Department of Labour Budgetary Review and Recommendations Report

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Employment and Labour

14 October 2015
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

BRRR Archive: BRRR 2015-2010: Budgetary Review & Recommendations Reports

The Committee went through the Draft Budget Review and Recommendations Report and raised concerns on various recommendations that the Department had not responded to, or made a commitment to follow up on. The wording was amended where necessary, to correct grammatical errors, and it was noted that the recommendations would be moved to a particular section of the Report to make it clear that even if the Department did not have to submit an immediate response, it would need to report on these matters later. It was noted that the Committee did not want to imply any criticism of the new Director General and would like to give him the chance to settle into the new role.

Further recommendations were added, to reflect that the Department must address recommendations of the Auditor General and take action against those responsible for mismanagement of funding. Although the majority of the Committee were happy with the wording, the EFF Member did not wish to accept the report because his specific recommendations on action needing to be taken against officials of the Compensation Fund was not accepted; he had thought that the recommendations needed to be more specific to ensure that retrospective action would be taken. Other Members thought that his point had been covered.

The Committee adopted minutes of 22 and 23 September. 


Meeting report

Draft Budgetary Review and Recommendation Report on the Department of Labour: Content Advisor briefing

Mr Sibongiseni Ngcobo, Content Adviser to the Committee, took the Committee through the Draft Budgetary Review and Recommendations Report (BRRR).

Ms F Loliwe (ANC) and Mr I Ollis (DA) noted a few grammatical errors.

Mr M Bagraim (DA) stated that as far as he knew, the tabling the amendments to the Unemployment Insurance Fund Act had already occurred in Parliament, which was contradictory to what section 2 of the draft BRRR outlined, where there was a note that this must be looked into.

Mr Ollis asked that on page 3, under Section 3.1. there was a need to clarify which Minister was being referred to; the current wording was vague as to whether this was the Minister of Labour or the Minister of Finance. Similar instances were apparent elsewhere so that all references to “the Minister” should be supplemented with a note of the full ministerial title.

The Chairperson asked the Content Advisor and the Researcher, Ms Sindisiwe Mkwize, to clarify which Minister was being referred to.

Mr Ngcobo stated that under that particular section ‘the Minister’ meant the Minister of Labour.

Ms Mkwize added that wherever there was any reference to the finances, in the next draft, the two would clarify which specific comments were being directed to National Treasury personnel.

Mr P Moteka (EFF) raised the point that the Department had not responded to the recommendations of the Commission for Conciliation Mediation and Arbitration (CCMA), as noted on page 5. This lack of response should be noted as of particular concern.

Ms Loliwe thought that this particular recommendation had been worded as a directive, so no response was necessary.

Mr Ollis thought that while the Department may not need to respond, that did not mean that the Committee was not at least expecting an acknowledgment. He suggested that if there were recommendations in the Report that did not require a specific response back to the Committee, these should be shifted out of the body of the report to the final Recommendations section. In this way it would alert the Department to the fact that the Committee would expect some response in the future. However, he agreed with Ms Loliwe that in this instance, the wording may not have notified the Department that a specific response was expected.

The Chairperson said that she did not remember giving deadlines to the Department. Furthermore she made the point that when the Committee made a recommendation, this would generally be on issues that the Committee had already been following up with no other earlier response being given. She thought that the phrase that ‘the Department is not responding’ should be rephrased, particularly taking into consideration the circumstances of the new Director General having requested time to settle into his role.

Mr Ollis suggested that then perhaps a response should be requested for the next year when the Department could report on progress, so that this request was not misinterpreted as attempting to judge the new Director General already, and not to put too much pressure on him as he became acquainted with his new role.

Mr Moteka ’requested the removal of the second recommendation on page 6. The response that the Department was receiving attention was not a direct answer.

The Chairperson agreed.

Mr Ollis (DA) requested that the recommendation on page 6, referring to the Committee urging the Department to resolve the discrepancy with National Treasury and organisations representing the disabled so that people with disabilities received benefits due to them, should be moved also to the final recommendations. This was an ongoing matter and had yet to be resolved.

Mr Ollis asked if the Chairperson would then sign off on all the changes being made to the Report today.

The Chairperson noted that the changes were being made on a projected screen as the Committee was going through the Report. However, she would not sign off until all the amendments had been correctly included in a hard copy, which would be brought to the Committee for final consideration at another meeting.

Ms Loliwe asked for clarity on the term “auditees” on page 22.

Mr  Ngcobo responded that it  meant the Department and its  entities.

Ms Loliwe requested that this should then be specified; the Report needed to be easy to read and vague terms should be avoided.

Recommendations section
Ms Loliwe suggested that in the recommendations it should be stated that although National Treasury had agreed to return the money that was taken away for appointment of inspectors, the Committee requested the Treasury to make part-payment of that amount available in the current financial year ,so as to allay the plight of vulnerable workers, by allowing the Department of Labour to appoint more labour inspectors.

Mr Ollis suggests that Ms Loliwe also reflect the direct amount in the recommendation, of R64 million.

Mr Ollis further suggested that National Treasury compels government departments to procure a certain percentage of goods from the Supported Employment Enterprises.

Ms Loliwe proposed that there be a recommendation that the CCMA allocation should be increased, to employ more commissioners to assist in dealing with strikes, thus mitigating against job losses.

Mr Bagraim and the Chairperson agreed that this should be added to the recommendations.

Mr Ollis suggested that stronger language should be used on the points to do with the Auditor-General. He also thought that new wording was needed for addressing the issues surrounding the Compensation Fund. The wording he suggested was as follows:

- The Department (must) urgently address issues raised by the Auditor General, especially under emphasis of matter and predetermined objectives, and report back to the Committee before the end of the financial year
- The Department (must) urgently address leadership as well as financial and performance management issues in the Compensation Fund and Supported Employment Enterprises.

Mr Ollis further suggested that it be specified that the Department tighten financial controls to prevent mismanagement of funds and to introduce tougher measures to deal with financial mismanagement by officials.

Mr Moteka put forward a recommendation that disciplinary action needed to be taken against the individuals from the Compensation Fund responsible for the irregular spending of R16 269 000 without any invoices, and to explain the spending to the Auditor-General. This had been referred to on page 11 of the Report. There should also be disciplinary action against the accounting officer for not taking action after the Auditor-General brought this information to light.

The Chairperson responded that the recommendation put forward by Mr Ollis on tightening financial controls encompassed Mr Moteka’s recommendation.

Mr Moteka disagreed; he felt that Mr Ollis's recommendation did not refer to the retroactive aspects, and would not ensure that the individuals who were responsible for the irregular spending of R16 269 000 would be held accountable; he felt that Mr Ollis's point only covered future actions.

Adoption of the Draft Report (as amended)

Ms Loliwe proposed the adoption of the Draft Report, as amended and Mr Ollis seconded that.

Mr Moteka opposed the adoption because the final recommendations did not encompass his last point that individuals who were responsible for irregular spending in the Compensation Fund must be  held accountable for their actions.

His objection was noted.

Adoption of Committee Minutes

Members adopted Committee Minutes from 22 September and 23 September 2015.

Other matters
The Chairperson noted that Member Ms P Mantashe (ANC) had been re-hospitalised in Panorama Hospital. The Committee would send her flowers and would visit her later in the week.

The meeting was adjourned.



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