CCMA and NEDLAC on their Annual Performance Plans 2015/16

Meeting report

The Chairperson welcomed visitors, Members and officials from NEDLAC and the CCMA

Briefing by CCMA Making a Difference 2015/16-2019/20 and APP 2015-16

Mr Daniel Dube, Chairperson of the CCMA Governing Board, said the Making a Difference Strategy seeks to achieve the following goals: enhancing and extending service delivery, to transform workplace relations, and advance development with the following sub goals:

• Enhancing the labour market to advance stability and growth
• Advancing good practices at work and transforming workplace relations
• Building knowledge skills

The second goal was to strive for organisational effectiveness with the strategic objective of optimising the organisation. About 101 advisory arbitrations awards were issued from 2011-2014 of which in 97% of the matter, the award found favour with the parties. The Advisory Arbitration awards also aid in the resolution of mutual interest and strike related matters. The CCMA saved 33 694 jobs from 2013 to 2014 and the job saving efforts generate a financial impact to the national economy of about 8 to 14 times on national expenditure. In the previous financial year, the CCMA dealt with 170 673 cases and conducted 43 033 arbitrations with only 45 awards sent to parties late. The CCMA had partnered with six universities in delivering a Labour Dispute Resolution Practice Qualification. Supply chain management systems will be strengthened with effective adoption of new DTI codes new Treasury regulations and further fostering good governance. 

Discussion
Mr M Bagraim (DA) said while the CCMA boasts that it has managed to resolve 97% of cases, users of the CCMA complain that commissioners bully them into taking certain awards or settlements. The training lay off spin was a failure and not taken by people at all and trade unions were not interested in it. The CCMA had not done much in explaining to employees the long-term implications of losing a job as they just hurry to claim their pensions. The CCMA offices in Cape Town were not user friendly, rent was not paid, the building was sold, and the toilets were without toilet seats and toilet paper and are a disaster for people who visit those offices, especially those who have travelled long distances. There were administrative problems in which awards were made against employees and not enforced. There were other organisations such as law societies; the Labour Law Society, did the CCMA make use of them? The CCMA could exploit business by going to them to train officials in small business labour dispute resolution.

Ms S van Schalkwyk (ANC) said that in a country like South Africa where unemployment was very high, the CCMA should explain the target of saving jobs at only 20%. Which strategic partners worked with the CCMA to address unemployment, poverty and inequality? Where would the offices be opened in Mthatha and Vryburg? She asked which countries South Africa refers to when it talks of best practices and how were they adaptable to South Africa.

Mr I Ollis (DA) asked why the central services committee had not appeared before the Committee for six years to understand what it does, how it decides in the central services Committee, and whether it has a budget? One of the problems affecting all South Africans was electricity and a threatened strike was looming. What has the CCMA planned to avert the strike given that it has the power to intervene? The strike will be devastating as the national grid is weak. What was the Ekhurleni declaration? It was good that sheriff costs were now paid by the CCMA. What were the average dismissals that it sees per year? How much does it cost to administer a person’s settlement and what the person actually gets in situations of unfair dismissal? What was the effect of the new Labour Relations Act since it was enacted? Did retrenchments increase or decrease? Does the CCMA have something to do with violent strikes? On the R100 million lease for CCMA offices in Cape Town, has somebody been suspended or charged for trying to commit fraud of any internal disciplinary hearing?  

Ms F Loliwe (ANC) said it was impossible to say a certain percentage of jobs will be saved without declaring the actual target. It was a non-committed target. She appreciated more than 170 000 cases were resolved in the previous financial year, but wanted to know the backlog. Why did the CCMA set a target of 75% instead of 100%? The budget did not indicate what the money on goods and services will be spent on, or whether the CCMA was in deficit or surplus in the 2014/5 financial year?

Mr D America (DA) said it was pleasing to hear that steps were being taken to assist vulnerable employees to ensure that their awards were being executed, which had been a problem for the vulnerable. Strategic objective one should state that 100% of employees were assisted rather than saying 25% progressively every quarter.

Ms P Mantashe (ANC) said the country needs labour peace and asked what the CCMA has done with the current public service negotiations. Which offices had already been opened, since the two offices were to be opened in 2015? Why was the Cape Town lease not mentioned in the report?

Ms Nerine Khan, Director, CCMA, replied that the sections that were amended in January in the Labour Relations Act had been slightly widened to give the CCMA power to influence invitation to the bargaining council in matters of interest. The CCMA system was based on voluntary participation and the CCMA does not have capacity in law such as in Canada where the court or minister can suspend a strike for negotiations.

The Chairperson said the law as amended gives the CCMA a little power and asked at what point that power Is used and at what stage the CCMA come in.

Ms Khan replied that section 150 has been amended in so far as a matter being of public interest or a national strike.  In such a case, the director of CCMA in consultation with the state may encourage the parties to come for engagements, but does not have the power to direct them. The director can use the psycho or socio pressure to start engagements. Previous successes include the private security strike in 2007 by inviting trade unions and businesses to engagements. It was based on social contract, on a voluntary basis. The timing of the intervention was based on the commissioners and mediators briefing the director in relation to how the process has gone in bargaining. The CCMA works behind the scenes and sometimes the parties reject the CCMA. Its intervention therefore has to be done at an appropriate moment. The CCMA works with them as to the best way of bargaining, the approach, making presentations, and whatever will be required. Different sectors have different needs. The CCMA assists parties on what they will table and additional support they may need. The post process involves asking what went wrong and how the parties can best work the way forward. The parties have to first accept the CCMA and its principles.

Mr Jeremy Daphne, National Senior Commissioner, CCMA, responded that the CCMA had introduced a labour market monitoring tool on existing and prospective strike matters. There were various levels of conflict identified with this tool namely alerted, escalating and when conflict manifests itself. Currently, private security negotiations were underway and have not reached a level to be referred to the CCMA. Sometimes parties ask for a CCMA facilitator in the collective bargaining process in preliminary rounds. When it reaches statutory reconciliation the CCMA deploys specialists and when the matters was not resolved and a potential strike offered, the CCMA then offers section 150 to the parties as well. From September 2014, the CCMA has closely monitored strikes countrywide and more than 70% were resolved. On collective bargaining there was a pilot in the engineering sector and the CCMA has looked at what worked and what did not. Advisory awards in the presentation referred to collective bargaining awards given on wage disputes. The CCMA has been closely monitoring the public service dispute and were using their facilitator.

Ms Khan said public service employees fall under a bargaining council and parties decide if they would want a facilitator. The CCMA was not directly involved in the process but was keeping in touch with the negotiators, but it does have influence over the process. The CCMA sometimes prepare parties and trade unions before they go to the negotiation process.

The Chairperson asked if the objectives were responding to the shortcomings observed in certain areas. What were the strength and weaknesses of CCMA? Members raised questions on areas where the CCMA was not effective enough and have not reacted promptly. What was new in the presented objectives that did not apply in the previous years? What plans were in place to achieve the goals informed by the shortcoming in the past years? There were public service negotiations and a number of strikes looming that members raised.

Mr Mkalipi, Deputy Director General, Department of Labour, replied that that went o the heart of the constitutional matter. The right to strike was a constitutional right. The CCMA cannot go too early because labour will accuse it for undermining its right to strike and it cannot go too late because society will blame it for not doing its job properly. It was a delicate balance it has to make. Each strike had to be looked at differently and when was the right time to intervene. When the strike starts workers will be very vocal thinking that the company will act while on the other hand the company will be rigid at the end saying workers were about to give up. The CCMA was trying to run around this and the CCMA cannot undermine the right to strike while ensuring that strikes do not destroy the economy.

Ms Loliwe said that entities must not try to be defensive on issues that do not need defence. Mr Mkalipi has given the answer to all the questions asked and there was no need to run around.

Mr Mantashe wanted to know at what point the CCMA gives a report to stakeholders, trade unions and company workers.

An official from the CCMA told the Committee that as to when the CCMA intervenes had been dealt by Mr Mkalipi. It was a balancing act and the tool that the director spoke about gathers for the CCMA and for the country the events that will likely lead to precipitation. The tool records events that when put together will become a petrol bomb to ignite at a certain point. The tool predicts conflict. The situation at Labour at national level will light up the situation. The tool was created for the country to understand why it ends up with strikes. The Labour Relations Act assumes that the parties were equal at any given moment with their invitation and acceptance, which is where the problem lies. The parties will say they are still talking.

The Chairperson asked in how many strikes the parties did not come to the CCMA to seek solutions. Do the strikes take the CCMA by surprise?

Ms Khan replied that on the major strikes, the CCMA was aware that negotiations were happening and were involved to the extent the parties wanted it involved. In the context of wage negotiations, the CCMA was aware of them, as for instance it was aware of the public service negotiations that were still in the bargaining chamber. While the CCMA may offer help or contact negotiators, it was not involved in the discussions because the parties were empowered by law to resolve matters themselves. In negotiations in the gold sector and they had chosen an independent facilitator not from CCMA. If that process deadlocks, the parties will have to come to CCMA before a strike. The CCMA was always negotiating, sometimes by invitation sometimes not. It was monitoring the big situations in the course of the last year and has been unsuccessful in some instances. It does an evaluation process of the bargaining process, contacts the parties and provides feedback and presents to the trade unions. However, this was all dependent on invitation. On the issue of bullying, they were target set for the commissioners by the governing body and they try to resolve disputes within their powers.

Mr Ronald Bernickon, National Senior Commissioner: Operations, CCMA said that the CCMA received 88 000 referrals. The objective of the CCMA was to achieve a return to work settlement, not necessarily to allow people to walk away with money. The problem was that the majority of workers that visit CCMA were not represented by trade unions. Most of them said that he/she does not want to go back to the employer; she/he just needs money. In such situations, the commissioner’s hands were tied. Commissioners were not encouraged to bully parties. Complaints were investigated and communicated to the complainant and the commissioner.

Mr Cameron Morajane, National Senior Commissioner: Legal Services, CCMA, said conciliation was a process of no record, and it cannot even record proceedings. When a complainant comes, he/she has nothing on record to show whether it occurred or not. In the arbitration, video recordings were used, but in conciliation and mediation, it was a process of no record and it was clearly stipulated in the Act that it was private and confidential. It was important to separate what happened before January 2015 because the process was different. In terms of the amendment, the changes in the enforcement only apply to cases that happened after January 2015. Cases that were pending will be treated in terms of the old law. The award has two portions, award or reinstatement. Sheriff costs only deals with portions that deal with money only. In cases where the employer was refusing to reemploy a person, the CCMA and the sheriff have no power. This was a matter that was solved at the labour court initiated by the employee. The assistance given was not in terms of percentages, but in terms of a design developed by the CCMA. Anyone who approached the CCMA was helped.

Ms Khan replied that the CCMA gets involved with practitioners in labour law society and industrial practitioners. It has mutual agreements where they help each other in training. For cost recovery, in certain specific areas it can charge a certain cost not on a profit margin. It was doing road shows and trained small businesses so that people become aware of its work. The target of 20% job saving was based on the historical data on the work it does. The process was always to try and save jobs. Where retrenchments cannot be avoided, the CCMA could offer assistance in terms of training and investments as far as it can go.

Ms Loliwe said if 20% jobs were saved, what percentage and number of jobs were retrenched.

Ms Khan said she would verify the numbers and give them back to the Committee. When an employer indicates to the CCMA that it has to retrench, it fills a form that 400 jobs will be lost and will try to save 100.

Ms Loliwe said the person who sponsored the 20% view must answer that question.

The Chairperson said the whole CCMA management was here and cannot tell the Committee that consultants developed the report.

Ms Khan said somebody will take the details from the computer.

Mr Daphne replied that the 20% was calculated based on the number of jobs to be retrenched and number of jobs saved of which the average was between 20 to 25%, but did not have the exact figures.

Ms Loliwe said this was not an answer. She had asked for the retrenched rates.

The Chairperson said the Committee does not require certain academic credentials to do oversight. The number of retrenchment deals with the core mandate of the CCMA and the vulnerable.

Ms Khan said offices in Welkom and Mthatha were opened after thorough consultation with stakeholders. When it gets infrastructure, and public transport access those recommendations will be given to the governing body and the CCMA will apply to Treasury for additional funding. Extensive studies were being done on Mthatha and Fryeburg to identify where to locate the offices.

The Chairperson asked if Ms Khan was confessing that she did not know where exactly the offices would be located. This question was asked last year; the CCMA has done nothing since then.

Ms Khan said the process goes through an approval process.

The Chairperson interjected and asked who approves it.

Ms Khan replied that the CCMA does a feasibility study and sends it to the governing body of the CCMA for approval.

The Chairperson asked how long the approval and study take.

Ms Khan replied that from a few months to six months and the governing body can request certain issues to be addressed. Treasury will then approve the recommendation of the governing body by allocating money. It also uses Department of Labour Offices and community centres around the country.

The Chairperson asked if it asks for approval of money before approval of the site.

Ms Khan replied that it was the other way round. Offices were chosen 10km from the city centre but valuations had to be done. Social partners in those areas can tell if it targets a wrong area.

The Chairperson asked who the social partners were.

Ms Khan replied that it was labour, business and the state or any one of them.

Mr Mkalipi said the CCMA deals with cases throughout provinces and over the years must report on where it was dealing with cases in that province. When submitting a case a form has to be filled. He suggested that since there were more than 200 DOL offices around the country, anyone should be able to walk in the DOL, fill in a form and despatch it to the CCMA. This would make reporting of cases easier. Other organisations can be used to submit a case. Hearing a case was done everywhere. The partnership between the CCMA and DOL should be strengthened.

Ms Khan said that on best practices, recognised research methods ensure that people can learn new things from other countries by doing comparative research. The Minister of Labour in terms of law appointed the central service committee under the auspices of the CCMA. A budget allocated to the central services committee.

Mr Mkalipi said the Committee was at liberty to call the central services committee to Parliament.

Mr Ollis said the central services committee must be called to parliament to explain what it does.

Ms Khan said the central services committee has made a determination that workers in Eskom were considered in essential services which means that they were restricted on their right to strike. However, there was a dispute on the determination by the central services committee. The receptionist working for Eskom has the right to strike. There was a case on the labour court on who was an essential worker. The last two or three years said Eskom wages were subject to interest arbitration.  

Mr Bernickon said that the Deputy Minister of labour convened the labour indaba in November 2014. What came out of the indaba was a declaration by business, labour and government that established principles that include creating employment, labour market stability, the right to strike, collective bargaining, and social security. The second theme was addressing inequality and towards a national minimum wage. Those two themes have found their home in NEDLAC. Two task teams have been established to detail information on the terms of reference. The CCMA has to promote what came out of Nedlac indaba.

Ms Khan said that the amendments in January gave effect that after an employer has worked for three months, he/she was deemed permanent whether he/she came in via a labour broker or not. Different labour brokers were interpreting that clause differently and the CCMA was expecting a lot OF cases from labour brokers. Commissioners were trained to deal with such cases.

Mr Haroun Docrat, Senior Commissioner: Collective Bargaining, CCMA, said the CCMA tries to secure picketing rules should employees go on strike. Violent strikes were an ongoing challenge. In September last year, The CCMA monitored strikes in the country and regions as well. On 42 out of 45 strikes, the CCMA was involved as early and tried to get people to work as soon as possible. The CCMA has introduced a strike-monitoring tool to try and assist the labour market.

Mr Morajane apologised that there was no report on the Cape Town lease in the presentation. The case itself was with the High Court and has reached a stage of exchanging pleadings. One of the applicants who had been opposing this case had withdrawn their opposition to the matter. There have been disciplinary cases but no case reported to the police on fraudulent activities. No fraud was found, but the lease was in contravention of the policies of the CCMA. R300 000 had been spent on litigation on the case at the High Court.

The Chairperson asked why the case ended up in court when nothing was reported to the police.

Mr Marojane replied that the case has two parts. A case brought by the CCMA to set aside the lease. There has been exchange of issues and withdrawals between the parties. The fraud element has not been found yet, which is why no case has been reported to the police.

The Chairperson asked which process would identify fraud.

Mr Marojane replied that the issue was that the forensic investigation that formed the basis for the case was whether it must be set aside or not, and what should be disclosed to the other parties. The issue was what records should be disclosed on the matters that form the case at High Court. No person was suspended.

Mr Ollis asked when the investigation was going to be finished and somebody was fired.

Ms Khan replied said the investigation only concerned one person who had has resigned from the CCMA.

Mr Ollis asked if that person was left to go free as was common in many government departments.

Ms Khan replied that the individual entered an agreement with the CCMA and that he resigned. The individual was accused not of fraud, but for not following procedure. This does not prevent the CCMA from taking any further action should anything further be found.

Ms Loliwe said the information given to the Committee has to be further probed and the entity must give all the relevant information.

The Chairperson asked the content of the agreement with the individual.

Ms Khan replied that the person was charged on a disciplinary offence, a hearing was conducted and an agreement was reached between the person and the CCMA in relation to termination of services.

The Chairperson asked what that person did exactly.

Ms Khan replied that there was a deliberate flouting in following supply chain procedures. This was the main charge brought to the individual. There were also other people but it was not to the extent that this individual was involved but related to committee chairing.

The Chairperson asked what the deliberate flouting involved.

Ms Khan replied that the forensic audit found that the person did not follow the supply chain procedures and presented that they were correctly followed, giving the committee wrong information. The individual deliberately manipulated supply chain procedures. No rent was being paid for the building.

Mr Ollis said in case that the court does not cancel this lease; an amount of R100 million has to be paid. The problem was not the legal fees, but that state money was to be used for an individual who deliberately flouted procedures.

Ms Ntombi Boikhutso, Chief Financial Officer, CCMA, added that the person was put on suspension because supply chain procedures were not followed. As a supply chain manager, it was his responsibility to understand the policies in place, and should have known better.

The Chairperson instructed the CCMA to come back and report on the lease agreement alone.  The CCMA was wearing white glasses on a person whom it had chosen to resign.

Ms Khan replied that the CMA currently had no backlog cases. The CCMA was required to settle cases in 30 days. Arbitration awards were settled and met within 14 days. Commissioners can apply to the director if unable to meet that deadline. Complex dismissals can take time and if being heard, were not considered backlogs.

Ms Boikhutso said the money on goods and services covered rentals, dispatch of cases, training and other operating expenditures.

The Chairperson instructed the CCMA to come back to report on the Cape Town lease alone.

NEDLAC Strategic overview 2015/16 to 2019/20 and APP 2015
Mr Mahandra Naidoo, Acting Executive Director, NEDLAC, said that over the next five years, NEDLAC would strive to promote growth, equity and participation through social dialogue. The strategic outcome oriented goals were to

- Promote economic growth, social equity and decent work
- Promote and embed a culture of effective social dialogue
- Promote effective participation in socio economic policy making and legislation
- Enhancing governance and organisational effectiveness

In order to achieve the above, the strategic plan was structured around three core programmes namely administration, core operations and capacity building funds. NEDLAC has appointed an independent audit and risk chair, an audit charter was concluded, established a risk management committee and developed a risk register.

Discussion

Ms van Schalkwyk asked what were the challenges experienced in filling vacant posts across the number of sector chambers, and how it influenced service delivery. There was a challenge of unemployment in the country. She asked for categories of vacant funded posts, and what the budget on goods and services caters for.

Ms Loliwe asked if maintenance would be completed. There were no consulting fees, were consultants being utilised?

Mr America asked if renovations were completed within budget and time. He asked if social partners have submitted business plans and how they were monitored in relation to funds allocated.

Mr Ollis said he had requested NEDLAC to invite the Committee to the labour indaba that happened in November 2014; but the invitation was never sent. He asked if the money to replace computers was replacing stolen computers, was there a break in at NEDLAC offices, was it reported to the police, and at which police station? He asked if social partners travelled to other provinces other than Gauteng.

Ms Mantashe asked the amount used for auditing fees

Replies to NEDLAC questions would be in writing.

The meeting adjourned.