Department of Labour on its 2015 Annual Performance and Strategic Plans

NCOP Economic and Business Development

26 May 2015
Chairperson: Mr E Makue (Gauteng, ANC) (Acting)
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Meeting Summary

The Department of Labour briefed the Select Committee on Economic and Business Development on its 2014/15 Annual Performance and Strategic Plan for 2015/16. The report explained that there were six programmes, and that the main Administration comprised the Ministry; Deputy Minister, Director General’s Office; Corporate Services (CS), Chief Operations Officer (COO), Chief Financial Officer (CFO). There were entities established in terms of various legislation and Cabinet decisions, to assist DoL in meeting its mandate, and these included the Commission for Conciliation, Mediation and Arbitration (CCMA); National Economic Development and Labour Council (NEDLAC); Productivity South Africa; and Supported Employment Enterprises (currently trading as Sheltered Employment Factories).

The Department explained that it was mainly concentrating on producing outcomes under Government Outcome, decent employment through inclusive economic growth; Outcome 5, a skilled and capable workforce to support an inclusive growth path; Outcome 11, create a better South Africa, a better Africa and a better World; Outcome 12, an efficient, effective and development oriented public service; and Outcome 14, transforming society and uniting the country.

Particular targets and achievements were noted for each of the programmes, and the Department focused particularly on the Management Performance Assessment Tool timelines and drawing of responses to meet the suggestions in the reports. It also noted that it was aiming to finalise 95% of all fraud cases received or detected, within 90 working days. Dates were also given for approval of various Departmental Communication Strategies and legislation (regulations). Workshops would be conducted on the Code of Good Practice for Equal Pay for Work of Equal Value. Under the Inspection and Enforcement Services, the performance indicator looked at the number of designated employers reviewed each year, to determine compliance with employment equity legislation, and it was targeted that all would be issued with the recommendations within 90 days of the review.

Members of the Committee made comments and asked questions of clarity with regard to how the Department determined the provincial allocation of the budget. It was suggested that although the North West and Northern Cape did not have high population figures, they had particularly stringent needs and vulnerable people. The Department was also asked how it allocated the numbers of job seekers that were registered on a database, and it explained in some detail the process of registration and work seeking but said that there were disparities, often because the skills set did not match the job requirements. The Department explained the fraud cases and set out how it was attempting to improve the systems. One Member congratulated the Department on the way it was handling the finances. Members also asked how it calculated the targets for fighting fraud and the inspections, and whether it should not be doing more, but the logistics and realities were explained.
 

Meeting report

Department of Labour 2015 Strategic and Annual Performance Plans

Mr Thobile Lamati, Director-General, Department of Labour, said that he would not speak to the vision and mission of the Department of Labour (the Department or DoL) although it was outlined in the slides.  The DoL had six programmes, including the administration, and was headed by the Ministry; Deputy Minister, Director General’s Office; Corporate Services (CS), Chief Operations Officer (COO), Chief Financial Officer (CFO). On the core side of the business there was the Inspection and Enforcement Services (IES), the Public Employment Services, Labour Market Policy & Industrial Relations, Unemployment Insurance Fund (UIF) (a Schedule 3A Public Entity), and the Compensation Fund (a Schedule 3A Public Entity).

He noted that entities established in terms of various legislation and Cabinet decisions to assist DoL in meeting its mandate included: the Commission for Conciliation, Mediation and Arbitration (CCMA); National Economic Development and Labour Council (NEDLAC); Productivity South Africa (PSA) and Supported Employment Enterprises (currently trading as Sheltered Employment Factories).

During the Medium Term Strategic Framework 2014 to 2019, the Department of Labour would contribute mainly on the following government outcomes:

  • Outcome 4: Decent employment through inclusive economic growth
  • Outcome 5: A skilled and capable workforce to support an inclusive growth path
  • Outcome 11: Create a better South Africa, a better Africa and a better World
  • Outcome 12: An efficient, effective and development oriented public service; and
  • Outcome 14: Transforming society and uniting the country.

Mr Lamati said that with regard to Government Service Delivery Outcomes and the Department of Labour Strategic Goals, the main goal for decent employment through inclusive economic growth would be pursued by the DoL promoting occupational health services; contributing to decent employment creation; protecting vulnerable workers; strengthening occupational safety protection; promoting sound labour relations; monitoring the impact of legislation; and development of the Occupational Health and Safety policies.

The goal of a skilled and capable workforce to support an inclusive growth path contributed to decent employment creation. The strategic outcome was to create a better South Africa, a better Africa and a better World. The goal is to strengthen multilateral and bilateral relations. There should be an efficient, effective and development oriented public service. For this the DoL had to strengthen its institutional capacity. The strategic outcome was the transformation of society and uniting the nation, whilst promoting equity in the labour market.

Mr Lamati noted that the Plans were approved and tabled in line with prescribed timeframes, which he explained to the Committee. The targets were met. The second performance indicator was to improve the Department’s performance based on the Management Performance Assessment Tool (M-PAT) assessment criteria, and to comply with 50% of the M-PAT level 3 and level 4 standards. The target was 55% of total DoL M-PAT standards per KPI at level 3 by March 2016. Again, he set out the timeframes (see attached presentation), saying that in quarter one the MPAT report would be received in June, and in quarter 2 the Departmental Action Plan to address that report would be prepared. New evidence to improve the Departmental score would be done by October 2015. In quarter 3 the evidence would be moderated, and in quarter 4 the Department of Performance Monitoring and Evaluation would release the moderated report, with new evidence by March 2016.

The third performance indicator that he highlighted was that 95% of fraud cases received or detected must be finalised within 90 working days. Other time lines were explained for the communication strategy to be approved.

Mr Lamati said that in terms of Inspection and Enforcement Services the performance indicator looked at the number of designated employers reviewed per year to determine compliance with employment equity legislation. The target was 750. Non-compliant employers who were reviewed were issued with a recommendation within 90 days of the review. The target was 100%. The target for numbers of workplaces inspected per year to determine compliance with labour legislation was 135 356, with quarterly breakdowns (see attached presentation). All non-complying workplaces should be dealt with in terms of the relevant labour legislation. The DoL targeted investigating 60% of reported incidents within 90 days. It also intended to have all applications for registration of entities processed within four weeks.

Mr Lamati moved on to the indicators for Public Employment Services (PES), where the performance indicators related to the number of final regulations in terms of the Employment Services Act  - here, the target was to have three  regulations relating to (1) Private Employment agencies, Temporary Employment Services section 13 and 52, (2) registration of work seekers section 52 and (3) the procedure for employment of foreign nationals, section 52 published by the Minister in the Government Gazette by March 2016. Quarterly breakdowns were provided (see attached document).

Setting out the targets for Labour Policy and Industrial Relations (LP&IR) he said that the Employment Equity Amendment Act must be implemented and evaluated within the set time frame, by March 2016. One target was to conduct nine workshops on Code of Good Practice on Equal Pay for Work of Equal value. The second target was to prepare, publish and do the final version and publication of the amended Code on Employment of People with Disabilities, which should be published by March 2016.

Discussion

Ms M Dikgale (Limpopo, ANC) thanked the Department for the presentation. She asked the Department how it determined the provincial allocation of the budget because KwaZulu-Natal (KZN) received a large amount as compared to Limpopo.

Ms Dikgale asked for clarity in terms of how the DoL allocated the numbers of job seekers that were registered on a database and those that were employed but not registered on the database.

Ms Dikgale congratulated the Department for handling its finances well.

Mr B Nthebe (North West, ANC) noted that on slide 13 of the presentation there was an indication of a 95% target for fighting fraud and resolving cases speedily. He asked whether the Department should not target 100% instead of 95%, because fraud and corruption must be rooted out aggressively in the Department.

Mr Nthebe asked, in regard to the monitoring and enforcement mechanisms of the Department, what the state of readiness was, in terms of the Department’s capacity internally that has been built, to ensure that litigation was brought against employers that were not complying.

Mr Nthebe asked about the provincial allocation in the Northern Cape, where there were vulnerable sectors of the economy like agriculture, yet it received the smallest allocation. He thought that the allocation should reflect the need to protect the most vulnerable and meet challenges on the ground.

Ms E van Lingen (Eastern Cape, DA) said that the Department of Labour was a very important Department because it checked up on everyone who had a business.

Ms van Lingen asked what fraud the Department was detecting, was it externally or internally, and how these cases were resolved in 90 days. She noted that page 11 of the report required it to file cases within 10 working days, which was not a particularly SMART target. She commented that numerous municipal managers and officials were suspended for fraud and the cases were not resolved, with them being on suspension for months, some without being charged. She asked if the Department was doing any oversight in that regard, and what was happening with those cases, which did not appear to match the targets set out in the presentation.

She noted that it was inferred in the report that the Department would be appointing a CFO and wondered how it had been operating in the meantime.

Ms van Lingen noted that the Department spoke of paying its accounts within 30 days, and wished that could be targeted as a labour issue - very few departments were meeting this vital component.

Ms van Lingen asked about the campaigns under the Employment Service Act, with a target of 48 in the Eastern Cape, whether this would be done at local Government level, how the general public was informed, and how it was advertised. It was vital for the Department to also inform the Members how the budget was split between provinces.

The Chairperson wanted firstly to request that the Department note the concerns of the Members that they wanted to see how Departments were actually implementing the plans. He noted that the CFO had a bereavement in the family and wanted this Committee's condolences to be conveyed.

Mr W Faber (Northern Cape, DA) agreed with Mr Nthebe's concerns, and said that although his province, Northern Cape, did not have a high population, it was the biggest and the traveling distances cost a lot; it was also one of the poorest provinces, and he agreed that allocations should try to uplift the poorest provinces.

Mr Faber noted that at paragraph 4.1.7 of the report there was mention of a submission to roll over funding, but he asked how the Department could set a target of 100% if it had no idea on how it would achieve - there should be certain statistics, and realistic targets.

The Chairperson said that the government and the country were not achieving well in providing dignity to people with disabilities. This Select Committee was humbled close to tears when Members were exposed, during their oversight in Port Elizabeth, to a sheltered employment factory where people were prepared to take their rightful place in society in terms of work and productivity. These people had commented that although at one stage they had huge support from the Department of Labour, this had later diminished. The Department of Public Works had been asked to look at this, in terms of the Expanded Public Works Programme (EPWP), but he also requested the Department of Labour to look at the factories providing sheltered employment, where there was great potential, but where people wanted more to do - they had the capacity, the premises and the potential to manufacture all sorts of things.

The Chairperson said that second point related to the construction industry, and he would be engaging rigorously when the next report was made to the Committee, for the recent events in Nepal indicated that lives were needlessly lost by poor construction. He asked that the DoL be rigorous when doing inspections involving construction. Infrastructure development was vital but it must meet proper standards.

Mr Lamati said that when the DoL allocated the budget it would look at the number of employees in a particular province because, in relation to the compensation of employees, it must be ensured that they would receive their salaries at the end of the month. It would also look at the economic activities in the different provinces, and look at the capacity the Department had to intervene in those sectors. It would not help the DoL to set a larger target in a particular area when it knew that it was limited in its resources to intervene there. The province would indicate what it intended to do, and how much it would cost, and based on that, the Head Office would allocate a budget, but it had to try to be as realistic as possible with the targets. For instance, in 2014/15 the DoL had set a very high target for inspection for compliance with occupational health and safety, but realised, mid-year, that it was too high in relation to the number of staff it had to do the inspections.

Mr Lamati noted that there was a challenge at the DoL with numbers of registered work seekers versus the numbers placed. The Employment Service System would register unemployed people, and employers should report job opportunities to the Department of Labour, for it then to match the people that were on the system with the job opportunities that were available. There were over 500 000 people on the database, with skills ranging from lower base employees to high level engineers; the majority, however, were at the lower level, and they were unable to be placed in many of the job opportunities because of their limited skills. However, the DoL was working with the Unemployment Insurance Fund to ensure that these people would improve their skills level so that they were able to take up these job opportunities. The ratios would remain high until there were more job opportunities and people with skills able to be absorbed in those opportunities. The second thing they've discovered was that it was difficult for them to track the people they've referred

It had been difficult for the DoL to track people placed, for they would not report back to the DoL, although it had now devised other tracking methods otherwise the figures would continue to appear distorted. All those who worked on the EPWP programmes were sourced from the Employment Services System, including the employees that were working at the Medupi power plant. The DoL was working with other Government Departments to ensure that it would give opportunities to unemployed people, because every branch of the Department had this system and local people could come and register.

Mr Lamati appreciated the comment made on management of finances and quipped that it was rare to get compliments.

Mr Lamati agreed that the DoL should ideally have a target of 100% to finalise fraud cases, but the difficulty was that it took a long time, often, to get the cases finalised, particularly if they also involved other people outside the Department. The internal cases were much easier to finalise. The DoL had taken a decision to focus on cases that were under its control - but this might be only 8 out of ten, with the remainder needing to be referred to external agencies for investigation.

Mr Lamati said the enforcement capacity to improve compliance was raised all the time. The DoL would like to have as many enforcement inspectors as possible. However, in his years heading the inspectorate, he had realised that even if the Department had ten times the number of inspectors it had currently, it was still impossible to get an inspector into each and every workplace and if employers had no desire to comply with the law the problems would continue. For this reason the DoL opted to do "blitz inspections", often in areas it would not normally visit because of capacity, and would not be shy to take people to court. The new amendments made life much easier for an inspector to take the process of enforcement forward much faster than in the past, because the requirement that the employer must first give an undertaking and honour it was removed from the process. The strategy enable the DoL to maximize the resources it had and get to places that it would normally not reach.

Mr Lamati commented that the provincial allocation was based on the figures the province provided to the DoL. It was hoping to move forward to specialisation of inspectors which might resolve some of the challenges. North West and Northern Cape distance factors were problematic, and the DoL would have to cater for a number of aspects.

Mr Lamati said that there were cases where people had defrauded the Unemployment Insurance Fund (UIF), or the Compensation Fund - perhaps by pretending that they were their relatives, and quoting those bank accounts, because they had been dismissed from work. Many of these cases were detected and there were many pending in court.

The Chairperson thanked the delegation from the Department of Labour for their presentation and was looking forward to their next engagement.

Committee Minutes Adoption

Members adopted minutes of 6 May and 12 May 2015, with no amendments.

The Meeting was adjourned.

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