Department of Labour on its 2015/16 Annual Report

Meeting report

Election of Acting Chairperson
In the absence of the Chairperson Mr M Rayi (ANC, Eastern Cape) the Committee elected Mr E Makue (ANC, Gauteng) as Acting Chairperson.

Apologies
Both the Minister and Deputy Minister of Labour had extended apologies for not being able to attend the meeting.

Opening Remarks by Department of Labour (DoL)

Mr Thobile Lamati, Director-General, DoL, said that in the interest of time the briefing would focus on those areas where the Department had not achieved. The briefing would also focus on work done in provinces. The briefing was on the Annual Performance Report 2015/16 even though it was already 2017. Members were urged to bear in mind that things in the meantime had happened since the Report had been compiled. The Committee was also urged to see the 2015/16 performance of the DoL in context of its performance in 2014/15 which had only been 42%. There was an improvement in performance as in 2015/16 the performance sat at 50%.

Briefing by the Department of Labour on its Annual Performance Report 2015/16
Ms Marcia Bronkhorst, Chief Operations Officer, DoL, provided a breakdown of annual performance as per strategic objective:
-contribute to decent employment creation: Of the nine planned indicators only four had been achieved hence performance sat at 44%.
-protect vulnerable workers: Of the seven planned indicators only three had been achieved. Performance was hence at 43%.
-strengthen multilateral and bilateral relations: The one planned indicator was achieved which provided a performance of 100%.
-strengthen occupational safety protection: Of the six planned indicators only four had been achieved which translated into a 67% performance.
-promote sound labour relations: None of the two planned indicators were achieved making performance 0%.
-monitor the impact of legislations: The one planned indicator was not achieved hence performance sat at 0%.
 -strengthen the institutional capacity of the DoL: Of the eighteen planned indicators only eight were achieved. Performance was thus at 44%.
-promote equity in the labour market: Of the six planned indicators five had been achieved. Performance was thus at 83%.

Members were also provided with annual performance figures as per Branch:
Administration Programme: Only eight of the eighteen indicators had been achieved. Performance was thus at 44%.Performance had dropped for Quarter 4 which had affected annual performance. Stringent monitoring of 2016/17 remedial plans had been adopted for all Branches of the DoL.

Inspections and Enforcement Services Programme: Of the sixteen indicators ten were achieved. Performance was therefore 63%.The Programme had significantly improved performance throughout the 2015/16 financial year.

Public Employment Services Programme: Of the nine indicators only four had been achieved. Performance was thus at 44%.There had been a large number of indicators that had been consistently been performing below par during the financial year. Provinces were managing change from manual to automated systems which had resulted in tighter controls and stringent quality assurance measures. Due to the new approach a number of reports that could not be validated by the system had been disqualified resulting in reduced performance. Once provinces had adjusted to the new system it was expected that performance would improve for 2016/17.

Labour Policy and Industrial Relations Programme: Of the seven indicators only three had been achieved. This translated into performance of 43%. Performance had significantly improved from Quarter 3 to Quarter 4. 

Further detail was provided on performance as per Programme from a provincial perspective. It was evident from the aforementioned figures that the overall performance of the DoL sat at 50%.78% of Annual Performance Plan 2015/16 indicators and targets were well above 75% and only 22% of Annual Performance Plan indicators were below 75% (See document).

Discussion
Mr Y Vawda (EFF, Mpumalanga) was concerned about the manner in which the DoL had reported its 2016/16 Annual Performance Report to the Committee. The Department seemed to have presented a copy and paste of its strategic plan in terms of what had been achieved. The Committee needed more detail than what was provided and more analysing should have been done.

Mr Lamati explained that sometimes the DoL was limited by the formats that they used for reporting. The DoL would provide the Committee with a more detailed report if it so wished.

Mr B Nthebe (ANC, North West) stated that the DoL had an indicator for sound labour relations yet there were two targets that were not achieved. He commented that the mining sector was experiencing problems due to low commodity prices which resulted in job losses. In addition, the recent drought in SA, more so, affected vulnerable groups. He asked the Department to comment on both of these issues.

Mr Nthebe was disappointed that issues that the Committee had raised in previous interactions had not been dealt with. Inspections by the DoL had also not served the purpose that they had been intended for. He felt that there needed to be consequences for companies who were not complying. In as much as the DoL had conceded that it had not achieved as much as it should have there was a need for greater effort to be made.

Mr Lamati conceded that there was a failure of labour market policy to achieve targets. On labour peace, the DoL had the Commission for Conciliation, Mediation and Arbitration (CCMA). The CCMA would be able to shed more light on the matter. The DoL was also concerned about the regularity of job losses and was engaged in discussions with the mining sector. The DoL engaged with mines to prevent retrenchments and to save jobs. If workers were retrenched and claimed from the Unemployment Insurance Fund (UIF), the DoL retrained them and placed them on a database of job seekers. He noted that government was doing quite a bit to assist vulnerable people. The Department of Agriculture was engaged to minimise the effect of drought. He stated that in the presentation the DoL had not spoken to what happened to companies that were non-compliant. If companies were not compliant then the DoL took them to court. For instance employers in the North West Province had been taken to court for none compliance on health and safety.
 
The Acting Chairperson stated that it was apparent from comments by members that the DoL needed to provide the Committee with more information. Members could approach the Chairperson of the Committee over the issue or the Committee could in writing request the DoL to address certain issues. It was also apparent that members were concerned about the DoL’s efforts on job creation. It seemed as if the DoL was more involved in creating an enabling environment for job creation. He suggested that the DoL’s Parliamentary Liaison Officer should follow the Committee’s Programme.

Mr L Magwebu (DA, Eastern Cape) stated that with all due respect to the DoL he found their performance to be depressing. Performance of 50% was unacceptable. He observed that two years ago Parliament had passed the Employment Services Act. The unemployment rate in SA was high with a total of 9 million South Africans being unemployed. The Act was placed in the hands of the DoL but the DoL was failing South Africans. He felt that the DoL in the main was failing but was only achieving on the periphery. He said that the Department’s comments left him cold and that it was not helping and empowering South Africans. The DoL was not meeting targets where it mattered. He gave the DoL many instances in its presentation where it had fallen short of meeting targets. The DoL could not even link unemployed persons with work opportunities that were available. It seemed as if the DoL was lacking capacity on the ground to meet its targets. He was interested in particulars of fraud cases.

Mr Lamati understood where the Member was coming from about the lack of performance of the DoL. He conceded that the performance of a Department should be above 50%. He reminded members of his opening remarks about where the performance of the DoL was coming from. He stated that the DoL took its work seriously and regularly monitored it. Monthly targets were tracked and efforts were made to improve performance. The DoL had implemented consequence management. He agreed with sentiments that the performance report was depressing. The report with additional information as requested by Members should address issues that Members had raised. On the Employment Services Act, he pointed out that when the legislation was negotiated at the National Economic Development Labour Council (NEDLAC) the DoL had wished to force employers to report job opportunities. Unfortunately it was not agreed to. The DoL did an analysis of the job seekers who were captured on its database. The problem that South Africa had was the structural nature of its unemployment. Most of the people on the DoL’s database had no skills. The Employment Services Act however called for people with high skills. He agreed to provide the Committee with a breakdown of fraud cases.

Mr J Londt (DA, Western Cape) was disappointed with the lack of political leadership from the DoL being present in the meeting. The Minister of Labour had only appeared before the Committee once with the Deputy Minister perhaps making an appearance twice or thrice. He noted that it was not the first time he was raising the matter and yet there was no improvement in attendance.

The Acting Chairperson said that he could not recall Mr Londt raising this matter before but he would nevertheless raise the matter with the Minister and get back to Mr Londt. He did however recall the matter having been raised in the House. He asked why the Public Employment Services {PES) Board had not been established yet. He observed that the DoL seemed to be having staffing constraints even though funds were there. He asked what the problem with the DoL’s Information Technology Systems was. The DoL needed to give the Committee an idea of what it was doing to address issues that members had raised and what progress had been made. He suggested that when the DoL reported on a certain province it needed to highlight the key economic drivers in that province. The DoL was asked what the reason was for the huge amounts of applications from labour organisations being refused.

Mr Lamati stated that the DoL trained beneficiaries of UIF and placed them in jobs. The DoL had a labour activation programme. The DoL was trying its best to create an enabling environment for job creation. There was cooperation with the Department of Higher Education and Training as well as with Skills Education Training Authorities (SETAS).The labour activation programme had some success and the intention by the DoL was to upscale it. It was being decentralised to provinces. He explained that when the DoL said it had limited resources it only had a limited number of counsellors to counsel a limited number of people. The economically active population in SA was 16m people. For instance there was one inspector to cover 160 000 economically active people. The accepted norm was supposed to be one inspector per 15 000/20 000 persons. He noted that the issue of resources would be a problem for the DoL for a long time. The DoL did its best with its limited resources. He stated that there were criteria for organised labour to meet in order to be registered. Those refused had not met the criteria. The DoL would look at key economic drivers in each province. On Information Communication Technology (ICT) challenges the DoL was making progress. The DoL’s data centre did not have the capacity to deal with the volume of work that it had to deal with. The ICT problem would in the near future be something of the past.

Mr Sam Morotoba Deputy Director General: Inspection and Enforcement Services, DoL, reiterated Mr Lamati’s remarks that that the Annual Performance Report 2015/16 was dated. He pointed out that the Minister of Labour had now formally appointed the PES Board. He conceded that there had been delays. However all procedures had been completed in the current financial year.

Mr Magwebu noted that the DoL had complained about a lack of resources and challenges that had been faced. He pointed out that the Employment Services Act stated that the Director General had to maintain labour centres. Parliament had in the Act listed the services that the DoL had to provide. The Act essentially stated what needed to be done. The DoL was asked to provide the Committee with a breakdown of supported employment enterprises in terms of provinces. He said that in SA 2m people were disabled. The DoL only managed to get 899 people employed. He asked what the challenges that the DoL had experienced were.

Mr Lamati referred to section 4 of the Employment Services Act which dealt with the responsibilities of the Director General of the Department of Labour explained that a number of the responsibilities were subject to the availability of funds. He stated that for 2016/7 the DoL was supposed to have been given an allocation to discharge the responsibilities as set out in the Act but the allocation had been withdrawn. Other government priorities had to take precedence. A total of R67m had been taken from the DoL. The DoL was well aware that it had to use its resources as best as it could. He said that there were a number of employers on supported employment enterprises the DoL did not unfortunately have the information at hand.

Mr Londt said that the DoL had paid over R13m in performance bonuses. Were these performance bonuses linked to the outcomes that had been achieved?

Mr Nthebe stated that in all likelihood there should be different expectations from the Committee and from the Portfolio Committee on Labour. The DoL could not expect to present the same Annual Performance Report to both Committees. He pointed out that from the comments made by members, the DoL should get the gist of what was expected of them.

Mr Vawda pointed out that the targets of the DoL also seemed low. It also looked as though Mpumalanga Province had performed badly when looking at slide 28. He asked why this was the case. The DoL was also asked what it did when there was non-compliance. He referred to the Lily Mine in Mpumalanga and asked what the DoL had done about the huge job losses that had taken place. The DoL was further asked whether it kept an eye on the agricultural sector. He further asked what the DoL was doing on the debate on the minimum wages and if this was being monitored. 

Mr Lamati, on targets that were low, said that the DoL did its best to align targets with resources that it had. Targets were set based on resources. Mr Vawda was correct that Mpumalanga Province had not performed well and it was a matter relating to Director General Reviews. Sometimes the Chief Operating Officers (COOs) of companies were not available. On non-compliance, he said that workplaces that did not comply were served with notices whilst others were taken to court. A total of 217 were taken to court. On the Lily Mine matter, the DoL had been in contact with the Department of Mineral Resources. The DoL did its best to assist workers. The DoL was engaging with the Departments of Agriculture and Rural Development on projects that they were running. He said that on the national minimum wage the DoL would be in a position to monitor it. The minimum wage would have fewer variations than there were now. 

The Acting Chairperson said that it was clear that the Committee had deep concerns about the performance levels of the DoL. He urged that the DoL addresse issues in the 2016/17 Annual Performance Report. There should be a huge improvement. The Committee would continue to engage with the DoL.

Committee Minutes
Minutes dated the 29 November 2016 and the 24 January 2017 were adopted as amended.
  
The meeting was adjourned.