UIF Labour Activation Programme: Department of Labour briefing

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Employment and Labour

12 August 2015
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

The Department of Labour (DoL) briefed the Committee on the Labour Activation Programme of the Unemployment Insurance Fund (UIF), introduced by government to mitigate the impact of unemployment and poverty. The Unemployment Insurance Fund (UIF) had identified the opportunity to participate in the labour market programme as supported by Section 48(1) of the Unemployment Insurance Act, No 63 of 2002, which empowers the UIF Board to advise the Minister of Labour on policies for minimising unemployment. The Department had established the Labour Activation Programme (LAP) supported by the recently adopted LAP Framework. The creation of the LAP was to prioritise the creation of employment and business opportunities, skilling and re-skilling of unemployed clients, combating long-term unemployment and poverty reduction. Achievement of these goals could only be realised through participating in key areas which included the training of the unemployed, assisting companies in distress, enterprise development and partnering with other government departments, State Owned Entities (SOEs) and private sector. With enterprise development, the Department was engaged in training on entrepreneurship skills for UIF beneficiaries who aspire to be entrepreneurs.

Examples of some of the many LAP partnerships that were presented included:
• The target for UIF-MICT SETA (Media & ICT Sector Education Training Authority) 1 partnership was 1000 learners, 800 on End-User Computing and 200 on Telkom Technical Skills. Of the 200 Telkom learners, 192 are UI beneficiaries and 8 non UI beneficiaries. Of the 200, 7 dropped out, 193 continued and 3 learners’ contracts were terminated due to misconduct. Out of 190 who have completed the training, 50 are employed. 10 are receiving 24 months additional training at the expense of Telkom.
• The UIF-MICT SETA 2 partnership was on a 50/50 basis and the learner target was 2000. Currently out of the 2000 learners, 1925 have been recruited for training (1099 are UI beneficiaries and 826 are non UI beneficiaries). Of the 1925 learners, 925 had already completed both theory and practical, 700 are currently in the workplace for practical/experiential learning and 300 are doing the theory component.
• The UIF-merSETA (Manufacturing, Engineering and Related Services) partnership was also on 50/50 basis and the learner target was initially 1 500, but only 806 learners had been extracted to date from the merSETA Learner Management System. Out of the 806, 704 are UI beneficiaries and 102 are non UI beneficiaries.
• The UIF – Transport Education and Training Authority (TETA) partnership offers Scuba Diving Training on a 50/50 basis and the target is 100 learners, 50 TETA and 50 UIF allocations. Of the 41 recruited, 15 UI beneficiaries have been recruited thus far in Gauteng and KwaZulu-Natal. The remaining learners will be recruited in coastal provinces (Eastern Cape, Western Cape and Northern Cape) to align the training to Operation Phakisa.
• The target for the training of UI beneficiaries was 5 000 unemployed young people and the Department had trained about 8 000 people.

Members suggested that the Department should be outsourcing the training and the teaching of learners to credible institutions like Technical and Vocational Education and Training (TVET) colleges that are capable of attracting participants to various programmes instead of using Sector Education Training Authorities. The Layoff Scheme could assist in training and retraining people who had recently lost their jobs to increase their chances of being employed in the future. Why are labour unions and private companies opposed to the Layoff Scheme? It was suggested that there should be a programme in place to train people before the end of employment as it could prevent the situation where people are trapped at home for a very long time after layoff. The Department needed to ensure that people had an interest in that particular project so that there would be commitment to the success of that project.

Members expressed dismay that these programmes were mostly focused in urban areas as unemployment and poverty were prevalent in rural areas. The presentation was not clear on the criteria that had been used by the Department to identify the 5 000 UI beneficiaries. What were the criteria used to identify the provinces that were prioritised in the piloting of the installation of solar geysers? What were the critical skills DoL prioritised in these training programmes? They also asked about the age limit and the requirements needed to identify the UI beneficiaries especially for pilot training. Which programmes were meant for everybody?

Meeting report

UIF Labour Activation Programme: Department of Labour (DoL) briefing
Mr Thobile Lamati, DoL Director-General, indicated that the rise in unemployment created by the financial and economic crisis has led to high levels of vulnerability for individuals, families and communities and worsened poverty. The active labour market programmes have been introduced by the government to mitigate the impact of unemployment and poverty in the country. The Unemployment Insurance Fund (UIF) had identified the opportunity to participate in the labour market programme as supported by Section 48(1) of the Unemployment Insurance Act, No 63 of 2002, which empowers the UIF Board to advise the Minister of Labour on policies for minimising unemployment and the creation of schemes to alleviate the effects of unemployment. Section 18 of the same Act empowers the DG of the DoL to refer UIF beneficiaries to vocational training as a pre-condition to the qualification for unemployment benefits. To implement these sections in the Act, the Fund established a Labour Activation Programme (LAP) Unit that is supported by a recently adopted LAP Framework. The Framework outlines the following goals:
- Creation of employment opportunities and business opportunities
- Skilling and re-skilling of unemployed clients
- Combating long-term unemployment
- Poverty reduction.

The achievement of these goals are realised through participating in key areas which included the training of the unemployed, assisting companies in distress, enterprise development and partnering with other government departments, State Owned Entities (SOEs) and private sector. The Labour Activation Fund was already established and the Department was about to enter into Memoranda of Understanding (MOU) with higher learning and further education and learning institutions. The assistance of the companies in distress will be important in funding unemployment alleviation schemes and the Social Plan has already been funded. With the focus on enterprise development, the Department was already engaged in the training of entrepreneurship skills for UIF beneficiaries who aspire to be entrepreneurs. There would be a concerted effort to partner with other government departments and the private sector to improve the capacity of the labour activation programme. DoL was aiming to increase the number of UIF beneficiaries trained and to leverage workplace/market exposure and funding gained from these partnerships.

Mr Lamati spoke about the various LAP partnerships:
• The UIF Mining Qualifications Authority (MQA) partnership is on a 50/50 basis and the learner target was 1000. Currently out of 1000 learners, 569 are UI beneficiaries and 431 are non UI beneficiaries. Of 667 learners who have completed the training thus far, 400 have been absorbed, 266 are unemployed. 232 are in permanent employment, 28 in contract employment and 140 were verified through Siyaya declarations.
• The UIF-merSETA partnership was also on a 50/50 basis. The learner target was initially 1500, but only 806 learners have been extracted to date from the merSETA Learner Management System. Out of the 806, 704 are UI beneficiaries and 102 are non UI beneficiaries.
• The target for UIF-MICT SETA 1 was 1000 learners, 800 on End-User Computing and 200 on Telkom Technical Skills. Of the 200 Telkom learners, 192 are UI beneficiaries and 8 non UI beneficiaries. Of the 200, 7 dropped out, 193 continued and 3 learners’ contracts were terminated due to misconduct. Out of 190 who have completed the training, 50 are employed. 10 are receiving 24 months additional training at the expense of Telkom.
• The UIF-MICT SETA 2 partnership was on a 50/50 basis and the learner target was 2000. Currently out of the 2000 learners, 1925 have been recruited for training (1099 are UI beneficiaries and 826 are non UI beneficiaries). Of the 1925 learners, 925 had already completed both theory and practical, 700 are currently in the workplace for practical/experiential learning and 300 are doing the theory component.
• The UIF-Transport Education and Training Authority (TETA) partnership offers Scuba Diving Training on a 50/50 basis and the target is 100 learners, 50 TETA and 50 UIF allocations. Of the 41 recruited, 15 UI beneficiaries have been recruited thus far in Gauteng and KwaZulu-Natal. The remaining learners will be recruited in coastal provinces (Eastern Cape, Western Cape and Northern Cape) to align the training to Operation Phakisa.
• In the UIF-Energy and Water Sector Education and Training Authority (EWSETA) project, the learners are trained on how to install solar geysers and also plumbing and the programme is piloted in the Ekurhuleni Municipality. The target was 300 learners (166 are UI beneficiaries and 133 are non UI beneficiaries and 3 learners have dropped out). Group 1 of 147 learners completed their learnership on 30 June 2015, Group 2 is due to complete on 30 November 2015.

Ms Rachel Masha, Deputy Director-General: UIF Labour Activation, spoke about:
• UIF-TETA partnership on learnerships for the National Certificate: Professional Driving. It is on a 50/50 basis and the target is 140 learners, of which 63 UI beneficiaries have been recruited thus far.
• UIF-TETA partnership on apprenticeships (Auto Electrical, Diesel Mechanics, Vehicle Builders, Electrician and Metro Guards, Diesel Mechanics, Electricians, Welders and Electro Mechanical, Avionics, Aircraft Turner Machinist, Aircraft Trimming, etc) on a 50/50 basis. The target is 637 learners and 120 UI beneficiaries have been recruited thus far.
• UIF-TETA partnership on pilot training was mainly on a 50/50 basis. The target is 20 learners and all 20 learners have been recruited (13 UIF beneficiaries and 7 non-UIF beneficiaries) and started the training.

The UIF has signed a MOUs with the following TVET Colleges together with the following municipalities: Motheo-Mangaung, Goldfields-Matjhabeng, Flavius Mareka-Moqhaka and Maluti-MalutiAPhofung in Free State. Coastal-eThekwini Metro, Umgungundlovu-Umsunduzi, Esayidi-Harry Gwala and Esayidi-Umuziwabantu, Umfolozi-KwaDukuza and Umfolozi-Umhlathuze and Mnambithi-Emnambithi in KwaZulu-Natal Ingwe-Matatiele, Ingwe-Mzimvubu and King Hintsa-Mnquma in the Eastern Cape , Boland-Cape Agalhas in the Western Cape, Sekhukhune-Elias Motsoaledi in Limpopo. The training of 450 aspiring entrepreneurs has been provided by SEDA, Moses Kotane Institute and LAP at the provinces. The LAP is in the process of finaliaing the Enterprise Development Strategy where aspiring entrepreneurs will be referred to Development Financial Institutes (DFIs).

The training lay-off scheme is funded 100% by UIF for training allowances and 14 companies have been assisted through the Training Layoff Scheme in the previous financial year (2014/15) where 2 084 workers were affected and 6 already in the current financial year where 320 workers are affected. The Department had allocated R50, 6 million for training allowances at these companies.

Mr Lamati said there were number of approved schemes not yet implemented and these included:
• UIF-Moses Kotane Institute –This is Maritime Enterprise Development training on Boat building, Skippers License, Maritime Imports and Exports Management and Maritime Technicians. The programme is funded on a 50/50 basis.
• UIF-Department of Energy partnership on solar geyser installation. The initial target was 54 municipalities. Due to UI participation, the number of municipalities increased to 77. All 77 municipalities signed on to participate on solar geyser installations to date.
• UIF-Department of Public Works (DPW) – This partnership focuses on construction skills. It is 100% funded by UIF and the DPW was to provide workplace experience.
• UIF-Department of Human Settlements (DHS) – This partnership focuses on construction skills and the DHS has been allocated R20 million for the proposed partnership. The DHS was to provide workplace experience.
• UIF- South African Maritime Safety Authority (SAMSA) – This partnership focuses on Maritime skills and it is funded 100% by UIF.

Discussion
Mr M Bagraim (DA) indicated that the Department should be outsourcing the training and the teaching of the learners at credible institutions like Technical and Vocational Education and Training (TVET) colleges that are capable of attracting participants as opposed to bringing in Sector Education Training Authorities (SETA). It is clear from the presentation that the labour unions are sceptical of the Layoff Scheme despite the fact that the labour force in the country was currently going through strain, with retrenchments from most of the crucial sectors. The Layoff Scheme could assist in retraining people who had recently lost their jobs in order to increase their chances of being employed in the future. Why are labour unions opposed to this Layoff Scheme? There is an indication that people are opposed to the Layoff Scheme as they want to have access to their pension funds and other benefits.

Ms L Mjobo (ANC) said that the President had indicated in the State of the Nation Address (SONA) 2015 that all the departments needed to play their part in creating job opportunities. The presentation was largely focused on those who were already out of work. The Scheme seemed not to be covering young people who were still employed in order to protect their potential income in case of a possible layoff. There should be a programme in place to train young people before the end of employment as it could prevent the situation where people are trapped at home for a very long time after layoff. It was almost impossible to get people over the age of 35 to choose training rather than looking for employment as those were people with responsibilities and accounts to pay.

Ms Mjobo commented that the majority of people in the country are not attracted to the farming sector and this was proven by the failure of the “one family, one food garden” initiative as very few people were interested in the initiative. The Department needed to ensure that people had an interest in the project that was undertaken so that there would be commitment to the success of that project.

Ms F Loliwe (ANC) appreciated the presentation but said that the recruitment strategy should be able to reach every corner of South Africa. The country needed to move away from the notion that everything needed to be done in Johannesburg and it was disappointing to observe that the Department was mainly focused in urban areas for the piloting of its programmes. She suggested that the piloting of the programmes should be done simultaneously both rural and urban areas in order to get the best results instead of being biased against rural areas like Eastern Cape and Northern Cape. The focus on rural areas should be seen in the context of poverty and unemployment in these areas when compared to urban areas.

Ms S Schalkwyk (ANC) also expressed dismay that the Department was focused on urban areas. The presentation was not clear on the criteria that had been used by the Department to identify the 5 000 UI beneficiaries. What were the criteria that had been used to identify the provinces to be prioritised in the pilot programme? What were the critical skills that were prioritised by the Department in the training programmes? She wanted to know whether DoL was considering working with the Department of Communications (DoC) and Universal Service Access Agency of South Africa (USAASA) in the training of installers of Set Top Boxes (STBs) for Broadcasting Digital Migration (BDM).

Ms T Tongwane (ANC) also asked about the criteria used to identify the 5 000 learners as UI beneficiaries. She asked about the number of rural municipalities considered for the installation of solar geysers programme and for plumbing that was piloted in Ekurhuleni Municipality.

Mr P Moteka (EFF) wanted to know the criteria used to identify the 5 000 learners as UI beneficiaries as this was not clear in the presentation. It is important to know the selection criteria used to identify the beneficiaries of all the programmes so as see whether the beneficiaries were spread throughout the country and the focus in this instance should be on rural areas. Rural areas could benefit immensely from the installation of solar geysers as this would not only create employment opportunities but sustainable development for the people.

The Chairperson highlighted the importance of knowing the criteria used by DoL to identify the UI beneficiaries. She asked if the learners were given any allowance or stipend during the training. The Department of Human Settlements (DHS) was offering an allowance to those enrolled on their training programme. It is important to know about the age limit and the requirements that were needed by beneficiaries especially in the case of training pilots. Which of the programmes were meant for everybody?

Mr Lamati responded that DoL was cognisant of the fact that the training and teaching of the individuals was not the main focus of DoL and therefore that was one of the reasons for inviting the TVET colleges to play their role in capacitation and training of learners and beneficiaries. DoL had noted a trend where individuals were opposed to the LAP as they want to have access to their pension funds and other benefits and only come once the money from those benefits was finished. There is now a focus on creating compulsory preconditions for accessing the Labour Activation Programme as the plan was to sustain the livelihood of those who were part of the scheme. The LAP has just been started and therefore this was part of the reasons it was not touching the economy as it was intended. DoL had adopted a very cautious approach to the LAP in order to avoid the situation of throwing money into a particular programme that might not be responsive to the challenges of unemployment, poverty and the retraining of the unemployed.

Mr Lamati added that the Minister has indicated during the Budget Vote that DoL had set aside close to R10 billion for the programmes and the intention is to ensure that the programmes are able to leave behind a legacy of sustainable development in the lives of the beneficiaries. The Layoff Scheme has been around for a while and this was put in place during the financial crisis to mitigate its impact. The uptake for the Scheme has not been great and one of the reasons is that the Scheme requires the private companies to be open and transparent to DoL on their financial performance and ownership and there was a sense of reluctance by private companies to share this information. The labour unions have also not been playing their role in terms of ensuring that their members are able to participate in the Scheme. DoL was also aware of some of the bureaucratic challenges that need to be addressed to increase the uptake of the Scheme. DoL was now advocating the importance of the Scheme as the uptake was dismal especially by organised labour and private companies.

There is a stipend given to learners enrolled in the LAP. Although this may not be that much, it could go a long way in assisting the beneficiaries. There is legislation for companies to inform DoL when they are about to retrench workers and this was to see if DoL could intervene in order to avoid a potential loss of income or employment. DoL had intervened in almost 91 companies that were in financial distress and this has saved about 2 000 jobs and this was part of the Social Plan which is funded by the UIF.

Ms Mpumi Mnconywa, UIF Chief Director: Labour Activation Programme, responded that DoL was investing about R1.8 million in TVET colleges for the training and teaching of learners to be enrolled in these various programmes. Some of the TVET colleges have agreed to collaborate with DoL but there were still delays as some of the municipalities have not agreed to come on board. The UIF was only meant for those who are unemployed; hence DoL only assisted those who were already unemployed and the nature of the insurance is to react when there is a problem or a crisis. DoL had already advertised to institutions of higher learning on the possible collaboration to train and teach learners in these programmes, and DoL was to advertise again at the end of August 2015 and this would be inclusive of institutions of higher learning such as TVET colleges and universities.

DoL has ensured that the training and teaching of learners was done in almost all the 11 district municipalities around the country and the lists of all the municipalities could be circulated to Members. The Minister also had a concern about the fact that the piloting of the training for installation of solar geysers and also plumbing was in Ekurhuleni Municipality and not in rural areas. The training programme is divided into 2 phases and phase 1 focuses on theory and phase 2 focuses on experiential learning (practical) and Ekurhuleni Municipality was the only municipality that already had a plan to do the installation of the geysers. The learners in this programme are expected to be able to install the geysers within the period of six months.

Ms Mnconywa responded that DoL was partnering with TETA for the training of learners and Operation Phakisa was not there when DoL embarked on the partnership and it was fortunate that DoL had not yet recruited learners for the programme. The target for UI beneficiaries was 5 000 unemployed young people and DoL had trained about 8 000 learners and this was mandated with requests that were coming from people that are non-UIF beneficiaries and it was always difficult to turn down some of the people that had shown interest in the programme. The 5 000 learners trained were selected from all provinces and districts around the country and these learners were identified from the system that captures the information of all the job seekers in the country which is managed by the Public Employment Services (PES) branch of DoL.

The requirement for the beneficiaries is to be able to be available for placement on any programme and this was whether on permanent, temporary or apprenticeships posts. The partnership on a 50/50 basis was to ensure that 50% of the learners must have contributed to the UIF and this is another system that is used to recruit the learners. It is important to highlight that most of the projects were operated nationwide and it was only the UIF-MQA programme that was not available in Eastern Cape and Western Cape.

The Chairperson asked if there was a strategy in place to ensure that all the individuals that were beneficiaries in the programmes were qualified in terms of the requirements that had been stipulated. She also emphasised that DoL needed to be clear on whether those who were given training and teaching were able to be absorbed into the labour market as this was the overarching goal.

Mr Lamati responded that DoL was using the job seekers that is available and DoL ensured that there was a link between a particular project and location of the beneficiaries chosen to participate in the training. This is a random process that is system generated and there is not much interference from the officials on the beneficiaries to be chosen.

Ms Masha added that DoL often requests the office to produce a letter in cases where the system had failed to generate a sufficient list of beneficiaries that meet the minimum entrance requirements. This is to consider other partners like SETA to provide DoL with a list of learners that want to be trained in a particular discipline. DoL was not only considering learners that had Grade 12 as there are students that had to start working by default - whether their parents passed away and therefore had to look for work. There is no payment that is required in order to participate in the UIF programmes and DoL always informed the student to alert DoL, in cases where students are required to make payment. The learners are paid a stipend of R1 500 for a one year programme and the artisan programmes are dependent on host employers for payment and this is the case for UIF-MQA.

Ms Mnconywa responded that DoL did not include the information on the programme involving digital terrestrial television (DTT) as it was still in the process of finalising the deal with USAASA. She assured Members that DoL will participate in the programme. DoL has already identified 18 TVET colleges to train learners in the DTT project and the focus was on scarce and critical skills like engineers and artisans. There are a total of 77 municipalities that will be able to benefit from various DoL programmes and there are 14 municipalities in Eastern Cape, Free State (4), Gauteng (9), KZN (15), Limpopo (8), Mpumalanga (4), Northern Cape (5), North West (7) and Western Cape (12). It was the competence of the Department of Energy to identify the municipalities that were to benefit in its various programmes and this was also the case in identifying the municipalities to participate in the installation of solar geysers. DoL ensures that the beneficiaries are not discriminated based on age but the reality on the ground is that those above the age of 35 are not showing interest in these programmes. The selection of those to participate in pilot training had to be good in mathematics and science and this was a specific requirement that was put up-front. Good marks in this case included students who had obtained a D symbol and upwards in Higher Grade mathematics and science.

Mr Lamati wanted to put it on record that the selection of learners to be enrolled in these programmes was not a major problem but the priority was to ensure that the programmes are effective in addressing the problem of youth unemployment and poverty in the country. The Layoff Scheme was specifically aimed to address the problem of job losses and DoL was responsible for encouraging labour unions and private companies to participate in this Scheme.

The Chairperson thanked DoL for its presentation.

Committee Business
The Committee Programme was adopted as is.

The minutes of 28 January; 4, 11, 18, 25 February; 15, 22, 29, 30 April; 6 May 2015; 23 and 24 June 2015 were adopted.

The meeting was adjourned.

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