Labour Laws Amendment Bill: Committee processes; BRRR Report

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Employment and Labour

04 October 2017
Chairperson: Ms F Loliwe (ANC) (Acting)
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Meeting Summary

The Parliamentary Legal Advisor took the Committee through the progress of the Labour Laws Amendment Bill thus far. In addition, he highlighted that the Department of Labour had identified the use of an incorrect formula in Clause 9 of the Bill which seeks to amend section 13 of the Unemployment Insurance Act. The ratio of 1:5 which related to credit: working days only results in 298 credit days instead of the anticipated 365 days. The proposed change was 1:4 in order to ensure benefits are paid for a longer period. Members of the Committee asked what the implication of the change of the formula would be on the Bill. The Department of Labour stated that there was an additional error in the maternity, stillborn and miscarriage benefits which reflected that it increased from 6 to 17-32 weeks instead of 17.32 weeks. This would impact the finalisation of the bill. Members expressed their concern over small errors which continue to delay the process. 

The Content Advisor presented a brief summary of the contents of the draft Budgetary Review and Recommendation Report. The Committee postponed the deliberation of the report to the next meeting.

Meeting report

The Committee Secretary welcomed members and read a letter from the Chairperson Ms L Yengeni (ANC) which was to formally inform the Committee that she has been redeployed by her political party to become the South African High Commissioner in Jamaica with immediate effect. She thanked the Committee for their discussions and wished them prosperity. 

The Committee Secretary asked members to elect an Acting Chairperson.

Ms F Loliwe (ANC) was elected unopposed as the Acting Chairperson.

Ms S Van Schalkwyk (ANC) asked the Acting Chairperson to congratulate and acknowledge Ms Yengeni’s letter on behalf of the Committee.
Mr M Bagraim (DA) said that despite his differences with the former chairperson, the Committee was going to miss her. The Committee had to acknowledge the work she had done and wish her well. He congratulated the Acting Chairperson on her appointment.
Other Members of the Committee congratulated the former chairperson as well as the Acting Chairperson on their appointments.
A Member proposed that the Committee organise a lunch event so that the Committee could bid the former chairperson farewell and thank her.
The Acting Chair said she will check but her understanding is that the former chairperson is in Pretoria from today undergoing training. If the former chairperson does have time, then this can be organised
Agenda and Apologies
The Committee Secretary read out the agenda for the day as well as the apologies.
The agenda was adopted with no changes.
The Committee, after noting that they had been submitted in writing, accepted the three apologises that had been received.
Mr Bagraim sought clarity on three issues. First, he asked if Members were going to receive hard copies of the documents that will be presented. Secondly, he asked if there is an attendance register to sign. Lastly, he noted that the Committee had voted on whether to accept the apologies that had been submitted. This was an administrative issue as far as he was concerned and not in the Committee’s power to say those Members can not be absent.
The Acting Chairperson clarified that the Committee had previously taken a decision that an apology will only be recognised if it is a written apology. This was being checked on that basis. On documents, she asked the Committee staff to make photocopies for Members even if they get it after the meeting so that they have something to reference. She further stated that there may be issues in terms of logistics as one of the aides was not present.
Committee Processes on Labour Laws Amendment Bill
The Acting Chairperson reminded Members that the Committee had submitted a report on the Bill to the House on 30 November 2016 and another on 22 August 2017. At this stage, the Committee needs to ask the Parliamentary Legal Advisor to assist the Committee on the next steps with regards to the Labour Laws Amendment Bill.

Mr Michael Prince, Parliamentary Legal Advisor, said that previously the Committee had submitted an interim report to the House requesting permission to include further amendments to the Labour Laws Amendment Bill. These amendments came as a result of inquiries into the subject matter of the Bill that took place during the public hearings. It was found that it was necessary to make further amendments to the Unemployment Insurance Act at the time. These amendments were not initially included in the Bill. The Committee therefore had to source permission from the House to include those amendments as per the rules of Parliament.
The amendments are related to two clauses in the Bill - clauses 8 and 12. Clause 8 seeks to amend section 12 of the Unemployment Insurance Act (UIA) in order to align the payment of parental adoption with and commissioning parental benefits with a payment of maternity benefits as provided for in the recent Unemployment Insurance Amendment Bill which has now been enacted.  Clause 12 seeks to amend section 28 of the UIA in order to enable prospective adoptive parents to access the adoptive leave when they most needed i.e when the child is first placed with them.

Mr Prince stated that there was another matter that he needed to inform the Committee about. Clause 9 contains a formula and it has come to the Legal Services attention via the Department that the formula that was proposed in the Bill is incorrect. An actuarial study was done to determine that formula. The Department proposed a change to that formula, it has given a reason for this proposal and how it is to be effected. The formula is part of the Bill currently and it is a change that the Committee could also effect.

Mr Bagraim said the Committee has deliberated on the amendments at length and agreed on those suggested amendments. Parliament had given the Commission permission to go ahead with the amendments. It had been debated at length, the reason for them and the necessity and value to public. He advised that time must not be wasted.

Mr D America (DA) referred to the comment made by the legal advisor on the changing formula. He asked what the financial implication of this is on the Bill.

Ms Van Schalkwyk asked what the impact of the formula would be given that the amendments had been forecasted on the previous actuarial report.
Mr Prince read out the reason that the Department provided to the Legal Services. The Department’s Operation Unit said that the ratio of 1:5 (ie. 1 credit equal to 5 working days) can only result in 298 credit days instead of the anticipated 365 days as contained in section 13 of the Unemployment Insurance Amendment Act. The intention is to pay unemployment benefits for a period of 365 days, which can only be achieved with a 1:4 ratio. The ratio must be configured in a system of implementation. Paying benefits for 365 days will be beneficial to the beneficiaries. This will result in beneficiaries receiving benefit payments for a longer period.
The Acting Chairperson asked Mr Prince to respond to Ms Van Schalkwyk's question about the impact on the actuarial report
Mr Prince replied that there was an official from the Department present that had approached legal services on the matter. He did not know how the impact related to the previous actuarial report.

Mr Thobile Lamati, Director General, Department of Labour, clarified there will not be any financial implication as the actuarial report takes into account that change. It was meant to be that way anyway. It was just a typo which resulted in the error that is being discussed.

Mr America agreed with Mr Lamati and asked what the next step is in order to effect the process towards finalisng the amendment. 

Mr Prince asked the Committee for permission to draft the amendment to the latest clause. The rest of the Bill is completed and the two clauses the Committee sought permission for are already included in the Bill. He said that the matter of the formula is the only outstanding item. With the Committee’s permission, a clause can be drafted with the Department to reflect the correct intention. This can be ready at the next meeting and the Committee can have a look at it then.

The Acting Chairperson asked the Department if it will be ready next week because if the two clauses can be incorporated then the Committee can decide on how to take the process forward.
Mr Lamati said that the Department will be ready next week but raised an issue that would have an impact on the finalisation of the Bill. He stated that if it is not raised here then it may create problems. It is an issue relating to maternity and stillborn and miscarriage benefits which has increased from 6 to 17.32 weeks instead of 17 to 32 weeks.

The Acting Chairperson asked for clarity on what impact this would have. She reminded the Department that the Committee has been dealing with the Bill for a long time and the sooner they finalise it the better. The Committee does not want a situation where it thinks it is at the end, there is another leg to go. Those who are technocrats must do their work to avoid delays.

Mr Lamati said the two outstanding areas which need to be changed are the 17-32 weeks for maternity benefits and the formula ratio.

Mr Prince said there is a challenge with the first request from the Department. The challenge relates to the Private Members Bill (PMB). The Committee had to get permission from the House to include new amendments that was not initially in the PMB and those were related to clauses 8 and 12 now currently in the Bill. The new amendment that the DG is referring to is now not in the PMB and is in the UIA Act. He had discussions with Procedural Offices at the NA Table Staff who indicated that the Committee would need to go back to the House to get permission to include further amendments in the bill. That amendment was not initially brought to the Committee when it requested permission to include further amendments. The Committee would have to go back to the House if it wants to include that amendment.

Mr Thembinkosi Mkalipi, Chief Director: Labour Market Policy, Department of Labour, explained that the actuarial report approved 17.32 now the mistake was done to make it 17-32 which would increase the cost to the fund outside the parameters that the actuarial report proposed. That was why the mistake has to be corrected and that is why there is a delay even in the promulgation because of the cost implication.

Ms Van Schalkwyk said Mr Mkalipi addressed her concern because she wanted to establish what the financial implications will be if the Committee will be outside the actuarial report or recommendations.

Mr Bagraim said this problem is going to set the Committee back into next year as they have to go back to the House. The public is waiting as this amendment will affect thousands of people which is why Members would want to go ahead as quickly as possible. It is problematic and embarrassing for the Committee to be in this situation. Even though it is a typographical error, it has cost implications. The Committee can not bend the rules and will have to go back. Whether the Committee is going to get parliamentary time in this term is probably negative because there are other issues and unfortunately the public would suffer through this.

The Acting Chairperson said missing small things results in an impression that it is a delaying tactic on the behalf of the Committee. She said that this is the last time the Committee will tolerate people not doing things correctly. This has been dragging for too long. Next week, the Committee must craft away of how it will go back to Parliament to address this. There was carelessness somewhere and the technocrats are supposed to be thorough in their work. She asked the Parliamentary Legal Advisor to guide the Committee.

Ms Van Schalkwyk said that this is unfortunate and that it is better to spend time doing things the right way than to be embarrassed at the end. She urged the Department to apply its minds on the small things in order to avoid such mistakes.

Mr Bagraim asked if the Department of Labour could notify the public through a press release that the Bill is on track. 

The Acting Chairperson thanked Mr Prince for his input and allowed members of the Department to leave. 

Outstanding Minutes
The Committee considered and adopted draft minutes

Minutes from 6/09/2017 were accepted with no changes

Minutes from 13/09/2017 were accepted with amendments

Draft Labour Budgetary Review and Recommendation Report (BRRR)
The Acting Chairperson said that she understood that the members only received the first draft of the BRRR yesterday and may not have been able to process it. She proposed that the Committee postpone deliberating and adopting the draft BRRR till the next meeting when the members had gone through it. 

Ms L Theko (ANC) asked for a summary of the report.

Mr Bagraim said that most of the report is a repeat of the factual situation of where the Committee stands. The recommendations of the audit report are a white wash. He recommended that the office staff look at these recommendations carefully as there has been a disaster with the audit of the Department. 

Mr Bagraim said that the Department has failed at its mandate of creating an environment to enable the business community to create jobs. He suggested that the Department re-looks at the recommendations as to why they are sliding downhill.

Mr Sibongisile Ncobo, Content Advisor, gave a brief summary of the content of the BRRR. 
The National Development Plan aims to eliminate poverty and reduce inequality by 2030. The conclusion reached was that the level of economic growth is not sufficient to reduce the level of unemployment. 
The recommendations of last year’s BRRR and what the Department has done about them. 
The annual report of the Department and its entities against their performance plans and to see if they achieved their goals. 
The findings of the auditor general financial performance of the Department and its entities 
The recommendations of the auditor general
The statement of financial performance for the year ended 31 march 2017
The financial and service delivery performance for the first quarter of 2017/18 financial year

Mr Ncobo ended by stating that the recommendations the Committee has to make to the Department must still be finalised. 

The Acting Chairperson asked for the submissions on the recommendations to be submitted by Friday. 

The meeting was adjourned.


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