Committee Report on Department of Labour and its entities 2014 Budget

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Employment and Labour

10 July 2014
Chairperson: Ms L E Yengeni (ANC)
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Meeting Summary

The Portfolio Committee on Labour met to adopt the report of the recommendations made by the Committee on Budget Vote 18: Labour and on the Strategic Plans of the Department of Labour (2014 – 2019) and its Entities.

The Committee was generally satisfied with the plans of the Department of Labour (DoL) and its entities. However, having noted the challenges of unemployment, poverty and inequality that the country is grappling with, the Committee recommended financially capacitating the CCMA, Nedlac and Productivity SA. These institutions would assist in addressing the challenges of protracted industrial actions through the provision of mediating services, as well as alleviating unemployment through job saving and job creation initiatives. It was recommended that the entities work together where possible to address these challenges.   

The National Development Plan’s (NDP’s) 2030 vision for employment and growth included a fall in the strict unemployment rate, from 25% to 14% by 2020, and to 6% by 2030, a rise in the labour force participation from 54% in 2010 to 65%, and about 11 million additional jobs by 2030. To achieve these targets, the rate of investment in the Gross Domestic Product (GDP) would be expected to rise from 17% to 30% by 2030.

Department of Labour
After receiving the presentation of the DoL, the Portfolio Committee recommended that the Minister of Labour give consideration to:
Expediting the process of building internal Information and Communications Technology (ICT) capacity without delay.
Briefing the Committee on progress regarding the organizational review and recommendations (Shanduka) project.
Ensuring that all vacant funded posts are advertised and filled in compliance with the Public Service prescripts.
Capacitating the Inspection and Enforcement Services programme so as to ensure that the DoL fulfills its decent work mandate.

Compensation Fund (CF)
The Committee recommended with regard to the CF that the Minister of Labour give consideration to:
Reporting to the Committee on the progress with regard to the implementation of the Umehluko claims processing system before the end of the second term, which would be September 2014.
Briefing the Committee on progress with regard to the implementation of the decentralized structure before the end of the third term, which would be December 2014.
Building an internal capacity to reduce spending on consultants.

Unemployment Insurance Fund (UIF)
After receiving the presentation of the UIF, the Committee recommended that the Minister of Labour give consideration to:
Investigating the possibility of using the reserves of the UIF for job creation initiatives.
Investigating the possibility of using the reserves of the UIF to improve on the benefits payable to the beneficiaries, as well as the duration of payments – particularly, better maternity benefits.
Reporting to the Committee on the number of unemployment insurance beneficiaries trained.
Briefing the Committee on projects funded through the UIF Social Responsibility Investments and beneficiaries on a quarterly basis.
Conducting an advocacy campaign to make people aware of the UIF benefits.   

Commission for Conciliation, Mediation and Arbitration (CCMA)
The Committee recommended that the Minister of Labour give consideration to:
Briefing the Committee with regard to the progress on the establishment of the fund to assist workers in enforcing the CCMA awards.
Ensuring that when planning to open new offices, consideration is given to access by the disadvantaged users of the services of the CCMA.
Ensuring that the Commission reports on case postponement statistics, and reasons for such postponements, in its annual report.
Ensuring that the CCMA offices are accessible to physically disabled users of the CCM services.
Financially capacitating the CCMA to accomplish its mission to be the best dispute management and dispute resolution organization trusted by its social partners.

National Economic Development and Labour Council (Nedlac)
The Committee recommended that the Minister of Labour give consideration to:
Strengthening the community constituency by ensuring that the interests of the unemployed and the most vulnerable groups are accommodated in decisions taken by Nedlac.
Financially capacitating Nedlac to play its role effectively as a forum for social dialogue.

Productivity South Africa
After receiving the presentation of the Productivity SA, the Portfolio Committee recommended that the Minister of Labour give consideration to:
Ensuring that funds are made available for Productivity SA to be able to extend its services to areas where they are currently not operating, for marketing purposes and to ensure that the entity is rendered more visible.
Encouraging Productivity SA to work with other entities of the Department, such as Nedlac and CCMA in job saving projects.


A Member proposed two inclusions in the draft report before its adoption.  The first was the introduction of minimum wages in all workplaces, including R12 500 for the mine workers.  The second was a recommendation that the law should be amended so that labour broking is completely scrapped. There was unanimous opposition by all the Members.  The Fourth Parliament had recently approved the bill which was presently before the President. The Committee could not recommend what would be contrary to what the Committee had recommended less than six months ago.
The recommendations made by the Committee were adopted.
 

Meeting report

Chairperson’s Opening Remarks
The Chairperson welcomed the Members of the Portfolio Committee.  The agenda of the meeting was primarily to adopt the report of the Committee on Budget Vote 18: Labour, and on the strategic plans of the Department of Labour (2014 – 2019) and its entities.

Report of Committee on Budget Vote 18: Labour
The report of the recommendations made by the Portfolio Committee was read by Mr Nkanyiso Mkhize, on behalf of the Committee Secretary.

In performing its constitutional mandate, the Committee scrutinized the alignment of the strategic plans (2014-2019) of the Department of Labour (DoL) and its entities, taking into account the State-of-the-Nation Address, government priorities and key policies to develop programmes, the National Development Plan (NDP) and the New Growth Path (NGP).
 
The NDP’s 2030 vision for employment and growth included a fall in the strict unemployment rate, from 25% to 14% by 2020, and to 6% by 2030, a rise in the labour force participation from 54% in 2010 to 65%, and about 11 million additional jobs by 2030. To achieve these targets, the rate of investment in the Gross Domestic Product (GDP) would be expected to rise from 17% to 30% by 2030.
The Department of Labour derived its mandate from the Constitution of the Republic of South Africa; Chapter 2 – Bill of Rights. The budget allocation for the Department for the years 2013/14, 2014/15, 2015/16 and 2016/17 were:
Administration:  R 840.4 million, R 787.7 million, R 829.9 million, R 956.8 million;
Inspection and Enforcement Services: R 439.2 million, R 403.2 million, R 433.1 million, R 600.2 million; Public Employment Services: R 400.1 million, R 466.5 million, R 489.2 million, R 514.7 million;
Labour Policy and Industrial Relations: R 765.4 million, R 869.9 million, R 926.2 million, R 976.4 million.

During the 2013/14 financial year, the Department received a total of R2.4 billion, which was increased to R2.5 billion in the 2014/15 financial year.
    
After receiving the presentation of the DoL, the Portfolio Committee recommended that the Minister of Labour give consideration to:
Expediting the process of building internal Information and Communications Technology (ICT) capacity without delay.
Briefing the Committee on progress regarding the organizational review and recommendations (Shanduka) project.
Ensuring that all vacant funded posts are advertised and filled in compliance with the Public Service prescripts.
Capacitating the Inspection and Enforcement Services programme so as to ensure that the DoL fulfills its decent work mandate. 

Compensation Fund
The Compensation Fund (CF) is a public entity of the DoL which administers the compensation for the Occupational Injuries and Diseases Act. The main objective of the Act is to provide compensation for the disablement caused by occupational injuries or diseases sustained or contracted by employees, or death resulting from such injuries or diseases. The DoL transferred R17.3million to the entity in the 2014/15 financial year. The budget allocation of the CF increased by R629.3 million, or 4.02%.

The Committee recommended that the Minister of Labour give consideration to:
Reporting to the Portfolio Committee on Labour on progress in implementing the Umehluko claims processing system before the end of the second term which would be September 2014.
Briefing the Committee on progress with in implementing the decentralized structure before the end of the third term, which would be December 2014.
Building an internal capacity to reduce spending on consultants.

Unemployment Insurance Fund
The Unemployment Insurance Fund (UIF) has a budget of R13.8million for the 2014/15 financial year. Its strategic objectives for 2014/15 to 2018/19 financial years are to fund poverty alleviation schemes, improve governance, strengthen institutional capacity of the Fund, encourage compliance through enhanced service delivery and improve stakeholder relations.

After receiving the presentation of the UIF, the Committee recommended that the Minister of Labour give consideration to:
Investigating the possibility of using the reserves of the UIF for job creation initiatives.
Investigating the possibility of using the reserves of the UIF to improve on the benefits payable to the beneficiaries as well as the duration of payments – particularly, better maternity benefits.
Reporting to the Portfolio Committee on the number of unemployment insurance beneficiaries trained.
Briefing the Committee on projects funded through the UIF Social Responsibility Investments and beneficiaries on a quarterly basis.
Conducting an advocacy campaign to make people aware of the UIF benefits.   

Commission for Conciliation, Mediation and Arbitration
The mission of the Commission for Conciliation, Mediation and Arbitration (CCMA) is to promote social justice and economic development in the world of work, and to be the best dispute management and dispute resolution organisation trusted by its social partners. The DoL transferred a sum of R687 million to the Commission in the 2014/15 financial year resulting to its budget allocation being increased by R52.6 million, or 8.8%.

The Committee recommended that the Minister of Labour give consideration to:
Briefing the Committee with regard to progress on the establishment of the fund to assist workers in enforcing the CCMA awards.
Ensuring that when planning to open new offices, consideration is given to access by the disadvantaged users of the services of the CCMA.
Ensuring that the Commission reports on case postponement statistics, and reasons for such postponements, in its annual report.
Ensuring that the CCMA offices are accessible to the physically disabled users of the CCM services.
Financially capacitating the CCMA to accomplish its mission to be the best dispute management and dispute resolution organisation trusted by its social partners

National Economic Development and Labour Council
The strategic objectives of the National Economic Development and Labour Council (Nedlac) for 2014/15 financial year are promoting and embedding a culture of effective, social dialogue and strategic engagement, promoting effective participation in policy making and legislation and promoting economic growth, social equity and decent work. The DoL transferred R 28 million to Nedlac for the 2014/15 financial year.

The Committee recommended that the Minister of Labour give consideration to:
Strengthening the community constituency by ensuring that the interests of the unemployed and the most vulnerable groups are accommodated in decisions taken by Nedlac.
Financially capacitating Nedlac to play its role effectively as a forum for social dialogue.

Productivity South Africa
Productivity South Africa is an organization for South African businesses, industries and the general public that advises, implements programmes, monitors solutions and evaluates progress in order to promote a more competitive South Africa.

The entity received R43.1 million, R9.1 million and R69.4 million in the 2014/15 financial year from the DoL, the Department of Trade and Industry (DTI) and the UIF respectively.  The total transfers amounted to R121.7 million.

Its strategic goals are to establish new and foster existing partnerships and measure the impact of these partnerships; to evaluate, design, and develop new and existing products and services, and demonstrate the impact of these; to assess, monitor and evaluate organizational performance; to determine, assess, measure, monitor and improve public presence and demonstrate impact; and to design, implement and monitor an employee value proposition strategy.

After receiving the presentation of Productivity SA, the Portfolio Committee recommended that the Minister of Labour give consideration to:
Ensuring that funds are made available for Productivity SA to be able to extend its services to areas where they are currently not operating, for marketing purposes and to ensure that the entity is rendered more visible.
Encouraging Productivity SA to work with other entities of the Department, such as Nedlac and the CCMA, in job-saving projects.
 
The Committee was generally satisfied with the plans of the DoL and its entities. However, it made recommendations to assist the Department and its entities to perform at optimal level, given the resources constraints.  Having noted the challenges of unemployment, poverty and inequality that the country is grappling with, the Committee recommended financially capacitating the CCMA, Nedlac and Productivity SA. These institutions would assist to address the challenges of protracted industrial actions through the provision of mediating services, as well as unemployment through job saving and job creation initiatives. It was also recommended that the entities work together where possible to address these challenges.  
 
Discussion
The Chairperson asked for Members’ comments and suggestions on the draft report of the Committee.

Mr I Ollis (DA), pointed out that the word “d” should be deleted from “cased” on page 7, line 11, under Programme 4: Labour Policy and Industrial Relations (LP&IR).

Ms T Tongwane (ANC), proposed that the word “of” should be removed from the sentence “The Department transferred of R28 million to Nedlac for the 2014/15 financial year” on page 12.

Mr P Moteka (EFF), proposed two additions to the draft report before its adoption. The first was the introduction of minimum wages in all workplaces, including R12 500 for the mine workers.  The second was a recommendation that the law should be amended so that labour broking is completely scrapped. This should be included on page 7, section 2.2.4, Programme 4: Labour Policy and Industrail Relations (LP &IR).  
Ms F Loliwe (ANC), was of the opinion that the word “caseload” on page 7, line 10 should be two words and not one.    It was suggested that the Research Unit of the Committee should look into it, to ascertain the correct way the word should be spelt and to rectify it, if need be.
The Chairperson agreed to the suggestion.
Mr Ollis stated emphatically that he could not support the suggested inclusions proposed by Mr Moteka. The issue of the labour brokers had been argued recently in the Fourth Parliament, and it was the view of the Democratic Alliance that it should be extended for six months.  However, an extension for three months was approved. That would have been the opportune time for this discussion to have been held. The bill had been approved by both Houses of Parliament, and the bill is before the President. The Committee could not recommend what would go against what the Committee recommended just less than six months ago. To do that would be to amend the Constitution.
Mr Bagraim supported Mr Ollis’s stance on the inclusions. He reminded Mr Moteka that at the previous meeting of the Committee, the legal experts that had been brought in had explained that on issues of this sort, for these kind of inclusions to be made, the legislation would have to be amended.
Ms Loliwe was of the same opinion as the two previous speakers. At the previous meeting, ample opportunity had been given for all Members to make recommendations into the report. Inserting any major clause now would hinder the report from being adopted today, as it was the desire of the Committee members to make sure that the report was seen in its final state by the Members before its submission.
Ms P Mantashe (ANC) reiterated that she would not support the two proposals being tabled by Mr Moteka. This was not a bargaining forum, but a Portfolio Committee.  Mr Moteka could wait for an opportune time to raise his inclusions.
The Chairperson said that it was obvious that the two proposals by Mr Moteka had been rejected by the Members. The processes as outlined in the constitution could not be flouted, as the issues were still before the President.  During the State of the Nation Address, the President had touched on the issue of the minimum wage, and the Department of Labour had also been asked whether they had started with the processes regarding the minimum wage. The input from the Portfolio Committee would also be included subsequently.
Mr Bagraim moved the motion for the adoption of the recommendations made by the Portfolio Committee on Labour.
Ms Tongwane seconded the adoption.
The Chairperson confirmed that the recommendations had therefore been adopted by the Committee.                  
The meeting was adjourned.
 

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