Labour Laws Amendment Bill: proposed amendments; Labour Budget Review and Recommendations Report

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Employment and Labour

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

The Committee deliberated on the latest proposed amendments to the Labour Laws Amendment Bill. The first was the formula used for maternity benefits and the second related to beneficiaries.

The Parliamentary Legal Advisor explained that the Committee must have public participation with regards to the clause dealing with the extension of maternity benefits. It advised that public participation would be done through publishing the clause on the website, sending it to the people who initially commented on the Amendment Bill and sending it to the people who commented on the Unemployment Insurance Amendment Bill.

The Department of Labour stated that the incorrect formula for maternity benefits needed to be corrected as the Department wants to pay maternity benefits similar to those being paid for maintenance which is 13.2 weeks.

Members agreed that the proposed amendments need to be widely publicised and that it should be circulated among people who initially commented on the Bill. After the responses are received, the Committee will proceed with the Bill.

The Committee considered and adopted the draft BRR Report. The recommendations that were amended were as follows:
-The Unemployment Insurance Fund and the Compensation Fund develop proper accounting systems and processes to accurately report on investments in terms of the required accounting standards.
-The Department regularly provides feedback on progress with cases referred to the South Africa Police Services
-The Minister of Labour takes steps to ensure that in its labour market regulation, the Department balances employment protection with creation of an enabling environment for job creation so as to realise the job creation potential of small businesses
-The Department report back to the Committee on progress with the stabilisation of IT systems
-Inspections and Enforcement Services programme is adequately resources so that appropriately qualified inspectors can be appointed and retained to monitor implementation of labour laws
 

Meeting report

Opening remarks
The Acting Chairperson welcomed everyone and informed Members that there would be two new people joining the Committee, Ms L Theko (ANC) and Mr L Khoarai (ANC).

Apologies were given by Mr W Madisha (COPE), Mr T Rawula (EFF) and Mr Khoarai.

Mr M Bagraim (DA) asked when the Committee will appoint a permanent Chairperson.

The Acting Chairperson replied that they will wait for parliamentary processes and will be advised.

Deliberations on the Labour Laws Amendment bill
Mr Perran Hahndiek, Procedural Advisor, National Assembly Table Staff, said that there were two problems identified in the amendment of the Bill. The first was the formula used for maternity benefits and the second related to beneficiaries. The Table Staff was asked by the Committee whether these amendments could be included in the Labour Laws Amendment Bill. The report the Committee submitted did not include the two additional amendments. The amendment referring to beneficiaries can still be included as it is reflected in the report. The amendment on maternity benefits was not included but it would be procedurally permissible for the Committee to amend the Bill to resolve the problems. It would not be necessary for the Committee to submit an additional request to the House according to Rule 286(4)(c).

Mr Michael Prince, Parliamentary Legal Advisor, explained that the Committee must have public participation with regards to the clause dealing with the extension of maternity benefits. The Parliamentary Legal Services Office recommends that the Committee calls for written comments on the clause, advertise the clause and give a brief description and the need for the clause. The public participation would be through publishing the clause on the website, sending it to the people who initially commented on the Amendment Bill and sending it to the people who commented on the Unemployment Insurance Amendment Bill. There may be other sources of publishing the Clause such as radio slots, public libraries, constituency offices and translating it into other languages. The public participation will depend on the impact of the amendment.

Mr Thembinkosi Mkalipi, Chief Director: Labour Market Policy, Department of Labour, explained that the implications on maternity benefits are that a person who goes on maternity and does not have a miscarriage can only be paid for 4 months and a person who does have a miscarriage can be paid up to 32 weeks. This will create a lot of challenges in terms of different treatment of people who are affected by giving birth and must spend time looking after the children.

Mr Mazwiogwani Phathela, Director : Legal Services, Department of Labour, said that in the event that the error is not corrected, people who receive benefits in terms of miscarriage will be paid more unnecessarily. In the amendments, the Department wants to pay maternity benefits similar to those being paid for maintenance. On the benefits of maintenance, it is clear they will be paid up to 17.32 weeks but maternity benefits would state up to 17.32 weeks which is why the error must be corrected.

Mr Phathela said that the maternity benefits related to miscarriage constitutes 0.17 of the benefits paid in the basket of maternity benefits. In the 2015/16 financial year the maternity benefits that were paid were 90 562 leading to 153 miscarriage beneficiaries. In the 2016/17 financial year it was 98 631 leading to 167 cases related to miscarriage benefits. It is important the errors are corrected as some will say they qualify up to 32 weeks while others on maintenance will get 13.2 weeks. It is common course that those who suffer miscarriages stay at home for less than 4 months. The error would encourage people to take extended leave knowing that if you have suffered a miscarriage you can still be paid for a lengthier period.

Discussion
Mr Bagraim said that there are no arguments that the amendments must go through. He asked the Table Advisor if he spoke of both amendments when he addressed the errors. He agreed that the public must be notified. It would be useful to be given written input and this must be swift so that he legislation can be passed early in 2018. The error is acting as a handbrake and preventing the Committee from making all the wonderful changes it wants to make. He asked that the legal advisor and the NA Table Staff come to an agreement as swiftly as possible.

Ms S Van Schalkwyk (ANC) stated that there must be mention of engaging all the relevant federations as it relates to the employees they represent to close the gap in terms of proper consultation.

Ms M Dunjwa (ANC) cautioned the Department against assuming that a person who has a miscarriage is likely to go back before 4 months as miscarriages are caused by certain complications. She was a bit uncomfortable by this statement. How this is crafted and phrased must not give this impression.

Mr Hahndiek replied that both the errors are technical. The error relating to maternity benefits is not covered in the report adopted by the Committee. The Committee has the space to make these amendments within the context of the procedures of the National Assembly which can be done quite rapidly. He added that the passage of the bill must still go through the National Assembly and the National Council of Provinces.

Mr Bagraim requested for an outline from the legal advisor in association with the Table Staff on the steps which need to be taken in order to activate this as quick as possible.

The Acting Chairperson responded by recapping that the Committee agreed on a need for public participation. It was agreed that the proposed amendments need to be widely publicised and that it should be circulated among people who initially commented on the Bill. After the responses have been received, and if there are extensive input, the Committee will proceed with the Bill. She asked the legal advisor if two weeks is enough for the process

Mr Prince advised that as it is a technical error, a 2-week period should be allowed to allow for public participation.

Mr Hahndiek said that the process the Committee engages in with people must be rational in terms of period and scope. He said that they could look at how the committee section has dealt with this in the past and what the avenues are

Ms L Theko (ANC) proposed an agreement for public participation then they move forward.

The Acting Chairperson said after 2 weeks they must come back and discuss further.

Mr Prince said the amendment which must be sent for public comments must be put before the Committee.

Ms Van Schalkwyk and Mr D America (DA) accepted that the amendments be sent for public participation.

The Committee agreed on this.

Consideration for adoption of the draft BRRR
The Acting Chairperson referred to the draft report and asked members to make comments on it.

Mr Bagraim referred to page 8 on the stabilisation of IT systems within the Compensation Fund (CF) environment to ensure optimal understanding and use of such systems before changing them. He said that it must not just be stabilised but completely sorted out.

Mr Bagraim referred to page 13 on inspection and enforcement services and said that there must be more budget for more inspection and better equipment.

Mr Bagraim referred to the recommendations and said the computer system is continuously blamed for non- performance. He had received a mail which outlined why people have not been paid, there are on going issues and failure with the old system and staff do not know how to work it. There had been 20 years of administrative problems and correction has been promised for the last 3 years which has not been done. He had received complaints from people who manage workmen’s compensation claims where people are not getting responses and payment. The Umehluko system has completely failed and this has been an excuse from two commissioners ago. It is an administrative issue and the public is complaining.

Mr Bagraim said that this is the Department that must create the environment to create employment and there has been nothing from the Department of Labour despite arguments that the system must be reworked. 10 million people are looking for jobs and this is horrific as job creation is a serious issue. This has been ignored in the Department. Those who managed to find work needed to have decent jobs that are legally compliant. Almost 30% of the workforce do not have letters of appointment. The Department cannot be entirely blamed but this needs to be brought to Parliament as many worked in dire conditions. Oversight is only done in formal businesses and not informal businesses. The majority of the businesses in South Africa are not compliant with labour laws. The terms and conditions of the labour laws must be re-looked to create an easier platform for businesses such as small businesses in the township to comply. The employed are becoming the elite and those that are employed do not have access to the labour laws which they desire. He added that most people in jobs are too scared to raise complaints as they may loose their jobs.

Mr America referred to the recommendation which said that human resource capacitation projects must shift focus from senior management service level to operational as to improve service delivery, and sought clarity on the context of this reference. He further referred to the recommendation on the Unemployment Insurance Fund(UIF) developing proper accounting systems and processes to adequately report on investments. The context of the matters raised by the Auditor General’s office on the inability to verify the investment and R9.6 billion in investment from the UIF in the Public Investment Corporation. A similar concern has been made in relation to the Compensation Fund. He suggested that proper accounting systems adequately report on investments on both the Compensation Fund and the UIF.

Mr America referred to the recommendation that in its labour market regulation, the Department balances employment protection with job creation so as to realise the job creation potential of small businesses. He suggested it be rephrased and ‘protection with job creation’ is left out.

Ms Van Schalkwyk agreed with the recommendation that the Department should provide regular feedback on cases referred to the SAPS. She said that in terms of labour market regulation it is a proposal to add regulatory amendments that are not needed seeing that in the current labour legislation there are already sympathetic views to the small business sector.

Ms Van Schalkwyk responded to Mr Bagraim’s point on the problematic IT systems highlighting that the recommendation that the Department report back to the Committee on progress with the stabilisation of IT systems at labour centres covers this. Service delivery must be accessed – people accessing the labour centres must not be frustrated by the IT system.

Ms Theko agreed with Ms Van Schalkwyk on the point of the labour market and said that the wording must be changed.

The Content Advisor responded to the queries from the members. He said that on bullet 2 of the recommendations was a response to Mr Bagraim’s recommendation that the Committee recommends that the Ministry of Labour takes steps to ensure that action plans are developed by the Department to address these challenges.

On the human resource capacitation recommendation, the Content Advisor said the point emanates from the engagements between the Committee and the Department where the Department mentioned it has addressed the capacity challenges at the senior management level. What was required was to now addressed capacity challenges at an operational level.

In response to Mr America’s point that the AG identified both the UIF and Compensation fund, the Content Advisor said that the Compensation Fund will also be included.

The Content Advisor responded to Mr America’s point that the wording on the labour market regulation must be changed by stating that members must decide whether the wording should be corrected or the recommendation should be removed.

The Acting Chairperson noted Mr Bagraim's remarks that there are backlogs in payments and the submissions he received on Umehluko system. This must be tested by making enquiries to the Department in order to give them an opportunity to respond.

The Acting Chairperson referred to a previous meeting that the Committee decided the Department has a responsibility to contribute towards job creation. On the issue of trade unions and people being afraid to voice their opinions, she said that there are hostile employers intolerant to trade unions which is why it is difficult for them to have a voice in the workplace.

Mr Bagraim said that the Committee did not agree if it is the responsibility of the Department to help create jobs. There was a very strong disagreement. The Department is doing a little bit by creating 100 or 1000 jobs here and there but they are not doing their jobs properly and it is their duty to create an environment to aid businesses in employing people. The business community is on an investment strike and the Director General a few weeks back said the majority of jobs are still contract posts and regulation and laws with regards to this have failed. In his view, the regulations are a disaster and the country is going downhill. Three years ago the President said10 million jobs would be created but 3 million jobs have been lost. No one wants to recognise that the country has gone backwards and not forward. The Department is spending enormous amounts of money in the wrong area. He said that there must be a re-look at the labour laws in the country.

Ms Van Schalkwyk said that page 2 of the report, emphasises the policy mandate of the Department of Labour. In relation to the proposed recommendation it is important to re-emphasise the point to ensure employment is protected as it is key in the current economic environment, she suggested the content advisor assist the Committee in redrafting this. She said that seeing that there is an entity in the department of labour that deals with the protection of employment, the mandate of the Department must be re-emphasised.

The Content Advisor said that the recommendation is trying to acknowledge that the mandate of the department is to both protect labour standards and to create an enabling environment for job creation; one mandate must not impede on the other.

Ms Theko asked if the mandate is job creation or to facilitate decent job creation.

The Continent Advisor said it is job creation.

Mr Bagraim said that the recommendation does not need amending as it is not saying the Department is creating jobs but small businesses are.

Mr America said that the two mandates must be balanced and suggested phrasing the recommendation on job creation as follows: ‘In its labour market regulation, the Department balances employment protection with a view of crating an enabling environment to realise job creation potential of small businesses'.

Mr Bagraim referred to page 27 and said it is not just the labour centres that must report on progress with stabilisation of IT, but the head office and the system as well. There must be competently trained people in the head office rather than outsourcing this work. In relation to the Acting Chairperson’s comment on his complaint, he said it has been over a period of 2 years that people are not getting paid and getting feedback.

The Acting Chairperson asked the Committee what their take was on expanding the point that the whole system and not just labour centres must be be incorporated.

Ms Van Schalkwyk said that the Committee cannot say the whole system is failing but she agrees looking at the whole system.

The Content Advisor spoke to the additional proposed recommendation on the inspection and enforcement services budget. The recommendation was that the Committee recommends that the Minister of Labour takes steps to ensure that the IEC programme is adequately resourced so that appropriately qualified inspectors can be appointed and retained to monitor implementation of labour laws.

Mr Bagraim said that it is not just the training and number of inspectors but the equipment and tools that could get to these farms to adequately capture the problems.

The Acting Chairperson asked to substitute equipment with proper tools of trade.

The Content Advisor said it was phrased in that way it in order to cover all resources including tools of trade

The Acting Chairperson gave the Content advisor time to clean the document before the Committee adopted the report.

The Content Advisor read the recommendations that had been amedned:
The Unemployment Insurance Fund and the Compensation Fund develop proper accounting systems and processes to accurately report on investments in terms of the required accounting standards.
The Department regularly provides feedback on progress with cases referred to the South Africa Police Services
The Minister of Labour takes steps to ensure that in its labour market regulation, the Department balances employment protection with creation of an enabling environment for job creation so as to realise the job creation potential of small businesses
The Department report back to the Committee on progress with the stabilisation of IT systems
Inspections and Enforcement Services programme is adequately resources so that appropriately qualified inspectors can be appointed and retained to monitor implementation of labour laws

Ms Van Schalkwyk proposed the adoption of the draft BRR Report seconded by Mr Bagraim.

The Committee approved the report.

Outstanding Minutes
Minutes of 4 October 2017 were adopted without amendments.
Consideration of the Draft Committee Programme Fourth term 2017
Mr America said that on 18 October, consideration of the Labour Laws Amendment Bill would not be relevant after the decisions made during the meting as the parliamentary legal team was given 2 weeks.

Mr Bagraim asked for an update on the 4 bills that are expected before the Committee in the last quarter.

The Acting Chairperson said that they would find out and inform the Committee.

The Draft Committee programme was adopted by Mr America and seconded by Ms Theko.

The meeting was adjourned.


 

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