Functions and Operations of Essential Services Committee briefing

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Employment and Labour

13 May 2015
Chairperson: Ms L Yengani
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Meeting Summary

The Committee was briefed by the Essential Services Committee (ESC) on its functions and operations, along with some of the challenges that it had been facing with regard to its relationship with the Commission for Conciliation, Mediation and Arbitration(CCMA).

The Essential Services Committee was established in terms of Section 70 of the Labour Relations Act (LRA) 66 of 1995. Its primary mandate was to conduct investigations as to whether or not the whole or a part of any service was an essential service, and then to designate it accordingly. Minimum service agreements (MSA) were set for essential services, which designated how many staff could go on strike. The committee also handled disputes on whether services were essential.

The ESC was located at the CCMA and operated in terms of the Labour Relations Act (LRA). The Director of the CCMA was the Accounting Officer of the ESC. Operating within the CCMA presented some challenges. The ESC was made to feel like a “step child” of the CCMA and the priorities of the two bodies often did not align.

The ESC’s strategic objectives were: an educated committee, set of users and public about the mandate and the work of the ESC; timeous preparation and implementation of the 2015 LRA Amendments; seamless operations with the CCMA; an ESC that is known and accessible to its users; and strategic interventions for MSAs.

The LRA (Act 66 of 1995) defined an essential service as the parliamentary service, the South African Police Service, or any service, the interruption of which endangers the life, personal safety or health of the whole or any part of the population. It was the service that was essential, not the employees, business, industry or the institution within which the service fell.

Members were concerned that the ESC, after having been in existence for a long time, was still struggling with accessing resources. They asked if the budget wasadequate, where the funding came from, and whether the CCMA was withholding resources from the ESC. Who did the Chairperson of the ESC report to? It was a serious matter that the ESC were claiming in their presentation that they could not perform because of a lack of resources.

Members felt that education should be considered an essential service, because strike action interrupted children’s education and this had a profound effect on their wellbeing. They also asked if the ESC had engaged with issues such as load shedding and strikes in the platinum mines.

The public and the trade unions were not fully aware of their rights and this process. There was a big task ahead in educating the workforce on these matters.

Members asked the ESC to elaborate on the challenges faced with securing service providers and on the friction between the CCMA and the ESC. How was this affecting service delivery? 

Meeting report

Ms Nerine Kahn, Director, the Commission for Conciliation, Mediation and Arbitration (CCMA) began the presentation by explaining that the CCMA housed the Essential Services Committee (ESC), but the ESC was run by the Essential Services Committee Chairperson, AdvLuvuyo Bono. This was the first time that the ESC had presented to Members of Parliament, and an overview of the ESC’s functions and operations was therefore given in addition to the discussion on the challenges that the committee was facing.

Establishment of the ESC

Adv Bono said that the Essential Services Committee was established in terms of Section 70 of the LRA 66 of 1995. Its primary mandate was to conduct investigations as to whether or not the whole or a part of any service was an essential service, and then to designate it accordingly. Minimum service agreements (MSA) were set for essential services, which designated how many staff could go on strike. The committee also handled disputes on whether services were essential. The net effect of designation was to limit the right to strike.

Essential services include municipal traffic services and policing, municipal health, the supply and distribution of water, blood transfusion services, and fire-fighting, amongst many others. Several services provided by nursing homes (including private nursing homes), the South African National Defence Force, and at airports were also included.

The committee was located at the CCMA and operated in terms of the Labour Relations Act (LRA). Members were appointed by the Minister in consultation with the National Economic Development and Labour Council(NEDLAC). The CCMA provided administrative support by appointing, managing and paying the ESC coordinator. In 2013, the ESC requested a seat in the CCMA governing body (GB)to provide a platform to raise its operational challenges. The seat was denied on the basis that the seats at the GB were set out by the LRA. The committee therefore resolved to write quarterly reports to the GB, and twice a year to the Minister and the social partners of the CCMA.

The director of the CCMA was the Accounting Officer of the ESC. The ESC had adopted an operational plan to achieve PFMA compliance. Quarterly reports and assessments were therefore required. The committee included a Deputy Chairperson who was also a CCMA Senior Commissioner, as well as government representatives.

Operating within the CCMA presented some challenges. The ESC was made to feel like a “step child” of the CCMA and the priorities of the two bodies often did not align. There were problems with logistics, office space and training of members. This was not seen by the CCMA as urgently as the ESC. Resources were limited, as the committee was servicing the entire country with only nine staff and without regional offices. This created problems with internet access and office space.

A common understanding of what the ESC was and who should run it was lacking. This effected the relationship between ESC and the CCMA. The role of the GB and the Accounting Officer was unclear, because the LRA established these processes separately from the CCMA. When the CCMA and the ESC did conduct joint projects the ESC was not catered for.

Strategic direction

The ESC’s strategic objectives were: an educated committee, set of users and public about the mandate and the work of the ESC; timeous preparation and implementation of the 2015 LRA Amendments; seamless operations with the CCMA; an ESC that is known and accessible to its users; and strategic interventions for MSAs.

A large component of the ESC’s work was research, and work with the International Labour Organisation (ILO) was underway to improve the MSAs and learn from other countries, as there were no international guidelines.

Roadshows would be conducted around the country to raise awareness about MSA. Every municipality, hospital and so on needed an MSA. The strategy was to create a framework MSA which could filter down to local levels. A monitoring and evaluation function was being established.

In 2015, the ESC aimed to conduct one self-initiated investigation, two Section 71 investigations, 17 Section 73 disputes, 45 MSAs for municipalities, 45 MSAs for the public service, and 10 MSAs for services currently determined, such as old age homes, blood transfusion services, air traffic control, the weather bureau and others.

Legislative framework

The LRA (Act 66 of 1995) defined an essential service as the parliamentary service, the South African Police Service, or any service, the interruption of which endangers the life, personal safety or health of the whole or any part of the population. It was the service that was essential, not the employees, business, industry or the institution within which the service fell.

The case law that impacted the work of the ESC included Chirwa vs Transnet, Certification of the Constitution case, NUMSA vs Bader Bop, and SAPS vs POPCRU.

Powers and functions of the ESC

The powers and functions of the ESC were to monitor the implementation and observance of essential services determinations, minimum services agreements, maintenance services agreements and determinations; to promote effective dispute resolution in essential services; to develop guidelines for the negotiation of minimum services agreements; to decide, on own initiation, or on a reasonable request of an interested party, whether to initiate investigations as to whether or not the whole or part of a service was an essential service; to manage the caseload; to appoint panels contemplated in Section 70C to perform one or more of its functions as set out in Section 70D; at the request of a bargaining council, the ESC must establish a panel to perform any function in terms of Section 70D; the ESC may request the committee or any other appropriate person to conduct an investigation to assist the ESC in an investigation and to submit a report to it.

Panels could conduct investigations on whether or not the whole or a part of a service was an essential or maintenance service and make a designation in this regard. It could also ratify collective agreements providing for the maintenance of minimum services in a service designated as a minimum service. Panels had to be presided over by a chairperson or deputy chairperson of the ESC or by a senior CCMA commissioner.

The ESC was funded by money appropriated by Parliament to the CCMA and by grants donations and bequests made to it. The Minister of Labour had the power to make regulations concerning the functioning of the ESC and the panels, after consulting the ESC.

Investigations

Investigations were posted in the Government Gazette indicating that services were being investigated and inviting interested parties to make written submissions and make oral presentations in public hearings. Once the decision was made, it was published in the Gazette.

Any party could refer a dispute arising from the negotiations to the Commission or a bargaining council.

Minimum Services

Minimum services agreements were usually negotiated, but if an agreement was not reached then the matter could be referred to the CCMA or a bargaining council. If an agreement was still not reached then the ESC could determine the minimum services.

Conclusion

During the 2012/2013, 2013/2014 and 2014/2015 financial years, the ESC had operated within its budget and had not had any adverse findings, queries or concerns. It had delivered on its mandate in terms of the LRA. The ESC had received outstanding support from the CCMA Legal Department. The 2015/2016 year had started on a challenging not from the Accounting Officer’s desk. It was hoped that these issues would be resolved soon.

Discussion

Mr D America (DA) said that the ESC had been in existence for a long time, and its role was well defined. It was regrettable that at this point it was still struggling with accessing resources. Was the budget adequate, and if not, why not?

Could education be considered an essential service? When children’s education was interrupted by prolonged industrial action, did this not affect the wellbeing of the child? Had this been considered?

Mr M Bagraim (DA) said that all the determinations made up until the beginning of this year had to be revisited in terms of the new law. Did the ESC have the budget and resources to do this? Load shedding affected service delivery, could the committee comment on whether they had approached Eskom to discuss this. The public and the trade unions were not fully aware of their rights and this process. There was a big task ahead in educating the workforce on these matters. How would the ESC advise and educate the workforce? He asked for an explanation of which staff members were selected as providing essential services. In a nursing home for example, not every member of staff would be indispensable. In South Africa, problems arising out of strike action don’t threaten life and limb, but threatened the country. For example, strikes on the platinum mines were hugely damaging to the economy. Was it possible for the ESC to step in to save South Africa?

Mr I Ollis(DA) asked if the ESC had presented to parliament before. The Committee would like to see them once a year. He requested clarity on who was in charge of ESC currently, so that the Committee could understand the chain of command. He likened ESC to Noah’s Ark, which had been around for a long time and needed to be brought into modern times. Perhaps the CCMA could assist with this.

Mr Ollis represented some 50 000 voters, and many of these voters were concerned about the Madube strike, and they were concerned that their children in school were not protected by an essential services determination. Personal safety was part of the consideration when determining if something was an essential service. If school children of six or seven years old were left without teachers or adult supervision because of strikes, was their personal safety not at risk? Should an investigation not be initiated to make teachers for Grade One pupils an essential service? What could he do to start this process as a Member of Parliament?

The strategic plan spoke about 45 municipalities needing an MSA. Was this the total number of municipalities still needing MSAs? What challenges were unresolved going into 2015?

Ms S van Schalkwyk (ANC) thanked the ESC for an insightful presentation. Who did the Chairperson of the ESC report to? It was of great concern that such an old organisation should have challenges such as a lack of space. For nine members to be servicing the whole country was insufficient. Why were there only nine members? Could the ESC elaborate on the challenges with securing service providers? She also requested an elaboration on the friction between the CCMA and the ESC. How was this affecting service delivery?

The Chairperson asked for specific examples of conflict with the CCMA that had affected service delivery.

Ms F Loliwe (ANC) asked the Accounting Officer to explain what the problem was with providing resources to the ESC. Why did the Director have to approve everything that happened at the ESC? This could affect service delivery.

Adv Bono responded that there would never be enough resources. There were 278 municipalities but 45 were targeted in the strategic plan. This was because they had to budget for what was realistic. These numbers were far from what they should be achieving. However, they hoped that the MSAs that they established in that year would cascade down to lower levels and therefore more municipalities would be reached.

The issue of education was a very difficult one. South Africa had signed the International Labour Organisation (ILO) Convention on MSAs, and education was not included in this. However, the ILO did recognise that state officials were essential, and school principals were state officials acting on behalf of the state. The inclusion of education amongst essential services had been discussed with the Minister, and was included in initial drafts of the Act, but was ultimately not included.

Mr Ollisasked if the ILO Convention meant that the ESC could investigate principals.

Adv Bono said that the ILO Convention allowed for this but the Act did not. Education was removed during the NEDLAC process. In order to change this there would have to be a change to that Section of the Act.

Mr Ollis said that NEDLAC did not make laws, the Members did. They were not bound by NEDLAC. The Minister and the DA felt that it should be included and ANC colleagues may agree. Would the ESC investigate the option of including principals as providing essential services? They were not bound by NEDLAC.

The Chairperson said that the Committee should investigate this, not Adv Bona.

Adv Bona said that the education of the workforce was an important matter. The communication plan as laid out in the strategic plan dealt with training. They were attempting to do this as far as possible with the limited resources.

Adv Bona said that the ESC was appointed by the Minister of Labour, this had nothing to do with the CCMA. The CCMA merely provided administrative support. They were placed within the CCMA because both organisations operated within the LRA. The ESC did not report to the CCMA. It was the ESC that initiated the process of reporting to the CCMA GB, not the other way around. They had done this because while the Director of the CCMA was to be the Accounting Officer, there had been no Accounting Authority. The ESC also initiated reporting to the Minister and social partners. In future they would also report to the Parliamentary Committee.

Adv Bona elaborated on some of the difficulties that had been experienced with regard to the relationship with the CCMA. He had requested a dongle and a cell phone allowance, and it had been agree that he would be given R1000 for phone calls. However, the CCMA had only provided R500 a month when it came to it. He had little control over budgetary issues like this, which created problems, especially as he spent a lot of time travelling in his capacity as Chairperson.

The Chairperson asked if the ESC’s funding came from the CCMA.

Adv Bono responded he was not sure, but suspected that the ESC was a line item in the CCMA’s request for budget. They were not funded by the CCMA but through the CCMA. This was his understanding of the matter.

Ms Kahn shed light on some of the questions surrounding the budget. The ESC budget had increased by 140% over the past three years. The ESC budget for this financial year was R3, 804 million, which was exactly what the ESC had requested. When the mid-term budget review came about, the ESC could make a presentation motivating for an increase if they felt it was necessary. There had already been a substantial increase, as in 2012 the ESC budget was less than R1 million and it was now nearly R4 million.

The Chairperson said that this gave a better understanding of where the funds were coming from.

Ms Loliweasked if the ESC was listed as a line item in the CCMA’s budget, and whether it was utilised solely for the ESC.

Ms Kahn confirmed that the ESC was allocated R3, 804 million, this was a ring-fenced line item, and was given to the ESC every month through the usual processes. It was specifically allocated only for the ESC.

Ms P Montashe (ANC) asked if the cellphone allowance was being refused as a matter of principle, was it based on the budget for the ESC. Withholding resources meant that the ESC was unable to do their job. They were covering the whole country and needed the resources to do so.

The Chairperson said that the ESC were claiming in their presentation that they could not perform because of a lack of resources.

Ms Kahn said that the Accounting Officer had to abide by processes of the organisation. A cellphone allowance had not been provided for in the initial budget as the Chairperson was a part-time position. Adv Bono had requested an allowance and was asked to provide cellphone bills with the calls made for the ESC marked so that the money could be reimbursed. This was an interim measure until the situation was resolved. Adv Bono had also asked for access to the CCMA IT system on his personal laptop. This was opposed to CCMA policy and regulations, and the CCMA was bound by the policies of the State. As an alternative, the CCMA had offered him an alternative laptop with 3G access, but he was not content with this. The CCMA had then sought to change the policy to accommodate him, but this required a meeting with the GB which was still scheduled for the next week.

Ms Kahn felt that the impression was being made that the Director decided on what resources were available to the ESC and what cases were dealt with. This was not the case, and she did not have any say in such activities. However, she had to account to the GB and to Parliament in relation to the spending of funds, and it was therefore important that policy and regulation was followed. The supply chain needed to be followed in line with recognised policy processes. There was no intention to withhold funds, but all involved were bound by the policies of the CCMA.

Ms Loliwe said that it was clear that not everything was well with regard to financing of the ESC. This was not a new body, what had been the practice previously? She suggested that the Director General (DG) should sit with the Director and the Chairperson of the ESC to resolve the problem of resourcing, and that the DG report on this at the next meeting. She asked the DG to ensure that this structure was able to fulfil its mandate.

Mr Ollis asked if everyone in the ESC worked part-time. This was confirmed.

The Chairperson agreed that R500 airtime was not sufficient and it was not fair to ask people to pay from their pockets and be reimbursed. There were basic requirements such as an office which should be provided. She did not understand how the CCMA could not provide this.

R3 million seemed insufficient for the work that the ESC had to do. The day before the Portfolio Committee had heard that the CCMA had spent R3 million on litigation, yet it did not have money to give resources to the ESC.

No one would like to be given an old laptop to work from, especially if they were travelling a lot for work. Everyone wanted the state of the art.

Ms Mantashe referred to the treatment of the ESC as a constructive dismissal attempt. Why was there a problem with accessing service providers? Did the CCMA not have a database of service providers?

Adv Bono responded that he was not clear in which cases three quotes should be obtained and in which cases service providers were sent from the CCMA. He felt that he did not have a say in which service providers were used, and conflict arose when he lodged complaints about service providers.

There was already a commitment from all parties to sit and resolve the resources issues.

Ms van Skalkwyk said that in some instances three quotes had to be obtained, and in some a particular service provider was enforced on him. Could the Director give clarity on that?

Mr Bagraim said that the quicker the resources issue was resolved the better. The work was vital but the budget was minimal. He hoped that the budget could be expanded and full time staff appointed.

Ms Kahn said that according to regulations, if the service would cost a under a certain amount then three quotes should be obtained, if it was over that threshold then a tender process had to be initiated. She could not comment on the particular incident when confusion had arisen over this matter as she did not know what incident was being referred to.

The Chairperson said that the CCMA was referring to processes and regulations but did it always happen that they followed these processes to the letter. This was an important question, particularly in light of the meeting yesterday in which the irregular tender processes at the CCMA were discussed. She would ask the Chairperson of ESC for specific examples.

Ms Kahn said that she would never say that everything was done perfectly as there were always challenges in relation to issues of this nature. In the CCMA’s annual reports there had been several references to supply chain challenges, and they were seeking to resolve this. She could see that this incident was investigated, but she could not comment on the specific incident.

The Chairperson accepted this response, and urgently requested the forensic audit report referenced in the previous days meeting.

Ms Kahn said that the CCMA had undertaken during the previous meeting to provide this, and it would be sent if it hadn’t already been.

The Chairperson said that it was clear that there were serious challenges, and that these should be deal with by the DG. She commended the Member who had invited the ESC to present to the Committee.

The meeting was adjourned.

 

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