NEDLAC & CCMA on their 2016 Annual Performance Plan; CCMA default award in Inyoni Boerdery case

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Employment and Labour

13 April 2016
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

The new Executive Director of Nedlac spoke about its four strategic outcome-oriented goals and its three core programmes. The 2016 annual performance plan of Nedlac is structured around financial controls, entity governance, its secretariat capacity and labour relations. There was a 5.2% increase in the 2016/17 compared to the previous year. The 2017/18 budget would increase by 5% and the 2018/19 budget by 5.9%.

Members asked Nedlac questions about funds allocated to refreshments, cell phone allowances, and travel allowances. Questions were also asked on job creation and retention.

The Commission for Conciliation, Mediation and Arbitration (CCMA) spoke about its strategy termed “Senz’umehluko” which signifies making a difference. It seeks to transform workplace relations in the country and advance development and its own organisational effectiveness. With respect to employees dismissed at Inyoni Boerdery, it was found that the employees were unfairly dismissed and an initial award of four months’ salary given. This was later reviewed when it was discovered that the Commissioner who presided over the case had made some errors. A later award of 10 months’ salary was made. However, the case is currently before the Labour Court.

Members asked the CCMA about its cost cutting measures and request for more budget, the appointment of Commissioners, the litigation involving its Cape Town building, the labour market tool and the workplace diagnostic tool it had developed, and conflict management in the workplace. It was commended for the number of cases it had resolved, the services provided to the public via its public advisors and for the innovation of introducing telephone meetings as this has helped in reducing costs.

Meeting report

Unemployment Insurance Amendment Bill [B25D-15]: NCOP Amendments
The NCOP amendments to the Bill were read out. These amendments were accepted and adopted.

National Economic Development and Labour Council (Nedlac) 2016 Annual Performance Plan
The Director General of the Department of Labour, Mr Thobile Lamati, introduced the new NEDLAC Executive Director, Mr Vilakazi Madoda.

NEDLAC Executive Director, Mr Vilakazi Madoda, gave an overview of the strategic plan for the next five years. These plans are divided into four strategic outcome-oriented goals which are:
- To promote economic growth, social equity and decent work
- To promote and embed a culture of effective social dialogue and engagement
- To promote effective participation in socio-economic policymaking and legislation
- To enhance governance and organisational effectiveness and efficiency.

In order to achieve these goals, the strategic plan is structured around three core programmes:
• Administration: which enhances organisational efficiency and effectiveness
• Core Operations: which considers and engages on policy and legislation in Nedlac chambers, task teams and committees, and creates a wider awareness of Nedlac’s work
• Capacity Building Funds – used for capacitating constituencies to be effective in Nedlac structures.

The 2016/17 Annual Performance Plan of Nedlac is built on work already undertaken in certain areas such as the financial controls which have been developed and implemented in its comprehensive set of finance policies. The Finance Committee and the Audit and Risk Committee meet on a quarterly basis and there is an independent chairperson for the Audit and Risk Committee who reports to Executive Council. The supply chain management unit manages all procurement and the comprehensive set of finance policies.

On entity governance, a risk register is managed and maintained on a quarterly basis. A document management system is also maintained. The IT charter and policies have been adopted with monitored and improved compliance with the Nedlac Protocol.

On Nedlac’s secretariat capacity, the vacant posts in Nedlac have been filled including that of the Executive Director. The coordinators predominantly hold post-graduate qualifications and training is provided to staff members.

On labour relations, a process has been established under the leadership of the Deputy President to address wage inequality and broader labour relations issues. This process reports into a specially convened Committee of Principals that is chaired by the Deputy President.

On the finances of Nedlac, there is a four year budget plan which runs till 2019. For the current financial year, the grant is R30 317 000 with interest of R420 000. Capital expenditure totalling R200 000 will be focused on upgrading computers, software upgrades and office furniture procurement. The Corporate Services budget for 2016/17 and 2017/18 have been reduced in order to reduce expenditure on consultants. For 2016/2017, the total to be spent on Administration is R20 830 000. The Chamber budget has been increased for inflation in order to continue facilitating engagements by these structures and the total funds for its core operations is  R5 921 000 while capacity building is set to gulp  R3 918 000. In comparison to the previous financial year, there was a 5.2% increase in the 2016/17 budget.

Ms P Mantashe (ANC) asked why the funds allocated to refreshments was high since National Treasury had recommended that cost cutting measures must be put in place.

Ms F Loliwe (ANC) questioned why a lot of funds were allocated to cell phone allowances and telephone bills. She asked for an explanation on the policy for the budget split since 43% of the budget was spent on salaries. The legal fees budget allocation was also high and wanted to know why that was so.

Ms S van Schalkwyk (ANC) commented on the allocation to consultancy fees and asked if there was no provision to strengthen internal capacity. She also frowned at the high allocation of funds to travel and accommodation.

Mr M Ollis (DA) referring to page 11 of the presentation asked for clarity on the broader labour relations issues. He asked for an update on what was being done to curtail strikes and requested an overview of the background of the new Executive Director. He asked for information on what happened to the previous director who was in that position. He spoke about the internal disciplinary committee that was set up to investigate the case of improper conduct against some employees; he wanted an update on that and that of the police investigation. Lastly, Mr Ollis asked if the current internal measures being put in place are effective.

Mr M Bagraim (DA) talked about the public perception of Nedlac as a “talk show” and asked what was being done to correct this perception. On the national minimum wage, he was of the opinion that this was not being handled properly and asked if there was a budget in place to deal with this. He also asked about the need for secret ballot voting before strikes and asked what was being done about that. He talked about the new trade union which was about to be formed and if there was any information about it. He asked about the disciplinary actions against the employees who were involved in misconduct; he wanted an update on the progress in the investigations.

Ms Loliwe disagreed with Mr Ollis asking about the background of the new Executive Director and also disagreed with Mr Bagraim’s question about the new trade organization to be formed. Ms Mantashe echoed the position of Ms Loliwe.

The Director General of the Department of Labour responded to the question of the background of the Executive director by talking about his work experience and stated he was not sourced from within the Department.

Mr D America (DA) asked why there was a differential in fund allocations on slide 14 and asked what the funds would be used for. With regards to the audit expenditure, he asked why the figures were high and for an explanation on the differentiation between building maintenance and general maintenance. Talking about the capital expenditure, he asked for an explanation on why it was pegged to R200 000.

Mr T Rawula (EFF) asked for the impact analysis of Nedlac on job creation and job retention strategies. He wanted to know how the conflict between labour and business affects NEDLAC as a platform expected to contribute to the objectives of the National Development Plan. On page 11, he wanted an update on national labour laws. With regards to communication and outreach, he asked what efforts were being made by Nedlac to connect with the ordinary people. Lastly, he commented on the request of Mr Ollis as regards the background of the new Executive Director. He was of the opinion there was nothing wrong in asking this.

Both Ms Loliwe and Mantashe disagreed with Mr Rawula on asking for Mr Madoda’s credentials.

The Chairperson made a ruling on this and told the Portfolio Committee a precedent of looking into the credentials of people who come to make presentations, would not be set.

Mr Ronald Bernikow, National Senior Commissioner: Operations at the CCMA, responding to the questions on trade unions and strikes told the Committee there were two task teams convened under the auspices of the Deputy President. One deals with labour relations and industrial action. Negotiations are ongoing to draft a code of conduct for both employees and employers and this process has not been completed. There is also a proposed legislative change to the existing Act as it applies to workplace. It proposes to improve worker relations. There is also a proposal to shift the onus from the worker to prove that he has been unfairly dismissed from his place of work. He pointed out that there were a lot of negotiations still going on with regards to labour relations and no agreement had being reached with any of the parties involved. There is also a task team on wage inequality which not only covers the negotiation of the national minimum wage but also looks at the case of unequal wages. No figures have been agreed on so far on the minimum wage and consultations are still ongoing.

Mr Madoda responded about refreshments, saying that food was usually provided at any meeting which exceeds four at Nedlac. On the salary percentage of , he said it was a function of the nature of jobs done at Nedlac and the fact that there are highly skilled people working there. He disagreed the sums allocated to salary was high hours because Nedlac was not competing favourably with other agencies of government in terms of salary. Talking about the funds allocated to travelling and accommodation, he responded by saying the funds were for the constituents whenever they go out to do their work and their jobs entailed a lot of travelling. The legal fees included in the budget were to take care of any uncertainties that might arise and a lot of legal interventions are needed for Nedlac. On the issues of disciplinary measures against those who were involved in fraud, he remarked that the matter was still under investigation and nobody had been charged to court.

Mr Mfonu Fikile, Nedlac Chief Financial Officer, replied about the cell phone allowances, saying that due to the nature of the business of Nedlac, a lot of work was being done outside working hours especially during travels and that was the reason a lot of funds was allocated to that. On the funds allocated to consultation, he said there was a lot of work done on research. The audit fees comprise of the fees paid to the Auditor General and the internal auditors who carry out the quarterly reviews. He explained that building maintenance entails light repairs while general maintenance relates to cleaning of the building. On capital expenditure, he said a proper response would be given at a later time.

Ms Kim Jurgenson of Nedlac replied that the internal controls structures at Nedlac have been strengthened and are working properly. On the comments about the public perception of Nedlac, she said that Nedlac had made progress in breaking into the mainstream media. The major problem faced as regards its public perception was with its social partners as they do not defend the institution, leaving the institution vulnerable. Nedlac is actually doing a lot of work which is not being put out there by its social partners.

Mr Lamati agreed with Ms Jurgenson and stated that it would be premature to discuss the yet to be established federation. Once this federation is registered, Nedlac will definitely find a way to engage with it. Regarding job creation and retention, Nedlac takes into account whatever decisions are taken that would create and retain jobs. On the comment that labour and business are always on opposite sides, he was of the view that it was part of the engagements. On those implicated in misconduct, he said that those implicated do not work for Nedlac anymore.

Ms Mantashe asked for clarity on the relationship between building maintenance and general maintenance.

Mr Ollis asked why it was taking too long to conclude the investigations against those who were indicted for misconduct and asked the DG what his thoughts were on the matter.

Mr Bagraim was happy about the detailed answers he got but asked that Nedlac provide the Committee with minutes of its meetings so that the Committee could have an idea of what exactly was being done.

The Chairperson responded to Mr Bagraim’s request for Nedlac minutes and said that that was not the mandate of the Committee. Her view was the Committee should be looking at matters affecting Nedlac’s performance.

The Chairperson noted that all indices showed that there was nothing wrong with the budget of the Department and she saw no reason why Nedlac had to complain about budget limitations.

The Director General responding to Mr Ollis, stated that the forensic reports were submitted by Nedlac for further investigation and the investigation had not been finalized. He also noted that he is responsible for the behaviour of only those who report directly to him. On the budget, he remarked that supply chain management had been strengthened and funds were allocated only as deemed necessary.

Mr Fikile further explained that the building maintenance had to do with physical maintenance carried on the building which involved renovations and replacement of broken parts while general maintenance referred to consumables such as liquids used for cleaning. The cleaning is usually done by two people who are outsourced.

Ms Mantashe was not pleased with the outsourcing of the cleaning jobs at Nedlac. She asked why that was still taking place.

Ms Loliwe also was displeased at the outsourcing of the cleaning jobs at Nedlac.

The Chairperson asked about the number of consultants being used at Nedlac and what they were being used for. She also asked for an explanation on how the researchers become part of the consultants.

Mr Fikile responded that the appointments go through a process.

Ms Jurgenson explained the components of the research and stated that the researchers must meet the requirements of the Department before their appointment and the chamber decides these appointments.

The Director General noted that the reason there was no internal capacity for researchers was because they were mainly under-utilized as they had to wait until a new opening arises for a new project.

Mr Rawula suggested that Nedlac builds its own research capacity instead of relying on consultants.

Mr Fikile remarked that Nedlac cannot embark on certain projects due to its financial constraints although these projects might be important to it.

Commission for Conciliation, Mediation and Arbitration (CCMA) 2016 Annual Performance Plan
Mr Daniel Dube, CCMA board chairperson, explained the process of governance in the CCMA. It is governed by a governing body made up of a non-executive independent chairperson and representatives from government, organised labour and organised business. The members of the governing body are appointed by their constituencies at NEDLAC and confirmed by the Minister of Labour.

Mr Cameron Morajane, CCMA Director in Cape Town, said the CCMA has developed a new strategy which it termed “Senz’umehluko” and it signifies making a difference. This strategy seeks to achieve two broad goals:
- To enhance and extend service delivery to transform workplace relations and advance development.
- To strive for organisational effectiveness.
The first goal has been simplified into three strategic objectives. Strategic Objective One seeks to enhance the labour market to advance stability and growth. Strategic Objective Two is concerned with advancing good practices at work and transforming workplace relations while Strategic Objective Three deals with building knowledge and skills. The second goal of the Senz’umehluko strategic plan has also been simplified into a strategic objective which deals with optimising the organisation.

Strategic Objective One has been broken down into five key performance areas which are providing thought leadership and facilitating social dialogue, advancing employment security, strengthening partnerships for better delivery, enhancing accessibility to services, and pro-actively responding to labour market developments. The job saving efforts of the CCMA saved 33 694 jobs in 2013/14 and CCMA’s job saving efforts generates a financial impact to the national economy 8-14 times CCMA’s annual expenditure. Strategic Objective Two was broken down into three key performance areas which are proactively facilitating improved bargaining, managing conflict in the workplace and transforming workplace relations.

In its attempt to advance good practices at work and transforming workplace relations, a Collective Bargaining Improvement Process (CBIP) was conducted. This process provides a structured approach for joint analysis of the wage negotiation process. It identifies issues that impact (both negatively and positively) on effectiveness and develops and implements initiatives to address them both jointly and individually. This improves effectiveness of the bargaining process and it was piloted in the civil engineering sector.

A tool to measure and predict conflict in the workplace was also developed. This tool provides a structured approach to monitoring the regional labour market, which in turn informs an intervention strategy that balances proactive and reactive measures. In the last financial year, the CCMA dealt with 170 673 cases and conducted 43 033 arbitrations with only 45 awards sent to parties late. In 2014/15 year the CCMA intervened in 236 incidents of public interest industrial action and resolved 85.3% of these.

Strategic Objective Three is simplified into two key performance areas which are developing and delivering capacity building programmes for users aligned with the needs of the labour market and professionalizing the practice of labour relations. Strategic Objective Four is simplified into three key performance areas. These are imbibing a culture that facilitates implementation of the new strategic direction, utilizing resources optimally and providing for continuous professional development aligned with the needs of the organisation and the people.

He provided a breakdown of the budget for  2015/16, 2016/17 and 2017/18 (see document).

With respect to implementation of the the labour law amendments, there were 298 equal pay for work of equal value cases, 97 sexual harassment cases, 104 cases with regards to race, 15 cases of religion and belief and 18 cases of gender and sexual orientation.

CCMA default award to dismissed Inyoni Boerdery employees
On 15 September 2015, Members of Parliament visited the farm where the employees were employed and a selected group were called for an interview about fair labour practices on farms. Six of them were employed as general workers and were dismissed on 24 September 2015. These employees lodged a case with CCMA on 28 September 2015. With the permission of employees, the Commissioner telephoned the representative of the employer, to enquire why they were not in attendance at the hearing. This was done as per the region’s drive to ensure attendance of both parties in cases. The representative indicated that he did not receive the notice and would therefore not be attending. Thereafter the Commissioner proceeded to arbitrate the matter in default and issued a default award dated 28 October 2015. It was found that the employees were unfairly dismissed. The Commissioner ordered compensation for the employees equivalent to four months’ salary per applicant. Due to improper service on the parties, the Commissioner on her own accord on 11 November 2015 rescinded the decision and the matter was set down for arbitration on 08 December 2015 and heard by another experienced commissioner. At the hearing, the employees sought compensation and the compensation was awarded in favour of the employees. They were awarded an equivalent of ten months’ salary to be paid on or before 31 December 2015 which was different from the initial four months’ salary. The employees approached the CCMA for assistance in enforcing the award as the employer did not honour the award. The challenge in the enforcement of the award was due to lack of enforcing authority by the CCMA. A writ of execution was received and sent to employees and submitted to the Sheriff in Barberton. On 10 February 2016, the Labour Court reviewed the application from the employer. The CCMA acknowledges that the initial default award was not in pursuit of social justice and an award quality improvement system has been put in place.

Ms Mantashe asked the CCMA to be precise about the challenges associated with its budget cut.

Mr Bagraim asked why the previous director of the CCMA left and the process being used by the governing council of the CCMA in removing Commissioners and why most of the Commissioners used by the CCMA were not CCMA employees. He asked for an update about the CCMA building and contract in Cape Town including litigation which arose from that.

Mr Bagraim was impressed and commended the CCMA on the number of cases reported and the short timeline used in determining such cases. He asked if the CCMA could help the Department of Justice in this regard. He also commended the CCMA for the initiative of introducing its course contents at some of the universities in the country to produce commissioners, he asked for the details of this programme. He commended the CCMA for the services provided to the public via its public advisors. He also commended the CCMA for the innovation of introducing telephone meetings as this has helped in reducing costs. He concluded by congratulating the new Commissioner of the CCMA in Cape Town.

Ms Loliwe advised the CCMA to readjust its spending to reflect the position of its budget. In her opinion the CCMA was contradicting itself in terms of its financial spending.

Mr Rawula referred to the last presentation done by the CCMA and asked if there was any plan for the Commissioners who were untrained in the amendments to labour law. He also referred to the Cape Town CCMA building case and the course being offered at some of the universities and asked for updates. He wanted an explanation on the process used in determining what part of the recruitment process for Commissioners is waived if they study the course at the university. He asked if the study of that course meant employment at the CCMA.

Mr America appreciated the presentation and the cost cutting measures being introduced by the CCMA. Referring to slide 11, he asked in what sector the proposed tool would be applied and when within the year. He asked for a more detailed explanation of the labour market tool and the workplace diagnostic tool. With reference to slide 12, he asked when that would be implemented and how the impact of the job saving unit was being measured.

Mr Ollis asked if the CCMA has ever been called to give its opinion on the management of conflict at the workplace. With respect to the rental agreement of the CCMA building, he wanted an assurance that the mistakes of the past would not be repeated again and wanted an update on the policy put in place to prevent such scenario from reoccurring. He noted there was no reduction in the spending powers of the CCMA which implied that there was nothing wrong with its budget allocation. He advised that cost saving measures be put in place.

Mr Dube said that the previous CCMA director had resigned by the end of May 2015 by informing the board that she would not be available after the end of her contract which would have been on 31 March 2016 and asked for permission to leave last December.

Mr Morajane, CCMA Director, spoke on the process of removing a Commissioner. He explained that the CCMA had two sets of Commissioners: full time Commissioners and part time Commissioners. For the full time Commissioners, they are dealt with like every other employee within the CCMA while with the part time Commissioners, they are dealt with the same way contractors are dealt with. In both cases, there is the need to exhaust all legal processes available and the final decisions lies with the board. He mentioned that it was correct most of the Commissioners were not working as full time Commissioners and it was their choice because they do not want to be tied to working only for the CCMA. On the Cape Town building, he stated a new building had not been acquired and based on legal advice the application to review the previous award was withdrawn. With respect to the timeline for attending to cases, he explained that new Commissioners were being employed every year and this has contributed to the success story of the CCMA so far. Each of these Commissioners are taught and are thoroughly knowledgeable about the new labour law amendments, especially those who sit on cases.

Mr Afzul Soobedaar, CCMA National Senior Commissioner: Mediation and Collective Bargaining, on the tools used in managing strikes, stated it was difficult to predict when there would be a strike but the CCMA has interventions used before, during and after strikes. One of the tools developed was the labour monitoring tool which is an intelligence gathering tool which helps to scan the labour market and gives an idea of what is going down there. The timing of intervention in a strike process is very critical to managing it. He also talked about the collective bargaining tool which helps to analyse any post-strike era.

Ms Ntombi Boikhutso, Chief Financial Officer: CCMA, reported on the Cape Town CCMA building and stated that a process was in place to get a new one.

Mr Morajane, talking about employing new Commissioners, mentioned there was no automatic employment for people who studied the CCMA courses at university. They have to apply for the job and go through the mentorship process for a period of time and after this is done, a report is written on the candidate and this will determine if such a candidate is employed as a Commissioner or not. The University of Cape Town, Free State University, Nelson Mandela University, University of Stellenbosch and Wits University are all universities with MoUs with the CCMA.

On the number of cases, he predicted that there would be a surge in the number of disputes in the current financial year. On outsourcing, it depends on the job grading. Opportunities are given to capacitate within the system to fill vacant positions to perform certain job functions. When this is not possible, such a job is outsourced, however resources are developed internally so that such a scenario is not repeated again. Members of the SADC region have requested to study the models used by the CCMA. This is possible but not done for free.

Ms Boikhutso agreed with the position of Mr Ollis on the budget. National Treasury gave an instruction for an increase in expenditure spending of 5.3% and this is a result of the request for special funding which was made to the Treasury to be able to implement the labour law amendments. There are certain additional functions now being carried out by the CCMA. The request for additional funding is to cater for all aspects of the new amendments to the labour laws.

Mr Morajane remarked about the training of Commissioners that it is quite an extensive programme to do and this process is being strained by finances. There is a conscious effort to train all the Commissioners and only accredited Commissioners are allowed to handle cases. Speaking on the employment equity plan, he remarked that was outside the jurisdiction of the CCMA.

Mr Soobedaar, referring to slide 11, replied that the tools developed are being implemented in the agricultural sector and that the work place mediation tool intends to deal with problems in the workplace by managing conflict in the workplace before they become full blown . The workplace diagnostic tool is an intervention to assist parties in the workplace. He also explained that a lot of work still needs to be done in developing a prototype algorithm for the conflict prediction tool.

Mr Morajane said that the CCMA had been called upon to give its opinion on conflict in the workplace.

The minutes of the previous meeting was adopted and the meeting adjourned.

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