DEL, CCMA, and Productivity SA; 2019/20 Quarter 1 performance, with Deputy Minister

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Employment and Labour

13 November 2019
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

Annual Reports 2018/2019

The Department of Employment and Labour (DEL) and its entities, the Commission for Conciliation, Mediation and Arbitration (CCMA) and Productivity South Africa delivered presentations on their performances for the first quarter of the 2019/20 financial year.

The DEL said it was faced with the challenge of aligning the new Department with the objectives of the President, which required an increased focus on job creation. This had meant that it was now realigning its internal processes to move away from those of the old Department of Labour.

The Department planned on strengthening occupational safety, promoting equity in the labour market, protecting vulnerable workers, strengthening multilateral and bilateral relations, contributing to employment creation, promoting sound labour relations, monitoring the impact of legislation and strengthening the institutional capacity of the Department.

Some of these goals had been achieved, but there were shortcomings. These were mainly due to staff vacancies in the provinces, and the lack of inspectors in the country to ensure compliance with occupational health and safety standards of employment.

Productivity SA had had to contend with a lot financial constraints, as a significant amount of its funding came only in the second quarter, so some programmes planned for the first quarter had had to be deferred.  Success had been achieved with programmes aimed at providing productivity and operational efficiency programmes to small and medium enterprises and cooperatives. Support had also been given to large and small companies in the industry sector, including those in the special economic zones (SEZs) and industrial parks through the Workplace Challenge Programme. The DEL had taken the decision for the entity to be funded directly by Public Employment Services.

The CCMA said it had set itself the target of conciliating all cases within 30 days from the date of receipt of a referral, excluding agreed extensions. They had fallen just short, dealing with 32 522 (97%) of 33 632 cases heard within the 30 days. It had also come within a whisker of sending all arbitration awards rendered to parties within 14 days of the conclusion of the arbitration proceedings (5 492 of 5 531 awards). The business and professional services sector remained the highest referring sector, at 29% of total referrals.  Private security was the second referring sector, with 14% of total referrals, followed by the retail sector with 11%.

The main issues for the Committee concerned budgetary planning. Members felt that a number of variances in targets were under-achieved due to budgetary issues. There was also concern regarding the visibility and efficacy of the DEL inspectorate, particularly in high risk sectors like mining, manufacturing and construction.

Meeting report

Deputy Minister’s comments on departmental restructuring

Ms Boitumelo Moloi, Deputy Minister (DM), wanted to put the presentations to the Committee in context. After the announcement by the President on 14 June that there would be a reconfiguration of the departments, the Department of Employment and Labour (DEL) would be replacing the Department of Labour in its entirety, with the new mandate being to reduce unemployment through job creation. This would require a new approach to the management and facilitation of job creation. This was a process that would take time, because the reconfiguration in itself would require realignment within the Department.

The current reports by the DEL were based on the annual performance reports (ARPs) from last year, as they were compiled before the realignment by the President. She pleaded with the Committee not to be surprised when presentation still pointed to measures that were taken before the realignment. The ARPs that highlight the work of the Department under the realignment would be available in the next financial year.

However, the DEL and its entities were already taking steps to implement some of the steps for realignment. In fact, it was supposed to make a presentation to the Cabinet for the economic cluster on the integrated youth employment strategy. It had been asked by the secretariat to hold on the presentation, as the President wanted to attend when it took place. The DEL would probably have to make the same presentation again to the Committee to keep them breast of everything that it was doing.

The Chairperson thanked the DM for her words, as they would be enabling an environment of collaboration. It was important that this Department was efficient, as it had a critical role in the process of ensuring that the unemployment rate, especially among the youth, was curbed.

Department of Employment and Labour: First quarter performance

Mr Thobile Lamani, Director General (DG): National Department of Employment and Labour (DEL), started by outlining the strategic objectives for the quarter. The Department planned to strengthen occupational safety, promote equity in the labour market, protect vulnerable workers, strengthen multilateral and bilateral relations, contribute to employment creation, promote sound labour relations, monitor the impact of legislation, and strengthen its institutional capacity.

The Department had 19 planned indicators, 18 of which were targeted for the first quarter. It had achieved 15 of the 18 indicators, putting it at an 83% overall achievement. The reason it had not achieved its goal of protecting vulnerable workers and promoting sound labour relations would be apparent in the presentation.

Regarding the performance per programme, the Department had achieved 100% of its administration; 50% of its inspection and enforcement services; 100% for public employment services; and 86% for labour policy and industrial relations. A comparative analysis for the first quarter and the fourth quarter for the 2018/19 financial year showed that there had been an improvement in achievements per programme, from 72% in the previous quarter to 83% in the current quarter.

For inspection and enforcement services there were a couple of provinces that seemed to be trailing. Gauteng, Mpumalanga, the Northern Cape and the Western Cape were all at 50% or below. Although there were some provinces that seemed to be trailing when it came to inspection and enforcement services, all the provinces performed well on public employment services with a 100% overall achievement.

Progress and challenges


For strengthening the institutional capacity of the Department,  the target was to achieve 100% of the implementation of the activities mapped for the first quarter. All the mapped activities for quarter one were achieved with 100% success.

Another goal was to have one annual financial statement (AFS) by 31 May 2019. The AFS was completed by the National Treasury and Auditor General’s (AG’s) due date. There was also a target to have all cases of irregular, fruitless, wasteful and unauthorised expenditure detected in each financial year, and to have them detected and reported monthly to the Accounting Officer.. This goal was achieved, with irregular expenditure amounting to R22 008.45 being discovered under six cases that were investigated. Fruitless and wasteful expenditure amounted to R360 547.06 under 50 cases. There was no unauthorised expenditure.

Inspection and enforcement services:

The goal for promoting occupational health services to protect vulnerable workers and strengthen occupational safety protection, was to inspect 55 173 employers. This was not achieved as only 52 184 employers were inspected to determine compliance with employment law. The reason for the variance was the high Departmental vacancy rate in the provinces. To remedy this, the branch was monitoring the filling of vacant posts to ensure that these were occupied.

There was a target of serving 85% of employers deemed non-compliant with notices within 14 calendar days of an inspection. This was achieved. Of the 52 184 employers inspected, 9 770 were non-compliant, and 9 729 (99.6%) were served with notices within 14 calendar days. There was a target to refer 60% of the non-compliant employers who were served with notices for prosecution.  This was achieved. Of the 9 729 employers served with notices, 2 024 failed to comply with served notices, and 72% were referred for prosecution. The branch strives to ensure that all the cases of non-compliant employers are referred for prosecution in order to ensure social justice for vulnerable workers.

There was target of 70% of reported incidents to be finalised within the prescribed time frames. This target was not achieved, as only 62% of the reported incidents were finalised within the prescribed time frame. 185 incidents were reported and 115 were finalised within the prescribed time frame. The reason for this under achievement was again the high vacancy rate in the provinces. To remedy this, the branch was monitoring the filling of vacant posts to ensure that these were filled. Only five of the nine provinces achieved their targets.

The Department had managed to claim money that was owed to workers. This was an amount of R442 798 under the Basic Conditions of Employment Act, and R5 486 223 on issues relating to the National Minimum Wage. These had been reported directly by workers to client services officials in the Department. Cases reported through inspectors had resulted in the recovery of R392 872 from 220 cases under the Act, and R6 231 652 under the National Minimum Wage.

The highest number of reported occupational health and safety incidents took place mainly in manufacturing, with 42 incidents making up 22% of the total. Construction had 35 incidents (18%), and agriculture had 23 incidents (12%).

Public employment services

The target for contributing to decent employment creation through inclusive economic growth was to register 161 000 job seekers in the Employment Services of South Africa (ESSA) per year. This was achieved, as 220 851 work-seekers had been registered. The reason for the variance was because of the high unemployment in the country and the number of advocacy campaigns conducted. To remedy this, the Department was going to improve the quality of job seeker registration and would develop an alternative intervention.

There was also a target of 50 400 registered job seekers to be provided with employment counselling per year. This was achieved, with 70 086 registered job seekers being provided with employment counseling. The reason for the variance was because of the introduction of the Situation Specific Evaluation Expert  (SPEEX) assessment tool and the improved advocacy campaign.

The Department also wanted 10 800 employment opportunities filed by registered job seekers per year. This was achieved, as the Department had 18 126 registered employment opportunities filled by registered work seekers. The reason for this variance was a result of improved employer conformation of placements, and an implementation of employer strategies.

Regarding placement by economic sector, only 3 308 (18%) opportunities filled by registered work seekers were classified by economic sector, and 14 818 (82%) were not classified. Most of the placement on opportunities classified by economic sector were from manufacturing (958), education (542), and safety and security (453). Challenges were mainly a skills mismatch and the fact that a number of registered job seekers lacked the required experience. To remedy these challenges, the Department wants to profile job seekers on the ESSA database. It also wants to establish employment schemes for low-skilled job seekers. It also wants to provide funding from the Unemployment Insurance Fund (UIF) and the Compensation Fund (CF) for the implementation of the of employment schemes.

Statistics for placements by age group were that a total of 18 126 work seekers were placed, and 12 631 (70%) were young people aged 15-35 years. The remaining 5 495 work seekers were aged 36 years and above.

The target for providing work opportunities for people with disabilities was to get 25 disabled persons employed by 30 June 2019. The target was achieved, with 35 disabled persons employed by that date.  The reason for this overachievement was the establishment of a factory in Limpopo, and new sales orders secured.

Labour and industrial relations:

To promote equity in the labour market, the target was to develop policy instruments to enhance the implementation of the Employment Equity Act by 31 March 2020. To do this, the 2018/19 employment equity report and public register had to be published by 30 June 2019. This target was achieved by the prescribed date.

The target to have one annual implementation report submitted to the Minister for sign-off by 30 April 2019 was achieved.

Another target was to have all collective agreements extended within 90 calendar days of receipt. This target was not achieved, as there were three collective agreements, with two of the three being extended within the 90 days, and the other extending longer than the 90 days because of a delay in submitting additional information by bargaining councils.  To remedy this, the Department was going to consult with the affected bargaining councils on how to draft agreements before submitting them to the DEL.

The Department wanted to have all labour organisations’ applications for registration approved or refused within 90 calendar days of receipt. This was achieved, as all 45 applications were responded to timeously – 38 refused within the time frame, and seven approved.

The Department wanted a monitoring report submitted by the end if the first quarter. This target, a directive in terms of section 19(1)(b) of the Labour Relations Amendment Act, had been achieved. Two annual labour market trend reports -- the Job Opportunity and Unemployment in the South African labour market, and the Annual Labour Market reports for 2018/19 -- were produced and submitted to the Chief Director by the June due date..

Mr Lamani said the Department’s allocation (less transfers) for the quarter was R2.126 billion. Expenditure (less transfers) had amounted to R412 million (19.4%), leaving a balance of R1.714 billion for the rest of the year. Compensation of employees (CoE) had accounted for just over R300 million, or 21.6% of the original R1.292 billion appropriated for CoE.


Mr M Bagraim (DA) said that many of the entities of the Department had been doing poorly, and he had expressed this through the various letters he had sent to the Department.  He wanted to know, with the jobs that had been created by the Department, how much it cost per job to be created. He suggested that all of this could be cheaper if the DEL just supported small businesses.

Mr X Ngwezi (IFP) commented on the mismatch of skills in the country. This was not something new, and one would have thought by now that this would be something where tremendous strides would have been made to solve this issue. He wanted to know if there had been collaborations by the Department to curb this problem. There were people who were being trained for skills that were not required -- some of them through government funding. What was the Department doing to help those people? He also commented on the issue of people not having the required experience. Was this inexperience also related to management positions?  It should not be still a problem, as it isolated people who needed work. Even if it involved management positions, not allowing the youth to partake at this level was a way of gatekeeping them from positions that mattered. The youth must be familiarised with those positions, as they also would need to fill them in the near future. He also wanted to know if this problem was mainly in the public sector or the private sector.

He regarded the number that the Department had reported on placements was too little. What was preventing the Department from placing a bigger number of people in the learnership programmes? Was it because they were not registered in the job seekers’ registry?  Considering the nature of these placements, and the people that they were targeting, he was keen to find out why the Department was not targeting places of higher learning like universities and technical and vocational education and training (TVET) colleges, where people were actually trained. This was a missed opportunity, because what tended to happen was that young people after graduating went home, and some of them were from rural areas. It became even harder to have them registered when they had gone to their homes, because they did not have access to the internet to make the necessary applications. This was something that could easily be addressed if the Department targeted them where they got their education.

He suggested that the same principles that applied to job seekers in the country should be applied to foreign nationals seeking employment in South Africa. They should be placed where they were needed, not where they wanted to be, because what ended up happening was that there was a concentration of the same skill in the same area when it was needed somewhere else in the country. Foreign nationals should be placed in the areas where they were needed.

Adv T Mulaudzi (EFF) wanted clarity on the indicators for the first quarter. The Department had said it had 19 indicators for targets, and 18 of those were set for the first quarter. He wanted to know if that meant that for subsequent quarters, it was going to deal with only one other indicator.

He said the inspectorate was not very visible, especially in a province as big as Gauteng. As a result, prosecutions were minimal in the province. In the context of occupational health and safety, little was happening in the mining provinces. The shortage of inspectors meant not much was done in places where the need was. He wanted to know if there was anything that the Department was doing to assist struggling provinces to meet their own targets, even if it meant deploying some people from the national Department.

Ms N Nkabane (ANC) also expressed concern on the underperformance of the provinces, and wanted to know what the causes were. Was it perhaps because they lacked the human capital required to fulfil those roles?  What consequence management was being applied to deal with underperformance?

The Chairperson referred to the critical unemployment situation in the country. For the Committee to be able to hold the Department to account, it had to know what was going on. She criticised the lack of detail in the presentation, and said Members should not be asking general questions, but rather ones referring to specific projects. The presentation had been set in broad strokes, not making a specific breakdown by region or by project. She wanted this detail so that she could go on site to see if there was actual progress being made by the Department. In its current format, the presentation by the Department did not provide her with the information to do this.

She said the provinces had to attend these meetings to account for themselves. As much as the Director General (DG) was the chief administrator, and therefore liable for the shortfalls of his Department, the provinces must be there to account.

Department’s response

Deputy Minister Moloi said she largely agreed with the Chairperson’s comments. The reports could be more explicit with regard to the projects that they were reporting on. It had to be possible to see which sector a set number of jobs came from -- not just presenting on the jobs that had been created, but where were they created. She also conceded that the numbers the Department had reported were too low, but it was working hard to improve them.

Mr Lamani responded to what the Chairperson’s comments regarding the performance of the provinces. He said that there was a system of review, where the Department reviewed the performance of the provinces, and the Chief Operating Officer (COO) would elaborate on the processes that were in place for consequence management.

With regard to the low numbers that the Department had set and achieved, the DG said he did not want to say that there were no resources, but the targets that the Department had set for itself were based on what it could do within its given budget.  It took underperformance seriously, and so it was a matter of planning and strategising properly so that all work was executed properly. Staff in the provinces were not lazy -- they were just not good at planning, and hoped that by the grace of god everything would turn out fine.

The Department did have bilateral agreements with other government departments and the private sector. In fact, it had just finished a pathway agreement with Harambee, facilitated by the project management office in the Presidency dealing with employment issues. Through these collaborations, the Department could place the five million people registered in its database. There was also an agreement with the Department of Higher Education and Training (DHET) to have access to people that had graduated that might need placement. The Department had also partnered with the Sector Education and Training Authority (SETA) on the issue of skills mismatch, as they were more familiar with the matter. The point was to make sure that through these collaborations, people were placed where they were needed. For example, in TVET colleges, students were partnered with the sectors that they were studying to better equip them with the necessary connections for employment opportunities.

Gauteng, the Northern Cape and the North West were mining areas, and the DEL did not have the jurisdiction to regulate how they were operated -- that was the role of the Department of Mineral Resources. If employees lodged a formal complaint and the employer had to corroborate, it was only then that the Department would have the standing to intervene.

He said would beg to differ on the matter of the visibility and efficiency of the inspectorate. Because the number of inspectors themselves was low, that meant that the number of cases they were able to process would also be low.

He told Adv Mulaudzi that the Department would continue to have 19 indicators throughout the financial year. The reason why the first quarter had 18 indicators was because one indicator was not scheduled to be completed in the first quarter. 

If the Committee wanted to have documents with all the sectors and figures, these were available and could be made available to the Committee as supplementary information to what was in the Annual Performance Plan.

With regard to the high number of job seekers and the number of placements that the Department had made, there seemed to be a big discrepancy. The number was too low. He agreed with the points made by the Chairperson and Mr Ngwezi, and said the remedy came down to making good collaboration with other Departments.

Mr Lamani said the costs associated with the Department being responsible for making placements; were actually very low. The reason for this was that the Department did not charge management fees, something that contributed to the low cost. The DG added, however, that the Department was working well with others to create employment opportunities, and that certainly one of the best ways to do this would be to empower small business enterprises so that they could employ people on their own, and this would have no costs for the Department. It was now working closely with the private sector to ensure that this happened. In fact, it regularly holds meetings on a monthly basis with the President to ensure that this occurs.

The Chairperson commented on the DG’s statement that the provinces were not lazy, but did not know how to plan. She understood why Mr Mulaudzi had been agitated and said they were lazy, because it could not be a sufficient justification that they just could not plan. These were people who were hired and deemed to know the job, if they did not know how to plan to execute their jobs properly, then they could be said to not know how to do their jobs.

Ms Aggy Moiloa, Deputy Director General: Inspection and Enforcement Services, DEL, said that country-wide, the DEL had just under 1 800 inspectors, and they serviced about 16.3 million employed people.  There was a clear disproportion here, so inspectors could not be expected to cover every aspect of the matters that were sent to them. The work that the inspectorate did was focused on sectors that were high risk. These sectors were informed by the Department’s administrative data, as well as supplementary information from relevant structures like the Commission for Conciliation, Mediation and Arbitration (CCMA). The Department had also bought about 150 cars to assist inspectors, and to improve on the issue of visibility.

Mr Ngwezi wanted to find out if the Department was doing something about the limited number of inspectors available. Would it be possible to have them placed directly at the institutions that require them, as it was clearly not possible to have them at all institutions, because of their small numbers. Perhaps they could be placed in the sectors that had been deemed to be high risk.

Ms H Jordaan (FF+) recounted a previous meeting, where the DEL had apparently said they would have meaningful a engagement with the DHET, and wanted to know if this had in fact taken place.  She also asked if there was any report about the impact of the minimum wage on living standards.

Adv Mulaudzi wanted more clarity on the issue of consequence management, as not enough had been said by the Department on the matter. He also commented that the statistics that were used by the DEL resembled those of Statistics South Africa, and wanted to know if this was because of collaboration between the DEL and Stats SA. He said he also wanted to see the quarterly budgets to check whether the Department was meeting its quarterly targets.

Deputy Minister Moloi said that the COO was supposed to have spoken on consequence management before Members could ask questions for the second time around. The Department was not running away from the question, it had just not had the opportunity to clarify its position.

Ms Marsha Bronkhorst, COO, DEL, said she was already dealing with the matter. She had already issued letters on underperformance, indicating that should this persist, there would be a delegation of their duties. This was a process, and as with many processes, it would take time to resolve the situation completely.

The DG commented on the issue of statistics and the relationship that the Department had with Stats SA. He said the Department collected administrative data, which meant that data would always differ slightly, because for the Department it was actual data, while for Stats SA it was data generated from a sample. Nonetheless, the DEL worked closely with Stats SA because their data resembles that of the World Trade Organisation (WTO). They were gearing towards recognising self-employed people as employed, since they did get a form of salary. This was what had been adopted in India.

The National Minimum Wage report had not come out yet. Once it came out, it would be made available to the Committee.

Regarding possibly having inspectors placed at institutions, particularly those that were in high risk sectors, Mr Lamani said they had been placed under supervision by the DEL, so that it could be on high alert about what was going on there.

Placing foreign nationals in areas where they were needed was a complex issue. Migration in general was complicated, because it included an array of other factors like the registering of visas with the Department of Home Affairs. The DEL was working on introducing a national labour migration policy that would hopefully deal with issues of this nature.

Deputy Minister Moloi asked if there could be a brief discussion about an ongoing court case regarding truck drivers that might have an impact on labour migration policy. However, it decided that because there were some ongoing issues in the case, it was perhaps worth waiting for it to be concluded before presenting it to the Committee.

The Chairperson observed that there needed to be comprehensive work done on the issue of labour migration. Refugees should be able to find jobs in the country, and this did not have to apply only to high paying jobs. Even low paying entry-level jobs like those of cleaners must be addressed. There must be a way of making sure that foreign nationals were employed, but not at the expense of citizens. She understood that this was a sensitive issue, but it was one that needed to be addressed otherwise it would continue being a touchy matter.

Productivity South Africa: First quarter performance report

Mr Mothunye Mothiba: Chief Executive Officer: Productivity South Africa, started his presentation by looking at two areas central to the entity -- enterprise development and sustainability, and job creation and preservation.

The main highlight during quarter one was that 977 small and medium enterprises and cooperatives on enterprise and supplier development programmes were supported through productivity and operational efficiency enhancement programmes, against a target of 813. 15 of the 977 were companies that ranged from small to large corporates in industry sectors, including in the special economic zones (SEZs) and industrial parks, supported through the Workplace Challenge Programme.

He reported on the areas on non-performance:

Programme one: Administration (Marketing and Communication)

The target was to host three productivity awards and regional milestone workshops. This target was not achieved, as only one instead of the targeted three were achieved, due to budgetary constraints. To remedy this, the outstanding awards and regional milestone workshops had been moved to the second quarter in order to combine them with the Transnet roadshows for more impact and cost savings.

Programme two: Productivity Organisational Solutions and Work Place Challenge Programmes (POS)

The target was to have 60 Education, Training and Development (ETD) practitioners and Skills Development Facilitators (SDF) trained by the end of the quarter. This was not achieved, as only six had been trained, because there was no operational budget to make sure that it happened. To remedy this, the entity was planning on collaborating with the DHET for TVET training in Kaizen.

The target for the entity was to have 813 enterprises capacitated to improve productivity and business efficiency. This was achieved, as the number of enterprises capacitated was 977. The reason for the variance of 164 wasdue to Productivity SA’s strategic resolution being activated to redistribute targets into the three regions where it had a physical presence -- Gauteng, the Western Cape and KwaZulu-Natal.  As strategic projects resonate in these provinces, training was over-subscribed to during youth month. Productivity SA would redistribute target-setting at the end of quarter two, after considering the funding situation at that point.  Further to this, Productivity SA had de-activated the acceleration mitigation plan to ensure that targets and funding balanced out over the duration of the financial year.

Programme three, which was aimed at supporting enterprises facing economic distress and initiatives aimed at preventing job losses, was not conducted as the were no operational funds to make that happen.

In Programme four (generation and dissemination of productivity related research and statistics) the target was to produce one statistical report on productivity and competitiveness. This was achieved.

Financial performance

Productity SA was meant to receive R13 million from the Department, and this amount was received in full. However, there were issues pertaining particularly to turn around solutions. The programme was suspended because there were no funds to complete them. Usually the entity received funding from the Department of Trade and Industry (DTI), but this money came in only during the second term so that meant that some programmes had to be suspended. It also meant that these projects would be done under the second quarter. This had affected the entity, as it was now picking up a deficit of R6.5 million.

Commission for Conciliation, Mediation and Arbitration: Quarter one performance  

The Commission for Conciliation, Mediation and Arbitration (CCMA) said it had set itself the target of conciliating 100% of all cases within 30 days of the date of receipt of the referral, excluding agreed extensions. They fell just short, dealing with 32 522 (97%) of 33 632 cases heard within the 30 days. The under achievement was due to operational and administrative errors, so improved internal controls had been implemented at the regional level in order to mitigate the risk of recurrence.

It had come within a whisker of sending all arbitration awards rendered to parties within 14 days of the conclusion of the arbitration proceedings (5 492 of 5 531 awards). Again, improved internal controls had been implemented at the regional level in order to mitigate the risk of recurrence.

The business and professional services sector remained the highest referring sector, at 29% of total referrals.  Private security was the second referring sector, with 14% of total referrals, followed by the retail sector with 11%.

The entity’s ‘vulnerable programmes’ focused on advocacy, educating and capacitating targeted vulnerable groups on their employment law responsibilities and rights, directly contributing towards the realisation of legislative objectives. The vulnerable groups were categorised by sector, gender, work arrangements and income streams. In the first quarter it had conducted 485 outreach services, including activities involving awareness raising, capacity building and social justice blockages, resulting in 10 661 intended beneficiaries being capacitated.

Financial performance

Ms Ntombi Boikhutso, Chief Financial Officer, Productivity SA, said that the entity had a budget of R1 billion for the financial year. In the first quarter, it had used about R257 million, which R12 million below the targeted amount, with an overall variance of R12 million. There was an increase in case-related costs, due to the increasing number of cases that the entity was taking on. Despite this, the entity had still performed within its operational means.


Adv Mulaudzi asked why some of the indicators for Productivity SA showed a zero.  Regarding Productivity Organisational Solutions, the reason for not achieving that target was due mostly to the lack of an operational budget. He wanted to know if any money had been budgeted for that project in the first place, or if the budget was taken by the Department. He asked if Productivity SA had a chief financial officer, saying that this was in the context of the CEO making a presentation on financial statements himself, instead of it being done by the CFO. He said a more detailed presentation was required, with a breakdown of the budget and costs per programme.

With regard to the CCMA he wanted to know how long a rescission of judgment took. There were variances for the quarter under review -- did this mean that the Department was giving the entity more money than it should be getting? If so, the money could be directed to other areas within the Department that needed it.

Ms Jordaan she wanted to know if the Department, perhaps with the help of the CCMA, could remedy the problems regarding operational budgets for programme two. This was important because there were industries that required that programme to be operational, such as South African Airways and a plant that risked closure in Saldana Bay. There was something that needed to be done about it, otherwise people would continue to lose their jobs.

Ms Nkabane said that in 2015 the CCMA had a performance of 91%, but in this financial year that number had plateau-ed at 75 %. What was the reason for this decline? She also wanted clarity on the strategic objectives of the CCMA, as the Commissioner had said that the entity was taking a strategic, rather than an operational approach, to targets.

Was there any legislation that enabled Productivity SA to obtain the necessary amount of money that would allow it to achieve its targets? She also wanted to know how far they were in the finalisation of the transfers from the Unemployment Insurance Fund (UIF) -- how far was the memorandum of agreement?

The Chairperson wanted to find out what the Department did when procedure was not being followed. She made reference to a spokesperson of the National Union of Metal Workers South Africa (NUMSA), who had said they had not been consulted on a labour issue relating to their clients. She wanted to find out what the Department did in such cases. She wanted to see a break down of statistics so that the Committee could see the trends in employer compliance and non-compliance.

Did the Department have a relationship with the Department of Small Business Development (DSBD)? She was asking this because Productivity SA said that they wanted payments to be made within 30 days. This was also a domain of the DSBD, so she wanted to know if there was any agreement between the two departments on how to do that.

Department’s response

Mr Lamani responded to the question of financial constraints leading to incompletion of targets. He said that the Department got some of its funding from the DTI. This money comes in late, only in the second quarter, which meant that the Department was playing catch up with some of its strategic objectives the first quarter. That amount was part of the budget that was meant to cover those costs, so it had been budgeted for.

On the question of why Productivity SA’s financial report was being presented by the CEO instead of the CFO, Mr Mothiba said the entity did have a CFO. However, the CEO was accountable for everything that was happening under him. For the more technical questions, the CFO advises the CEO.

The entity was working closely with the CCMA because a number of people were being retrenched currently, particularly on temporary relief. There were quite a number of companies that were being utilised presently for skills training. Once funding fully came through it, would allow Productivity SA to have a much broader stroke of effectiveness on the matter. Unfortunately, not everyone would have been saved at that time because of the lateness of the funding.

He commented that the DEL did not have a relationship with the DSBD because it was not responsible for compliance mechanisms for employers.

The CCMA commissioner first responded to the question relating to timelines for rescissions. The timeline starts from the date that the rescission application has been received, and after that there would be five days in which the opposing party had to reply to the rescission. The commissioner would have 14 days to make a ruling.

With regard to assisting with what was happening in Saldana Bay, this linked with what was happening with SAA with regard to what the CCMA could in that situation. There was a proactive approach, where they would contact the affected parties directly and ask them if they needed any assistance. The reason why they have to ask instead of intervening was because the entity was not empowered to make that kind of determination. There first needed to be an application for that to happen. He also confirmed to the Committee that the SAA matter would be dealt with by the CCMA.   

There was not necessarily a decline in the performance of the CCMA. If one was to look at the targets not achieved in 2019 and those not achieved in the previous financial year, they remained the same. What the entity had chosen to do was to have fewer strategic goals so as to ‘stretch’ what the entity could do. It was now concerned with setting itself fewer but harder targets that were strategically meant to address many of the issues that it had to deal with. It did not set itself the same targets every year because these targets ended up being too easy to achieve.

The CFO clarified that the organisation did not have more that it needs. There were indeed areas where the organisation had underspent, but this was due to operational reasons that might have meant it was not appropriate to perform the tasks at that particular time. This was substantiated by the fact that there were some areas where the entity had overspent, and that there were varying factors that lead to differences in spending. The entity definitely did not have more that it needed.

The DG commented on the matter of possible retrenchments. The CMMA was already sitting with about 22 000 cases, and the proposed retrenchments at SAA and those happening at the plant in Saldana Bay were adding to that number. With regard to the funding of Productivity SA, the UIF would be funding the entity till the last quarter of this financial year. The Department had taken a decision to fund the entity fully, so they would be getting their funding directly from Public Employment Services. The UIF would then enter into an agreement with the Public Employment Services because the UIF had to fund public employment schemes, and Productivity SA still fell under such schemes.

The Chairperson talked about the importance of the DEL in addressing issues that were happening nationally.  The Committee would hold the DG to account for such matters, and she hoped the DEL had taken the concerns of the Committee to account. She also thanked the Ministry for being present and taking the concerns of the Committee seriously. She said she would like the DEL to address the issue of migrant labour in the country, as at the moment it was a very sensitive topic.

The meeting was adjourned.

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