Unemployment Insurance Amendment Bill: briefing; Employment Equity Report: adoption

Meeting report

LABOUR PORTFOLIO COMMITTEE
12 August 2003
UNEMPLOYMENT INSURANCE AMENDMENT BILL: BRIEFING; EMPLOYMENT EQUITY REPORT: ADOPTION

Acting Chairperson: Mr G Olifant (ANC)

Documents handed out:
Unemployment Insurance Fund Amendment Bill Powerpoint Presentation
Unemployment Insurance Fund on Domestic Workers Presentation
Report on Employment Equity

SUMMARY
This meeting was a continuation of the meeting held in August 2003 that concerned the introduction of domestic workers into the Unemployment Insurance Act of 2001. The Committee was briefed on a report on the expansion or improvement of maternity benefits under the UIF Act.

The Commissioner of the Department of Labour outlined the progress of his Department since the introduction of domestic workers into the Act. He presented the UIF Amendment Bill to align the law with the Skills Development Act 97 of 1998, with the Public Servants Act of 1994 and to remove any conflicts of law within the Unemployment Insurance Act itself. The proposed amendments can be found in sections 1, 3 (1)(b), 3 (1)(c), 3 (1)(e), 11, 12, 16 (4), 21, 24, 27 and 37 of the UIF Amendment Bill.

The Employment Equity Report was adopted.

MINUTES
Domestic Workers
Mr Mkhonto, Commissioner in the Department of Labour, highlighted the increase from 69 688 employers registered in terms of the Act in March to 217 385 employers registered in April in terms of the Act. The Department’s progress from March to April 2003 was a result of its publicity campaign. Due to 458 439 employees were registered and thus there was higher compliance in this sector than in the commercial sector. (Please refer to attached presentation)

A call centre had been established to facilitate the registration process and the large numbers of calls that were unable to be answered by the centre had decreased over time.

Mr Mkhonto outlined a number of the Department’s publicity exercises including the Minister’s train ride from Pretoria to Johannesburg aimed at educating commuters.

Mr Mkhonto mentioned some of the constraints on his Department. They faced complicated registration forms, a call centre with inadequate capacity, the payment of a high overtime rate to staff members, the delays in the issuing reference numbers to employers and the bad publicity resulting from these delays.

In contrast, Mr Mkhonto said the Department had been successful in registering the large volumes of employers and employees, establishing the call centre and online registration facility and creating a system that could handle multi-payment options (this system replaces the old system that only allowed for payment by cheque).

With regard to maternity benefits, Mr Mkhonto said that the new system provided women with the opportunity to claim benefits based on the length of their employment. He mentioned that stakeholders were not happy with this system and they recommended providing four months of full pay to women on maternity leave.

Mr Mkhonto said this proposal is to be investigated by actuaries. The actuaries are also going to examine the benefit structure as a whole especially as the Act provides that the Fund should create a reserve so as to cope with contingencies arising that would place a great demand on its funds.

CCMA
Mr Mkhonto proceeded to present the Unemployment Insurance Amendment Bill by way of his UIF Amendment Bill briefing (please refer to Powerpoint Presentation attached).

He said the definition of the CCMA in section 37 of the Act needed to be removed as the CCMA is not suitably equipped to deal with appeals concerning this legislation. The Regional Appeals should replace the CCMA in fulfilling this function.

The amendment also aims to delete the definition of "seasonal worker" to eliminate the unintended exclusions contained in the current definition. This amendment aims to reinstate coverage for those workers currently excluded because they have worked for less than three months.

The current legislation excludes from coverage all workers/employees who receive remuneration under a learnership agreement. The amendment in section 3 (1)(b) aims to exclude from coverage only those employees who enter learnerships in terms of section 18 (2) of the Skills Development Act 97 of 1998 such as those learners who were not in the employment of their employer when the agreement was concluded.

The amendment of section 3 (1)(c) seeks to exclude those officers or employees as defined under section 1 (1) of the Public Service Act of 1994.

The current provision provides that all employees including those in receipt of a monthly state social pension contribute to the fund, but section 14 (1) (a) explicitly excludes those employees in receipt of a state social pension from accessing benefits.
This amendment is aimed at eliminating this contradiction by excluding those in receipt of a monthly state social pension from contributing while they are unable to access benefits.

The section 11 amendment is aimed at correcting a mistake in which the Minister instead of the commissioner is expected in terms of the law to prepare a business plan.
This amendment streamlines the provisions of this law with those of the PFMA.

The present legislation does not take into account the situation of multiple employment relationships and as a result fails to cater for those workers who work for multiple employers and who in the process of their employment lose one or more jobs. This section 12 amendment addresses the above situation by inserting the new provision that recognises the above situation in a concept of "partial unemployment" for those workers with multiple employers in terms of section 12 (5) and 12 (6).

The section 16 (4) amendment is intended to bring in a provision that recognises that in the case of domestic workers, unemployment may result from the death of their employer.

The current provisions in sections 21, 24 and 27 provides for two benefit regimes that were not intended. This amendment is aimed at streamlining the benefits to allow claims officer to top-up benefits for those employees who continue to receive income from their employers whist unemployed as a result of maternity, ill-health or are required to take adoption leave.

The section 37 amendment is brought in to replace the jurisdiction of the CCMA over UIF matters and to provide that he Minister after consultation with the UIF Board appoint Regional Appeals Committees to adjudicate all complaints arising out of the decision of the claims officer/s. A decision by the National Appeals Committee will be final. Any further appeals would have to go through the Labour Court process.

Discussion
Mr Olifant (ANC) apologised for Mr Manie’s absence as he had fallen ill and therefore he was to chair the meeting.

Mr Mshudulu (ANC) asked how urgent it is to have the amendments made to the Bill as time would be needed for engagement with affected stakeholders especially with women in respect of maternity benefits.

Mr Redcliffe (DA) asked why the number of employers registered in under the Unemployment Insurance Act 2001 ("the Act") differed from the number of employees registered under the Act. Were there fines levied on employers in terms of the Act after payments by employers to the fund fell due after 7 May 2003? Were there bottlenecks in issuing the reference numbers necessary for employers to make these payments?

Furthermore, Mr Redcliffe (DA) wanted clarity regarding section 2 (c) of the Unemployment Insurance Amendment Bill ("the Bill") as to why Public Servants are excluded from claiming under the Bill.

Mr Olifant (ANC) welcomed the State Law Adviser.

Mr Zulu (IFP) commented that the inclusion of the CCMA in the Act was a laborious process and therefore to exclude the CCMA in terms of the Bill would require time and the input of interested parties.

Mr Zulu asked about the nature of the credits that accrued to fund members entitling them to claim benefits.

Mr Zulu expressed his concern at the safety of the Minister on the train ride he undertook in an effort to publicise the Act.

Mr Mkhonto said that he is an official in the Department of Labour and thus not responsible for the safety of the Minister. He assumed the safety of the Minister was adequately handled by those responsible for safety as the event was without a mishap.

With regard to the credit system, Mr Mkhonto said the universal approach was being applied. To earn credits under the Act one must be in employment, a member of the fund for at least six days and one must have worked for at least thirty days. In these circumstances, every six days worked entitles one to claim benefits to the value of 45% of one day’s earnings.

He held that this system also applies to claiming maternity benefits.

Mr Mkhonto stressed that this was a contentious issue. Stakeholders felt that often a woman only obtains employment at a later stage in her pregnancy. This means she is unable to earn sufficient credits to claim enough to support herself during her leave. Therefore, Mr Mkhonto said an actuarial inquiry had been commissioned so as to determine the feasibility of allowing a woman to claim 100% of her pay for four months of her leave. Mr Mkhonto said a report would be submitted on this inquiry as soon as possible.

In response to Mr Redcliffe concerning the question as to why Public Servants are excluded from the Act, Mr Mkhonto said that after consultation with the Treasury and the department responsible for the administration of the affairs of Public Servants it was found that Public Servants should be excluded from the Act.

Mr Mkhonto said that there were no fines levied on employers as the Department acknowledged that their systems were unable to issue the reference numbers timeously and as such employers could not be held responsible for their failure to pay if payment depended upon the issuing of the reference numbers.

Mr Mkhonto took the opportunity to thank the South African community for its support during the implementation of the Act. He mentioned that 80% compliance with the Act had been recorded which surpasses the compliance of the commercial sector with the Act. With regard to the commercial sector’s non-compliance, Mr Mkhonto said that many companies still had concerns about the security of the information provided to the Department on registration of employees. However, Mr Mkhonto said compliance is improving and the Fund has registered over four million people in the space of two years.

Mr Moonsamy (ANC) complimented the committee on protecting domestic workers whom he said are the most exploited labourers. He stated that these amendments are reasonable but he enquired about the bad publicity mentioned by Mr Mkhonto and about the reasons for the delayed issuing of the reference numbers to employers

Mr Pillay (NNP) wanted to determine the criteria whereby a person would be appointed in the Regional Appeals Committee mentioned in section 1 (c) of the Bill.

Mr Mzondeki (ANC) asked whether the fears of certain stakeholders had been allayed as to domestic workers losing their jobs as a result of an employer’s dissatisfaction with the mandatory registration of domestic workers in terms of the Act.

Mr Mshudulu (ANC) questioned how these amendments would be communicated to the public.

Mr Pillay (NNP) asked about the cost implications on the State resulting from these amendments.

Mr Mkhonto said the publicity received by the department was not necessarily bad it was just not positive publicity. This publicity resulted from the delay in issuing the reference numbers but the publicity caused their capacity to be increased to include online, fax and call centre facilities.

Mr Mkhonto explained the delay in issuing the reference numbers by saying that access to the online registration facility was facilitated by SETA and therefore to issue a registration number meant that the registration had to be processed by SETA before a number could be issued thus causing a delay. The Department had since then been given a preferential facility by Seta whereby the public could transact with the Fund directly and reference numbers should be issued instantaneously.

Furthermore, Mr Mkhonto said there had been criticism of the Department’s e-mail facilities. Members of the public e-mailed the Department but failed to supply return e-mail addresses so that any replies to e-mails had to be done via the postal service. This caused a delay and the Department was criticised for their inability to reply to e-mails efficiently.

In response to Mr Moonsamy (ANC), Mr Mkhonto said that the members of the Appeals Committees were to be appointed by the constitutions of NEDLAC and that it was not the Minister who would decide on these appointments.

The fears mentioned by Mr Mzondeki (ANC) had not proved warranted as the general response to the Act had been of compliance with its stipulations and any dismissals that could have resulted would have been out of ignorance on the employer’s part as to his or her duty in law. Some employers were ill informed as to who was required to register under the Act and opted not to employ a domestic worker. The Department has recognised this problem and will continue to campaign publicly as to the requirements of the Act.

Mr Olifant (ANC) congratulated the progress made by the Department of Labour and the committee and he said the necessary deliberations and a possible public hearing would follow.

Report on Employment Equity.
Mr Redcliffe (DA) expressed his concern that he did not want to reject the report of the Solidarity Union summarily. He said to do so would be to misinterpret their presentation. He said what the Solidarity Union asked is that discrimination inherent in Affirmative Action be addressed they did not say that Affirmative Action was discriminatory in its entirety

Mr Mshudulu (ANC) replied that Employment Equity as it stands was intended in the Constitution and any discussion alluding to altering the nature of Employment Equity was not necessary. He then suggested that if "rejects" is too harsh a word then the committee could alter it to "we do not agree" with the presentation of the Solidarity Union.

Mr Olifant (ANC) said if necessary this issue could go to a vote.

Mr Redcliffe (DA) accepted Mr Mshudulu’s suggestion but he reiterated that often employers misinterpreted terms in affirmative Action policies such as the word "Black" some employers fail to include Coloured persons as Black people which led to discrimination within the framework of Affirmative Action.

Mr Redcliffe (DA) said that he would agree to amend the word "rejects" by replacing it with "are not accepted".

Mr Olifant (ANC) asked who was in favour of adopting the report. Mr Pillay (NNP) and Mr Mzondeki (ANC) adopted the report.

Mr Olifant (ANC) asked if the house would adopt the report. The report was duly adopted.

The meeting was adjourned.