The Unemployment Insurance Fund, an entity of the Department of Labour, reported on the Labour Activation Plan of the Unemployment Insurance Fund. The Commissioner of the Unemployment Insurance Fund responded to the Portfolio Committee concerns about the Labour Activation Plan. Six activities were complete while four were work-in-progress. A diagnostic process was being undertaken to determine whether there were gaps that had to be addressed to bring about effectiveness and efficiency in the Labour Activation Plan. The Department was still working on the enterprise development, a new area for the Department. According to the Commissioner of the Unemployment Insurance Fund, the Labour Activation Plan report showed that the team was turning the corner in driving performance in the Labour Activation Plan. The provincial spread of projects was improving, although the three big provinces still took the lion’s share. The solar geyser installation project was concentrated in Gauteng with 100% in terms of targeted learners. It had not yet been rolled out to other provinces.
Training of the unemployed was successful in all but two colleges in the Western Cape, where recruitment of learners was well below target and was blamed on the low stipend provided to learners. The Department was reviewing the stipend. Projects were monitored in all provinces but the Free State, which had been monitored previously.
The Labour Activation Plan targets proposed for 2018/19 sought to enable entrepreneurship, enhance employability and preserve jobs. In line with enterprise development, the Department had increased employment in SMMEs by improving the capability to self-employ. Those were lessons learned from its German counterparts. In respect of training the unemployed, the Department up-skilled the Unemployment Insurance Fund beneficiaries to re-access the labour market. In terms of the training lay-off scheme, the Department had reviewed the training processes and provided financial assistance and turn-around solutions to distressed business. In line with turnaround solutions, the Department provided rescue solutions for companies to make them more efficient and effective. The Department sought to make Unemployment Insurance Fund relevant or to shift from Unemployment Insurance Fund to Employment Insurance Fund by taking a leaf from the best practices in Germany.
Members were generally appreciative of the Labour Activation Plan Report. The questions revolved around why the Department was focusing on Gauteng and KwaZulu-Natal when there was a desperate need for intervention in other provinces. Was the Department engaging other Departments and entities in terms of the placement of people? Why was the installation of the solar geyser project skewed to Gauteng? Why were no projects in the Free State monitored?
The Committee also discussed the way forward on the Labour Bills before the Committee. To finalise public input and to prepare the Bills for Parliament, the Committee would be meeting on 19, 20, 22 and 23 March 2018. That would allow the Committee to table the Bill in the House on the 27 March 2018.
The Chairperson declared the meeting open and welcomed everyone present to the Portfolio Committee on Labour. She advised the Committee that Ms N Tolashe (ANC) was absent because she was no longer going to be part of the Committee. She had been deployed in the Eastern Cape to do the work of the party there.
The Committee Secretary, Mr Zolani Sakasa, presented the agenda of the meeting. He had received an apology from the Director General of Labour, Mr Thobile Lamati, who was chairing a SADC meeting. Ms S Van Schalkwyk (ANC) proposed the adoption of the Minutes, seconded by Ms L Theko (ANC).
The Chairperson requested Mr Maruping to make the presentation in the absence of the DG.
Update on the Labour Activation Program of the Unemployment Insurance Fund (UIF)
Mr Teboho Maruping, Commissioner, Unemployment Insurance Fund, Department of Labour (DoL), acting on behalf of the DG, introduced the five-member delegation from the Department.
The Chairperson interrupted to acknowledge the arrival of a representative from the Office of the German Ambassador.
Mr Maruping began the presentation by reflecting on the concerns of the Committee in respect of the Labour Activation Program (LAP). A status report was presented on each aspect of the programme. The initial tasks had been tackled and were either complete or work-in-progress.
Findings from the first term report indicated that learners were struggling to get host employers for workplace experience in building and civil construction. The amount of the stipend was inadequate, funding did not cover toolkits, while the quality and quantity of personal protective equipment was unsatisfactory. To resolve problems, partners were encouraged to seek opportunities with host employers in advance and also to assist with engagement with other SETA’s for placement. Stipend payments were being investigated and UIF funding would include the cost of toolkits, medical, protective equipment and project management.
Mr Maruping outlined a comprehensive approach to improve monitoring and evaluation, which would be driven by head office, but which would involve provincial offices in key aspects of monitoring and evaluation.
A diagnostic process was undertaken of the LAP by the Unemployment Insurance Fund (UIF) to determine whether there were further gaps that had to be addressed to bring about effectiveness and efficiency in LAP. The third quarter assessment showed that training of the unemployed UIF beneficiaries had not been fully addressed and the LAP Turnaround Strategy had not been developed and, therefore, had not been not implemented.
The Department was still working on the enterprise development, a new area for the Department. The Labour Activation Plan showed the Portfolio Committee that the team was turning the corner in driving performance. It had been a concern for the Committee previously when the team showed only 40% in performance, but performance was currently at 69%. In line with Labour Activation projects provincial coverage, the provincial spread of projects was improving although the three big provinces were still taking the lion’s share. However, the situation would improve in the new financial year. The solar geyser installation project was concentrated in Gauteng where it showed a 100% attainment in terms of targeted learners.
Challenges in the current projects for training of the unemployed included the recruitment of only seven out of a recruitment target of 50 at the West Coast College in Vredendal. The main challenge was that the stipend was too low. A total of 43 projects had been visited and monitored.
The Labour Activation Plan for 2018/19 sought to enable entrepreneurship, enhance employability and preserve jobs. In line with enterprise development, the Department had increased employment in SMMEs by improving the capability to self-employ. The Commissioner informed the Committee that those lessons had been learnt from their German counterparts. In respect of training the unemployed, the Department would up-skill the unemployed UIF beneficiaries to re-access the labour market. In terms of the training lay-off scheme, the Department had reviewed the training processes and provided financial assistance and turn-around solutions to distressed businesses to make them more efficient and effective. The Commissioner also said that the Department sought to make the Unemployment Insurance Fund relevant and to shift from UIF to Employment Insurance Fund, taking a leaf from the best practices of Germany.
Overall, on the challenges of the already employed, becoming employed and risking employment, the Department was enhancing employability, preserving employment and enabling entrepreneurship. Outcomes included improving fiscus and tax; increasing UIF revenue collection; improving the quality of family life; improving the dignity of individuals and reducing crime levels, poverty and unemployment. Key Government Projects included: Phakisa Ocean Economy, War on leaks, Solar Geyser Installations, Television smart boxes, and a joint public-private fund for Small Business Support which would provide “venture” funding to black entrepreneurs. The successful renewable Independent Power Producers (IPP) model would be extended to the coal and gas sector as part of the scaling up of investments.
Ms S Van Schalkwyk (ANC) appreciated the report and acknowledged the progress made in terms of the concerns that had been raised by the Committee and the positive movements in those areas. She welcomed the report on performance per provinces, unlike the combined report of the 14 February 2018 meeting.
In terms of the way forward, the Department had indicated that there was some movement in some of the areas, although it was a moving target. Ms van Schalkwyk, however, requested a clear indication of how the Department was progressing in terms of percentages. That would assist the Committee because a percentage would give a clearer indication of progress in respect of how far the Department had moved in addressing issues, especially those of concern to the Portfolio Committee. She asked the Department to provide, at a later stage, exactly how many jobs had been created. She commended the entity in terms of the improvement from 40% to 69% in the Labour Activation Plan Third Quarter Performance.
On the development and implementation of the Labour Activation Plan turnaround strategy, she sought specificities from the Department as to when the Department was planning to develop and implement the strategy. Ms van Schalkwyk referred to the provincial spread of the programs that the Department was addressing. She referred specifically to the solar geyser installation project, and taking cognizance of the limited funds available, she asked why the Department was only focusing on Gauteng when there was a desperate need in other provinces. She recommended that the installation project be spread throughout the provinces. The Reconstruction Development Programme (RDP) houses had been built for solar geysers but they had not been installed. Community members could not get the benefit of those initiatives by government. She stressed that the Department had to at least try to spread the installation project throughout the provinces. It was imperative to capacitate some individuals in respect of the solar geyser installation project or to transfer the skills to other people.
In terms of the placement of people, she asked if the Department was engaging other departments and entities about the skills that they needed so that the Department could redirect the training to address the skills required, especially in local government and the Department of Labour.
Mr D America (DA) thanked the Commissioner for the report. He noted that after putting the learners through the training process, the uptake of employers was not as good as expected. Employers were not as enthusiastic about absorbing the newly trained recruits into full-time employment and so he appreciated the Department’s renewed consciousness that entrepreneurship should be strong. He encouraged the Department to focus on entrepreneurship. He welcomed the fact that those people who had been exposed to or had been the beneficiaries of the scheme had been able to seek finance to start enterprises. Under the current low economic growth, the labour market was such that it could not absorb the entry of additional people into the workplace.
Like Ms van Schalkwyk, Mr America said that he was worried about the over-emphasis on two provinces, that was Gauteng and KwaZulu-Natal, whilst there were nine provinces in South Africa. He said there was a great need for the programmes in the Eastern Cape because of youth unemployment. He asked what the Department was doing to make it possible that people in rural provinces would have greater access to more opportunities. Those opportunities would have a beneficial effect on improving the fiscus and tax; increasing UIF revenue collection; improving quality of family life; improving the dignity of individuals and reducing crime levels, poverty and unemployment. Improvements had to target the youth, particularly in rural provinces. Concerted efforts needed to be applied by the Department to reach the intended outcomes.
In addition to what had been noted by Ms van Schalkwyk on the solar geyser project, he asked to what extent the project installation had occurred in the sunny provinces and whether there was collaboration with the Department of Human Settlements. Was it possible for the Department of Labour to link the opportunities with the houses that had already been built? He said that in his constituency, 95% of the 300 houses about to be handed over, were lacking solar geysers.
Ms T Tongwane (ANC) requested a spreadsheet showing the projects which had been monitored, and which could be updated periodically in respect of the Labour Activation Plan.
The Chairperson applauded the Department for taking up the issue of an internal audit as that would make things easier for the Department when they went to the Attorney General. Referring to the Third Quarter performance of the Labour Activation Plan, she noted that 33% in respect of the training of the unemployed UIF beneficiaries, was low. She was sure that it was not because the Department was unable to access beneficiaries of the UIF. There were a lot of unemployed youth whose parents were contributing. Even the youth themselves were contributing to unemployment insurance. She recommended that the inspectors from the Department ensured that employers deducted for Unemployment Insurance. She said the 0% achievement on the Labour Activation Plan Turnaround strategy was a concern. She raised queries about two colleges which were beneficiaries of the current active projects on training of the unemployed by TVETS: Boland TVET College in Paarl where Phase 2 had an actual recruitment of 24 out of a target recruitment of 50; and the West Coast College with an actual recruitment of seven out of a target recruitment of 50. In explaining the disjuncture, the Department had indicated that the current stipend was not enticing as it was too low. The Chairperson asked if other provinces were better off. Why was the Department not taking the little stipend to a needy area where a little amount could make a difference? In addition to what has been indicated by Mr America, she said Gauteng seemed to be getting more whereas it already had more opportunities for employment. She asked why the Department was taking coal to Newcastle where it was not needed.
On the concentration in Gauteng and KwaZulu-Natal, Mr Maruping said that Department needed to go back and look at the distribution. They would request a province-based expression of interest in targeted provinces, so that provinces could bring their province-based programs. That would help the Department to move away from the concentration on Gauteng and KwaZulu-Natal.
In line with collaborating with other departments, especially for placement, the UIF was still struggling with the legal framework for supply chain and the transferring of funds to another department. The Department was still trying to find a legal way. The Department had already engaged the Department of Public Works (DPW) which had many opportunities for the Department’s beneficiaries as DPW wanted to refurbish its buildings and upgrade security. There were many opportunities in DPW. The Department would look for a way to manage the relationship. The Department would finalise details with the Department of Public Works and that would open the doors for the placement of learners. The Department would also look into municipalities where there might be other opportunities that the Department could consider.
In respect of the turnaround strategy, it had been developed and implemented. The reason why the report showed 0% for the Labour Activation Plan turn-around strategy was that the Department was still fine-tuning to give it a better look and a facelift by enabling entrepreneurship, enhancing employability and preserving jobs. The Commissioner promised that by the end of the financial year, the strategy would be done.
In terms of training the unemployed, he said it was a genuine concern raised by the Members. He said the Department had cleaned up the supply chain management and had started the procurement process. The Department would meet the target only by the end of the year and was aiming to have at least 5000 people in class and in training by then. The Department had completed the expression of interest, contracts had been signed and training was expected to commence from the beginning of March. Some training was already starting, and the Department was expecting that the percentage achievement would look very different in the next report.
On the advertisement for interns, the Commissioner explained that the Department was looking for over 100 interns; at least one intern per labour centre in all nine provinces which would total about 126 interns. In line with that, the reach for the projects within the communities would be much easier. The advertisement for recruitment would be placed in March.
Regarding the percentage improvement on performance, six out of ten Labour Activation Plan activities had been achieved and only four were ‘on amber’ in terms of progress. Next time the Department would provide scientific feedback on its position in respect of LAP.
There was no reason for the Department not to spread its wings in terms of the solar geyser installation project. The Department would immediately engage the Department of Human Settlements to get things done.
On the issue of the stipend, the Department admitted that the Committee had raised an issue that the Department had never thought of. People who were out of class and working did not need a stipend, and the Department needed to give it to the people who actually needed the stipend and would make use of it. He promised that the Department would work on that.
Apart from the questions, all the comments raised by the Members would also be taken into consideration to improve the Departmental processes.
Further Clarity Seeking Questions
Ms L Theko (ANC) welcomed the report. She said that recruitment was not attracting people to come on board and there was a need to put in place an awareness program to alert Members. In terms of visits and monitoring, there was zero monitoring in the Free State and yet there were projects in the province. She was concerned about whether the projects in the Free State. If they were not being monitored, were they going to perform or not?
On the issue of stipend as the Department had indicated, Ms van Schalkwyk agreed it would be in order if it was to be finalised by March so that it attracted recruits. On the issue of placement, she asked how the Department was going to place people and whether the Department had a strategy for placement.
Response by the Unemployment Insurance Fund
The Commissioner said that in terms of awareness, the Department had public recruitment services where it recruited. All UIF beneficiaries, when they went to claim for unemployment, were automatically registered by the Department and that was where the Department recruited from. Recruitment was not an issue, it was just about keeping them in class. Some of them earned R6000 or R8000 and they received a stipend of R1500 and so they did not prioritise training over what they were getting on the job. In some rural areas, R1500 was a significant amount. That was what the Department was going to look at.
In terms of visits and monitoring, the Department had visited the Free State on a ministerial visit and so the Department saw it as imperative and prudent to focus on other provinces just for the quarter. The Department was not ignoring the Free State.
In terms of the stipend, the Department was hoping that by the end of March, it would have come up with a decision, have changed the agreements and applied for the necessary approvals. The main part, which was the actuarial evolution, had given the Department the green light on where it could increase the stipend.
The Department acknowledged that placement was still a challenge, but the Department had made it a requirement for departmental partners in the project to provide a guarantee to the Department that the learners would be placed.
The Department had noted the issue of collaboration with departments, municipalities and other government entities where it could drive placements much more quickly. The Department would give an update in the next presentation in respect of attending to that matter.
The Chairperson hoped that the Department understood that the report tabled showed that things were different from what they had seemed to be when the Committee conducted its visit. To take the Department up on the challenge of checking on progress, she requested a list of the programs so that the Committee could chose randomly where they wanted to go to confirm the reports. She requested that the list be sent to the Secretary of the Committee. The Committee would notify the Department when they came back from the visit. The Committee wanted the program as well as the address so that they did not bother the Department but could just go to a site. The Chairperson appreciated the improvement that was reflected in the report.
On a lighter note, Ms S Van Schalkwyk said the Department should add the GPS code in case the Committee could not find the addresses.
The Chairperson sought consensus for the adoption of the draft minutes of 28 February 2018. The Secretary indicated that the name of Ms L Theko (ANC) had been added and that mistake rectified.
Ms T Tongwane (ANC) proposed the adoption of the minutes, and Mr D America (DA) seconded the adoption. The minutes were adopted with minor amendments.
Way forward on the Labour Bills before the Committee
The Chairperson explained that there were three Bills in front of the Committee that would be handled simultaneously because one of the Bills impacted on the other two. The National Minimum Wage Bill impacted on the Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA).
She said that because of the deadline of the 1 May 2018, the Committee had agreed at the last meeting to meet in the week after the closing dates for submissions by the public, i.e. on 22 March. Subsequently, it had been brought to the Committee’s attention that there would be a sitting of the House on 27 March 2018. When the Committee had taken the decision regarding 22 March, it had been understood that the next sitting would be in May. The Bill also had to go to the NCOP. Members had to reconsider meeting on the 19 March, taking into consideration what had been said by Mr America. The Chairperson requested Members to go back to their party principals to be released from the constituency day on Monday 19 March so that they could meet as the Portfolio Committee on Labour. The Committee would be meeting on the 19, 20, 22 and 23 March 2018 so that the Committee could finalize the processes on their side and create an opportunity for the Committee to table the Bill in the House on 27 March 2018.
Ms S Van Schalkwyk (ANC) formally moved for the proposal made by the Chairperson and asked for the provision that, since the 19th was on a Monday, the meeting start at 11:30am to allow those members who would be travelling to arrive in time for the meeting. Ms T Tongwane (ANC) seconded the proposal to start at 11:30am.
The Chairperson said that the Committee would have to request the Content Adviser to assist because, after Sindi had left, the Committee had not been given a researcher. The expectation was that, once the submissions arrived on the closing date of 16 March, staff would work around the clock so that on 19 March, the Committee could be given a summary of the submissions. Members could then debate based on the summary.
Ms L Theko (ANC) proposed closure and Ms T Tongwane seconded the proposal.
The meeting was adjourned.
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