Labour Budget Review and Recommendation Report

Meeting report

The Chairperson welcomed everyone and said the objective of the meeting was to consider amendments to the Budgetary Review and Recommendations Report of the Portfolio Committee on Labour.

The Committee went through the analysis page by page, determining some changes which could be made, in particular, to grammar and the correct use of terms. No changes were needed in the first two pages.

With regard to the overview of the key policy focus areas, dealing with the improvement of Unemployment Insurance Fund (UIF) benefits to better the lives of beneficiaries, especially women, Mr I Ollis (DA) argued that the inclusion of domestic workers on maternity benefits was not correct. The inclusion of domestic workers was supposed to be on Compensation Fund benefits instead. Other Committee Members agreed with him and removed this point, which was put in another category on page three.

Mr M Bagraim (DA) wanted to ascertain how the second point on page four would tie in with the austerity measures. The bullet point in question stated that the Minister would ensure that the vacant posts were filled with suitably qualified persons within 12 months, as required by the Public Service Regulations (PSR).

Ms F Loliwe (ANC) urged other Members to disregard the issue of austerity measures, since the Department was alleging that it was understaffed.

Mr Ollis then urged the Committee to include the word ‘key’ in the relevant bullet point so that the statement would read as follows: “The Minister would ensure that the key vacant posts were filled with suitably qualified persons within 12 months, as required by the PSR.”

Mr Sibongiseni Ngcobo, Content Advisor, reminded the Committee that the point under scrutiny was simply one of the summary points of the 2013/14 BRRR recommendations. The Committee apologised for the misunderstanding.

Mr Ngcobo highlighted that, under overview and assessment of financial performance, operational expenditure had to be included under the heading ‘Main’ in the 2013/14 column, because it did not included transfers and subsidies.

Mr Ollis asked the reasons for the increase from R2.1 million to R2.4million.

Mr Ngcobo responded by referring to page six, paragraph one. The increase in the overall budget was mainly the result of an upward adjustment of the budget for Public Employment Services, while labour policy and industrial relations programmes had been increased from R246 million to R400 million, and from R111 million to R764 million, respectively.

Mr Ngcobo said that information on 2014/15 financial performance was received from the Treasury department.

Mr Ollis asked why the budget had been cut.

Mr Ngcobo quoted directly from the information by the Treasury Department. He said that by the end of the fourth quarter, there were 118 vacant posts -- mainly pupil inspectors, generalist inspectors, specialist inspectors and principal inspectors. Funding had been reduced in the 2014 budget due to the delays in filling the posts over the past three years.

The Chairperson wanted to know the reasons for the decision by the Treasury Department. The Department was acting as if it was covering up for something in the manner it put across its explanation on the budget cut. She said that Treasury had reduced the money on the grounds that the Department was not spending it.

Mr Bagraim said there was a need for money and inspectors to facilitate proper inspection. South Africa had the lowest ratio of inspectorates in the world. Something was not adding up, and it was unfair on the part of the Treasury to do nothing about it and later blame the Department.

Mr Ollis clarified the situation of the budget cut. He said that under-spending had occurred in the previous years and because the department was not spending it, Treasury had cut the budget. The language used to explain the situation was wrong; hence the confusion among Committee Members. The explanation satisfied the Committee members and Mr Ngcobo.

The Chairperson encouraged the Department to give clear explanations to avoid future confusion. The Committee should state how the paragraph should be worded. If there was a need to ask for more money, then conditions must be specified, since the budget had been cut due to under-spending.

Ms Loliwe proposed that the statement which was causing problems should be broken into two parts, to read: “Funding for these unfilled posts was reduced in 2014,” and that: “Budget due to the delays in filling these posts over the past three years.”

Mr Bagraim agreed with Ms Loliwe, and added another statement recommending the recruitment of more inspectors. The Chairperson suggested that the additions should be done at the end.

Mr Ollis said that the Department allocated money to trade unions and organisations for the disabled. Most of the money had not been paid out, especially to organisations for the disabled, and this had not beenmentioned anywhere in the report. There was a need to talk about that.

The Chairperson said that the Department had already responded to this issue in the last discussion. The manner in which it had been given should be reviewed.

Mr Ollis said the Department had complained that some changes had been made, and that the complicated criteria had made it difficult to comply with. There was also a problem of accounting. All he wanted was for the Department to sort out this mess and make sure that the money was channelled to its rightful beneficiaries, especially the vulnerable such as disabled people. He did not want to enter into politics over the matter.

The Chairperson urged the Department to come up with a formulation which spoke to the fact that the criteria must be reviewed as quickly as possible to benefit vulnerable groups such as the disabled.

Ms Loliwe warned that a regulation could have implications of excluding some beneficiaries who had been benefiting before. The Committee should keep that in mind.

Mr Ollis proposed the following phrasing: “We urge the Department to immediately resolve discrepancies with the Treasury and disabled organisations so that the organisations can receive payments or benefits.”

Ms Loliwe wanted the Treasury to work out the obstacles in the implementation of the new regulations.

Mr Ngcobo said that the concerns raised by the Committee would come out as recommendations.

Mr Bagraim said the Compensation for Occupational Injuries and Diseases Act (COIDA) and UIF were supposed to be separated from each other, and not as per the bullet point 5.3 on page 13. He said the Committee had lots of problems with COIDA, since COIDA had been identified by the Auditor General as negative. Performance delivery by COIDA had been very harmful.

Mr D America (DA) clarified that the issues raised by Mr Bagraim were on page 16 under 9.2.

Mr Bagraim said that the Information Technology (IT) system had been blamed for the poor performance of both the COIDA and UIF. He pointed out the misplaced phrasing on government and operational issues on page 14, under 7.2. The statement read: “Another issue of concern is the IT system of the Department.” This was wrong. Instead, he pointed out that it should read: “Another issue of concern is the failure of the IT system of the Department.”

Mr Ollis referred to the issue of labour policy and industrial relations with particular attention to the National Economic Development and Labour Council (NEDLAC). The Committee should say that NEDLAC was looking forward to the summit in order to gain new ideas to improve labour relations. New proposals from the summit would help to improve deteriorating labour relations, where strikes had been rife recently.

Mr America said that instead of using the word ‘proposals,’ the Committee should use the word ‘outcomes,’ as it was better suited to the intentions of the Committee.

Mr Ollis and the Chairperson rephrased the second bullet point on recommendations to read that the Department and its entities, instead of the UIF, must report quarterly to the Committee to ensure that the quarterly expenditure improved, thereby omitting the word ‘funds’. The Chairperson said mentioning the Department was more appropriate than referring to the entities, because the Department, and not the entities, reported to Parliament.

Mr Ollis added another recommendation, saying that the Department must urgently resolve the discrepancy with Treasury and organisations representing the disabled so that they received benefits.

Ms S van Schalkwyk (ANC) concurred with Mr Bagraim on the challenges facing vulnerable groups, and said that the number of inspectors must be increased. Due to the challenges faced by vulnerable groups, the Committee proposed that the number of inspectors in the four categories should also be increased. In this line, the Chairperson suggested that the mentioned bullet point should be broken into two separate points as:

- The Department must monitor and ensure that Inspection and Enforcement programme’s expenditure increases to ensure that more specialist inspectors are hired and are provided with appropriate tools of trade such as vehicles and laptops.

- The Department must report to the Committee on a quarterly basis on progress made with regard to filling of vacant funded posts.

Ms Loliwe was concerned there would be repetitive points, and suggestsed some of them should be taken out. She asked if only specialist inspectors were required and proposed that that category be taken out. She added a recommendation that the budget cut for Inspection and Enforcement Services (IES) be reviewed, and the Committee would monitor its adherence.

Mr Ollis urged the Department to channel money to workers for training, and to reduce red tape so that workers could also benefit.

In response, Ms Sindisiwe Mkhize, Committee Researcher, said that training was done by NEDLAC and the Commission for Conciliation, Mediation and Arbitration (CCMA), and not by the Department directly.

Mr Zolani Sakasa, Committee Secretary, recommended the Department should simplify the procedure for assessing the training layoff funds.

The Chairperson said recommendations must be conditional, and recommended that the budget cut for IES be reviewed. The Committee would request the Department to table a detailed plan with time-frames for the expenditure.

Ms Van Schalkwyk questioned how the budget should be reviewed, as the review process was problematic.

The meeting was adjourned.