Unemployment Insurance Amendment Bill: oral submission; Joint Oversight Report; Fourth Term Committee Programme; Update on international study tour to Cuba

Meeting report

Opening Remarks
The Chairperson stated that the Committee had considered Absa Bank’s written submission on the Unemployment Insurance Amendment Bill. The Committee had taken the decision to respond to Absa in writing about its submission and to invite it to make an oral submission if it so felt the need to do so. However due to some miscommunication, Absa Bank had not seen the Committee’s response to its submission and had come to the meeting prepared to do an oral submission. Absa Bank was given some time to peruse the response to their written submission and if they still felt that they needed to make an oral submission they should feel free to do so. If they were satisfied with the response there was no need to make an oral submission.

Absa Bank oral submission on the Unemployment Insurance Amendment Bill [B25D-2015]
The delegation comprised of Ms Vanessa Carstens Absa: Early Careers Lead, Ms Kerry Warren Absa: Legal Counsel and Ms Antoinette Napier Absa: Skills Development.

Ms Warren noted that the Bill was a noble attempt to curb unemployment difficulties. She said that overall Absa Bank was happy with the responses given to their written submission. There were just one or two points that they wished to speak to. The first was on the amendment to section 5 of the principal act. Absa Bank was a bit unclear on what the financial obligation on the employer was. Currently employers did not make contributions through learners. Contributions were done through the Skills Development Act. What obligation was there on the employer to finance contributions?

Ms Carstens explained that in terms of the Skills Development Act learners were excluded from making unemployment insurance payments. Would the employer/company also be required to contribute along with the learner with the new amendments? She felt that if the learner was required to make a contribution then it would increase the learner’s financial burden as learners only earned between R3000-R6000 per month. Many of them supported families.

Discussion

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, Department of Labour, responded that on earnings of say R6000 per month the contribution would only be 1% which comes to R60. He understood that many learners supported their families. However domestic workers also supported their families and their average wage was R1800 per month. Domestic workers were required to make unemployment insurance payments. Absa Bank as a financial institution should concede that it was a good investment to make the contribution given the benefit that it held. Learners would be covered if they made contributions. Learnership contracts were usually from 6 months to a year. What income would they have after the learnership was completed? So it was a good idea for them to have unemployment insurance. The most important thing was that learners who had contributed would be paid unemployment benefit insurance after their learnership contracts had ended.

Ms Carstens accepted the points made by Mr Mkalipi. She enquired about learners who only made contributions midway through their learnerships. It would depend on when the amendments in the Bill would take effect. She also accepted that farm workers and domestic workers earned much less than some learners in learnership programmes. She asked how it would be ensured that learners in learnerships understood the implications. She asked when the Bill would come into effect.

The Chairperson said on getting the message across there would be a process of advocacy.
 
Mr Mkalipi noted that once the Bill was passed President Jacob Zuma would have to promulgate it. He stated that advocacy on the Bill would be done to all workers so that its implications could be understood. The Bill also covered public servants. Employers needed to educate their workers and learnership participants. Trade unions also needed to be brought on board.

Ms Napier asked how the Bill would be tied up with the Skills Development Act. The Skills Development Act said that learners on learnerships did not have to make contributions. How would the Skills Development Act be changed? 

Mr Mkalipi asked whether Absa Bank was saying that the Skills Development Act was contrary to the Unemployment Insurance Act. He asked which section of the Skills Development Act said so. He needed to look at it. He doubted that the Skills Development Act would have a provision which said that it had authority over the Unemployment Insurance Act.

Mr M Khawula (IFP, Kwa-Zulu Natal) noted that the Department of Trade and industry used the term “wages” whereas Absa Bank spoke of a “stipend” that learners in learnerships were paid. Did it mean the same thing when it came to the legal obligation to make a contribution?

Ms Carstens explained that when learnerships were registered, Absa Bank paid a stipend. She felt that stipend and wages meant the same thing. The Skills Development Act spoke about a stipend being paid.

Mr Mkalipi agreed that it meant the same thing.

Mr S Mthimunye (ANC, Mpumalanga), referring to the impact of the Skills Development Act on the Unemployment Insurance Act, said that it would help if the Committee could have access to reports of the National Economic Development Labour Council (NEDLAC), the State Law Adviser’s Office and Parliamentary Law Adviser’s Office. These reports would shed light on the history of the Bill in terms of the processes that it had been through. He pointed out that the Bill was doing away with the exclusions provided for in the Skills Development Act. There was thus no contradiction between the Skills Development Act and the Unemployment Insurance Act. 

Ms Noluthando Mpikashe Parliamentary Law Adviser’s Office explained that the Unemployment Insurance Act applied to anyone who worked more than 24 hours a month. If it was less than 24 hours then the Act did not apply. If learnerships were usually from 6 months to a year then it applied to participants.

Ms Warren suggested that in section 3 on the application of the Unemployment Insurance Act an amendment be made to include, “learnerships”, “apprenticeships” and “internships”. She felt it would make things much clearer.

Mr Mkalipi stated that if a person worked more than 24 hours a month then the Unemployment Insurance Act would apply. In drafting legislation it was accepted practise that one did not specify categories as it tended to complicate matters. Persons could take up a court challenge that a certain category had been omitted. He noted that Absa Bank seemed to have a concern where a person had only done a part of a learnership and went on maternity leave. The issue was what would be the extent of the benefit.

Ms Carstens said that most section 18(2) learners were unemployed before participating in learnerships and hence could not have built up much credits. Hence the alleviation of unemployment hardship would be minimal. On maternity leave she stated that there was an 18 week qualifying period on maternity benefits. Absa Bank had observed that when learners went on maternity leave they tended not to complete learnerships. The Unemployment Insurance Act provided for a maximum period of 17.3 weeks of maternity benefits. The intention was good for some females to claim benefits. She asked what about same sex females who adopted kids. How would they access benefits? She added that the 66% maternity benefit did not deal with death and sickness.  

Mr Mkalipi explained that in order to qualify for a benefit the learner should at least have been employed for 13 weeks. In terms of the Bill maternity benefits did not come from unemployment insurance benefits. The 13-week requirement was there to ensure that persons at least made contributions to the Unemployment Insurance Fund for that period. He pointed out that most companies had the same maternity benefit limitations. On completing learnershps he said that learners could leave at any time. Unemployment insurance would be paid depending on the credit that learners had. There was nothing in the Bill that was wrong or disadvantageous to learners. It would be the same if a worker was dismissed from his job after working three months ie 13 weeks more or less.

Ms Mpikashe, on same sex partners, said that there was a bill in place that was being considered by the National Assembly.

Mr Mkalipi noted that there had been a Labour Court ruling on the matter of same sex partners adopting a baby. Same sex partners were entitled to the same maternity benefits.

Ms Carstens appreciated the responses and accepted them.
 
Mr E Makue (ANC, Gauteng) felt that Absa Bank was not helping themselves by raising issues that were beyond those that were contained in its written submission. It was not fair of Absa Bank to expect the Department of Labour to respond off the cuff to issues that it raised.

The Chairperson said that Absa Bank was not raising new issues, they were simply elaborating on the ones contained in their written submission.

Ms M Dikgale (ANC, Limpopo) understood the concern of Absa Bank on pregnant females not returning to complete their learnerships once they had given birth. Was Absa Bank able to assist the females after their learnerships were completed?

The Chairperson said that things had been dealt with thoroughly. The intention was to have a draft report compiled that would state what the amendments in the Bill contained, what oral and written submissions had been received and that the Committee would deal with the Bill on 8 November 2016. Thereafter the Bill would be considered by the House.

Mr Mthimunye asked when the draft report would be made available to the Committee. Once the Committee had the draft report members could enter into discussion. The Committee would deliberate on the Bill on 8 November 2016.

Joint Oversight Report to Gauteng Province by the Select Committee on Trade and International Relations and Select Committee on Economic and Business Development
The Chairperson placed the Draft Report before the Committee for consideration and said that members could propose amendments to it where they deemed it necessary.

Mr Makue encouraged members only to propose amendments and changes to the Draft Report that were of a substantive nature. He further suggested that substantive changes should be submitted by 12pm the following day, 2 November 2016. He proposed that the Draft Report be adopted.

The Committee adopted the Draft Report.

Mr Nthebe pointed out that the Committee needed to follow up on commitments made in the Draft Report.

The Chairperson suggested that the Committee in a joint sitting with the Select Committee on Trade and International Relations discuss the recommendations made in the Draft Report.

The Committee agreed.

Draft Fourth Term Committee Programme
Mr Mthimunye pointed out that even if members suggested changes to the Draft Committee Programme it would be to no effect as Parliament had already adopted it overall programme.

Ms Dikgale proposed that the Draft Committee Programme be adopted.

The Chairperson explained that the only reason why changes were made to the Draft Committee Programme was due to the fact that the Committee had extra meeting slots that had opened up due to the Unemployment Insurance Amendment Bill to be finally dealt with by the Committee on the 8 November 2016.

The Committee adopted the Draft Committee Programme unamended.

Committee discussion on international study tour to Cuba
Mr Makue wished to highlight certain issues on the international study tour to members. He noted that the tour would be to SA’s embassy in Cuba, to look at tourism and also international relations. Important issues to be looked on the tour would be economic development, public transportation, labour and small business development ie Small Medium and Micro Enterprises (SMMEs).

Committee Minutes
Minutes dated 25 October 2016 was adopted unamended. 

The meeting was adjourned