Department of Labour, Supported Employment Enterprises, Compensation Fund & CCMA Quarter 3 & 4 performance

Meeting report

Mr M Bagraim (DA) said the absence of members of the Portfolio Committee (PC) was not good, considering the large number of delegates.

Ms F Loliwe (ANC) responded that Tuesday was not a day dedicated for the PC on Labour’s meetings, so many ANC Members were present at other meetings that were running according to schedule. ANC party members were committed to the Committee and were always available on Wednesdays, which was the day assigned to the PC on Labour meetings.

The Chairperson added that the meeting was necessary in order to complete its tasks, and that other Members would join as the meeting progressed. The Committee would take the reports of the third and fourth quarters together, because it was behind schedule. The apologies of the Members who were not available should be accepted. She also informed the Committee and the team of the presence of the chairperson of the Committee on Health, Ms M Dunjwa (ANC).

Mr Bagraim accepted the apology of Ms Loliwe, saying he was not pointing fingers at anyone, and also apologised to the delegates from the Department of Labour (DoL) for not having a full house.

The Chairperson thanked Mr Bagraim, and said the colleagues from parties other than the DA and ANC were never present in PC Labour’s meetings. She indicated that the DoL had not been able to brief to the Committee the week before because it had other engagements.

Department of Labour: Third Quarter Report

Mr Thobile Lamati, Director General, DoL, said that the Department would highlight the areas where the DoL had not achieved its targets, and provide the reasons. There had been a progressive improvement since the 2015/16 financial year, when the overall achievement had ranged from 60 to 69%, and was currently standing at 72%. The DoL hoped to improve on the current performance until it got over the 90% threshold.

Ms Marsha Bronkhorst, Chief Operating Officer, DoL, gave a breakdown of the performance on each of the strategic objectives, including its contribution to employment creation, how it had promoted equity in the labour market and protected vulnerable workers, the strategies used to strengthen multilateral and bilateral relations, as well as occupational safety protection. She also highlighted strategies used to, promote sound labour relations, monitor the impact of legislation and strengthen the institutional capacity of the Department. The target to strengthen occupational safety protection and promote sound labour relations had recorded a 100% achievement, while other targets were not fully achieved. In addition, 23 annual planned indicators were achieved, while nine were not achieved. She gave details of targets and performance according to each province under the categories of administration, inspection and enforcement services, Public Employment Services (PES), and Labour Policies and Employment Relations (LPER) programmes.

Discussion

Ms F Loliwe (ANC) remarked that the Committee did not make compromises on the labour force, so it would expect 100% overall performance from the Department. She asked the DoL to explain why it still had 894 vacancies. Were the beneficiaries of the training programme organised by the DoL aware of the benefits of such training, and what was it doing to reduce the issue of beneficiaries not turning up for training? She observed that the registration for job placements were being done online, so she asked the DoL to state how people in the rural areas would be able to register for job placement, since the rural areas lacked modern facilities. She commented that during the oversight visits of the Committee, Members always found unregistered foreign nationals working in companies, and asked the DoL to state who was responsible for allowing these people to work without due registration.

Mr D America (DA) said the issue of fruitless expenditure in the third quarter had presented itself again in the fourth quarter, and there had been an increase from R30 million to R50 million between the two quarters. Did the DoL have a mechanism in place to address fruitless expenditure?

Mr Bagraim observed that a scorecard of three compliances out of 160 for inspection and enforcement was unacceptable, especially because most of the companies examined were formal sector companies. He remarked that it was possible to get 100% non-compliance in the informal sector, so an achievement of 86% performance on inspection and enforcement meant that the target set by the DoL was not adequate. He commented that the DoL employment agencies were not efficient, and suggested that the private sector could handle the assignment better, since the public sector employment agencies were not making any impact on unemployment.

Ms Dunjwa asked the DoL to state the sector that had challenges with the registration of foreign nationals.

The Chairperson asked the DoL to state if the category where it was lagging behind in the registration of foreign nationals was the highly skilled worker category, or vulnerable workers like domestic workers and security personnel.

Ms Dunjwa asked why the Department had not used the opportunity of learnerships to fill the vacant positions, because the number of vacancies was overwhelming.

Mr Lamati said the request to improve the performance of DoL was noted, and the Department would strive to achieve a 100%. The vacancies created were due to the expansion of the compensation fund (CF) and unemployment insurance fund (UIF). However, the DoL had set out plans to fill the vacancies, such as accepting learners in 2017. In addition, although the vacancies had been advertised, there had been a challenge in capturing applicants’ curricula vitae (CVs), but the Department intended to fast track the employment process.

The Chairperson said there was a need to advertise the positions before the existing staff were promoted and the positions became vacant.

Mr Lamati said it was only when a person was appointed for a higher position that the position left vacant could be advertised because the person to be selected could not be predicted in advance. There could be instances when it was possible to advertise before the position became vacant, but it would not be possible in others. The training of the shop stewards helped in the reduction of the number of inspections required. The Department had a twofold approach to the training -- it started with advocacy, and then education. There were two problems to the training of the shop stewards -- the shop owners not releasing the shop stewards, and the unions not ensuring that the shop stewards attended the training. Training was now being arranged as requested by shop owners.

In creating awareness about the registering of applicants in the job placement, there were areas that were difficult to access. The Department had buses that went to remote areas in collaboration with employers and career counselors, although the DoL was not yet everywhere since it was difficult to be everywhere. The application for work permits came through the Department of Home Affairs (DHA), while the DoL made recommendations to the DHA. It was the responsibility of Home Affairs to monitor registration and ensure that foreign nationals maintained a legal status in the country. It was the responsibility of the company that employed the foreign nationals to ensure that skills were transferred, because the skills could not be imported indefinitely. The DoL worked together with DHA on the issues of working conditions, the validity of work permits and wages. Companies that employed the foreign nationals were to blame for the employment of unregistered foreign nationals.

The reporting of inadequate expenditure had been detected, and the DoL was taking steps to ensure there was consequence management. He indicated that the figures in the report were not in millions, as understood by Mr Bagraim. There were two types of inspection -- proactive and reactive inspection. The proactive ones were planned inspections, while the reactive inspections were based on complaints from people. The reactive inspections had to do with the informal sectors. The 4 269 companies were the total for the formal and informal sectors. The Department would increase the number of inspections in the 2017/18 financial year.

The DoL was not fully capacitated, but it was using its limited capacity to carry out its work effectively. The PC should assist in increasing capacity in the Department. The Public Employment Services Bill had been brought before the Committee to compel companies to register job opportunities with the DoL, but it was said to be unconstitutional. The DoL had then decided to encourage the employers to register job vacancies free of charge, but it seemed that companies did not prefer the services of public employment agencies, which they often had to pay for. The DoL was working with the private sector and not in competition with it. It would work to complement the temporary employment services.  When either the public or private sector placed people on jobs, it amounted to a reduction in unemployment and was good for the country. There was no data presently on the sectors where the DoL had challenges with regard to the registration of foreign nationals, but the Department would make a breakdown available to the PC.

Ms Dunjwa asked if there was a working relationship between the Department of Health and the DoL.

Mr Lamati said there was a Memorandum of Understanding between the Department of Health and DoL.

Ms Loliwe said the Department must reduce the lack of jobs in South Africa by filling the available positions. Although it was reported that 90% of the jobs had been advertised, what happened to the 10%, knowing that these were funded positions? She concluded that the Department should not come next time with a huge number of funded positions that were still vacant.

Mr Bagraim said it was important for the Department to know that more people listened to radios than watched television. There were more than a thousand community radio stations which would welcome the Department to enlighten people on their programmes and provide a channel to reach people in the rural areas. He said that there must be a reason why people preferred to pay for the services of paid employment agents, rather than use the free agency in the public sector. The employment agency in the public sector was not giving value for money, and the money allocated to it could be used for inspection services. The report showed that companies were willing to pay for the services, so the DoL should state what could be responsible for their preference to pay the private sector, rather than get the service for free from the public sector. He also encouraged the DoL to work with Home Affairs to make the process of employing foreign nationals easier and quicker.

Mr Lamati said the DoL had asked the Department of Home Affairs why applications had not been processed, despite recommendations from the Department. There was a need for Public Employment Services to ensure that job seekers were adequately placed in available positions and the DoL was constantly improving service provision to the public.

Department of Labour: Fourth Quarter Report

Ms Bronkhorst gave a breakdown of the performance for each of the strategic objectives of the fourth quarter. The targets to strengthen occupational safety protection, to promote equity in the labour market, and to promote sound labour relations, were achieved 100%, while other targets were not fully achieved. Out of 34 annual planned indicators, 27 had been achieved, while seven were not achieved. She gave details of targets under administration, inspection and enforcement services, Public Employment Services (PES), and Labour Policies and Employment Relations (LPER). The performances according to provinces were had been 60%, 93%, 75% and 67% respectively, cumulating to an average of 79%. Performance had improved from 53% at the end of 2015/16 financial Year, to 72% and 79% between the third and fourth quarters of the 2016/17 financial year. The DoL was committed to maintaining a high level of performance, with consequences for non-performance.

Supported Employment Enterprises (SEE) had achieved 63%, 75%, 75% and 50% against its performance targets for the four quarters. There was a need to improve in the new financial year and the focus on the mandate would bring about a positive impact on the lives of persons with disabilities. The SEE had recorded a 225% gross loss, and there had been just two product exhibitions instead of the eight advocacy campaigns that had been targeted in the third quarter. The target to increase sales of products in the fourth quarter had also not been achieved. 150 people living with disabilities had been provided with jobs and 100 schools had been visited to create awareness about SEE. It had achieved 50% of its targets in the 2016/17 financial year, but had also recorded some losses as well.

Discussion

Ms Loliwe said the Support Employment Enterprises (SEE) was an area that needed assistance, and asked the DoL to describe the strategies put in place to assist it.

Mr Bagraim also said SEE was important for the people and for the country. He asked the DoL to ask for proper documentation, and establish why the governing body of SEE did not give proper documentation to the DoL.

Mr Lamati indicated that the structure of SEE had to reflect that it was business oriented, as opposed to other government departments.

Mr Sam Morotoba, Deputy Director General: Public Employment Services, DoL, indicated that the National Treasury (NT) needed to allocate funds to SEE. A new structure should be put in place at SEE and the capacity should be geared towards business, instead of the structure in place in other government departments. This process was currently being facilitated through engagements with the Department. The DoL had acknowledged that SEE needed assistance. A lot had been done to remove the burden of salary and administration from SEE by the Department. SEE’s administration was now only focused on factory workers, in order to maintain their focus. There were deliberations to take away decision making in the Department, to allow SEE to have its own supply chain and human resources. He said the Department and the Minister of Labour were playing a major role in marketing SEE. He invited Members to view the display of SEE’s furniture which was on display in Parliament. The DG had issued a directive to the DoL and its entities regarding the procurement of furniture from SEE. There was also a plan to expand and diversify its products, and the DoL had secured NT’s approval for SEE to charge 50% upfront before embarking on any procurement requests.

Mr Virgil Seafield, Deputy Director General: Labour Policy and Industrial Relations, DoL, informed the Committee that the law did not allow the return of an application, or an extension of agreement, to a party because the application was not complete. The amendment of the legislation sought to allow the Minister of Labour to extend the time for agreement with the party to ensure that informed decisions were made.

Compensation Fund: Presentation

Mr Vuyo Mafata, Commissioner: Compensation Fund (CF), highlighted the overall performance on the strategic objectives for the third and fourth quarters for all the CF’s programmes, and the achievements based on expenditure. He also described the performance in terms of claims and medical benefits in each province and the statistics on injuries by province, gender and sector. In summary, he referred to the challenges faced in each programme and the strategy used to correct the challenges faced.

Discussion

Ms Loliwe said that although there was improvement in the performance of the CF, the improvement was slow. She asked why the Northern Cape (NC) was always the worst performer when provinces were ranked.

Mr Bagraim said that there were competent and hardworking people in the CF, but advised that the backlog should be outsourced so that past problems did not hinder its future prospects. He asked why the registration of new people at the CF was still a challenge. He also observed that the Minister of Labor had uncovered fraud cases, so he asked for the Committee to be updated on the disciplinary action taken in respect of fraud cases. W had the CF not achieved its set targets? He also asked the Commissioner to confirm if the statistics on reported injuries mentioned in the report were for one quarter, or for both quarters.

Mr America asked why there was a low level of achievement in programme 1 (administration), and whether this had had an impact on the achievement of programme 2 (operation). He asked the Commissioner to clarify if it was possible to achieve more targets in programme 2 (operation) if there was an improvement in programme 1.

Mr Mafata said the CF would need a combination of skill and ability to find and attract the right staff. There was currently a lot of support from the head office with the functions and processing of funds. The CF had dealt with most of the backlog -- the past claims that had not been paid were those with problems in their documentation. Most of the challenges had been because there was no electronic platform that accepted information directly from the companies, so there had been a need to send inspectors to check the correctness of the information given by the companies.

A possibly fraudulent interception of claims had been discovered. 35 people had been placed on 60 days’ suspension to allow for investigation. The people had resumed while investigation was ongoing. The Fund was not adequately structured to fulfill its mandate, although there was a plan for restructuring where skills in certain areas were inadequate. The issues raised by the Auditor General were deep, so the CF had embarked on a turnaround plan. The new structure would enable it to deal with the challenges. He said there was no link between programme 1 and programme 2. The statistics on injuries mentioned in the report were for the reviewed financial year.

Commission for Conciliation, Mediation and Arbitration: Presentation

Mr Cameron Morajane, Director: Commission for Conciliation, Mediation and Arbitration (CCMA) said there was a total performance average of 86% by the CCMA in the third quarter. Three targets had not been achieved. The case management system had been rolled out. About 80% of the talent management and succession and procurement plans had been implemented.

Three targets out of the 33 targets set for the fourth quarter were not achieved. He gave reasons why some targets were not met -- the industry sustainable process had been experimental, and there had been a mistake with the target time set for talent management, which had been indicated as one year instead of five years. The target for the procurement plan was not met due to delays in the procurement process.

The progression from 76% to 91% between the 2015/16 and 2016/17 financial years was achieved under difficult situations. The CCMA had recently lost about three of its key staff members, and another was hospitalised and in a serious condition. Some of the achievements of CCMA were:

• It had saved 52% of jobs of employees facing retrenchment,s which translated into more than 25 196 jobs saved;
• Assisted about 4 000 vulnerable employees through the CCMA and Sheriffs Board partnership, whereby CCMA awards had been enforced;
• A number of transformation in the workplace interventions, and some capacity building programmes.
• 143 matters which were in the public interest had been settled;
• 53 336 people were capacitated to better understand the law and their rights.

He said the CCMA had contributed to the nation by saving about 25 000 jobs and had contributed to conflict resolution, with particular reference to the conflict among different parties in Parliament and the Southern African Development Community (SADC) countries.

Discussion

The Chairperson sent condolences to the CCMA and to those who had lost their loved ones, and a recovery wish to those who were sick. She applauded the intervention of CCMA in the Parliament situation, and said that Parliament appreciated the Minister and CCMA.

Mr Bagraim thanked the Director for the report and the reassurance. He said agreement with the insurance board was vital. He sent his condolence to the family of the departed who he said had been an icon in the arena of conflict settlement. He asked the Director to inform the PC on Labour about the funeral, because they would like to attend.

Ms Dunjwa asked the CCMA to state which sector was targeted, and what language it used for the ‘knowing your rights’ enlightenment programme, with a particular focus on farm workers.

Mr Morajane said that in order to increase accessibility, it would be helpful to open offices in the townships. Also, people knew their rights and had the ability to access help when they needed it. The intended impact of the CCMA was ease of access. It reached out to all sectors, either by being invited or by inviting people. Understanding what was happening in other sectors was helpful, because it could help in the provision of specific specialists. Agriculture and domestic staff were vulnerable, but were often difficult to access, so the CCMA would target these sectors so as not to defeat the purpose of the Act. He said explaining a new law in different languages was difficult and because of this, multilingualism had been made an important part of the employment requirement, and the referral forms had been translated into all South Africa’s languages.

Ms Dunjwa asked if the CCMA included sign language in its different training programmes.

Mr Morajane said sign language was catered for, and Braille was being developed for blind people. However, these were costly expenditures which should not be hindered because of funding, so it was important to consider these factors during budgeting.

The meeting was adjourned.