Labour Budgetary Review and Recommendations Report; Fourth Term Programme

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Labour

19 October 2016
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

The Committee Content Advisor briefed the Committee on its the Budgetary Review and Recommendation Report. Recommendations were that the Department reported quarterly to the Committee, vacant funded posts be filled, the Department set its performance targets in line with its human and financial resources. The Committee recommended capacitating Labour Centres to improve service delivery, improved processing of work visa applications to facilitate acquisition of scarce skills in the 2016/17 budget report. Appropriation for 2015/16 was R2 704 billion and total revenue was R2 714 billion. The Department had received an unqualified audit opinion. Irregular expenditure was R25.3 million; fruitless and wasteful expenditure was R34 000 and total expenditure was R2.611 billion. The Department received R2.8 billion in the 2016/17 financial year. 1.72% work seekers were placed in registered employment. The Department achieved 44% in contribution to decent employment and 43% in protection of vulnerable workers. There was an overall achievement of 62% in performance for the first quarter of 2016/17. Some challenges were shortage of staff and cars in Labour Centres. There were no technical errors in the reports. The Committee had recommended that the performance information be verified for credibility and completeness; issues raised by the Office of the Auditor General be urgently addressed; key management vacancies be filled with qualified personnel; and all transgressors be speedily investigated and held accountable.

The Chairperson said the report was balanced but the only predicament was that the Department disputed the findings of the Auditor General. She proposed that she would meet with the disputing parties first and the Committee would meet with the parties afterwards. The DA, EFF, COPE, and AGANG Members disagreed with this and said the Chairperson should meet with the two entities in the company of the Committee as the Chairperson’s proposal was wrong, would cast aspersion on her person as well as limit the Committee from playing its role of oversight. Members said the Committee was not required to make findings but to hold the Department to account and not the Auditor General. Members unanimously agreed that the Committee should consider the earlier date when the disputing entities could be convened to a meeting to give the clarity and thereafter the report would be finalised. Draft minutes of the meetings of 7 & 22 September; and 12 October 2016 were adopted without amendment.

Meeting report

Opening remarks by the Chairperson 
Correspondence was received from the Loliwe family to express appreciation to the Committee for its support on the loss of their mother. Mr I Ollis (DA) wanted to confirm if his own appreciation was also received in respect of the condolences from the Committee as regards his father. Mr Zolani Sakasa, Committee Secretary, said he had received it but had erroneously not brought it to the meeting. The Chairperson apologised.

Labour Budgetary Review and Recommendation Report

Mr Sibongiseni Ngcobo, Content Advisor, presented the Budgetary Review and Recommendation Report (BRRR). He said the 2015/16 BRRR recommendations amongst others were that the Department of Labour (DoL) reported quarterly to the Committee. On the vacant funded posts to be filled, the DoL set its performance targets in line with its human and financial resources. In the2016/17 budget report, the Committee recommended the capacitating of the Labour Centres to improve service delivery, improved processing of work visa applications to facilitate acquisition of scarce skills, facilitating speedy transfer of funds to organisations for people with disability. The actual expenditure in the 2014/15 financial year (FY) was R2.419 bn. The appropriation for 2015/16 was R2 704bn, which was an increase of 1.17% over the expenditure for 2014/15 FY, while total revenue was R2 714bn. Administration had 30% of the Budget, Inspection and Enforcement Services (IES) had 17.5%, Public Employment Services (PES) was 18.3% while Labour Policy and Industrial Relations (LP&IR) was allocated 34%. The DoL received an unqualified audit opinion for the year under review. Irregular expenditure was R25.3m while fruitless and wasteful expenditure was R34 000. Total expenditure amounted to R2.611bn which was an increase of 8.07% spent in 2014/15 FY. The DoL received R2.8bn in 2016/17 FY. By the end of June, it had spent 26.9% of the total budget. Slow spending was mainly on compensation of employees due to vacant posts.

Ms Sindisiwe Mkhize, Researcher, Parliament, spoke on the overview and assessment of service delivery performance for 2015/16. Only 1.72% work seekers were placed in registered employment as at 30 March 2016. The DoL achieved 44% and 43% in contribution to decent employment and protection of vulnerable workers respectively. Administration achieved 44% of its target, IES achieved 63%, and PES had 44% while LP & IR achieved 43%. There was an overall achievement of 62% in performance for the first quarter of 2016/17 which was an improvement from the 47% in the 1st quarter of 2015/16 FY. Some challenges identified by the Committee during oversight visits were shortage of staff and cars in Labour Centres. There were no technical errors in the reports.

After the presentation of the Annual  Report and input from the AG the Committee recommended that the performance information be verified by the audit Committee for credibility and completeness; the DoL urgently addressed issues raised by the AG and reported to the Committee on ways to address them; key management vacancies to be filled with qualified personnel; briefing on proposed  adjustments to the training layoff scheme and that all transgressors be speedily investigated and guilty parties held accountable.

Discussion
The Chairperson commended the report for being balanced as the Content Advisor was also able to show what was in the strategic plan, what had been achieved and what had not been achieved. The only predicament was the findings of the AG and what transpired in the Committee on the day. The Committee interacted with the Office of the AG on those findings. The Department as well as its entities also presented its annual report. The DoL and the AG had gone into detail to convince the Committee why the findings were that way. The Department had given the reason why it was not happy with the findings. The Chairperson had said in that meeting that the Committee had a responsibility to interact with the parties so that the issues of the findings were finalised. The Committee must be seen as being neutral as it was not 100% sure which side was accurate. In this predicament, the only way forward was to call the two parties concerned together. The Chairperson said she had the last consultation that morning and she had been given a go ahead to call the parties that were in disputes. It should not appear as summoning as there was only a summoning when you are unhappy with that person. She said the first meeting would be the Chairperson and the disputed parties and afterwards the Committee would meet with Parties. The Committee would continue to make proposals on the report. She said she was doing everything within her power to follow processes with the predicament that had arisen.

Mr M Bagraim (DA) said he was not sure what the Chairperson was proposing. Was the Chairperson trying to propose a meeting between the Department and the AG’S office almost in secret and the Committee would not see the minutes or hear the recording? He was even more perturbed that the Chairperson did not want to do that in front of the Committee for the first time. He was not sure to what end the Chairperson would use her mediation skills. An audit was an audit. It was either correct or incorrect. It was a scientific skill that the auditors had. Was the Chairperson trying to tell the AG to move a little bit on their audit? This was wholly inadequate. Was the Chairperson saying the Department should present another report to the AG for audit as the initial one was not good?  This was also inadequate. This whole process sparked of socialism of personality as opposed to facts. The AG knew its job and how to do an audit. If the AG did not know its job what the Committee could do was to look into the skills of the AG. If the DoL was saying that what was presented to the AG was incorrect it must come and explain to the Committee. For the Chairperson to present that to the Committee as her proposal was wrong.

The Chairperson replied that Mr Bagraim had deliberately wanted to hear one side of the story. If the Members of the Committee had not heard what the Chairperson had said, they should say so. As Chairperson of the Committee, even before the reports come to the Committee she was afforded the chance to sit with the AG in secret if Mr Bagraim decided to use that word. She also had similar privileges with the Department as well. She said she had just made a proposal and if any Member was unclear, it should be stated so that there would be clarity. The AG knew their job and no one was questioning them in that regard. The Committee was dealing with parties that had both presented their cases. She wanted to follow the same process the entities followed before presenting to the Committee and afford the parties the opportunity of speaking first with the Chairperson. She was not mediating as she had no skills for mediation. She could not just summon them as that had certain connotations. This was the right procedure.

Ms F Loliwe (ANC) said what the Chairperson was saying was that two parties who were supposed to give a report had given different signals. What the Chairperson had said was that she would meet with the parties concerned and make it known that there was confusion and a need for clarity. Thereafter, the Chairperson would come to the Committee to report the correct version of the facts. This would help to save time so that by Wednesday next week, the Committee would have a common recommendation.

Mr T Rawula (EFF) agreed with the approach of the Chairperson not to summon the AG as it had wrong connotations. In a meeting with the Committee last week the entities of Labour raised its reservations on the comments of the AG. It was pointed out that it must not be seen as though the DoL doubted the competence of the AG despite the Department’s reservations. The Chairperson would not want the Committee to cast doubts on her person. The different Political Parties would have its views as to the reservations of the Department. The view he proposed was that while the Chairperson would not summon either of these parties, it would be better if the Chairperson called the AG and the DoL separately to the Committee to avoid conflict so that Committee Members could understand in detail the issues at hand. He was contrary to the proposal of the Chairperson meeting with the entities alone as it would cast aspersion on the Chairperson.

Mr Ollis said this was not the first time the Committee was being confronted with such an issue where the AG had made a finding which a certain entity did not agree with. In either of these cases the Committee had never acted as arbitrators or created a version of facts itself and put it in the report. It was not the role of the Portfolio Committee to find the correct view as suggested by Ms Loliwe. This was not possible as the AG as well as the DoL’s report had already been published. Parliament had a body that interrogated what went wrong and it was called SCOPA. The Committee could recommend that the Standing Committee on Public Accounts (SCOPA) met and interrogated the two entities and the two reports. If the Committee went ahead to interrogate it would become a mini court. The AG found it and the Committee and the DoL disagreed with it. There was nothing stopping the Chairperson to have a cup of tea with the AG or the DoL. There was no such vehicle open to the Committee where it decided who was right or wrong. The Committee was not required to make findings but to hold the DoL to account and not the AG. The Committee could not make findings as Ms Loliwe had said. It could only make a report.

Mr W Madisha (COPE) said the question that should be responded to was whether the current meeting was necessary. The Chairperson had said she would consult with those parties and then come back to the Committee for discussions. He agreed with Mr Rawula. The Committee should be committed to work together. As the report was tabled there were many contradictions that were identified. The Committee should sit and look into that and have a discussion as a Committee to chart the way forward. Meeting should not be held with the entities outside the Committee.

Mr M Tlouamma (AGANG) said the AG had a Constitutional mandate. What would be the point of reference when the Chairperson met with the two institutions?  Would the meeting be binding on the Committee or would it be for the Chairperson’s interest? This proposal would further limit the Committee in playing its role of oversight. His view was that whatever the contradictions might be, the Constitution was binding, which was to make sure that the DoL were accountable. He did not want to find the Committee through the Chairperson to be collaborators to hide anything. He was not casting aspersions as in the country there were countless examples of mismanagement of funds. He was not in support of the Chairperson’s proposition until he was sure of the point of reference of what the Chairperson wanted to achieve. Were the Members of the Committee not capable of listening to the institutions and hearing what it had to say with the Chairperson? The main job of the Committee was that of oversight. Members could do this with the Chairperson as the latter must convince the Committee why she wanted to meet with the institutions in person first.

The Chairperson said there would be no reason for the meeting to continue if at the end of the recommendation of the Committee, there would be amendment as a result of clarity.  Politicians liked to spin and deliberately not listen as it suited them. She did have coffee with the AG’s office as it was requirement for all Chairpersons to meet with the entities before appearing in the Committee. It was not on a friendly basis. There was need to do so before the matter was brought before the Committee. Nothing would be changed. This would be done in her capacity as a Chairperson as was usually done with all Chairpersons. The dispute in this case was greater than the disputes that were had in the past. The Constitution was not undermined when there was need for clarity. At the end of the day, it was the Portfolio Committee that wrote its own report and not SCOPA. How would the Committee write a report when there were so many disputes? Before Constitutional bodies came to brief the Portfolio Committee, they would have done their homework. There was need for clarity for the sake of the report as the Committee had never encountered this kind of dispute. The Committee must do its work. You question when there was no clarity. It was not about who was wrong or right but there was need to know what had happened so that the report of the Portfolio Committee would be accurate. At the end of the day, there was need to make the DoL to give account as it would still come after the proposed meeting with the Chairperson to clarify before the Committee. She was treating the entities with the same respect the entities gave to her office.

Mr Rawula said he heard the point the Chairperson had made. Since it was a proposal it was subject to the view of the other Members of the Committee. The Chairperson had said it was the practice of the office of the AG to meet the Chairpersons before presenting. He did not know the process that was usually followed. The Chairperson should remember that the subsequent meeting with the AG was informed by the last meeting of the Portfolio Committee. The Committee had met with the DoL and had seen how strongly the Department felt about the office of the AG. The privilege the Chairperson wanted to have could only cast aspersion on her person. He advised that it should be communicated to the AG that the Chairperson would have considered the proposal of the AG’s office but the DoL had raised its views in the Committee. Since the DoL accounted to the Committee, there was a likelihood that the Committee would have subjective views in terms of the performance of the Department as well as develop some sympathy for DoL She implored the Chairperson not to meet with the AG until the latter had met with the Committee. Let the Committee meet with the AG and the DoL separately and thereafter together.

The Chairperson replied that she had not said she would meet with only the AG but both parties that were in dispute.

Ms Loliwe said the Committee should consider the earlier date when both entities could be convened to a meeting to give the clarity that the Committee had sought. What had transpired in the diverse reports in the areas where the two parties were not in agreement? This would help to get closer to the results. The Committee was not taking sides with any of the entities but rather monitoring the Department.

 Ms S Van Schalkwyk (ANC) said there were a lot of questions in terms of the inconsistencies in the reports and the briefing notes. Nothing could be changed at this stage. The Committee should finalise the processes of BRRR and make a recommendation in terms of the two entities. The Committee should seek clarity without trying to amend anything

Mr Ollis said he was quite happy with the suggestion to meet the two entities for further clarity. That should be done as soon as possible and thereafter finalise the report. The DA Members were ready to come at any time.

The Chairperson said that would be done first and afterwards the reports would be finalised.

Mr Rawula said the Committee was now converging on the idea of meeting both entities together. It was a misrepresentation to refer to the reservations of the Department on the comments of the AG as a dispute. It was a reservation that the Committee noted from the Department and it must be noted as such. It was a reservation that the Committee would get clarity from the AG. It was never a heated debate per se as the AG was not there. The Committee Secretary should not quote that the Committee submitted a dispute. He was available on Tuesday.

 Ms Loliwe said the Committee was using dispute in the English term and not as a legal term.  She suggested that because of the urgency of the matter the next meeting should start at 08h 00 next Tuesday and end at about 09h30 as some Members had other meetings that day.

The Chairperson said the meeting would be on Tuesday subject to what the two entities would say. If it were not possible text messages and emails would be sent to alert Members.

Adoption of minutes
Draft minutes of Committee meetings of 7 and 22 September; and 12 October 2016 were adopted without amendment.

Fourth term Committee Programme
The fourth term Committee Programme was adopted but the Chairperson said it depended on the Parliamentary Programme. If the latter changed the Committee would come back and readopt.

 Mr Ollis said should it was assumed that the statutory minimum wage had been cancelled.

The Chairperson replied that the final word concerning that would be heard in the Tuesday meeting.

Mr Sakasa, Committee Secretary, said the only meeting that was not in the fourth term Committee Programme was the meeting that had been agreed for the adoption of the BRRR on Tuesday.

The meeting was adjourned.

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