Department of Employment and Labour 2019/20 Annual Performance Plan ; with Minister & Deputy Minister

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Employment and Labour

03 July 2019
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

The Committee was briefed by the Department on its Strategic Plan and Annual Performance Plan 2019/2020. Both the Minister and Deputy Minister of the Department were present at the meeting.

The Minister said there was a meeting with the President on the reconfiguration of departments. He added this means there will be some realignments in the Department and members will be kept informed of such realignments. He said the culture of accountability is very important and assured Members that at least one Minister will be present at Committee meetings.

The presentation, led by the Director-General, highlighted the structural nature of unemployment and skills mismatch as the biggest challenges the Department faces. He explained the number of registered work seekers is much higher than the number of work seekers actually placed in learning opportunities. The allocation of annual targets is dependent on the resources each province has. He explained that both employer organisations and trade unions must reflect a provision of balloting into their constitutions. This will ensure a strike is agreed upon before workers begin striking. The breakdown of the budget includes funding workshops for the blind and work centres for the disabled. He explained that factories provide employment for disabled people and appealed to the Committee to support the new factory recently opened in Limpopo. The bulk of the budget is transferred to the Commission for Conciliation, Mediation and Arbitration (CCMA) so that they are able to carry out dispute resolution effectively.

Members raised concern on how the Department plans to restructure itself now that its mandate includes both employment creation and labour. They asked how the Department would address the challenge of unemployment and suggested it work together with the Department of Higher Education to achieve a skilled and inclusive workforce. Members also asked how the Department monitors irregular expenditure and the steps it would take to decrease the amount. The accessibility of Thusong Centres, in particular their working hours, was also raised as a concern. They asked how the Department would mitigate against delays in finalising investigations of incidents once they are referred to the National Prosecuting Authority. Members also raised concern on unduly long strike action and asked what interventions are put in place to deal with it.

Meeting report

The Chairperson opened the meeting and greeted everyone in attendance. She introduced the Committee support team and said the mandate of the Committee is to oversee the interests of every South African citizen irrespective of political affiliation. She then handed over to the Ministry to begin the presentation.

Remarks by Minister
Mr Thulas Nxesi, Minister of Employment and Labour, in briefing, said it is paramount to have a good working relationship between the Ministry, the Department and the Committee in order to deal with the biggest challenges. The Committee is responsible for carrying out oversight which may be uncomfortable at times but holding the executive accountable is very important. The culture of accountability must be taken seriously and at least one Minister should be present at Committee meetings.

Minister Nxesi said employment creation lies not only with the Department of Employment and Labour (DEL) but also other departments such as Public Works. The focus should be on whether other departments are delivering structures to further development. Some of the programmes, such as crash courses, are ineffective. The quality of programmes must enable people to form links with employers. There was a meeting with the President on the reconfiguration of departments. As a result, there might be some realignment in order to take on the new State of the Nation Address (SONA) priorities. He added that Members would be kept informed of such realignments.

Briefing by the Department on the Strategic Plan and Annual Performance Plan 2019/20
Mr Thabile Lamati, Director-General, DEL, thanked the Minister for his introductory words. He said the reporting period of irregular expenditure cases happen throughout the year. The allocation of annual targets is dependent on the resources each province has. He noted the programme of Inspection and Enforcement Services. Where employers are not complying, inspectors issue them with contravention notices. If the employer fails to accept and honour the undertaking, the matter is referred directly to the Commission for Conciliation, Mediation and Arbitration (CCMA) and not the Labour Court (LC). The LC only deals with matters concerning the application of the Basic Conditions of Employment Act (BCEA). Employers are supposed to keep a register of both incidents and accidents and steps taken to address them. Once these cases are referred to the Department, they are investigated internally and finalised before being referred to the National Prosecuting Authority (NPA) who decide whether to prosecute or not. The decision to prosecute remains with the NPA.

Mr Lamati said employers approach the Department to register learning opportunities and work seekers are provided with vocational counsellors in the labour centres. He explained the number of work seekers that are registered were much higher than the number of work seekers placed in those learning opportunities. The biggest challenges remain the structural nature of unemployment and skills mismatch. The publishing of the public register still needed to happen because the Minister had just recently joined the Department. The Minister also still needs to sign off on bilateral agreements. The Commission was currently busy reviewing the national minimum wage and would recommend an adjustment when it is ready with the outcome of the review. This outcome will then be shared with the Committee. He explained that trade unions and employer organisations need to reflect changes in their constitutions to include the concept of balloting. Balloting must happen before a strike takes place to ensure that the strike was agreed upon. The Department would report on this and share it with the Committee.

Mr Lamati explained that transfers are taken from the total budget amount. What is left over after the transfers forms part of the operating budget of the Department. Supported Employment Enterprises (SEE) provides work to disabled people who manufacture linen, desks for schools and furniture for government departments. This is an institution the Department would like to continue to support so that disabled people are provided with employment. A new factory has recently opened in Limpopo and the Department was hoping to open another one in Mpumalanga. Mpumalanga is the only province which does not have one of these factories. He appealed to Members to support this entity. He noted that South Africa is a member state of the International Labour Organisation (ILO) and as a result, the Department pays a subscription to the ILO. South Africa is also an executive member of the African Regional Labour Administration Centre (ARLAC). This is a capacity-building institution that trains government officials. The CCMA is allocated the bulk of the budget so that it is able to deal with dispute resolution effectively.

The Chairperson thanked Mr Lamati for the presentation. She asked Members to raise questions and comments.

Mr M Bagraim (DA) thanked the Minister for being present and the Director-General for the presentation. He noted the Department sets and meets its own targets and suggested an external agency should set some targets for the Department too. The policy mandate of creating decent employment is questionable. There are about 10 million unemployed South Africans so the focus needs to be on creating work as opposed to creating decent work.

Mr Bagraim said the presentation indicates the Department treats its employees with dignity. He said he has received numerous queries a day from people, in particular employees from the Unemployment Insurance Fund (UIF) and the Compensation Fund (CF), who would not agree that this target was being met. Was the presentation referring to employees in the market place or the Department’s own employees? When reference was made to inclusive economic growth, what did the outcome mean? The Department must work together with the Department of Higher Education (DHET) to achieve a skilled and capable workforce to support an inclusive growth path. Also, irregular expenditure needs to be dealt with. Every year for the past five years this amount has increased. What was the Department going to do about that? Would there be a decrease this year?

Mr N Hinana (DA) said Thusong Centres remain inaccessible and are not providing sufficient trading and services. They are closed when people need them. Could the Department look at extending their opening hours? How many disabled people were employed in the Department and was there a target the Department sought to meet? He noted that different sectors were registering under one trade union. Is there a threshold of membership when applying to register as a trade union? Who determines the boundaries?

Mr M Cardo (DA) said the rebranding of the Department was going to require a reconceptualisation of core work from focusing on those who are already in work to getting the unemployed into work. What does the new name mean to the Department? How is it going to be restructured to give effect to the new focus on employment creation? He noted the amount budgeted for programme 4, Labour Market Policy and Industrial Relations, is less than the amount of total transfers from it. He asked for an explanation for this discrepancy?

Mr M Nontsele (ANC) said the target was sitting at 60% in the area of Inspection and Enforcement Services but this area affects vulnerable workers the most. He asked if there was a more elaborate plan to deal with it and improve the 60% target. The time period of investigations being finalised was of concerns. Could the timelines be mitigated so that investigations are finalised much sooner? Could Members be provided with more details on where SEE’s are located? He asked if a schedule on this could be attached as part of the presentation.

Ms N Nkabane (ANC) commended the Department for taking action where there have been cases of irregular expenditure. She noted the White Paper on Transforming Public Service Delivery. She asked how the Department was synergising this to ensure public service is being transformed. This particular function is more championed by the Department of Public Service and Administration (DPSA). There is an issue of relying upon the NPA to ensure cases are finalised. How does the Department deal with delays from the NPA?

The Chairperson noted that systems of detecting irregular expenditure within the Department were reported on monthly. How has the Department managed to do that? She also noted the formation of trade unions. How confident was the Department that there were not any fly-by-night trade unions? She asked for an explanation on the budget amount allocated to Inspection and Enforcement Services? Why was it such a low number if it is the cornerstone of the Department? Why was R1.2 billion allocated to the Labour Market Policy and Industrial Relations programme?

Mr Lamati replied the Labour Market Policy and Industrial Relations programme is the branch responsible for ensuring there is labour peace, workplace conflict is monitored and labour market policies are developed. The CCMA falls under this branch and it gets the lion share of the budget. The budget of the National Economic Development and Labour Council (NEDLAC) was also included under this branch. On synergising an outcome with the transformation of public service delivery, the DPSA is responsible for setting policies for recruitment and standards to be applied. The DEL has a recruitment policy that complies with it. The DEL also has Black Economic Empowerment imperatives and each position has its own inherent requirements which must be adhered to. He added the Department will provide Members with a schedule of the locations of SEE centres and figures of how many people are employed in these centres.

Mr Lamati said the Office of the Registrar ensures there are no fly-by-night trade unions. Through the Registrar, the Department is able to sift out applications from trade unions who only want access to the CCMA and charge vulnerable workers money. The systems which detect wasteful expenditure allow the Department to pick up on cases on a quarterly and monthly basis. In most instances, they relate to contracts which have lapsed but provinces do not indicate this. The Department’s supply chain management focuses on contract management and the system is able to pick up on expired contracts. There is a requirement that wasteful expenditure must be reported by any official in the Department. He added that provincial offices are required to report to head offices monthly. The Department is working on improving the 60% target on Inspection and Enforcement Services. It strives to ensure all cases are resolved and finalised timeously but sometimes it requires going to court and this affects the target percentage.

Mr Lamati said the finalisation of cases is a frustrating experience the Department has with the NPA. The Department does its own investigations and submits cases to the NPA. The NPA then begins their own investigation to find a criminal act. In instances where prosecutors are familiar with the Occupational Health and Safety Act, there is much better responses from the NPA and the courts. In instances where there are serious delays, the Department interacts with the courts and speaks to the president of the LC. There are different categories of investigations. Section 31 investigations don’t take long to finalise but section 32 investigations take the longest because it is a public enquiry that requires lawyers and technical experts. It resembles a court process and is rigorous. After having gone through that process, the Department still has to report it to the NPA.

Mr Lamati said the discrepancy on the transfer amount from programme 4 was because those transfers include households, municipalities, donations and gifts. The office of the Registrar determines the boundaries in terms of the Labour Relations Act (LRA) of who can apply to become a trade union. One of the criteria is to check if the applicant is a bona fide applicant. On the issue of Thusong Centres, the Department has a campaign where it spends a whole day in certain areas and it takes its services to the people. Instances of irregular expenditure has been increasing even though wasteful expenditure has decreased. It spoke to the fact that the Department owns cars and third-party claims have to be settled. A car accident cannot be predicted and the Department has to cover third party liability.

Mr Lamati said there is a Memorandum of Understanding with the DHET to deal with work seekers. On the issue of treating Department employees with dignity, a number of people who do not want to stand in long queues will call and approach members of Parliament instead. Once their complaint is reached by the Department it is given priority and is resolved. This is unfair for people who go through the entire process to get their cases resolved. The issue is not a reflection of backlog but rather a reflection of the routes people take to get their claims resolved faster. He added the UIF has improved its processing of maternal benefits. Decent employment is about providing an environment for people to work in. This is equally as important as employment creation. When the Department sets targets, it is informed by the resources it has. The reality was that there are limited resources and the Department strives to be as reasonable as possible when it sets its own targets. It won’t set a target it knows it can’t achieve.

Mr Sam Morotoba, Deputy Director-General: Public Employment Services: DEL, replied the Department employs people with mental disabilities in factories. He invited Members to visit those factories.  

Minister Nxesi replied the Department is obliged to provide decent employment under the ILO. During bad times for employees, employers must be able to help them and provide basic benefits. The issue that needs to be dealt with is how to define employment now that the Department is one of employment and labour. The existing Department has a footprint across the country. This is seen in the area of labour centres, skills development and Inspection and Enforcement Services.

Minister Nxesi said the President of Nigeria made a statement that no job should be given to a foreign national if a Nigerian could do it. The same sentiment was said in Zimbabwe. There is an issue of burning trucks in Durban. The drivers told the Department the issue is that there are companies who have exploited the position of Zimbabweans and Mozambicans. Some companies have employed 100% foreign drivers claiming that South Africans do not have the skills to drive trucks or are lazy. This situation is the same on the farms and in the hospitality and security industries. Companies are motivated by greed and exploit vulnerable workers who are coming from outside the country knowing they will take any employment regardless of the hours. The issue of burning trucks in Durban is a serious thing. When there is a strike, it means that goods and services are not moving.

Mr Nxesi said it is wrong to focus more on unemployment and abandon the labour mandate of the Department. All institutions will be key in upping the game and the focus is to upscale where possible. This process requires a review of the current process together with analysis of cooperation with other departments who have the same objectives of enhancing employment creation and strengthening the labour market. It is common cause that structural unemployment is a major challenge. There needs to be longer-term measures which relate to macro employment policy to address this. Work seekers require skills providers and this is why the Technical and Vocational Education and Training (TVET) colleges are very important in the rural areas. Vocational education needs to be emphasised otherwise the country will struggle with unemployment.

The Chairperson asked if there were any more questions from Members.

Ms A Zuma (ANC) said there were people who had been staying on a farm for more than 20 years and when one of their family members died, the owner of the farm evicted the family and did not allow them to bury their loved one. What role is played by the Department in such a situation? Was there any policy or provision on evictions?

The Chairperson said the duration of strikes was concerning. What role does the Department play when a trade union takes its members on a five-month long strike? If workers are taken on a strike for more than a month, they find it very difficult to recover. They lose property and are unable to pay for their children’s schooling fees. Inspections must be conducted across all state departments in the country.

Mr Lamati replied the Extension of Security of Tenure Act would apply to the situation of eviction and the Department of Rural Development and Land Reform has sole responsibility in this situation. The DEL’s responsibility was limited to making sure people are paid according to the national minimum wage, and that occupational safety and basic conditions of employment are adhered to.

Mr Virgil Seafield, Deputy Director-General: Labour Market Policy and Industrial Relations, DEL, said the long duration of strikes could be mitigated by requiring a ballot before a strike. This requirement is in the LRA and the Department had requested the Registrar to ensure there is a provision in the constitutions of trade unions. The Registrar is empowered in terms of the regulations of the LRA to do this. There were also other interventions which could be made in terms of the LRA. The CCMA has the ability to intervene, by offering its services of dispute resolution, when a strike has an impact on the economy of the country. There is also voluntary arbitration. The Minister has the right to appoint an arbitration panel through the CCMA when he is of the opinion that a strike has been unduly long. It doesn’t suspend the strike but it provides a forum and ability to settle the dispute. The current amendments to the LRA stipulates that the Minister can intervene regardless of whether there is an agreement or not.

The Chairperson said the Association of Mineworkers and Construction Union (AMCU) was taking its workers on strike for more than five months. Was there any time-frame for an intervention by the Minister?

Mr Seafield replied there was no clear time-frame. Section 18 of the Constitution provides for the right to freedom of association and section 23 provides for the right to strike. The Department cannot limit these rights stipulated in the Constitution. Although there is no time-frame, the Minister must take into consideration two criteria: the impact on the country’s economy and the impact on the lives and livelihood of people.

The Chairperson said the employment of people with disabilities is important. The Department is doing profound work because people with mental disorders are always being seen as useless. The issue of foreign nationals needs to be seriously addressed. Members of the Committee must know they will be subjected to inspection by the Department. Inspection is not only a responsibility of the Department but also of Members when they conduct oversight. She thanked officials from the Department for their presentation and then adjourned the meeting.


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