it did not mean a thing because they requested specific figures and not general numbers.

The Chairperson added documents must be able to be understood by the people in the constituencies without Members help.

Mr Mlenzana echoed these sentiments saying the documents were not worth taking home.

Mr Moshe Ramokolo, Productivity SA Portfolio Manager, thanked the Members for the feedback. In terms of assisting organisations, the statistics of companies going down showed funds needed to be increased to provide assistance so as to make them profitable and keep the jobs.

For agriculture, he noted that he was responsible for the three Cape provinces. In a rural area in the Eastern Cape, they were working with a number of companies in danger of going down to ensure they were sustained. The same applied in the Northern Cape, especially in the area of Kuruman, where they were involved with a number of co-ops. They tried to ensure there was a focus on all these rural areas. Productivity SA was also focused on companies employing more people, especially co-ops in the rural areas which employed many people.

Ms Mashamba said the information was available and they would like to take their document back, clean it up and provide the geographic details. She explained the funding for the programme came through in November 2012 instead of April but they found the discussion helpful and they valued the contribution.

The Chairperson said the Committee looked forward to the refined documents. She said the Committee expressed the same concerns with other entities as well and it was important for them to remember this was the Select Committee and they wanted detailed provincial information.

Ms Winnie Everett, CCMA Senior Commissioner, referred to the Section 189A Facilitations presentation slide on page 41 of the DoL presentation and looked at the jobs saved per province. She explained this was a special project of the CCMA which dealt with large scale retrenchments were the company employed more than 50 employees and wanted to wanted to retrench a least ten of  these 50 employees. This fell under Section 189(A) of the Labour Relations Act. Section 189(A) was a different and unique section to Section 189 cases, where the CCMA only dealt with the case after the dismissal had taken place so there was very limited opportunity for the CCMA to intervene and save jobs. This slide spoke to when the CCMA did a facilitation and it gave the CCMA the opportunity, before the dismissal took place, to intervene, explore options and partner with other organisations who were meant to save jobs and so this was where the real work of job saving, from a CCMA perspective, could take place.

Ms Everett clarified that the figures in Column 1 (Number Of Employees Likely To Be Affected) came from the union which called the CCMA to facilitate and was likely to be an overestimation of the number of jobs likely to be affected.

Mr Ronald Bernickow, CCMA National Senior Commissioner, added the CCMA then got involved with the consequence that there were a number of forced retrenchments, voluntary severance packages and the number of jobs actually saved. This was then a reduced figure.

Ms Everett said this was invariably an overestimate at the beginning and this was not included in the jobs saved as it was an overestimate and was not claimed.

Mr Mlenzana said he used to work with the unions. He asked how the CCMA debated small-scale or minor dismissals.

Mr Bernickow said there was no legal requirement for the CCMA to get involved or impose themselves on small scale dismals but the law required the CCMA to get involved in large scale retrenchments. The CCMA only got to hear of people losing their jobs after it had happened when the worker complained of unfair dismissal. Unless the law was changed to require the CCMA’s involvement in all retrenchments, their hands were in a sense tied.

On the issue of accessibility particularly in the rural areas, he stated the CCMA had presented a detailed accessibility plan with DoL - with a major investment - to reach every corner of the country. He said that every labour centre would become a referral and advice point of the CCMA. The CCMA also presented a plan to Treasury where bricks and mortar were involved to include all areas. They had just approved a Witbank and Vaal office - he understood these were fairly big centres but they were extending into every rural town in the country. The money had already been invested and the case management system was coming on line and now the frontline staff needed to be trained to run the accessibility points for all the rural towns. In conclusion, there was a detailed accessibility plan in the process of being rolled out.

Mr Sibande said the intention of the Committee was to assist. For the CCMA, the question was simply around accessibility. But their response showed they were creating a problem out of another problem by using the labour centres which in itself was not enough. He was disappointed as the Committee gave the budgets for these entities.

Mr Jacobs noted the CCMA said they were hamstrung on the issue of small-scale retrenchments yet they did not even make a recommendation to the Committee to amend the law which he felt was their duty.

Mr Bernickow said they took the points raised to heart. The CCMA had made recommendations to NEDLAC particularly around small-scale retrenchments. The problem with the current legislation meant that these workers were forced to go to labour court and not CCMA. The CCMA did make extensive recommendations to arbitrate these matters.

On the point of accessibility, he explained the CCMA working with the DoL was, in addition to their other work, extending their accessibility. They did submit a detailed plan on accessibility to the Portfolio Committee and they were willing to come back and talk to the Select Committee on this.  However, their understanding was to talk about the job issue today so they were not fully prepared to talk about the general issue of accessibility but they could come back to present the plan.

The Chairperson said that if they had a plan they could have presented it during their response. She asked him not to spoil it by talking about the Portfolio Committee when he was now here with the Select Committee which wanted a proper response.

Mr Bernickow said they had heard the concern and would take the discussion on board and deal with it properly.

Ms Everett discussed the implementation of the Training Lay-Off Scheme noting that people could now participate up to a year as opposed to six months and there had been a number of improvements in the rules. However the challenges with the rules were that they did not accommodate termination of contract for example at a building site. The CCMA would appreciate the assistance of the Committee in addressing these hurdles and with the difficulty of payment backlogs.

She mentioned in the Eastern Cape there was currently a very significant application for a training layoff scheme intervention around a high-tech plant improvement at Mercedes Benz. She said the Committee was probably aware that the economic situation in this province was very poor and Mercedes Benz SA virtually carried the economy of the region if not directly then through companies which were its service providers and manufacturers to Mercedes Benz. With their shut down for six months, a significant training lay-off scheme was in progress which could cover up to 6000 workers in the region which was supported by the MEC of the province.

The Chairperson thanked the CCMA and said she wanted to hear from the UIF.

Mr Vuyo Mafata, UIF CFO, responded on the issue of investments and said more of the money accumulated needed to be given back to the beneficiaries hence the draft Unemployment Insurance Bill which was out for public comment where the Fund sort to benefit the beneficiaries. Once this Bill came into law there would be an improvement in benefits. However, there was a need to preserve the investment money so the Fund used the surplus funds to invest to protect the money from eroding; but they were in the process of improving the benefits. On the R1.2 billion committed to the Training Layoff Scheme, the Fund only gave money to the projects which had been approved to date for the last three years.

Ms Mpumi Mnconywa, UIF Chief Director: Labour Activation Programme, apologised that the information provided did not give justice to a thorough breakdown per province. They would send the Committee the detailed information. On the training achieved, she said 1000 trainees were not enough but it was just a pilot and they were left with nothing after the scheme and budget was moved from the DoL to the Department of Higher Education hence these unconvincing numbers. When it came to manufacturing and engineering training, in the Northern Cape, 100 people had been trained, 80 had been trained in the Western Cape, 80 in Kwazulu-Natal, 200 in Mpumalanga, 150 in Limpopo, 100 in the North West, 270 in Gauteng, 0 in the Free State and 100 in the Eastern Cape which made the total number of trainees 1080. Under training in the mining sector, 39 were trained in the Northern Cape, 0 trained in the Western Cape, 11 in Mpumalanga, 26 in KZN, 156 in Limpopo, 165 in Gauteng, 62 in the Free State and 0 in the Eastern Cape. Under computer skills, there were a total of 1000 trainees with the break down as follows: 200 in Gauteng, 150 in Limpopo, 200 in Mpumalanga, 200 in North West, 50 in KZN, 6 in Western Cape and 6 in the Eastern Cape. Most of these users (800) were doing computer end-user training while the other 200 were doing advanced training. For training in agricultural projects, the UIF Board had actually recommended that training could not be done without the participation of the SETAs. The advantage of working with the SETAs meant they could meet the UIF halfway if the total training amounted to R100 million. This meant the UIF paid R50 million and the SETAs paid the other R50 million. Because of this the project on agriculture had to be placed on hold and the UIF had made a presentation on 30 July to all the SETAs and principals of the FET colleges to ask for their partnership.

Mr Sibande was concerned they did not mention KZN or the Northern Cape. He felt the UIF was too focused on places which were well developed and over populated. He was worried as to why they said the UIF was committed to the Training Layoff Scheme with the R1.2 billion rand but were telling the Committee the budget for the scheme had been moved to the Department of Higher Education.

Mr Morotoba explained the difference was that this was skills levies which were collected through the SA Revenue Service as 1% off the employer’s payroll and this was the money that had been moved to DHET. The R1.2 billion was a commitment coming from the UIF which had nothing to do with the skill training part. This was a contribution by the UIF to pay for the loss of wages when companies were about to retrench workers. Workers had the option, when they were retrenched, to stay at home or be trained. This money would be used to pay them what would normally be their wages or pay for the training component.

Ms Mnconywa did indicate when it came to manufacturing and engineering, in KZN, 80 trainees benefited while 100 trainees benefited in the Northern Cape. For mining, in KZN, 26 trainees benefited and in the Northern Cape 39 were trained. This was a pilot project which was almost complete and then the roll-out would take place and they would ensure the Free State benefitted much better than they did under the pilot project.

The Chairperson wanted the UIF to comment on the backlogs in payment as mentioned by the CCMA.

Mr Mafata said there were not any backlogs on their side but explained training only took place after projects were approved.

Mr Morotoba said the main challenge was with the undocumented mine workers which had gone beyond being a South African problem but a Southern African Development Community (SADC) problem. Two conferences were to be held with the ministers to deal with this problem. The biggest problem was in the Mpumalanga area through Mozambique but they were working with people in Police Intelligence on it and there was a follow-up meeting next week in Beachwood about this problem. There was a realisation that labour migration policies needed to be coordinated and harmonised and for the issue of the movement of people and asylum-seekers to be regulated and the International Organisation for Migration were supporting the DoL in this process because if the problem was not addressed it might just explode and affect the whole SADC region. The DoL had addressed the problem to an extent in the Employment Services Bill in the management of the applications of foreign workers in conjunction with Home Affairs.

Mr Morotoba said the DoL had made an application to get a slice or allocation of the R4 billion which they did not get. However, with the Bill's passage through Parliament, there would be further engagement with Treasury to get some funds out of the R4 billion.

On the manufacturing of furniture, he noted the DoL was looking into this but there were problems with the pricing and control especially with large orders as they took a lot of time to manufacture. They now focused on projects targeting schools. The Departments of Correctional Services and Environmental Affairs were also coming on board but currently they were still beating them on quality and pricing because of the kinds of workers they had.

On the interaction with trade unions, Mr Morotoba said there were many forums which were used - NEDLAC was a well-known one with a large number of sub-committees but the legislation also provided that the boards of the CCMA, Productivity SA and the UIF should be be constituted by various stakeholders which was consistent throughout. In areas where there were certain sparks, like in Marikana, the DoL usually asked the CCMA to intervene to prevent potential disasters in the cases of mass dismissals.

He said the DoL’s strategic plan had massive ambitions but they were aware that if they improved their assistive devices they could improve their service delivery. For transformation, the DoL was aware that some people were resistant to change which had sometimes cost them business with other departments because they had said that if the DoL did not change some of the factories, they were not willing to do business with them. There were a number of strategies used to combat this and attrition was one of them - as people reached pension age they would be let go of as well as making use of dismissals. The trade unions were helping the DoL change the attitude of factories which were resistant to change. An agreement had been signed to look at the change to workers’ wages.

Mr Morotoba said their information was usually collected at the labour centres, got coordinated at provincial level and then went through to head office. Further than this, there was the internal audit which went unannounced to specific labour centres to see the records to ensure the information received was verifiable. The Auditor-General did the same thing. Devices were used in the labour centres for self-registration which could also be done through the internet. The DoL had realised that many people, even in the rural areas, made use of cellphones and they were working with enhancements whereby people could use the cellphone to update their information and participate in job searches. They were also updating their satellite offices located on buses especially in the rural areas. There were currently two buses but Treasury had agreed that over the years they would provide a greater allocation. The DoL also relied on the data of StatsSA, particularly for the unemployment rates per province via the Labour Force Quarterly Surveys. The DoL’s figures could then be verified against those of StatsSA.

A range of measures were used to liaise with private companies such as through the jobs fairs where they learnt how to register vacancies and training opportunities without coming to the DoL. He could provide the Committee with a breakdown of these companies.

On the allegation that labour brokers hang around the DoL’s labour offices to recruit staff, he said when section 198 was amended it was realised that many private recruitment agencies also operated as temporary agencies and the long-term strategy of the DoL was to reduce recruitment costs to employers by ensuring the labour centres did recruit and eliminated placement costs for people who were looking for jobs. The allegations were noted by the DoL and it did happen in Gauteng where some of the DoL’s staff took information from people that were registered on the system and then passed it on to a private labour broker who then successfully placed these people and then demanded payment from the employer but those involved were currently facing disciplinary action. The DoL did intervene in a number of ways in this issue by tightening the code of ethics, how information was managed and sensitising staff around these issues through a standard operating procedure and making it known, through the system, when information was sold. The DoL would align their figure of placement with the UIF's and provide this information to the Committee by 16 August.

Lastly, on the question of collective bargaining, the Labour Relations Act was quite clear on this but so far, none of the unions and companies the DoL had engaged with through NEDLAC had said they did not want the process of collective bargaining.

Mr Jacobs said two issues were not responded to - what was the role of private companies/big business in providing ordinary people with skills, he even used the example of unemployed graduates. The other issue was SMMEs - did they ever graduate or did they remain SMMEs.

Mr Maratoba responded about training, noting the introduction of the Skills Levies Act had the original intention that everyone had to train and the conditions for which they could get their levies back was with the proof that they had trained. Nationally, everyone agreed that companies, including government departments (which was where SETAs came in), needed to train. However this issue had moved outside of the terrain of the DoL to the Department of Higher Education and Training to ensure that companies did more, enforced, implemented and complied with the Skills Levies Act.

Ms Lalane Janse van Rensburg, Productivity SA Executive Manager, was glad the question on SMMEs was asked as Productivity SA had an SMME development programme which assisted aspiring entrepreneurs, as well as cooperatives, to implement an early warning system. When Productivity SA went in, they brought along this system. They did not fund them at any stage but assisted them with implementing a productive mindset in terms of being a productive citizen and being a productive business. This was done through a programme and model which started with the business start-up workshop then the SMME graduated into a business improvement workshop after which they graduated into a coaching environment. This was a voluntary process so many cooperatives and SMMEs did not wish to participate in the entire cycle because they had to submit information to Productivity SA for them to measure the progress made. The early warning system was very measurable and the Productivity SA model tried to assist with regards to all avenues and every stage on the business. She was thankful for the funding they received but felt the focus should be on the entrepreneur, specifically the cooperatives as previously alluded to, they had an entirely different ecosystem but there was always room for productivity training. They would like to open this office in every province -  they had a beautiful, sustainable process which had been piloted with 2998 cooperatives under the South African National Apex Cooperative (SANACO) and the programme worked. Everything in life cost money and they did receive funding but if they got the opportunity to expand on this programme they would welcome it.

Ms Mnconywa of UIF responded to the issue around the contribution of the private sector. She said the UIF’s proposed partnership with Sasol meant that Sasol set aside several schemes worth R50 000 for training and other schemes worth R750 000. The UIF was also in partnership with ArcelorMittal and although their contribution was not in monetary value, they provided assistance for the pilot training that was done in Gauteng and the challenge of placement of the trainees as they did not have enough experience. ArcelorMittal provided them with the workplace experience which companies sought and by providing mentors.

The Chairperson said if training was done with specific provinces it should be expanded to all provinces in partnership with provincial offices, it should not be limited. In Mpumalanga and Limpopo there were factories which were empty where the DoL could open sheltered employment. The DoL needed to look for this, talk with the Department of Trade and Industry and see where they could perhaps start establishing those SEFs.

She thanked everyone for their presence and they awaited the information as they did not want to misrepresent the entities. She told the Members they would deal with the minutes in two weeks as there was no meeting next week because of the Women’s Parliament. She encouraged people to take part in this Parliament.

The meeting was adjourned.


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