Afrikaanse Handels Instituut: briefing

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Employment and Labour

25 February 2003
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

25 February 2003


Mr D Olifant (ANC)

Documents handed out:
Labour Market Appraisal Presentation (Appendix)

Overview of AIDS Initiatives in Corporate South Africa
Seven Discussion Points on Human Relations Development and Skills Development
South African Qualifications Association Budget and Long Term sustainability document



The Afrikaanse Handels Instituut briefed the Committee on four sectors of the labour market. In the unemployment and job creation sector, it was stated that unemployment is running at 30% of the labour force. It called for intense investment, skills development and the creation of jobs in the future through the small business environment. It was suggested that attention be given to a better level of co-operation between the Labour and Education Departments. It was also stated that the marketing of South Africa as an investment destination would assist in job creation. It was recommended that consideration be given to reducing the burden of complex labour requirements for small businesses.

The Institute presented an overview of some AIDS initiatives by corporate South Africa. It dealt with corporate best practices such as hospices, home-based care, primary health care and AIDS education.

A representative from SANLAM outlined the main considerations in implementing the Employment Equity Act and other empowerment legislation.

Briefing by Afrikaanse Handels Instituut

Mr Van Vuuren, representing the Afrikaanse Handels Instituut, briefed the Committee on four sectors of the labour market. In the unemployment and job creation sector, he explained that unemployment is running at 30% of the labour force. It called for intense investment, skills development and the creation of jobs in the future through the small business environment. It was suggested that attention be given to a better level of co-operation between the Labour and Education Departments. It was also stated that the marketing of South Africa as an investment destination would assist in job creation. It was recommended that consideration be given to reducing the burden of complex labour requirements for small businesses.

The AHI introduced seven discussion points:
-The transformation of recommendations made by government bodies into concrete resource plans.
-The appointment of a second National Skills Authority (NSA) with a proactive approach to the implementation of recommendations.
-The creation of a Government body to regulate human resource development strategies being given a high level of importance.
-The Education Department should recognise the need to increase the budget of the South African Qualifications Authority (SAQA)
-The authorities should recognise the need to streamline the payment of grants to the Sectoral Education and Training Authority (SETA).
-The Minister of Labour should trim the responsibilities of SETAs to enable them to concentrate on core business.

The AHI gave an overview of some AIDS initiatives by corporate South Africa. It dealt with corporate best practices such as hospices, home-based care, primary health care, AIDS education and events, the role of the press and Government, mother and child programmes and economic and social considerations.

Mr van Vuuren covered certain statistics relating to unemployment and job creation and the need to encourage labour intensive investment, the role of small businesses in job creation, the marketing of South Africa's economy as a job creating tool and finally the dysfunctionalism between key government Departments. All role players would have to pull together to achieve the progress expected by the country. In regard to the role of small business he submitted that the statutory requirements related to labour were too complicated for small businesses to implement. As regards inter-governmental relations he said that the AHI often had to act as mediator between the Labour and Education Departments.

Mr M Mzondeki (ANC) said that it was his experience that government Departments do co-operate well. He also noted that the labour relations laws were bringing about good results. He did not think that employers felt threatened by the legislation. However, the large numbers of qualified people made it difficult to provide jobs. He stressed the need for Government to do all in its power to create jobs for skilled graduates.

Mr M Ramodike (UDM) believed that South Africa had good social partners that have helped, and will help, to market South Africa. He mentioned that these ties should be strengthened and greater incentives introduced to encourage wider participation by those partners.

Mr G Oliphant (ANC) said that concrete examples of unco-operative behaviour between Labour and Education should be provided. He did not believe there was a serious case of disharmony. The road to job creation lay in public-private partnerships. These should be fostered wherever possible. He asked the AHI to provide an analytical report on the shortcomings of Government's job creation strategy.

Mr K Moonsammy (ANC) dealt with the healthy state of the economy. Although the labour laws were beneficial, companies seem to try to avoid the responsibility of paying proper wages. He mentioned as an example the case of a company called "The Waverly Blanket Corporation". It had relocated to Botswana after having operated in South Africa since 1926. This move had been prompted by the search for cheaper labour. He advocated that a greater role should be played by government in job creation.

Mr van Vuuren replied to the assertion that the best medium for job creation was the small business sector. He maintained that the laws had been too sophisticated for small business to cope with. Small businesses simply did not have the resources to monitor the labour laws properly or hire consultants. He advised that the main objective of small business would usually be sustainability and this demanded its full attention. He suggested some form of exemption from the labour laws to help small businesses. As regards job creation through economic upliftment, he believed that incentives should be introduced to make it attractive for COSATU, Government and Business to work together to achieve maximum progress. On the request for a business analytical programme on job creation, he mentioned that business had been working for some time on this and its report should be released soon.

Mr Oliphant asked why there had been so little implementation of the resolutions passed at the Growth and Development Summit.

Mr Olifant considered that corporate South Africa had not met its responsibilities with regard to job creation. It seemed to him that none of the excellent decisions taken at the Presidential Job Summit had been implemented by corporate South Africa. Ways and means should be found to assist small business with its labour legislation problems even if this resulted in a moratorium.

Briefing by Kumba Resources
Dr R Verster and Ms M Gunter raised the following discussion points:

-The pivotal role of practitioners in the fields of Human Relations Development (HRD), and the great need to translate concepts into actively pursued resource plans.
-The appointment of a second National Skills Authority (NSA) with four committees to focus on legal, financial, and skills development (including the Skills Education and Training Authority (SETA) so as to create a meaningful player in the labour arena. Dr R Verster believed that the NSA was not highly regarded by government.
-The introduction of a Human Resources Development Strategic Organisation as an umbrella organisation in the Human Resources Development field. Such an organisation would co-ordinate government strategies, measure South African strategies against international achievements and elevate Human Resources matters to a very high level.
-The National Qualifications Framework Study Team Report should be urgently implemented and regular feedback given by the Labour and Education Departments with regard to the implementation of its recommendations.
-The budget of the South African Qualifications Association amounting to R33 million was inadequate and the Director of Education should be prepared to contribute more than R11 million.

He emphasised the inordinate delay in the payment of the skills levy grant to SETAs. At present this takes place after the annual training report, which causes unnecessary delays. Delays have resulted in the inordinate accumulation of interest on funds it cannot use which amounts to an estimated R103 million for 2003.

The functions of the SETAs have been overburdened by the Minister of Labour at the expense of its core business prescribed by the Act, for instance, NSF projects, and the role in the learnership campaign.

According to its budget the South African Qualifications Authority (SAQA) is under-resourced and this renders them unable to cope with key functions.

Mr J Durand (NNP) said that the unemployment figure was nearer 40% than 30% as alleged by Mr van Vuuren. Corporates have not increased jobs as they should.

Mr Oliphant said that detailed information should be made available to the Committee about those government Departments or corporates and other bodies that are not producing the required resource planning. There continues to be a need to enhance the capability of SETAs to expand job training. Sufficient funds were not being made available to fringe organisations advancing skills training.

Mr Mshudulu recommended close co-operation between corporate South Africa and the Labour Department. He requested specific examples of those areas that needed improvement for presentation to the Committee.

Mr Olifant said that something should be done about inhibiting the employment of temporary staff. He added that temporary staff erode the jobs market for the needy. He firmly believed that functions such as cashiers in supermarkets should be given to permanently trained staff and not to temporary staff as seems to be the case at most supermarkets.

Dr Verster said that funds should be made more freely available to the National Skills Fund (NSF) by government and that learnership campaigns should be set up to meet existing or projected job requirements. More joint partnerships should be set up to explore ways and means of expanding job creation.

Ms. M Gunter said that some twelve and a half percent of SANLAM trainees were guaranteed jobs. The 12.5% were made up of top students.

Dr Verster reiterated the need for inter-governmental co-operation and the need to make SETAs more effective. He suggested multi-party training forums.

Mr Olifant asked why large investors did not invest more fully in disadvantaged areas. He cited the lack of shopping centres in Atlantis.

Mr van Vuuren replied that NAFCOC and SACOB had plans on the table.

Briefing by Sanlam
Ms M Bossett presented a comprehensive overview of the types of AIDS initiatives undertaken by corporate South Africa. She dealt with the contents of such initiatives, best practices, corporate challenges, the stance of Government, and innovative strategies. (please see powerpoint presentation attached)

A Member said that responsibility for the care of AIDS sufferers carried on after the death of the victim. Matters to do with family counselling and care for dependants remained the concern of The Department of Social Services. Provision needed to be made for that.

Mr S Rasmeni (ANC) commended Ms Bossett on the AHI's approach to AIDS. He said he was shocked at the exaggerated media coverage of the AIDS pandemic. A common strategy by Government and business should be put in place. Although AIDS was very serious the authorities must not lose sight of other devastating illnesses.

Mr Moonsammy believed that very strong leadership would be introduced to lead a public-private joint effort to contain the disease.

Ms E Thabethe (ANC) said that the attitudes towards AIDS had been mainly party based. She felt that government should take a strong lead in setting objectives. NEDLAC workshops on AIDS had been positive and should be continued. However, concrete examples of problems should be laid before the Committee. She told the meeting that victims were generally afraid to disclose their HIV status. Companies were testing for AIDS without the permission of the person concerned. They also tested for AIDS on the pretext of testing for something else. She asked Ms Bossett whether Sanlam had experienced such problems.

Ms Bossett confirmed that Sanlam never tested for HIV without the consent of the worker. Although the other diseases were important the death rate with regard to AIDS was the highest and this made it imperative to deal with as efficiently as possible. She stated that Business South Africa and Nedlac were engaged quietly in research and the formulation of policies. She reiterated the problem of inter-governmental squabbling. She confirmed the importance that Sanlam placed on home care. She said that the attitude of employers to HIV disclosure was positive and such disclosures did not affect security of employment or retrenchments. She believed that most corporations have respected workers rights regarding AIDS testing. She concurred with the statement that nobody could say whether AIDS was a virus or not. She dealt with the general acceptance of the contention that AIDS prevention is better than treatment. The sensationalism of the press had led to conflicting and ambiguous perceptions. She explained that business had involved itself thoroughly in community planning for AIDS. Hospice was one example of the kind of care provided to AIDS sufferers.

Transformation and Black Economic Empowerment
Ms Y Themba gave an overview of the positive strides AHI member corporations were making towards transformation, black economic empowerment and real black corporate responsibility. She said that black empowerment strategies had been formulated and implemented alongside business strategies by top management. Companies such as Sanlam had appreciated the need for the upliftment of the disadvantaged as it had memories of the imposed disadvantages of the Afrikaner through colonialism.

She stressed the need for transparency as a key factor in the application of equity principles and went on to say that appointments by Sanlam were not made as a kind of lip service to the labour law requirements. She explained that one percent of Sanlam's after tax profit was dedicated to social investment projects with black empowerment very much to the fore.

She advised that demutualisation provided the means of introducing a collective voice by the disadvantaged at Board level. As regards retirement fund investors, she said that Sanlam was encouraging managers of predominantly black pension funds or trade union funds to become active and not passive investors. This was seen as creating better black stakeholder responsibility. New subsidiaries of Sanlam had been designed around black empowerment principles.

Mr Olifant asked Ms Themba to submit her presentation in writing, to which she agreed.

Ms E Thabethe said that she would be grateful if Ms Themba would be more specific about the kind of problems encountered in the transformation process. She would be interested to find out how Sanlam tackled its employment equity problems on a case by case basis. Regarding training she asked for information on how the SETAs could beef up their operations. She agreed that training should be carried out with a view to filling actual vacancies or projected vacancies.

Mr Oliphant confirmed the need to synthesise training with available jobs. He advocated that corporates should involve themselves in employment training for people outside its workplace.

Mr Mzondeke believed that a plea by small business for assistance to cope with the application of the labour laws was just an excuse. He felt there was a resistance on the part of small businesses to apply black empowerment legislation

The Chairperson thanked the presenters for their input.

The meeting was adjourned.

Presentation to the Parliamentary Labour Portfolio Committee
25 February 2003
Labour Market

· Unemployment/job creation
South Africa's population growth rate over the past decade was higher than the growth in the GDP.

Domestic fixed investment and foreign direct investment levels are very low by international standards and result in an economic growth rate significantly lower than most competitor countries.

Unemployment is around 30% of the labour force. Formal sector employment has fallen by one job in eight since 1992.
We need to encourage labour intensive investment. We need to encourage training and skill development. We need to make it less onerous for companies to hire the unemployed.
· Small Business Environment

The small business sector is the area that will have to be relied on to create future employment and anything that will be an enabler should be seriously considered.

· Collective Impact of Labour Legislation

Individually each piece of recently introduced labour legislation can not only be justified but makes sense. The challenge however is to introduce it in a manner that it does not put an undue strain on the sectors of the economy that are crucial in alleviating the lack of meaningful jobs problem.

· Marketing of South Africa as a destination of Choice

There is a lack of consensus and collective action by the social partners in marketing South Africa as a destination of choice.

· Perceived or Actual Dysfunctionality between key Governmental Departments

Business continually experiences problems where Government Departments do not communicate with each other or even where there is strong feelings of animosity one for the other. This is extremely counter productive.


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