Labour Law Reform: National Minimum Wage Bill, BCEA & LRA Amendments; Labour Department + Compensation Fund Quarter 2 performance, with Minister

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Employment and Labour

31 January 2018
Chairperson: Ms F Loliwe (ANC)
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Meeting Summary

The Department of Labour briefed the Committee on labour law reform. The National Minimum Wage Bill was the result of a NEDLAC engagement process about wage inequality and the labour relations environment. The national minimum wage (NMW) was the minimum level below which no employee should be paid:
• The level will be R20 per hour to be implemented and enforced from 1 May 2018
• NMW for Farm/Forestry workers:R18 per hour (90% of the NMW)
• NMW for domestic workers: R15 per hour (75% of the NMW)
• NMW for workers on the Expanded Public Works Programme (EPWP): R11 per hour (55%).
Anyone who worked for someone else and got paid for it, was defined as a worker. The NMW could not be varied by contract, collective agreement or law. The NMW would be reviewed annually. Employers could apply for exemption for up to a year. Regulations were developed to deal with details of the exemption process.

The Basic Conditions of Employment Act (BCEA) Amendment Bill amended the BCEA Act, consequent upon enactment of the NMW Bill. If a worker worked less than four hours on any day, he had to be paid for four hours. The provision applied to workers who earned less than R40 per hour. Inspectors could refer disputes to the CCMA in relation to the NMW Act, the Unemployment Insurance (UI) Act, and the UI Contributions Act. Any person could refer a dispute to the CCMA for failure to pay any amount owing to that person.

The Labour Relations Act (LRA) Amendment Bill stated that extensions of collective agreements concluded in bargaining councils would only require a majority by either trade union(s) or employer party(ies). The Bill required secret balloting for labour organisations, as a system of voting by members that was recorded and secret. To resolve violent or intractable strikes or lockouts, the amendments provided for the establishment of an advisory arbitration panel.

In discussion, there was common concern about the R11 per hour minimum wage for EPWP workers. It was felt that it was not a living wage, and that government could afford paying more, as it was the chief employer. A Member warned that it could cause revolt and discord, as EPWP workers were exploited, volatile and militant. There was concern about the fact that the NEDLAC process excluded some unions. A DA Member argued that the four hour minimum requirement in the BCEA Amendment Bill would destroy piecemeal work. There were also questions about communication; exemption; the definition of “worker”; balloting; extension of collective agreements, community caregivers, and the section 189 requirement that employers had to consult with workers prior retrenchment, which the EFF deemed inadequate.

The Department of Labour reported on its Quarter 2 performance. Fruitless and wasteful and unauthorised expenditure amounting to R504 877 and irregular expenditure of R528 986 was detected and reported. A new relationship had been developed between the Inspectorate and the Compensation Fund which would revolutionise health and safety in SA. Complaints that had been reported to DOL included those to do with BCEA and sectoral determinations where wages were not in line with determinations; unpaid overtime, and unlawful deductions from wages. There was inspection underperformance due to operational challenges in Gauteng, Limpopo and Mpumalanga. Two provinces were placed under administration. The number of registered work seekers was much higher than work opportunities registered and placements secured. The audit action plan would be reviewed by Auditor General South Africa (AGSA).

In discussion, there were questions about complaints; inspections; provinces placed under administration; social media activity, and injuries.

The Compensation Fund reported on its Quarter 2 performance. Performance indicators achieved were percentage of approved benefits paid within five working days; percentage of claims adjudicated within 60 working days of receipt, and percentage of medical invoices finalised within 60 working days of receipt with 96% of compensation benefit claims received adjudicated within 60 days of receipt, and 93% of medical claims finalised within 60 days of receipt. Overall performance for strategic objectives was 43%. Reasons for underperformance included non-compliance by employers and inadequate requests that resulted in a lengthy approval process.

In discussion, there were questions about integration of computer systems; underspending; backlogs, and fiscal dumping.

Meeting report

Introduction by Chairperson
The Chairperson noted that the programme for the quarter would run according to tight timeframes. All hands had to be on deck to move in the right direction. If Nelson Mandela had been alive, he would have celebrated 100 years in the current year. It had to be kept in mind that it was the centenary celebration of an iconic figure, and everyone would do well to make him proud. The Minister was welcomed.

Minister of Labour introductory comments
Ms Mildred Oliphant, Minister of Labour, commented about reasons for the National Minimum Wage Bill. The ANC as ruling party, in its manifesto of 2014, decided to investigate the possibility of a minimum wage Bill. The task was delegated to the Deputy Minister, and the process started with NEDLAC. It was finalised in NEDLAC at the end of October 2017, and the proposals were submitted to Cabinet in November. The purpose of the Bill was to advance economic development and justice, to protect workers against low wages, and to protect the national minimum wage. There would be annual adjustments based on reviews. Concerning exemptions, each company unable to pay minimum wages had to submit relevant documentation. The Portfolio Committee had been briefed about general exemptions at a previous meeting. The Labour Relations Amendment Act dealt with relations between organised labour, business, government and NGOs. A code of good practice had to emanate from the national framework peace accord. After Marikana and incidents in the transport sector, there was a forum led by the President to inform on good practice. The mining sector unions signed a peace accord. The code of good practice was the result of a call for intervention by government into unresolved issues between employers and workers. The Department of Labour played a central role in interventions.

Labour Law reform: briefing by Department of Labour
Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, said the National Minimum Wage Bill came from a process of engagement through NEDLAC on wage inequality and the state of the labour relations environment. The national minimum wage would be the floor below which no employee was to be paid. The level would be R20 per hour from 1 May 2018. The minimum for farm workers was R18 per hour, for domestic workers R15 per hour, and for EPWP R11 per hour. The NMW applied to any person who worked for another and who received payment for that work. The NMW could not be varied by contract, collective agreement or law. Variation by contract could only be where it provided a more favourable wage. The NMW had to be reviewed annually. An employer could apply for exemption from the NMW for up to one year. There would be regulations to deal with detail of the exemption process.

The Basic Conditions of Employment Amendment Bill introduced amendments to the Basic Conditions of Employment Act, 1997, consequent upon the enactment of the National Minimum Wage Bill. Definitions were aligned to include the NMW Act. Any worker who worked for four hours or less on any day had to be paid for four hours. The provision would apply to workers earning below R40 per hour. Inspectors could refer disputes to the CCMA in relation to the NMW Act, the UI Act and the UI Contributions Act. Any person could refer a dispute to the CCMA concerning failure to pay any amount owing to that person in terms of BCEA and NMW, a contract of employment or a collective agreement.

The Labour Relations Amendment Bill prescribed that extension of collective agreements concluded in bargaining councils would only require majority by either the trade union(s) or the employer party(ies). A picket would be prohibited unless there were picketing rules in place. The Bill required secret balloting as a system of voting by members that was recorded and secret. To resolve strikes or lockouts that were intractable or violent, amendments provided for the establishment of an advisory arbitration panel to make an advisory award to assist the parties to resolve the dispute.

Ms Fatima Ebrahim, Parliamentary Legal Adviser, noted that Legal Services had tagged the Bill as a Section 75 Bill. The time had arrived for public participation, and sufficient time had to be provided for that. The legislation represented a large percentage of South Africans. Legal Services was happy with the information and would liaise with the Portfolio Committee.

Ms N Tolashe (ANC) welcomed the Minister and her team. She was looking forward to implementation of the legislation. It was announced in the 2017 SONA, and it was exciting that it had been drafted within one year. It was not easy to implement timelines. Historically there had been progress as in 1994 nothing was agreed upon. She asked the Minister about communication with the people. There was going to be spoilers, but still everyone had to be taken on board. People had to understand where the legislation was coming from, and where it was going. Further discussion on exemption was needed. Conditions related to the involvement of organised labour in the process, had to be considered. People had to be taken on board. In a recent talk show where the Deputy Minister talked about the role of the Department on the continent, it was gratifying to see how people participated. It was a difficult baby to claim, and the Department had to take centre stage in doing so. The DoL was well advised not to allow hijacking. It had to be at the centre.

Mr M Bagraim (DA) referred to the statement that the aim was to pass the NMW Bill by 1 May 2018. Yet the Legal Adviser had stated that there had to be time for consultation. National Treasury had stated that 750 000 jobs would be lost through the legislation. He asked how much consultation that merited. The public had to know. The presentation stated that NEDLAC had agreed to R20 per hour. He had not read the NEDLAC minutes. He assumed that there would be a quid pro quo arrangement, whereby social partners agreed that in exchange for the R20 NMW other issues would be dealt with, related to the LRA. It was stated that there was a two year process related to farm workers and domestic workers. He asked if that would be from the time the NMW Bill was passed. He asked why EPWP workers were to be paid less. More could be afforded, and the government could afford it more easily than the private sector. The trade unions were angry at the definition of “worker”. Independent contractors fell under the national minimum wage. He asked if that meant someone selling fruit by the roadside could demand a minimum wage, and who would pay that. The Minister had to comment on that. For the unemployed, the minimum wage was zero. 56% of people in the 16-25 age group were unemployed.

Mr W Madisha (COPE) asked if there would be discussions to provide clarity between the present and 1 May, or whether it was an accomplished fact. Government was saying that unemployment stood at 27%, but there was evidence that the figure was in fact 40%. Of those employed, many were only temporarily employed and extremely vulnerable. It had to be looked into. Many unions claimed that they were not involved at NEDLAC. The CCMA had historically failed to enforce, and many workers could not afford to go to labour court. He asked the Minister about the statement on page 9 that extension of collective agreements concluded in bargaining councils would only require a majority by either the trade union(s) or the employer party(ies). The owner of one factory might agree, and that of another might not. He asked how enforcement would be dealt with. Restaurant workers were given two hours work and then told to go home, and others would come in for three hours. He asked if Members would only be allowed to ask questions, and implementation would carry on regardless.

The Chairperson told him that all Bills followed the normal route.

Mr P Moteka (EFF) asked about situations where workers would be sent home because of conditions beyond their control, like machine breakdowns. To allow payment for only four hours would allow room for exploiters. He referred to the definition of worker, with reference to community caregivers. Those workers were not on the minimum wage list. Worker conditions were the responsibility of government. Government was the biggest employer. The EPWP was not bringing improvement; EPWP workers had to have the same status as normal workers. Community caregivers were not respected by departments, and not included in the minimum wage. He referred to section 189(2) of the Labour Relations Act. It referred to consultation prior to retrenchment, but to employers it came down to merely informing workers that they would be retrenched.

Ms S Van Schalkwyk (ANC) referred to non-compliance with the NMW Bill by employers. She asked about the maximum time frame for payment to be backdated, and whether a worker could claim beyond the maximum time frame, if the worker could prove that it was longer than the maximum time frame. She asked about balloting by trade unions. Trade unions were compelled to ballot. Some trade union constitutions made no provision for that. She asked about time frames for them to comply, and penalties for non-compliance.

Mr Mkalipi replied about exemptions. The Minister was responsible in terms of the Bill to make regulations on what information had to be supplied, and what steps taken. Regulations were developed to an advanced stage. There would be no easy way out for employers, but it was not to be too difficult, else unemployment would result. The question was whether the fiscus could afford the R20 per hour minimum for EPWP. Government had a million employees, excluding EPWP. The aim of EPWP was to give access to income and skills, not to provide full time employment. Government could not employ everybody. EPWP was a sectoral determination, and the legislation protected that. EPWP remuneration would increase with the others, and the same applied to learnerships. According to the BCEA and the LRA, there had to be an employer/employee relationship. It was agreed at NEDLAC that a worker was someone who worked for somebody. If the worker was independent, the minimum wage could not apply. If someone wanted to wash your car he worked for you, and had to be paid for four hours.

He answered Mr Madisha about participation at NEDLAC. Any organisation had a constitution and a constituency. NEDLAC could not unfairly refuse participation. Any federation could apply. It was the only institution that allowed debate. Yet NEDLAC could not be compelled to include those who did not qualify. Bills were published for comment by workers outside NEDLAC. Everybody could comment. There was a presentation to NUMSA, which was not part of NEDLAC.

Mr Mkalipi replied that enforcement was going to be a big issue. Inspectors had to be able to enforce the law. The CCMA had a good track record. Many workers were not included in collective bargaining. If it rained, they were sent home. If community caregivers were part of EPWP, those provisions applied to them. All workers who worked for somebody were included in the Minimum Wage Bill.

He answered Ms Van Schalkwyk about limitations. The BCEA limited inspectors to 12 months to initiate a non-compliance process. The amendment prescribed that there were three years in which to complain. Inspectors could give a compliance order for three years. If the employee had kept records for five years, he could go to the CCMA. The three year period applied to inspectors. Many unions did not provide for balloting in their constitutions. The current law required balloting. The Registrar could compel amendment to the constitution to comply with the law. If there was non-compliance, the union could be deregistered. In that event, there were dire consequences. It could not go to the CCMA or the labour court, or be part of a bargaining council. Deregistration was a death penalty. Once it became known, the vultures would gather. A deregistered union would be vulnerable to competing unions, who would tell workers that the union could no longer represent them.

The Minister replied that if an employer applied for exemption, it had to give reasons and submit financial statements for two years. Workers had to sign to the fact that there had been discussions between them and the employer. It had to indicate how it would deal with the situation, and how workers would be paid. Regulations would be strengthened.

The Minister told Mr Bagraim that although Treasury had earlier warned about a loss of jobs through the NMW, there was agreement later on, and Treasury was part of the Ministerial members that took part in discussions. The 1 May was the date aimed at for implementation of the NMW Bill, but DoL realised that it would depend on whether the legislation was finalised. Parliament would have its own programme to deal with the legislation. Organised labour had been warned that if the legislation was not finished earlier, it could delay the process. The aim was to conclude the Nedlac process by end of September 2017, but it was only concluded at the end of October.

The Minister replied that EPWP was not employment per se, it was meant to train workers for two years. The entities that dealt with it as employment were mostly municipalities. Community caregivers were employed by the health and social sectors. It was based on the Labour Relations Act and was for a period of three months. Social Development trained them to get full-time employment.

The Minister replied that Section 189(1) and (2) empowered employers and workers and the CCMA to deal with challenges, so that when an employer gave notice of the intention to retrench, the CCMA had to have all the reasons. Workers had to be consulted. It could disempower workers if Section 189(1) and (2) were removed, as it was linked to the CCMA process.

She noted that the Department had held its own public hearings where interested South Africans could make inputs. Workers were encouraged to participate. Everybody was invited, whether union members or not, also unions not included in the NEDLAC process. People were allowed to make submissions.

The Minister replied that extension of collective bargaining agreements to other parties allowed the Minister to make decisions, based on a majority related to employers or unions. Currently it had to be gazetted, so that non-parties could comment. Most employers agreed during bargaining, but there was often one that went to court afterwards. There had to be stronger legislation, so that someone who had participated could not go against what had been agreed upon. She agreed with Ms Tolashe that communication strategies had to be strengthened. Road shows were being done to educate workers. The last day was to be on 16 February.

Mr D America (DA) asked about interim measures for the time period between when the notice was served to a union to amend its constitution to insert clauses relating to balloting, and the implementation of provisions in the Bill. He asked about non-compliance with the NMW when an employee approached the CCMA, when it fell within the ambit of unfair labour practice. Inspectors had 12 months to initiate a non-compliance process. He asked if it was from the day the employee became aware of unfair labour practice, when the employee was acting independently from the inspectorate. He referred to the unintended consequences of excluding EPWP from the R20 per hour minimum wage. It was stated that it was mostly the municipalities that provided EPWP work, but there were also NGO employers. EPWP employees were often out of work for a long time, and they were hugely exploited with no benefits. EPWP workers were to be excluded from the NMW, and would receive R11 per hour, which was not a living wage. The unintended consequence would be revolt and discord. The question was how a volatile and militant section of the labour force would be dealt with.

Mr Bagraim remarked that if an employer had to pay for four hours for the washing of a car, the work would not be given. Piecemeal work would be destroyed. He referred to the extension of collective agreements concluded in bargaining councils which only required a majority of either employees or employers. The operative word had to be “may”, rather than “must”, so as not to tie the Minister’s hands. Parliament had faith in the Minister, and she had to have a choice. She could be trusted to exercise her mind with her advisors, that was why she had been appointed. He asked for the Minister to comment on that.

Mr Moteka commented that he was not arguing for the removal of section 189. But he was worried about the fact that employers did not consult about pending retrenchment, they only informed. They had to be threatened to make sure that there was consultation. The EPWP was not included in the R20 per hour minimum wage requirement because of the sectoral determination. It defeated the purpose of establishing a living wage. R11 per hour was not a living wage. Limited duration contracts in the private sector were subject to the R20 per hour benefits. He asked why the same could not be true for EPWP. Some community caregivers were not under EPWP and had served for more than 10 years.

Mr Madisha suggested that the protection of the working class and job creation had to be looked into in a following Committee meeting. Key proposals had to be looked at.

The Minister commented that the DoL was tabling proposed amendments. It was the role of the Committee to deliberate and to come up with final provisions. The DoL would supply a report of what was agreed on by all constituencies of NEDLAC. The report would reveal who agreed on what. She answered Mr Bagraim that NEDLAC had insisted on “must”, because Provident Fund issues were involved. If agreements were not signed, it would affect the contribution of the worker when it came to pensions. She had to act within the law. The amendment was brought in so that the Minister could have the power to extend agreements. With regard to minimum wage vis a vis living wage, the aim was to set a standard below which it was not allowed to go. The living wage was conditioned by the circumstances of the time. Collective bargaining also had to be strengthened. Many workers earned below the NMW. Vulnerable workers had to be empowered.

Mr Thobile Lamati, DoL Director General, answered Mr America that as Mr Mkalipi had indicated, the Registrar would give time to comply with the balloting requirement. Provisions were clear. A union could not simply change its constitution, there had to be a congress to allow for it. There was a programme to allow for that. The Registrar would allow time. Mr Mkalipi had explained that if there was no compliance, the penalty would be deregistration, which was painful.

Mr America said that he understood the process, but asked what would happen if the dispute became industrial action, and changes were not yet effected yet because the union did not have a congress to effect changes in the constitution. He asked if there would be exemption in terms of LRA provisions because the constitution had not been adapted yet.

Mr Lamati responded that the Registrar would say that within a given period changes had to be made to the constitution, but if that had not happened, the existing constitution would be valid until the changes were made.

The Chairperson told Mr America that he might not be satisfied, but the DG had outlined what the law stated. She ruled that Mr Lamati was not to respond further. Once the issue was opened up for dialogue it could take the conversation off course, and the two speakers would contradict each other. He could engage with Mr America personally on the matter.

Mr Lamati continued that inspectors could refer a complaint to the CCMA. Workers could only refer to the CCMA about unfair labour practice. The DoL argued that instead of taking a case to court, an inspector could take it to the CCMA if the employer had not complied with an undertaking or a compliance order. Inspectors had three years to deal with a case against an employer. If an employee became aware of non-compliance two or three years after it happened, it was still within the time allowed to approach an inspector. Another avenue was for an employee to take it to the CCMA himself, then there were no time limits, as long as there was evidence that the employee had worked for the employer beyond three or four or five years. The employer only had to keep records for three years, according to the law. If the employee took the case to the CCMA directly, and the employer took the case to the labour court for review, the employee could not go to the labour court, as he could not afford lawyer’s fees. But it was possible with the help of the Department, who could argue the case at a labour court. He answered Mr Moteka that the consultation required by Section 189(1) and (2) recognised the fact that employers were not negotiating. The legislation was strengthened so that people could be elected to represent the workers who were strong themselves and knew the law, and had the interests of workers at heart. Amends were made to strengthen collective bargaining and to ensure that workers joined unions in numbers for protection. It was difficult for the DoL to interfere in cases where the law stated that there had to be consultation, if people did not agree with the outcome of the consultation. He replied further to Mr Moteka that Mr Mkalipi had explained that the NMW applied to all workers. However, if community caregivers were employed through the EPWP process, the EPWP wage applied. If they were employed for a different purpose, the NMW would apply.

Motion of desirability for the Labour Reform Bills and plans for public comment
The Chairperson commented that the NMW was first raised in the SONA of 2014. Public hearings on a NMW were held in all provinces. Once the DoL had brought the report about agreement in NEDLAC, the ball would be in the Committee’s court to take the process forward, but a table had to be cleared for discussion. Motions of desirability had to be raised for the Bills. She asked the Committee Secretary to read out motions of desirability.

The Committee Secretary read out the motion of desirability for the NMW Bill, which referred among others, to provide for a national minimum wage; the establishment of a NMW Commission; annual review and adjustment of the NMW’ and exemption from payment of the NMW.

The Chairperson asked for a show of hands. Seven Members voted in favour, and two against. She pronounced that the Bill was deemed desirable.

Mr Moteka protested that it was a play with words.

Ms Ebrahim commented that the Committee had to consider the desirability of the subject matter. It did not imply that there had to be agreement about the Bill itself. There only had to be agreement about the fact that legislation was needed.

The Committee Secretary read out the motion of desirability for the Labour Relations Amendment Bill, which included providing for criteria for the Minister to extend collective agreements; to provide for picketing; to extend the meaning of balloting to refer to balloting that was recorded and secret; to provide for the independence of the Registrar and Deputy Registrar, and the appointment of an advisory administration panel.

The Chairperson asked for a show of hands. Acceptance was unanimous.

The Committee Secretary read out the motion of desirability for the Basic Conditions of Employment Amendment Bill, which included provisions for daily wage payment; to repeal provisions dealing with sectoral determinations; to extend provisions related to the Commission for conciliation, mediation and arbitration; to extend provisions for monitoring and enforcement by labour inspectors; to provide for claims for underpayment, and to strengthen collective bargaining in various sectors.

The Chairperson asked for a show of hands. Two members were opposed, and one abstained. The Chairperson noted that the Legal Adviser had emphasised the need for public participation. She asked Members for motions of how much time had to be granted for public submissions.

Ms Tolashe suggested a period of three weeks.

Mr Bagraim protested that there had to be a Bill before the Committee went to the public for comment, hence he would suggest a period of eight weeks.

The Chairperson asked which Members were in support of a three week period.

Mr Madisha commented that he had thought that it would be looked at in terms of the planned implementation date of 1 May.

The Chairperson told Mr Madisha that it was not up to the wisdom of an individual to say when a Bill would be implemented. She asked for a show of hands. Six members were in support of a three week period, and three were in support of an eight week period.

Department of Labour Quarter 2 performance
Mr Thobile Lamati, DoL Director General, said that under the Administration programme, R504 877 fruitless and wasteful and unauthorised expenditure was reported during Quarter 2 and R528 986 irregular expenditure was detected and reported. Department audit and risk committees were fully functional.

Inspections carried out were proactive, in the form of planned inspections by the inspectorate, or reactive as a result of requests and complaints. Categories responsible for the highest numbers of injuries during the period were metal tube, furniture and door manufacturing; motor garaging, and wagon, coach, carriage and motor body building. The top cause of injuries for the quarter was in the category “struck by”. Federated Employers Mutual statistics indicated that falling on to different levels was the top cause of injuries in the construction sector. A new relationship had been formed between the Inspectorate and the Compensation Fund that would revolutionise health and safety in SA.

Complaints related to BCEA and sectoral determinations included wages not in line with determinations; unpaid overtime, and unlawful deductions from wages. Underperformance on inspection and enforcement services was due to operational challenges in Gauteng, Limpopo and Mpumalanga. Inspection and Enforcement Services in Gauteng and Limpopo provinces were placed under administration.

61% of registered work seekers were young people between the ages of 16 and 35. 50% of registered work seekers were provided with employment counselling. The number of work seekers registered was much higher than opportunities registered and placements secured.

Overall performance on strategic objectives for the quarter was 56%. Challenges with the interim financial statements included a lack of financial and management accounting skills and adequate resources in finance and supply chain management. Matters raised by internal audit had been addressed, and the audit action plan was currently being reviewed by AGSA as part of the interim audit.

The Chairperson asked for slide 13 to be unpacked. Employment equity stood at 1%. She asked what the target was. There were a lot of zero percentages on slide 18 (Inspections per sector – BCEA actual performance). Slide 37 stated that only 7% of complaints were from the farming sector. She asked if farm workers were not reporting. She referred to placement performance (slide 58), which was bad. There was a lack of partners.

Ms Van Schalkwyk remarked that it was hard to interpret the briefing against the background of the fourth industrial revolution. She was still absorbing it. The overall performance was 56%. It was an improvement over Quarter 1 but still not satisfactory. Total expenditure was 96%. She asked what had happened. She requested that the next quarterly report had to draw a comparison to the previous quarter. There were two provinces under administration. It was not clear whether Mpumalanga was under administration. There were challenges in other provinces in the previous year. She asked if interventions had yielded results. She commended the increase in social media activity. She referred to slide 55 (work seekers registered by disability). Placement was not reported on. She asked how compliance was to be enforced, if labour was not registered.

Mr Madisha asked what was done to deal with injuries across all industries. He asked what the Committee could do about problems identified in slide 38 (complaints per sector).

Ms Aggy Moiloa, Deputy Director-General: Inspection and Enforcement Services, replied with reference to slide 13, that the slide referred to actual performance related to inspections per employment law. Compliance in line with administrative issues was inspected. Procedural investigations amounted to 1 678, and under the DG review to 544. It appeared that there were more complaints in some areas, but it had to be balanced out against the national picture. In answer to Mr Madisha about what was done about complaints received, she said that inspections were conducted to pick up types of problems related to employers. In terms of national complaints, because of proactive interventions, no compliance notices were issued out to give employers a period in which to comply. There were 60 231 inspections related to BCEA. If there was no compliance, notices of compliance were issued.

Mr Madisha said that people were dying. There were thousands of people not responded to by the Compensation Fund.

Mr Lamati replied that slides 29 and 30 referred to the number of people whose lives were insured as licensees of the Compensation Fund. The table indicated how many people in the sector were insured, not how many incidents had occurred in the sector. The DoL had to know how many people were being dealt with, when Department came with interventions. It had to know how people were exposed to different occupational health and safety hazards in a sector. The slide painted a good picture of how many employees were insured, it was not an indication of how many had lost their lives. If something happened they would be compensated.

Mr Madisha said that it had to be looked into how many workers were not insured. He asked what would happen to them.

Mr Lamati replied that the DoL checked through inspections if companies contributed to the Compensation Fund and the UIF. If not, it was reported to the Compensation Fund Commissioner and there would be a follow-up. In terms of enforcement processes in the DoL, it was made sure that companies complied.

Ms Moiloa responded about provinces currently under administration. The head of Gauteng was present to talk about that province. It would become apparent in the third quarter that interventions in Limpopo had resulted in improvements. It was not only those two provinces that contributed to underachievement. Severity of underachievement had to be looked at. Challenges were more complex in Gauteng and Limpopo, and a more intensified approach was needed. There was an action plan for Mpumalanga, and things would look different in the third quarter.

Mr Tshepo Mokomatsidi, Gauteng Chief Director of Corporate Services, replied that there were challenges of inspection and enforcement. The biggest challenge was BCEA inspection. 5 000 inspections were not conducted. Johannesburg and Germiston had not performed well. Weekly cars were made available to inspectors, but they did not interact with their supervisors. They only saw them on Fridays. There were weak managerial controls in Gauteng. A project plan was developed and assistance was requested from the provinces that were doing well, to deal with backlogs. Improvement would become evident in Quarter 3, and real targets could be achieved by Quarter 4. Performance assessments would reflect targets not achieved. A hard line was taken in Quarter 4 with inspectors who had not achieved targets. A commission was established to investigate reasons for underperformance in Johannesburg. Some inspectors were performing well. Labour centre managers were rotated to strengthen areas where there were weaknesses.

The Chairperson commented that if Johannesburg did not have a labour centre, one could not expect it to perform well. She asked why there had to be a commission of enquiry.

Mr Mokomatsidi replied that the office was closed. Officials were accommodated at the provincial office. He agreed with cars being taken home by inspectors, but they did not interact with team leaders. They only met with managers once a week. There was a lack of management. Johannesburg and Germiston were the chief culprits. There were other pockets of underperformance, but Johannesburg and Germiston carried the most targets. When they underperformed, it impacted on other areas.

Ms Tolashe remarked that she was not hearing about consequences for people who did not do their work, and who failed to meet with managers. She asked what was done to people who tarnished the name of Gauteng.

Mr Lamati replied that the DoL had gadgets to measure performance. There were steps that could be taken. The leadership of inspection and enforcement would be placed under administration. There was no labour centre in Johannesburg and the DoL had to depend on another government department to secure offices. There were challenges with the Germiston office. Alternative accommodation had to be found. The Ekurhuleni municipality would assist with that.

Mr Sam Morotoba, Deputy Director-General Public Employment Services, replied that people with disabilities were not disaggregated. Placement opportunities were higher than the numbers. Interventions were to assist employers to supply opportunities in line with occupational specifications. Processing issues had to be tightened. There were system challenges related to capturing information from people. Client liaison officers had to match people against opportunities. The DoL worked with (Technical and Vocational Education and Training) TVET and the Sector Education and Training Authority (SETAs). There was a large number of people in the labour market without skills. The labour activation programme under the UIF also worked with the DoL.

Mr Virgil Seafield, DDG: Labour Policy and Industrial Relations, replied that there were two categories of non-registration, namely those that did not comply, and those that were non-genuine. Figures related to the number of people affected, not the number of organisations. The DoL walked a path with those that did not comply with registration requirements, they could not be turned away. The DoL ran over the time frame with the registration of organisations.

Ms Marsha Bronkhorst, DOL Chief Operating Officer, replied to the Chairperson about slide 18 (inspections per sector – BCEA actual performance) that the Department had a choice between taking the top 10 sectors or all of them. All were taken. Some numbers were so low that it was thrown out as zero. She replied to Ms Van Schalkwyk that a comparison between the quarters was in the annexure. The Department had been quiet for a long time when it came to increased social media activity. Currently 2000 new followers were registered. Younger people were being reached.

Mr Madisha asked what was meant by non-genuine organisations.

Ms Van Schalkwyk asked if the Committee could get access to data about slide 47 (prosecutions per province – actual performance).

Mr Lamati replied about non-genuine organisations, that there were those who came to the Registrar claiming to represent people, but they only wanted access to the CCMA to take money from poor workers. Some did not even have offices or members.

Compensation Fund Quarter 2 performance
Mr Vuyo Mafata, Compensation Fund Commissioner, noted that of the two planned indicators for providing effective and efficient client oriented support services, none were achieved. Of the five planned indicators to provide faster, reliable and accessible Compensation for Occupational Injuries and Diseases (COID) services by 2020, three were achieved. The overall performance was 43%. Indicators achieved were the percentage of approved benefits paid within five working days; percentage of claims adjudicated within 60 working days of receipt, and percentage of medical invoices finalised within 60 working days of receipt. 96% of compensation benefit claims received were adjudicated within 60 days of receipt. 93% of medical claims were finalised within 60 days of receipt. Indicators for assessment of registered employers and adjudication of requests for prosthetic and assistive devices were not achieved.

Mr Bagraim asked if computer systems were intermarried.

Ms Van Schalkwyk remarked that she was worried about the 43%, but at least it was explained. Underexpenditure was clarified but it caused concern that 100% of the money was not being used. She commended the 96% adjudication of claims. She asked about backlogs.

Mr America asked about budget spending in relation to targets achieved. He asked about contingent liabilities. After six months, 20% budget spending was low. The last Auditor General report made recommendations for improvement on the AG findings. He asked that the Committee be updated in future about addressing the AG findings.

Mr Mafata replied that computer systems were currently stable. It was possible to pay and adjudicate claims. He replied about backlogs that there were 60000 claims for which medical records were needed. The Commission would report on repudiated or approved claims. There was no fiscal dumping, unspent money went into the Commission surplus. A lot of transactions could only be accounted for at the end of the year. The Commission would report on the AG recommendations when it reported on its audit action plan.

Mr Lamati noted that the Compensation Fund had moved to a new building.

Mr Bagraim remarked about fiscal dumping, that the Unemployment Insurance Fund (UIF) was concerned about the protection of Public Investment Corporation (PIC) money in the UIF.

Mr Mafata assured him that workers' Compensation Fund money was safe.

Committee programme
The Committee programme was adopted with amendments. It included briefings by other entities, such as the feeder companies of the textile industry; deliberations on Bills, and oversight visits in the last two weeks of the quarter.

Committee minutes of 22 November were adopted.

The Chairperson adjourned the meeting.

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