Orientation workshop on core operations of Department & entities

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Employment and Labour

04 February 2020
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

As part of its orientation workshop, the Portfolio Committee was briefed by various entities of the Department of Employment and Labour. Presentations detailed the various labour laws, the mandate of the Inspection and Enforcement Services (IES) branch, as well as the mandate of the executive and advisory boards. All entities provided an overview of their respective roles, the challenges faced and their compliance and oversight procedures within the Department.

Issues of significance that were raised throughout presentations and discussions related to undocumented foreign nationals and issues of non-compliance by employers who did not adhere to South African labour laws. The issues faced by vendors were also noted. The Department and Committee Members both stressed the need for policy reform that was aligned to changing patterns within the labour market to ultimately promote development and job creation that would prioritise South Africans.

The Committee stressed skills development within communities which could also serve to assist the IES in fulfilling its mandate. The Department highlighted the various challenges it faced in relation to the National Minimum Wage (NMW) and the impact it had had on the alleviation of poverty and the conditions of living. It said the NMW had had a marginal impact on unemployment in the country, and very little to no impact on the agricultural sector. A decision had been taken to review the NMW on an interim basis, and the commission had recommended that it be increased in line with inflation.

The Department explained that equity plans were formulated by employers themselves, and not the Department. It was noted that in newly emerging industries, such as the e-hailing taxi services, the relationship between the employer and employee remained unclear. The conditions of what was constituted as child labour had been discussed. The Department and the Committee unanimously agreed that more strenuous action needed to be taken against those entities which did not adhere to South African labour laws and infringed upon the rights of employees, and emphasised the importance of collaboration between the various departments.

In the afternoon session, the Committee conducted four sessions with members from four branches of the Department.

Public Employment Services presented the branch’s operation and programmes. Members were eager to know about the Department’s plans for addressing the rising rate of unemployment during its drafting process of green and white papers. A Member asked about the impact of migration on labour market stability and urged the Department to review whether it facilitated creating jobs for South Africans. Concern was also raised over the lack of proactive and timeous responses from the government in handling applications submitted by job seekers to the Department. A distinction between concerns over xenophobia and considering the demands of poor South Africans was made.

The Committee was then briefed on how the Department managed its performance, as well as the various performance reports. Members did not ask questions in this session.

In the third session, the Committee was briefed about the Unemployment Insurance Fund (UIF) by its Commissioner. Questions asked included whether the UIF had sufficient funding to pay out retrenched workers at state-owned entities in the event of mass retrenchments, the relationship between the various entities and the Department, as well as the lack of records for some UIF contributors. One concern shared by the Committee was that presenters seemed to not understand the appropriate content to be included in a workshop.

The last item on the agenda was the briefing by Compensation Fund Commissioner. They heard that the Fund was funded from levies paid by employers. Employers were classified according to 23 classes and further sub-divided into 102 sub-classes, with each having its own assessment rate. This levy, however, could be reduced. Some employers may apply for a reduction of levies by demonstrating any mechanisms to reduce the danger exposed to employees.

Meeting report

The Chairperson said that the orientation workshop was being held due to various processes and challenges that were taking place in the labour sector. While workers had rights, it was important to remember that rights and responsibilities were very closely connected. Workers had a right to strike, but in doing so, certain steps needed to be taken. She introduced the programme facilitator, Advocate Luvuyo Bono, chairperson of the Essential Services Committee (ESC), who took over from her.

South African labour laws
Mr Virgil Seafield, Deputy Director-General: Labour Policy and Industrial Relations, Department of Employment and Labour (DEL), provided an overview of the various labour laws. These included:

  • Labour Relations Act of 1995 (Act 66)(LRA);
  • Basic Conditions of Employment Act 75 of 1997 (BCEA);
  • National Minimum Wage Act of 2018 (NMWA);
  • Employment Equity Act 55 of1998 (EEA);
  • Employment Services Act of 2014 (ESA);
  • Unemployment Insurance Act (UIA) and Unemployment Insurance Contributions Act (UICA); Occupational Health and Safety Act 85 of 1993 (OHSA); and
  • Compensation for Occupational Injuries and Diseases Act of 1993 (COIDA).

(See attached document for a detailed overview of the various acts.)


Dr M Cardo (DA) commented that South Africa’s labour legislation was too onerous and that there needed to be amendments, deregulation and a loosening of the labour market in law and regulation. He referred to the National Minimum Wage Act (NMWA) in particular, and asked when the Department last carried out a comprehensive impact assessment of all the laws which were housed within the Department, and what effect these laws had on the state of employment in the country. He asked if there were plans in place to revisit some of the legislation which currently governed South Africa’s labour framework. He asked what the latest situation was with the NMWA, and if a decision has been taken by the reviewing commission to increase the national minimum wage. Had the introduction of the NMWA in any way contributed to preventing increasing levels of unemployment in South Africa?

Mr Seafield answered that the Department had conducted research on the impact of the national minimum wage, and had also considered the broader picture in relation to the impact it had had on the alleviation of poverty and the conditions of living in its research. This needed to be reviewed again, and the National Minimum Wage Commission was currently in the process of conducting this research. The Department had initially wanted to release certain figures on this issue from Statistics South Africa, but due to the sensitivity of this information decided against it. He added that the figures revealed that there was a marginal impact on unemployment in the country. There were different impacts on employment in the various sectors. For example, the national minimum wage would not have the same impact on farm workers as it may have on domestic workers. He stated that the national minimum wage had very little to no impact on the agricultural sector.

Mr Seafield said it depended on who was spoken to, and when, regarding the onerous nature of South Africa’s legislation.  He referred to the International Monetary Fund (IMF) and the World Bank in relation to this. The onerous nature was simply about hiring and firing workers. The World Bank had indicated that the fundamentals of South Africa’s labour legislation were sound. A decision had been taken to review the national minimum wage on an interim basis. The commission had recommended that the Minister of Employment and Labour, Mr Thulas Nxesi, increase the NMW in line with inflation, and not by the 5%. Mr Seafield emphasised that the representation of the parties in the National Minimum Wage Commission had an equal contribution or share between organised business and the community, and that those parties had agreed on the recommendation to increase the NMW by 5% as an interim measure.

The Chairperson asked if it was acceptable in South Africa for children to be used for labour, and if there was any way that this legislation could be reviewed?  She said there was a commission which had been assigned to deal with issues relating to the minimum wage, and asked about the progress the commission had made with its report, and if the Committee would see the report during the course of the year. She asked about learnerships and said that for the duration of the learnership, young people were left to navigate their own survival and that some of them were taken advantage of. Should protecting their rights be the responsibility of unions, or the labour inspection and enforcement entity?

Mr Seafield referred the question about learnerships to Mr Sam Morotoba, Deputy Director-General: Public Employment Services (PES), to answer. He said that the report would be given to the Committee.

Mr Seafield said the law dictated that no child should work, particularly if the type of work had an impact on the child’s health, safety and schooling. The law also indicated that no child should work up until the age of 16, and should provide a qualification. For example, a child should not work in the agricultural sector, or subsistence agriculture, with the exception that this type of work did not have a negative impact on the health and wellbeing of the child.  A child should not be used to work in a spaza shop that was run by his or her parents. He did not think there was any need for amendment to child labour laws in the country. He believed it was a question of enforcement. Child labour was by its nature a hidden form of employment and while a complaint may be lodged about a specific entity, when this complaint was attended to the entity was not found to be in contravention of the child labour laws. He stated one needed to be vigilant about child labour, but reiterated that child labour laws did not need to be amended unless to make provision for the protection of children in specific circumstances, such as child-headed households. This situation should not exist, as children should be at school. Such situations needed to be dealt with by extending the services of the social security net to these households.

Mr Morotoba offered some context on learnership opportunities, saying that in the area of development of individuals, much loss had occurred. Prior to 1994, there had been what was called the “Manpower Development” in Bophuthatswana, Venda, Ciskei, Transkei, and many more areas. There had also been a loss experienced under the central government which covered the four provinces, such as the Manpower Training Act and the Career Guidance and Placement Act. Loss was experienced in various sectors, such as the building industry relating to the Black Builder’s Training Act. Post-1994, what government did was to amalgamate and repeal those pieces of legislation and in its place it had emerged with one law, which was the Skills Development Act of 1998. This act sought to combine all the skills development interventions which were targeting mainly those who were employed and those who were not in schooling systems, and to regulate how these individuals should enter into employment. The Manpower Training Act and the Career Guidance and Placement Act initially had their own labour relations dispensation, which meant if learners experienced any issues at work, their grievances were dealt with separately. The conditions of employment, such as remuneration for those individuals doing learnerships, was aligned to the Basic Conditions of Employment Act, except if they were included in the collective bargaining agreements as per the Labour Relations Act, and this amendment was done.

In 2010 a proclamation was made to transfer skills development functions to the Department of Higher Education and Training. The President issued an instruction that this should be done in line with the law. It took four years to separate some functions from skills development and retain others. Apprenticeships were also regulated in line with the Basic Conditions of Employment Act and its provisions. However, there had been a lack of understanding of some of these provisions and the strengthening of them. Since the Construction and Education Authority (CETA) and the Sector Education and Training Authority (SETA) had left, the Department had been a weak liaison through the departmental inspection to deal with these cases. Inspectors dealt with reports of abuse as part of their usual inspections, and this was perhaps why it had not been reported as abuse.

There were other areas which were complex, such as the internships, and many other skills had emerged which were not necessarily learnerships. He referred to Public Works Programmes (PWPs), where the Minister of Employment and Labour issues a determination that regulates the conditions of employment, such as remuneration. Mr Morotoba indicated that there had been serious instances within some Departments where the sectoral determination was not adhered to, and despite the exemptions, Departments had applied for variations from the sectoral determination that had been issued. Despite the Minister issuing a determination, some companies still flouted these regulations. He said that the Department of Higher Education and Training, as well as the police, should work together.

Ms N Nkabane (ANC) welcomed the presentation and said that past labour laws had promoted separate development. When the ANC came to power during the democratic dispensation in 1994, the newly elected government had reformed some of the policies in order to ensure that some gaps were filled. The mandate of the Department of Employment and Labour was to ensure that jobs were created and preserved to address the current challenge of unemployment. She asked if it was not time for policy reform that would ensure the current crisis that South Africans faced was addressed. Would the current legislation address these challenges? She was happy that the Basic Conditions of Employment Act also addressed the informal sector. Since there were provisions for child labour, how should the Department ensure that no exploitation took place in this sector, as some employers may take advantage of children who, for example, featured in advertisements and thereby exploited this labour law provision? What should be done after the advisory board compiled a report for the Minister? What measures should be put in place to ensure that the private sector complied with labour laws? What role should the Portfolio Committee play, and how should it strengthen its oversight role? What was the role of Departmental officials, as such critical reports could not simply be compiled without any action being taken? What was done when inspectors discovered issues of non-compliance, and who resolved these matters?

Mr Seafield replied that each piece of legislation was preceded by a socio-economic impact assessment study, which was required before the proposed legislation came to Parliament. The changing nature of work also impacted on whether there was a need for a change in legislation. The DEL had to look at the changing nature of work and if the legislation was aligned with this. The notion of the Employment Equity Act was predicated on voluntary compliance, so the law did not compel any employer to change his employment patterns. The law required that the company and its employees develop an employee equity plan and report on this. He emphasised that the equity plan was created by the employers themselves. Sectoral targets had been set to ensure a faster pace for change, and the cost of non-compliance to the employers’ own equity plans had also increased.

Mr Seafield said that more could be done and that South Africa should be prescriptive with its legislation. The role of the Portfolio Committee should be to assist the Department and ministry in relation to the work that it did.

Mr X Ngwezi (IFP) commented that the reality of the working conditions of private security was not good. He referred to a programme which he watched on a news channel, which dealt with private security. The security personnel were being underpaid and some were found to be under age. The labour laws also referred to foreign nationals. He asked if it was possible to embark on policy reform based on the fact that South Africa faced high rates of unemployment. These policy reforms should prioritise South Africans, although he was not saying the current legislation did not prioritise citizens. He referred to a Ghanaian labour law which did not allow informal trading by foreign nationals, and stated that South Africans were afraid of tackling issues such as these out of fear that they may be called xenophobic. In his opinion, it would not be xenophobic to declare that out of 100 jobs, 80 or 90 would be given to anyone who was legally in the country. He asked about the gaps in the private security industry and wanted to know what should be done to remedy this.

Mr Seafield responded that the private security sector had established a bargaining council for these workers. The Department had struggled to do this for years, but an agreement had now been reached. He pointed out that industrial action in the private security sector was highly conflictual and had led to the loss of life in the sector. With the current intervention of the Commission for Conciliation, Mediation and Arbitration (CCMA), one had not seen that type of adversarialism in the private security industry. The country was reaching a point where it had dealt with the issues facing the sector. The Private Security Act sets the criteria which qualifies one for the position and sets how to deal with issues the sector may be faced with.

A Committee Member said that there had been complaints, particularly from organised business, that South African labour laws were too rigid. He asked if these concerns had been addressed, because it seemed as though once an amendment had been made to a labour-related act, a threat of withdrawing investments lingered, which was an impediment to the economy. Surely there had been an international labour standard and benchmarking that had been done in relation to the promulgation of any act? This benchmarking had been done in a way that was aligned with international economies that were similar to South Africa. He referred to the National Economic Development and Labour Council (NEDLAC) report, and asked if small businesses were represented at the NEDLAC level. Most of the matters that affected small businesses may not affect organised businesses.

Mr Seafield said that each piece of legislation was preceded by a socio-economic impact assessment study which was required before the proposed legislation came to Parliament. The DEL was dealing with the rigidity of the labour market and the notion of variation which was built into the legislation. There was a mechanism within law that dealt with an employer’s inability to pay the minimum wage.

Mr Morotoba added that the new industries which were emerging must be recognised, where the employer and employee relationship remains unclear. He referred to a situation where taxi and Uber drivers were fighting, which resulted in the death of Uber drivers who worked via an application which was registered remotely. The employers in this case would not recognise themselves as such, and instead would state that the Uber driver had not been employed by them, but had been driving their own car. One had to recognise the changes in employment patterns and revisit the laws.
Mr Morotoba said that other questions would be answered during the presentations that would be made later in the day.

Mandate of Inspection and Enforcement Services
Ms Aggy Moiloa, Deputy Director-General: Inspection and Enforcement Services (IES), said that Ms Nkabane had raised the issue of job preservation, and IES was at the crux of this. The mandate of IES was to ensure that jobs were sustainable, safe and that remuneration of workers was aligned with what the law required. There were 1 880 inspectors across the board, and the IES was in the process of recruiting 500 new inspectors who would serve as the preventative arm of the Compensation Fund. IES also ensured that the various labour laws were complied with.

Ms Moiloa said that when inspectors went out on field work, they asked how many individuals were employed and how many of them were foreign nationals. The payroll and status of foreign nationals who were in the country was also looked at to monitor whether they were legally in the country. She said some courts were very lenient when assisting the IES to hold non-compliant employers accountable. She gave an example of a situation where the IES sends a notice to a non-compliant employer, who also does not comply with the conditions of the notice. The IES then refers this to the magistrate’s court. She pointed out that an admission of guilt fine costs only R500. Wholesalers and retailers such as Shoprite, with an excess of 25 000 workers -- which was the highest number in the country -- were also the biggest claimants for injuries. The IES recorded this information and targets sectors which present as high risk in this way.

Ms Moiloa referred to an earlier question on private security, and said the IES actively plans at a sectoral level to prepare for the challenges faced. She believed everyone should act as inspectors and report any irregularities that come to light.

(See attached documents for mandate, specialisation areas, legislation administered by the IES, composition of the branch, role of statutory and advocacy services, the statutory service structure and responsibilities, and internal and external stakeholders.)


The Chairperson commented that if the Department had visited and assessed a certain sector, children would not have died in pit toilets. She asked what the Department of Labour had observed about this sector, which was in an appalling state. Many had said the Minister should be recalled, but there were many issues which had not been considered. She asked how the DEL worked with the informal sector. She asked this was because the Department of Health had formulated a programme to revive and improve the health of learners. She used the example of a vendor who worked to generate an income for him or herself, and asked if the Department thought these vendors would agree to being regulated. Her concern was centred on the health and safety of these vendors, and she pointed out that the municipalities were getting away with murder as they were not creating an enabling environment for vendors. Had the Department ever gone to schools to see if learners would be interested in being inspectors in order to encourage development and job creation? She mentioned that the Offices of the Master of the High Court had been closed by the Special Investigating Unit (SIU) for two days, and asked if the IES was certain that they would never be subjected to this.

Mr Ngwezi asked how employers could be protected in the process of inspection and law enforcement. In the South African retail sector there were what was referred to as “China malls,” or shops. He asked if the IES had ever established a relationship with these stores, as he had met employees of such stores in Empangeni and Richards Bay who said they could not be released from work during the day for voting, which was a constitutional right. He pointed out that while South Africa appreciated the investment these store owners made in the country, they needed to comply with its laws. He was aware that there was a shortage of staff, but pointed out that the police department had gone the extra mile to establish Community Policing Forums (CPFs). The IES needed to reach out to individuals within communities to work with them and keep them informed about what took place in their respective communities.

Ms Moiloa said that when the IES received a complaint, they withhold the identity of the person and visit the workplace in question, where interviews were conducted with employees. These employees were chosen by the IES as it was aware that employers send workers who they know would say what the IES wanted to hear. Some employees were also afraid to speak in the presence of employers, so the Department had a particular way of gathering this information. Last year and the previous year, these malls in the Western Cape had been checked at random and a seminar had been held. The ambassador had also joined in at the seminar. She reported that all the employers were compliant with the legislation. Where challenges were identified, this group of employers were willing to comply. She said licences were also taken away from stores who refused to comply. Regarding the CPF, unions should play their part to sensitise the Department to places that were problematic.

The Chairperson asked if the Department thought it was correct for it or the Committee to introduce a bill that would deal with the regulation of foreign nationals coming into the country. Would it be necessary for the Department to provide skills to those who it believed would have the ability and capacity when investigating, since it may be challenging to identify fraudulent documents? The Department should set aside a fund or call upon the police or the Hawks to assist those who would specialise in checking that the documents of foreign nationals were authentic. She cautioned that political blackmail should not be tolerated, since it was always said that South Africa as a country was xenophobic. It hurt her that a bishop and human rights commissioner had been assaulted by foreign nationals in Cape Town, but this had attracted very little media attention. The Committee, as lawmakers, must ensure that the law was observed by foreign nationals as it was done in other countries, without succumbing to political blackmail.

Ms Moiloa said that there was an advisory council for Occupational Health and Safety, which had been put in place to advise the Minister. The Department collaborated extensively with the Department of Health on HIV programmes, which it also enforced. Some parts of its Department had been closed down by its own inspectors, in addition to it inspecting public facilities. She agreed that the cost of compliance was challenging to regulate in a meaningful way.

The Department had a school inspector programme which served to source a few interested pupils which it would fund through school and university and ultimately employ them. The Department took in a certain number each year, following which these learners were absorbed as inspectors within the Department. She referred to a Kenyan model that had been introduced to the Department. The Kenyan’s had introduced Occupational Health and Safety (OHS) as a subject at school. OHS permeated every environment, including the home and the workplace. She agreed with the Chairperson that factories were getting away with murder, and said the Department -- with the assistance of the Hawks -- had shut down four factories in the Fordsburg area in Gauteng. She added that all the owners were Chinese, and some had become nationalised South Africans. She highlighted that all the employees from three factories that were shut down had travelled from Malawi and were undocumented. She mentioned that in one factory, workers had been locked in, slept on the premises and even purchased goods from their employers. The conditions were very bad, and one of the groups of employers had appeared in court last week. The Department intended to make an example of those three factories so that it may act as a deterrent to other employers. She again mentioned that the cases the IES referred to the courts were not prioritised.

Mr Morotoba added that sometimes employers did not adhere to what had been set out by bargaining councils, which had at one point resulted in workers clashing with employers and setting trucks alight.

Executive board versus advisory board

Ms Yimla Singh, Acting Chief Director: Legal Services, DEL, explained the difference between the executive and advisory boards in relation to governance, accountability and power. The executive board was accountable for the performance and affairs of public entities and provided strategic direction to the entities’ management. The executive board also needed to ensure that public entities complied with legislation. The advisory board was advisory in nature and provided advice to the Minister on policy matters relating to legislation, and therefore had no legal obligation and could not be held accountable.

(See attached documents for more details.)

The program facilitator asked if the Committee had any questions for Ms Singh, but no questions were asked.

The committee adjourned for lunch.

Public Employment Services

Mr Morotoba briefed the Committee on the Public Employment Services (PES) branch’s operations, programmes, mandate, achievements and challenges.

The organisational structure of the PES was outlined, and the budget allocation for each sub-programme and its purpose was provided. The total budget allocation for 2019/20 was R611.198 million. He stressed that many of the PES programmes could be traced back to the 1960s, but still remained in force today.

Mr Morotoba described PES’s achievements. From 2014/15 to 31 March in 2019, 3.6 million workers had been registered and one million had been provided with counselling. The Department had placed 109 122 workers. He stressed that the skills base in the South African labour market often did not meet employers’ requirements and expectations, which caused the high level of unemployment.

The subsidies to designated organisations were provided. These organisations were Dreamhouse Workhouse, the Johannesburg Society for the Blind, the KwaZulu-Natal Society for the Blind, Itekeng Disabled Centre, Cape Mental Health, the Cape Town Society for the Blind, Pietermaritzberg Mental Health, the Kwazulu-Natal Blind and Deaf, the Institute for the Blind, and Employment Solutions for People with Disabilities.

The PES challenge, which was highly relevant to the skills shortage in South Africa as part of its mandate, was to report on unemployment in the country. He assured Members that the PES had all sorts of interventions in both the public and private sectors to address the issue.

He highlighted employment and migration, and said the three interventions the Department had to follow were in line with the International Labour Organisation (ILO), labour migration policy and employment schemes.

Mr Morotoba used an example of asylum permit immigrants. He said the Department of Home Affairs (DHA) currently had a five-year backlog of asylum seekers. There was a regulation that if an asylum seeker did not received a formal refugee permit in five years, the asylum seeker automatically had the right to work. He also mentioned that there were other types of foreigners in the country, such as irregular immigrant workers, those on intracompany visas such as Mercedes Benz workers, as well as foreign workers coming with new investors. The DHA allowed new investors to bring in up to 40% of staff members for the first five years.

On the linkage between employment and migration, he said that several issues that existed from pre-1994, but no longer fitted the current dynamic, such as the Mozambican nationals in the mining sector. A multi-Department meeting was to take place this week to discuss migration’s impact on the labour market, and suggested a green and white paper could be developed after the meeting. He urged the Committee to have a joint session with the DHA on the labour market, expressing his concerns about scarce skills and the “brain drain” effect on the continent.


The Chairperson asked what PES planned to do about the increasing high level of unemployment in the process of crafting green and white papers. She stressed that people were angry with the government as a result of unemployment and poverty. She asked what could be done to address the unemployment issue, especially among skilled young black South Africans. She enquired about the issues related to Home Affairs, as it seemed unclear to her. She commented that PES has not mentioned its plan on facilitating the growth of small businesses.

Mr S Mdabe (ANC) stressed the importance of coordination and collaboration in creating employment and, asked what the Department’s role in job creation was. He was concerned at the non-response and non-achievement in some projects launched by the government. He asked how these challenges would be addressed through the government’s intervention. He also said that the selling of commercial farms by private individual farmers had not been adequately assisted by the Department of Agriculture. .

Mr Morotoba responded that Department of Employment and Labour was a labour cluster. About what would be happening on employment during the drafting process of the green and white papers, he responded that the President had already conducted and overseen the process, and would make an announcement. Ministers would also be able to elaborate more in detail on agricultural or any other issues. He was not the person to answer that question, but he assured the Committee that a coordination framework had been created.

On what the Department and his branch should be doing, he responded that he had already made a suggestion to meet with DHA to discuss the impact of migration on the labour market. He suggested Members should meet with Parliament’s research unit, as it could greatly help them to understand the situation.

Regarding xenophobia, he said that his Department had its own processes of carrying out inspections, and these were not covered by the media in order to avoid negative publicity and allegations on xenophobia. He believed that this method had proved effective so far. His Department was working closely with the DHA on inspecting work places and ensuring all immigrants hired had papers. However, this information was not shared in the media.

He believed that constitutional issues would arise out of demarcating sectors. His Department had consulted the Department of Small Business Development to listen to their views and opinions. For instance, he believed that there were certain sectors where foreign nationals could not conduct business, such as hairdressing etc. The purpose was to help grow local small businesses. He also mentioned that the South African Revenue Service (SARS) was also closely monitoring illicit goods and seizing them. He believed these operations had achieved satisfactory results. However, these activities were not covered by newspapers and other media, as once the news got out, this method would become ineffective. He suggested Members could join the Departments involved in those operations to oversee their activities. However, he cautioned against the involvement of media.

The Chairperson argued that this workshop was not a workshop dealing with xenophobia. She did not think that the issues raised by Mr Morotoba were the problems to be discussed today. Her question was on why people were still unemployed despite of the many attempts that they had made to apply for assistance from the Department. She pointed out that there were an abundance of hotels and garages that employed foreign nationals while South Africans were unemployed. She mentioned the escalating issue of xenophobia in Khayelitsha, where locals wanted foreigners out, and urged the Department to review the connection between unemployment and xenophobia. She said that perhaps it was time to stop being diplomatic -- it was about the lives of black South Africans who were jobless. Poverty and starvation made people fight.

Mr Morotoba suggested Committee should see the joint work of PES involving the African Union (AU) and the Southern African Development Community (SADC). Migration was an intricate issue, so he could not give a definite answer to the Chairperson.

The Chairperson commented that it all came down to the choice of words. The Department needed to be less diplomatic in the workshop -- it was being too diplomatic and always avoided giving direct answers.

Development of Annual Performance Plans and Strategic Plans

Ms Nolukholo Sigaba, Chief Director: Planning, Monitoring & Evaluation Unit, Department of Labour, briefed the Committee of the managing of performance information in the Department.

She said performance information was a term that was used frequently by Auditor-General. She explained that the Department delivered services essential to the well-being and development of the communities. To ensure that service delivery was as efficient and economical as possible, the Department was required to formulate strategic plans and annual performance plans (APPs), allocate resources for the implementation of these plans, and monitor and report the results through quarterly and annual performance reports. These planning and reporting tools constituted performance information.

Performance information was essential in order to focus the attention of the public and oversight bodies on whether the Department was delivering value for money, by comparing performance against budgets and service delivery plans, and to alert managers to areas where corrective action was required.

Performance information also played a growing role in budget allocations and was increasingly used to monitor service delivery. This meant the information must be accurate, appropriate and timely.

Ms Sigaba described the purpose of managing performance information in the Department. In order to achieve its mandate, the Department should establish these links:

  • With the government programme of action;
  • With the Departmental strategic plan, APP, branch work plans, quarterly and annual performance reports, and individual performance agreements from the Accounting Officer to the lowest level employees;
  • With Departmental planning, monitoring and evaluation guidelines and the performance information process flow; and
  • With governance structures, as well as compliance with government prescripts.

The process for the development of the 2020/25 strategic plan and the 2020/21 APP for the DoL was provided. The process consisted of an environmental analysis and taking stock of the previous years’ performance in order to set realistic targets for the five years ahead. Subsequent to the distribution of the draft National Development Plan (NDP) Medium Term Strategic Framework 2010-2025 by the Department of Planning, Monitoring and Evaluation, the Department had also embarked on a series of processes.

The seven priorities of the government for the DEL were presented, indicating the goals and which Departmental branch would be responsible for implementing those goals. 

Priority 1: Economic transformation and job creation;

Priority 2: Education, skills and health;

Priorities 3 & 4: Consolidating the social wage through reliable and quality basic services;

Priority 5: Social cohesion and safe communities;

Priority 6: Building a capable, ethical and developmental state; and

Priority 7: a better Africa and world.

The last part of the presentation covered operations of the Department, such as its nine provincial chief directorates, service standards, the service delivery improvement plan, Batho Pele planning and reporting.

The draft APP for 2020/21 was provided to the Committee. As it was not part of the briefing, Ms Sigaba did not go into the details.

Adv Bowo, the workshop facilitator, said that the Committee would have to wait for the targets report in due course, as it was still too early in the year to do the reporting.

Unemployment Insurance Fund

Mr Teboho Maruping, Commissioner: Unemployment Insurance Fund (UIF), briefed the Committee on the Unemployment Insurance Fund (UIF).

He described the new UIF credit accrual system, the dependent benefit, as well as the maternity benefits. Workers would accrue UIF credits faster, and briefed Members on the Fund’s organisational structure and that of the Advisory Board.

The UIF process happened within a claimant’s province. The UIF branch had nine provincial offices, 125 labour centres, and 820 visiting points.

He said the Fund’s organisational performance had increased since he took office in December 2016.

Mr Maruping showed the Committee the UIF’s investment portfolio. The presented diagrams showed that there was R172 billion under asset management. The Fund had been utilised, and was invested in electricity and other important infrastructures. He pointed out that 51 000 jobs were sustained because of the UIF’s investment portfolio. 25 000 students who were not covered by the National Student Financial Aid Scheme (NSFAS) were now able to study. The UIF invested in student accommodation. It had also participated in saving Edcon in 2019, and had saved 140 000 direct and indirect jobs.

He briefed the Committee on the UIF’s strategic risk progress, as well as the progress reported by the Auditor-General (AG). On the strategic risk progress, 12 principal risks had been identified -- four of which were identified as high risk, and eight as medium risk. 53% of mitigation plans had been implemented by the UIF as at 30 September 2019. The AG’s report had found that 81 findings were registered with AGSA, of which 22 had been resolved as by the end of November last year. There were 38 works in progress, and 21 were behind schedule, but he assured the Committee that interventions were in place to manage the time in order to deliver. Progress was monitored and interrogated by the internal audit unit quarterly.

He informed the Committee of the ten disruptors in the 2019/20 financial year, and emphasised that the UIF had saved 3 852 jobs.

Describing the UIF’s successes, challenges and interventions, he said it was implementing job summit interventions. More needed to be done to connect unemployed persons to other jobs, or to put them back to learning and training.


Dr Cardo asked what the Fund’s obligations at state-owned entities (SOEs) were in the event of staff retrenchments. Would it have sufficient funds to pay out these workers who were being retrenched?

Mr Maruping responded that SOEs such as South African Airways (SAA), Eskom and Telkom were like any other UIF contributors in the country, so the UIF would be able to pay in the event of a massive retrenchment of workers. Within the UIF, there was a temporary job scheme and a higher-impact social fund for job preservation.

The Chairperson expressed her confusion, as this workshop seemed to have failed to explain the relationships between each entity and the Department. She commented on the presentation, calling it a good one. She then reminded Mr Maruping that this was a workshop and thus the presented materials were fitting on this occasion. She asked Members as well as presenters to think what should be entailed in a workshop. The Committee wanted to know what the UIF was. They wanted to be more informed so they could better serve their constituents and answer their questions.

Adv Bowo, who was himself a Commissioner of the Commission for Conciliation, Mediation and Arbitration (CCMA) said that he had observed in more than 20 cases which involved retrenched workers, that they had struggled to have access to their UIF benefits because the Department had no record of their contributions. Meanwhile, these retrenched workers’ employers all confirmed that their UIF contributions had been paid to SARS. He said that the relationship between the entity and the Department could be discussed on the following day.

On the content for workshops, Mr Maruping said that he was unfamiliar with what ought to be included in a workshop, but gave an assurance that he would do better next time.

On the deductions by SARS, he said that SARS deducted the UIF, tax and other deductions, and then paid to the UIF. In the event of claiming, the UIF reviewed what had been paid by SARS against what had been paid by employers. He explained that some employers declared that they paid R100 per employee, but some paid above R100 and others paid below that R100. In the event where retrenched employee’s former employers had paid below R100, the UIF did not disadvantage employees as long as they could prove that they had been employed.

The Chairperson responded that the Department should feel free to communicate with her so that she could tell them about Members’ expectations for a workshop. She accepted the apology offered by Mr Mashuping

Compensation Fund

Mr Vuyo Mafata, Compensation Fund Commissioner, briefed the Committee on the Department’s Compensation Fund.

The Compensation Fund (CF) was established in terms of the Compensation for Occupational Injuries and Diseases Act, as amended. The main objective was to provide compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees, or for death resulting from such injuries or diseases, and to provide for connected matters.

There were currently seven ILO conventions, of which two had been ratified and five not ratified by the South African government. These provided the rationale and compass for the CF.

The core business of the Fund was divided into three units: Compensation and pension benefits, medical benefits and disability, and care and rehabilitation. If a person was injured, the person may be eligible to one or all these benefits. In the event the person succumbed to injuries, their dependants would be receiving the benefits, provided that they were of school going age.

He explained the source and management of the funding. It was funded from levies paid by employers. Employers were classified according to 23 classes and further sub divided into 102 sub-classes, with each having its own assessment rate. This levy, however, could be reduced. Some employers may apply for a reduction of levies by demonstrating any mechanisms to reduce danger exposed to employees. In scenarios like this, the Department did give rebates.

The achievements of the Compensation Fund were listed. These were

  • Restructuring of the CF, resulting in much needed critical skills.
  • Stability in the operations of the Fund.
  • Eradication of the backlog in claims.
  • Halting the deterioration of audit matters.
  • 94% compensation claims being adjudicated within 40 days of receipt.
  • 93% medical claims being finalised within 60 days of receipt.

The main challenges of Compensation Fund were financial management, service delivery and people management.

Mr Mafata also explained the mutual assurance in terms of section 30 of the Compensation for Occupational Injuries and Diseases Act (COIDA), and said that the Minister issues licences to two mutual associations to provide COIDA services.


The Chairperson said that the Department could provide details of the budget allocation in due course. However, since it was a workshop, she was not going to ask the Department for that. She reminded the Department that the Standing Committee on Public Accounts (SCOPA) would do that in due course.

She commented that the session had been very informative. She stressed the point that this was a workshop and not a portfolio committee meeting. The purpose of a workshop was for Members to learn and stay informed. Labour law issues would be the subject of a briefing the following day. She asked members to do preparatory work for what would be presented then.

The meeting was adjourned.

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