Unemployment Insurance Fund Amendment Bill: discussion; Skills Development Amendment Bill, Postal Services Amendment Bill: adopt

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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report


23 September 2003

Ms Nkuna

Documents handed out:
Unemployment Insurance Amendment Bill [B35-2003]
Skills Development Amendment Bill [B46-2003]
Postal Services Amendment Bill [B40-2003]
Unemployment Insurance Amendment Bill Powerpoint Presentation
Postal Services Amendment Bill Powerpoint Presentation

Relevant document:
Minister of Labour's speech on passing the Bill in the NCOP : 22 October 2003(see Appendix)

The Commissioner of Unemployment Insurance, the Department of Labour, presented the proposed amendments. These amendments were discussed. The Committee adopted the Skills Development Amendment Bill and the Postal Services Amendment Bill.

Unemployment Insurance Amendment Bill
Mr Makhonto, Commissioner of the Unemployment Insurance Fund briefed the Committee on Unemployment Insurance Amendment Bill (UI Bill). Mr Makhonto told the committee that the legislation was proposed to address the administrative problems encountered in implementing the principal act. He highlighted the need to replace the CCMA with a Regional Appeals Committee to process appeals against the decisions of the claims officers.

The Department faced challenges relating to the interpretation of the law which now excluded certain workers previously covered in the legislation. The UI Bill also aimed to clarify the definition of public servants and it attempted to bring in amendments to effect the inclusion of domestic workers, taking into account the nature of their employment. The UI Bill would remove the burden on pensioners who were still in employment to contribute to the UI Fund. At present, these pensioners were required to contribute to the Unemployment Insurance Fund but they were not entitled to access benefits.

Certain members raised issues concerning the UI Bill but due to time constraints some issues were not addressed.

Postal Services Amendment Bill and Skills Development Bill
The committee adopted the Postal Services Amendment Bill and the Skills Development Bill.

Ms Ntwanambi (ANC) asked Mr Makhonto how long it would take before the Unemployment Insurance Amendment Bill comes into affect.

Ms Ramodibe (ANC) asked Mr Makhonto to explain the amendment to section 21 of the Unemployment Insurance Act (the UI Act).

Mr Setona (ANC) asked about the extent of the financial implications of the UI Bill. When would funds be available to implement the UI Bill? How would aggrieved workers access the Regional Appeals Committees if they resided far from the location of these Committees.
Would those Public Servants excluded from having to contribute to the UI Fund include members of the local government?

Mr Tolo (ANC) asked what leverage there was for a person who was previously unemployed to access his or her benefits even after they had found a new employer.

Mr Makhonto replied that the law required both an employer and employee to register under the UI Fund. Additionally, employers were required by law to report changes in the employment status of their employees. Therefore, there was little scope for people to access benefits after they had found new employment. Furthermore, the Department's database was designed in such a way that it alerted claims officers to remove employees from the claims queue once they had been registered by a new employer.

Ms Nkuna asked Mr Makhonto to clarify who was entitled to claim from the UI Fund.

Mr Bhengu (ANC) reiterated that the committee would like to be informed as to the accessibility of the Regional Appeals Committee. How was the Department dealing with employers who were simply refusing to register their employees? How was the Department educating the people as to their rights under the UI Bill.

Mr Makhonto replied that the Department took the role of educating people seriously. He said the Minister visited the provinces on a monthly basis to speak to rural communities about their rights. The Minister took these opportunities to listen to complaints. The Department was also running a roads-show starting on 26 September 2003. However, despite their efforts, the Department unfortunately could not reach everybody and therefore it had to rely on the members to communicate with the people.

Mr Makhonto said that only people employed by the national and provincial governments were included in the definition of public servants and therefore the local government employees were still entitled to claim from the UI Fund.

With regard to the accessibility of the Regional Appeals Committees, Mr Makhonto said that every labour centre could be used to file appeals. However, all appeals would be adjudicated at the location of the Regional Appeals Committee. He made it clear though, that appellants were not required to attend the hearings and they were therefore not expected to bear the burden of transportation costs to the location.

Mr Makhonto said that the Department had fully evaluated the extent of the financial implications of the Bill and they had been included in the budget process. These implications did not pose a risk to the Department's finances.

Mr Makhonto said in reply to Ms Ntwanambi (ANC) that he hoped the Bill would be promulgated by 1 April 2004.

Ms Ntwanambi asked if pensioners would be required to contribute to the UI Fund until this time.

Mr Makhonto said that he was waiting for instruction from the Minister as to their contributing.

Ms Nkuna said that due to the time constraints, the committee had to move to the Skills Development Bill.

Mr Setona (ANC) asked why the youth were not included in the definition of a "designated group" in section 1(a) of this Bill.

Ms Adrienne Bird (Deputy Director-General of the Department of Labour) replied that the definition of a "designated group" in this Bill was intentionally consistent with the Employment Equity Act. The Department, despite this definition, had included a specific objective in its National Skills Development Strategy dealing with the youth.

Mr Setona (ANC) asked if there were any established benchmarks against which the committee to measure the progress of the Department in achieving their objectives.

Ms Bird said the Minister convened the National Skills Development Conference at which the Minister reported on their progress. Ms Bird extended an invitation to this Conference to the committee. Furthermore, she said the Department could compile a report on their progress for the committee.

Ms Nkuna moved to formally adopt the Bill.

The committee agreed to adopted the Skills Development Amendment Bill without amendment.

Ms Nkuna moved to adopt the Postal Services Amendment Bill.

The Postal Services Amendment Bill was agreed upon without amendment.

The meeting was adjourned.



Madam Speaker, honourable members, I am deeply grateful for the opportunity to place before this House the Skills Development Amendment Bill for consideration and adoption.

In the five years that have passed since this law was passed literally millions of people have been trained under its banner. Many of these people have been the workers who keep our economy running in all the mines, offices, shops and factories of our nation. With the training they have received we believe that the productivity and competitiveness of their workplaces has been improved as well as their own employment security and prospects. In addition, hundreds of thousands of unemployed people have also been trained - young and old - trained to find work in the formal labour market, to create their own income generating opportunity or to participate in social development projects that aim to improve the lives of their communities and the households that constitute it. The skills revolution that the legislation was intended to unleash is indeed well underway.

The Amendments set out to remedy the challenges that have had to be faced in the process of implementation.

Whilst many of the achievements that I have just alluded to are the product of the hard work on the part of many of the Sector Education and Training Authorities or SETAs as they are called, it is a matter of public record that some of the SETAs have not worked well. Allies and opponents alike have forcefully brought the problems to the public's attention because they are concerned to see every cent collected under the Skills Levy for training delivery being spent properly - and certainly not wastefully or fraudulently. I agree completely with this view. It has been patently painful for me to watch incidences of poor performance, inadequate accountability and in some instances, financial impropriety.

In a country where the rule of law reigns supreme, I can only exercise powers, which have been conferred to me by law. The current law does not allow me to adequately intervene and address matters that many of you have correctly complained about in relation to the operation of SETAs.

My first response was to highlight this problem to our social partners whose representatives sit on the governing boards of these SETAs. I was thrilled when the social partners accepted the challenge and made the commitments they did at the Growth and Development Summit. You will remember that both business and labour said that they would ensure that their representatives to the SETA Boards are at a sufficiently senior level to take meaningful decisions and provide strategic direction, and that they would ensure that they are adequately prepared for this responsibility. Hopefully in future they will stand to account when problems arise - and I will not have to take the heat alone! After all I do not sit on the Board of any SETA!

However, I must accept that ensuring that the Skills Development Act's purposes are achieved is my responsibility. And in summary, the central reason for the Amendments are to give me the right to fix the problems that have arisen, so that the skills revolution can accelerate a pace without being drawn back by the negative publicity that the bad apples attract.

When considering the changes to the law I had a choice, I could attempt to remedy each and every problem as it arose or I could clarify my expectations of good, efficient performance and transformatory practice for all SETAs and then put in place procedures to target those who deviated from this. I have chosen the latter course. I felt that the former course would lead to an ad hoc set of prescriptions, which would increasingly skew the playing field in ways that would eventually undermine the universal training agenda we are trying to put in place.

So you will see in these amendments a new obligation on all SETAs to enter Service Level Agreements with the Department of Labour that clearly set out performance outcomes, and very clear steps should any SETA fail to meet its obligations in terms of these Agreements. For example, I shall have the power to instruct SETAs to remedy a problem, and if they fail to do so, then this will itself constitute grounds for the take over of their administration.

Some feel, I know, that giving me the power to set salaries for staff and allowances for Board members is 'going too far' - that this is the Board's responsibility. But again, let me say, that the need for this intervention arose in response to the public outcry about these matters, and where the social partner representatives on SETA boards, who had the authority to set reasonable standards in this regard from March 2000, failed to do so. However, to those who are concerned that I will exercise this power in an arbitrary way that interferes with the performance of SETAs need not worry. It is precisely in order to promote SETA performance that I am introducing these measures and so a fair balance will be found, following a fair and transparent process.

There are other changes to the Skills Development Act that have been occasioned by other implementation problems. In regard to private employment agencies for example, there are those of you in this house that will recall the case that was highlighted in the media last year, in which it was found that young women were being recruited by unscrupulous private employment agencies from the rural areas with the promise of domestic work in Cape Town. They were ferried to town in taxis that they were later expected to pay for, kept in barrack-like conditions and then hired out at extremely low rates of pay. Most of the agencies engaged in this practice were not registered with the Department of Labour, but ambiguities in the legislation made it unnecessarily difficult to close them down. The proposed Amendments put the matter beyond doubt. All private employment agencies will be expected to be registered - and will only be registered if they comply to decent work practices - and their failure to do so will undoubtedly lead to their closure. I salute those in the private sector employment agency industry who have supported this measure, demonstrating their commitment to 'clean up' this industry.

Not all the amendments are solving negative problems however - I will highlight just one positive measure. These Amendments are introducing Employment and Skills Development Agencies. These agencies are intended to accelerate the uptake of learners in learnerships by taking from smaller employers and even non-governmental agencies all the 'hassle' of the administration side of learnerships. There will be no reason for any firm not to take on learners after this amendment. Indeed I support the call of the National Youth Commission that every single employer should have at least one learner. Only on this scale will we be able to achieve both our Growth and Development target of 72 000 learners by May next year and the National Skills Development Strategy target of 80 000 by March 2005.

There are other amendments of a technical nature that bring this legislation in line with the Public Finance Management Act and provide for the funding for the administration of the National Skills Fund from its own resources. I trust that all honourable members who are committed to the objectives of the skills revolution will support these proposed amendments and also do their bit within their spheres of influence to ensure that our skills revolution become a resounding success.

I thank you

Issued by: Ministry of Labour

22 October 2003


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