Department of Labour 2018/19 Annual Performance Plan; with Minister & Deputy Minister

NCOP Economic and Business Development

22 May 2018
Chairperson: Mr M Rayi (ANC, Eastern Cape)
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Meeting Summary

Minister of Labour said that the Committee had been invited to attend International Labour Organisation (ILO) meetings. The Southern African Development Community (SADC) had been approached by the ILO to participate in meetings but had observed that there seemed to be a gap for members of parliament to participate at the ILO. President Cyril Ramaphosa had been appointed as co-chair of the ILO’s Global Commission on the Future of Work. Why had the National Minimum Wage not yet been implemented? The intention had been to finalise it by 1 May 2018. There had been agreement at the National Economic Development and Labour Council (NEDLAC) over the National Minimum Wage. She noted that implementation could not take place until legislation had been finalised by parliament. She hoped that the legislation would be finalised by parliament in 2018.

The Committee was given an overview of the Department’s Strategic Plan 2015-2020. The Department provided the Committee with a breakdown of its planned APP targets for 2018/19 across its four Programmes ie Administration, Inspections and Enforcement Services, Public Employment Services and lastly Labour Policy and Industrial Relations.

On the financials of the Department for 2018/19 the total appropriation for the Department sat at R3.29bn.

Members were informed that the entities of the Department ie the Unemployment Insurance Fund and the Compensation Fund were not covered in the APP presented as they had their own respective APPs.

The Chairperson spoke to the process on the National Minimum Wage Bill as it was proceeding through parliamentary processes. It was highly unlikely that the Bill was to be processed by the Committee within the remainder of the second term of parliament. The Bill would most likely be dealt with by the Committee during the third term of parliament. Members did feel that the Bill needed to be introduced as a matter of urgency. Did the National Minimum Wage cover Expanded Public Works Programme workers as well? Members also felt that the National Minimum Wage should not be looked at in isolation but rather within a broader context. The Department was asked why it had taken so long with the Compensation for Occupational Injuries and Diseases Act Amendment Bill and the Mine Health and Safety Act Amendment Bill. How did the Department monitor the impact of legislation on the South African market? Members asked how effective labour centres in provinces were. Members were concerned about incidences of fraud and corruption within the Department. Why did it take so long for cases to reach completion? Why had the Department not taken swift action? Delays cost government millions of rands if people investigated remained with the Department. The Department was asked what strategic action it had taken. Members appreciated the challenge that the Department faced on limited resources for its inspectorate. Given the resource constraints what sectors were prioritised for inspections? Did the Department have a way of making inspections more effective within its current appropriation? Members raised the matter of the recent bus strike with the Department and asked what was being done to prevent the recurrence of such strikes. On the creation of work opportunities the Department was asked what types of work did it intend to create and in what provinces were they to be created. Members observed that on the financials of the Department there seemed to be challenges around contract management and case management. Members asked what was being done to turn things around. Members felt that the number of work opportunities created for persons with disabilities were far too little. The Department was asked to provide the Committee with a list of organisations for the disabled that it funded. How could the Department assist people who were differently abled? Members asked how the Department created awareness of the support that it provided to disabled organisations. Given the recent violence involving Uber drivers the Department was asked whether there was legislation to protect Uber drivers. Members noted that youngsters often complained that they did not hear back from the Department after they had registered as job seekers. Could the problem be the Department’s Information Technology system and if it was had it been sorted? The Department was asked what its plans on inter-departmental cooperation were and whether it was already taking place. The Department was asked to provide assurances when vacant posts were to be filled. What was the Department’s take on the Fourth Industrial Revolution? Members asked what the Department had in place to ensure that the Commission for Conciliation, Mediation and Arbitration (CCMA) resolved disputes timeously. What oversight role did the Department play over labour courts? The Department was asked whether it paid its service providers within 30 days and whether it allocated 30% of its business to Small Medium and Micro Enterprises (SMMEs).

The Committee adopted its Report on Budget Vote 18: Labour APP 2018/19.

Meeting report

Opening remarks by Deputy Minister of Labour Mr Phathekile Holomisa

The Department was before the Committee to present its Strategic and Annual Performance Plan (APP) 2018/19. Members wished to be briefed on how far the Department had progressed on its APP. The Department would answer any questions that members had.

Briefing by the Department of Labour on its Annual Performance Plan (APP) and Budget for 2018/19

Mr Sam Morotoba Deputy Director General: Public Employment Services provided the Committee with an overview of its Strategic Plan 2015-2020 and continued with detail on the Departments APP 2018/19. Members were given insight into targets that had been set across its four Programmes for 2018/19.

Programme 1: Administration

On contributing towards best governance and management practices within the Department a target was set to have 45% of the Department’s M-PAT standards per key performance indicator at level 3 and 4 by March 2019.On effective communication and marketing of the Department’s work, the target was to have the communication annual action plan approved and to have 100% of activities in the plan implemented. 

Programme 2: Inspections and Enforcement Services

For 2018/19 the target was set at having 218 732 employers inspected to determine compliance with employment law. The target was also set to have 65% of reported incidents investigated and finalised within prescribed time frames.

Programme 3: Public Employment Services

For 2018/19 the plan was to have 650 000 work seekers registered on the on the Employment Services of SA (ESSA) system. There was also to be 85 000 work and learning opportunities registered on the ESSA system. The intention was to have 200 000 registered work seekers provided with employment counselling per year.

Programme 4: Labour Policy and Industrial Relations

The plan was to have the National Minimum Wage introduced by May 2018. The intention was also to have 100% of collective agreements extended within 90 calendar days of receipt by the end of March 2019. The plan was also to have 100% of labour organisation applications for registration approved or refused within 90 calendar days of receipt by the end of March 2019.

Mr Bheki Maduma Chief Financial Officer (CFO) continued with the financials of the Department. For 2018/19 the total appropriation for the Department sat at R3.29bn.

Mr Morotoba stated that the entities of the Department ie the Unemployment Insurance Fund and the Compensation Fund were not covered in the APP presented as they had their own respective APPs.

Concluding remarks by Minister of Labour Ms Mildred Oliphant

On multilateral participation the Committee had been invited to attend International Labour Organisation (ILO) meetings. It would be useful if members could attend the ILO’s Committee on Standards in front of which countries who did not adhere to standards had to appear. The Southern African Development Community (SADC) had been approached by the ILO to participate in meetings. The SADC had observed that there seemed to be a gap for members of parliament to participate at the ILO. She said that President Cyril Ramaphosa had been appointed as co-chair of the ILO’s Global Commission on the Future of Work. Why had the National Minimum Wage not yet been implemented? The intention had been to finalise it by 1 May 2018. There had been agreement at the National Economic Development and Labour Council (NEDLAC) over the National Minimum Wage. She noted that implementation could not take place until legislation had been finalised by parliament. She hoped that the legislation would be finalised by parliament in 2018.

Discussion

The Chairperson stated that the Committee had taken its own initiative to initiate processes in parliament which would enable them to participate in International Labour Organisation (ILO) committees etc. He noted that the National Assembly (NA) had finalised its report on the National Minimum Wage Bill and had ATCed it. The Committee had placed its own advertisement in newspapers calling for submissions on the Bill. The advertisement would run for two weeks. He did not think that the Committee would be able to deal with the Bill during the remainder of parliament’s second term but would do so in its third term.

Ms M Dikgale (ANC, Limpopo) asked why the Department had taken so long with amendments to the Compensation for Occupational Injuries and Diseases Act Amendment Bill and also the Mine Health Safety Act Amendment Bill.  The Department was also asked how it monitored the impact of legislation on the South African market. How effective was labour centres in provinces and especially in the Limpopo Province?

Mr Maduma stated that at Tsaneen in the Limpopo Province within the next two month labour centre offices would be occupied. He stated that in 2017/18 there had been challenges around the action plan of the Department where some documents could not be produced. A new procedures manual was utilised. He pointed out that contract management was no longer such a big problem. On leave management full rollout of the new system had already commenced at Head Office. Rollout had already taken place at some provinces. By the end of June 2018 all leave applications would be electronic and all provinces would be covered.

Mr Morotoba said that the COIDA Bill had taken long because of delays on consultative processes. Processes had been finalised. The COIDA Bill would not cover mining. The Mine Health and Safety Act covered mining.  The COIDA Bill would be sent to parliament after it had been with cabinet. The Department had a system in place to look at the performance of labour centres. Consequence management did apply. Information could be provided to the Committee.

Mr W Faber (DA, Northern Cape) was concerned about corruption in the Department. There had been 116 fraud cases reported and registered. A total of 12 fraud cases amounting to R6.6bn were outstanding for longer than a year. There were 216 misconduct cases of which 160 were under investigation. These cases took up to four years to reach completion. The Department was asked why it did not take swift action. He said that it cost government millions of rand to keep these persons in their positions at the Department. What strategic action had the Department taken?

Ms Aggy Moiloa Deputy Director General: Inspections and Enforcement Services (IES) on corruption and fraud cases said that she did not have the full detail at hand. Together with cases on misconduct the Committee would be in writing be provided with information. On leave management the process had been started already. It would cascade down to the provinces.

Mr L Magwebu (DA, Eastern Cape) said that the Department was well aware of its challenges on lack of resources when it came to its inspectors. He said this against the backdrop of the recent bus strike that had taken place. The issues which led to the strike were night shift allowance and dual drivers. He noted that there were issues of compliance and enforcement of basic employment rights. What was the Department doing to prevent a strike from happening again? The Department had presented a target of having 21 000 inspections in the Eastern Cape. Given the resource constraints that the Department was going through which sectors had been prioritised for the financial year. Some sectors like farm workers were more vulnerable. On supported employment the Department had a target of 100. He asked for more information. What type of work did the Department intend to create and in which provinces? SA’s unemployment rate was a huge concern and the figure was even worse in the Eastern Cape. The figure sat at 35.5% in the Eastern Cape and was climbing. On the financials of the Department there seemed to be challenges on contract and case management. What did the Department do to turn things around? He asked on contract management whether the Department had staff at senior level. 

Ms Moiloa conceded that the capacity constraints of its inspectorate were true. In total there were 1650 inspectors plus vacancies. Of the total, 1200 were to enforce the Basic Conditions of Employment Act. The number of inspectors was far too little. She said that on inspections, vacancies and enforcement the Department had an information system strategy that was dealing with the issues. She noted that enforcement was not only the responsibility of the Department’s. Social partners also had a stake to play. Organised labour should play its part. Employees had to know their rights. On how the Department directed its resources she explained that there were high risk and problem areas to which resources were directed. Farm worker, retail & wholesale were some of the problem areas. Inspectors targeted problem areas. The Department was also busy strengthening its enforcement arm. In the past financial year the Department also built the statutory capacity of its Inspectorate. The Department also worked with various role-players. Inspectors needed to be as productive as possible hence training had to go up a few notches. Internally the Department worked closely with the Unemployment Insurance Fund (UIF) and the Compensation Fund. In the past the Department’s systems were disintegrated. The Department now worked on integration.

Deputy Minister Holomisa on inspections and enforcement said that social partners’ involvement should go beyond policy and legislation. Social partners had to play a role in enforcement efforts. Organised labour should be part of enforcement.

Mr E Makue asked why a target of only 100 additional disabled persons was to be provided with work opportunities by end of March 2019. The financials of the Department spoke about transfers to organisations for the disabled that the Department supported. He asked that the Committee be provided with a list of organisations that it funded. In his constituency there had been centres for disabled persons that had closed down. There were instances where the productivity of disabled centres was higher than that of able bodied persons’ factories. How could the Department assist people who were differently abled? The Department was asked how it raised awareness of the support that it provided to disabled organisations. People out there did not know that the Department provided such support. Did the Department have a media campaign? He said that a strategy was needed to assist Uber drivers. The recent violence between Uber taxi drivers and MVA taxis was unacceptable. People were dying unnecessarily. Was there legislation in place to protect Uber drivers? The Department was also asked whether it had a plan to protect workers that worked in guesthouses. He pointed that young people often complained that they did not hear back from the Department after they had registered as job seekers. If the Information Technology (IT) System of the Department was the problem he asked whether it had been sorted. He noted that the Department of Higher Education and Training wished to cooperate with the Department on skills development. On inter-departmental cooperation the Department was asked whether there were plans in place for it to happen. Given the budgetary constraints that the Department was facing he asked whether it had a way for inspections to be effective within its current appropriation. The Department was asked to give the Committee an assurance when vacant posts would be filled. What was the Department’s take on the Fourth Industrial Revolution?

Ms Moiloa responded that advocacy work done was directed at both employees and employers. Both parties needed to know their rights and obligations. She said that the hospitality sector was covered, The Department’s targets did respond to problematic areas. She noted that if issues were brought to the attention of the Department then it could be dealt with. This applied to the bus strike as well where there were grievances around night shift allowances etc. The Department did proactive inspections and reactive inspections. She stated that the vacancy rate of the Department was 8% at present. The Department was committed to the filling of posts but the reality was that it was a moving target. By the end of June 2018 vacant posts as at April 2018 would be filled. Posts that were vacant should not be vacant for more than six months. On Information Communication Technology (ICT) the Department had experienced network failures. Resolving it was made a priority. Data centre migration had taken place and by August 2018 it would be complete.  

Mr Morotoba said that the Department was addressing infrastructure issues but that external issues affected it as well. He noted that the Department was introducing WiFi to some of its buildings. The Department was engaging with the Department of Trade and Industry (DTI) on initiatives to create employment. Efforts were also being made to work with the Department of Higher Education as well as with the Department of Home Affairs. On organisations for disabled people that it was funding he stated that National Treasury had given the Department three years within which phase out the organisations that it was supporting as many of them dated back to the 1980s. The process would be finalised by the end of May 2018.  The Department did however allow new entrants to come in. The total amount given to these organisations was only R12m in total. It was only the salaries of disabled persons that was subsidised. The salary had been R500 per month but it had increased to R700. A balance was needed between the salary that the disabled persons received from the Department ie R700, their social grant received and the profits that they made on the goods that was sold.

Deputy Minister Holomisa asked that the Committee also engage with departments on to what extent they supported the factories employing disabled persons. The Fourth Industrial Revolution was a reality and had to be embraced. On contract workers and labour brokers he emphasised that all workers should enjoy the same rights.

The Chairperson said that the Department was partly blamed on some of the issues like night shift allowances on the recent strike by bus drivers.

Mr Virgil Seafield Deputy Director General: Labour Policy and Industrial Relations on the bus strike issue said that there was no need essentially for the Department to get involved. The bus industry had a bargaining council. The issues raised were around night shift allowances and dual drivers. The bargaining council had its own dispute resolution system. Parties had representatives in the bargaining council.

The Chairperson asked if the Department had no role in implementation.

Mr Seafield said that the Department did have a role. On international level the Fourth Industrial Revolution was being discussed. It was not only about mechanisation. Nature of work changes was discussed. Conversations had taken place with Germans. The impact of the Fourth Industrial Revolution had to be understood especially on how it affected the agricultural sector. Nowadays farmers send a short message service (sms) message to a control unit to switch on sprinkler systems. There was perhaps no need for doctors to perform procedures anymore as robots were more efficient. There was a need for a broader sense of understanding of the Fourth Industrial Revolution first before regulation could take place. How was workers adequately protected? Were unions still needed? These types of issues had to be looked at.

Mr Silumko Nondwangu Chief Executive Officer (CEO) Supported Employment Enterprise (SEE) pointed out that provinces did not come to the party to create jobs for people with disabilities. In the Eastern Cape Province commitments made by the Province had not translated into orders from factories employing disabled persons. Orders were mainly from national departments. On other organisations that were supported by the Department the Committee could be provided with a breakdown of special schools visited in the country. Collaboration was taking place. The factories produced quality items.

Mr S Mthethwa (ANC, Mpumalanga) asked the Department what it had in place to ensure that the Commission for Conciliation Mediation and Arbitration (CCMA) to conclude disputes timeously. The Department was also asked what oversight role it played over labour courts.

Mr Seafield stated that the CMMA had a 97% finalisation rate. There was significant efficiency. The Department did not have oversight over the labour courts. The courts decisions were their own. There was a legislative framework that was applied. The Department did sit on the panel that appointed labour court judges.

Dr Y Vawda (EFF, Mpumalanga) addressing the Department said that he trusted that the National Minimum Wage would apply to Expanded Public Works Programme (EPWP) workers as well. He noted that not much had been said about contract labour. Would it in the long run be scrapped? The National Minimum Wage needed to be introduced as a matter of urgency. It was long overdue. The National Minimum Wage should not be looked at in isolation. The issue was about equitability and about how the working class shared in the Gross Domestic Product (GDP). He asked Deputy Minister Holomisa whether the Department looked at the bigger picture. 

The Chairperson responded that once legislation reached parliament it was no longer in the hands of the Executive. He said to Dr Vawda that the National Minimum Wage Bill was now in his and the rest of parliament’s hands. Members could make whatever proposals they wished on the National Minimum Wage Bill. The Deputy Minister may or may not respond to the National Minimum Wage issue. 

Mr Seafield agreed that on the National Minimum Wage one had to look at the broader context. Social security reform was needed. One also had to look at what mechanisms were in place to assist small businesses who could not afford to pay the National Minimum Wage. There was agreement that the National Minimum Wage was a matter of urgency. The EPWP was also covered by the National Minimum Wage. He explained that on issues like contract work the Department had adequately responded to issues effectively. The Labour Relations Act needed to deal with these types of issues. There was a slew of legislation that that dealt with issues of contract workers, labour brokers etc.

The Chairperson asked whether the Department paid its service providers within 30 days and whether 30% of its business was given to Small Medium and Micro Enterprises (SMMEs). He informed the Department that additional information to be provided to the Committee should be done within seven days. He added that if any documentation was sent to the Committee’s counterpart in the National Assembly then it should be sent to the Committee as well.

Mr Maduma responded that on payment within 30 days the Department was doing well. For the year under review performance sat at 99.98%. The reason for it not being 100% was because some accounts had been rejected. On supporting SMMEs the Department needed to still fine tune this. The issue was about what the definition of a small business was.

The Committee adopted its Report on Budget Vote 18: Labour APP 2018/19.

The meeting was adjourned.

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