Orientation workshop continued

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Employment and Labour

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

Documents handed out: NEDLAC presentation to the portfolio committee on labour workshop [awaited]

The Portfolio Committee held a two-day workshop at which all entities of the Department of Employment and Labour were tasked with presenting on their mandates, their challenges and goals.

The purpose of the workshop was to guide the Committee on how to further assist these entities. The most common challenge that all Departments faced were the financial constraints which led to limited service delivery and overworked staff members.

The Committee was briefed by the Commission for Conciliation, Mediation and Arbitration (CCMA), which covered the country’s labour law framework, the challenges of enforcement, and some of the legal obstacles which needed to be resolved. The National Minimum Wage Act had resulted in a significant increase in its case load.

Presentations were also made by Productivity SA, the National Economic Development and Labour Council (NEDLAC) and Public Employment Services (PES). All of the entities gave details of the innovative ways in which they were trying to curb the financial constraints they were facing, and also welcomed suggestions made by the Committee.

Meeting report

Mr Cameron Morajane, Director: Commission for Conciliation, Mediation and Arbitration (CCMA), began by quoting the Preamble of the Constitution of South Africa: “We, the people of South Africa, recognise the injustices of our past…” He explained that in every presentation he makes as a leader of an entity of government, he reminds everyone of the foundations of the Constitution because the spirit and values of the country were reflected in the Preamble. Every right and freedom in the Constitution must be driven by the spirit and purport in the Constitution. This was an introduction, because there were certain parts in the country’s employment laws that had been manifested as creating the complications that had been discussed the previous day.

The employment law framework, based on the presentation given yesterday, was by no means a complete overview of legislation that was operating within employment law. However, one could not do without it because these were the key, founding statutes which the country operates under.

The ILO was introduced into the system through section 39 of the Constitution -- the interpretation clause -- which in effect means that the conventions and regulations issued in terms of those regulations must be taken into account when interpreting our own Constitution and legislation. Practically, this means that when interpreting the Labour Relations Act (LRA), the National Minimum Wage Act (NMWA) and other legislation, one had to remember that South Africa was a sovereign state and part of the family of nations. With some of the problems, especially with section 198 (LRA) regarding labour brokers, the interpretation the court adopted to resolve the dispute took into consideration what the international community had addressed regarding labour brokers, but the issue was the domesticated understanding of the interpretation.

The CCMA was founded by one statute, the Labour Relations Act. To clarify, the LRA was not enacted to create the CCMA, but rather the CCMA was a creature of the statute.

There was a lot of duplication in the legislation which resulted in interpretation problems. For example, the National Minimum Wage Act creates the minimum wage, but in order for it to be enforced, the Basic Conditions of Employment Act (BCEA) needed to be put into play. For lay persons, it was difficult to understand the dispute resolution process due to the multiple statutes involved.

The CCMA’s jurisdiction had expanded to include the Employment Equity Act (EEA). The EEA was taken for granted, despite it being born directly from the Constitution. The equality clause was extremely important. If one were to achieve equality in the country, then one needed to fully implement the EEA. If the EEA was frustrated, then the equality clause was frustrated. When the CCMA executes its mandate based on the EEA, there must be consciousness around that. All the rights included, such as race, religion and culture, were protected in the Constitution. Section 36 of the Constitution, the limitation clause, provides that the rights and freedoms contained could be limited only by law of general application. Everything in the framework mentioned was law of general application. There was a difference between original legislation and delegated legislation. The CCMA was dealing with the latter because it dealt with human rights, which declared the death penalty unconstitutional based on the Criminal Procedure Act, but interpreting section 36 and 39.

Looking at the National Minimum Wage, specifically the definition of employment law, the jurisdiction expands to include Occupational Health and Safety, the Unemployment Insurance Fund (UIF), etc. The legislature could not create laws unless there was a problem called the mischief rule. The National Minimum Wage was created because there was a problem, such as poverty, equity, and unemployment. The NMW created a minimum standard to resolve that. The legislature placed a mandate on the CCMA and Department of Employment and Labour to put into force the legislation. The broad mandate of the legislature was a mandatory and discretionary function in terms of section 115 of the LRA.

The Preamble provides that “South Africa belongs to all who live in it”. The CCMA had dealt with cases of foreign nationals who did not have work permits, and it was argued in the labour court that a foreign national could not work in South Africa without a permit, so the CCMA and the labour court did not have jurisdiction. That premise was incorrect. The labour court provided that as it related to an employment relationship and an employment contract, it was different. Further, the Constitution provides that South Africa belongs to all who live in it.

There was tension between the executive and the judiciary, in that the Preamble mentions something differently and the statute provides something different. There was tension between the LRA, the Immigration Act and the Constitution. The courts had held that even though one did not have a work permit, the CCMA had jurisdiction over the matter. This was provided for in terms of section 239 of Constitution. Even though one may not be an employee, one could be a worker. There needed to be judicial and legislative clarity on that point.

There was a 40/60 rule which stipulates that employers could employ only 40% foreign nationals and 60% locals, which was a directive from the Department of Home Affairs. There was a statutory problem of law, policy and constitution. There needed to be clarity on this.

Enforcement

Mr Morajane said the CCMA, the Department, courts and sheriffs had all been tasked with enforcement. If there was a compliance order issued by the Department, or an award issued by the CCMA that was not executed or enforced, then those institutions were insignificant. The value of enforcement was not the document issued, it was the content of what was issued. For example, if the award stipulated that the employer must reinstate and pay but the employer refused, what was the value of that award? How many compliance orders were issued by the Department that remained unexecuted because they were ignored? How many cases were pending in court, subject to section 145 and 148 on review?

What did enforcement mean? Not the award issued, but the execution of the award which the beneficiary would understand. Another issue was at the magistrates courts, which were brought into the employment law framework through section 143 of the LRA, which meant that they must enforce and attach, as there was a new trend whereby employers refused to pay out awards claiming that assets did not belong to them. It was worse for domestic workers, because there would be a dispute over who the employer was. When the sheriff went to attach goods and there was a dispute of ownership, there was a new process that began at the magistrates court. Magistrates refused to be involved in those processes. It was the interpleader process, whereby the magistrate determines who the owner of goods is. Now because the Magistrate refused to do so, it meant that the award was dead.

The legislature was then approached to amend this provision to exclude the magistrates court because it if the mandate was in terms of section 158 of the LRA, execution becomes easier. The LRA was created to enforce section 185, 188 and section 23 of the Constitution. The South African Human Rights Commission (SAHRC) wants to expand section 23 to not only a labour relations issue, but also a constitutional issue. Their argument has always been that labour law problems have always been constitutional problems. In essence, if one was unfairly dismissed, it was a violation of the Constitution.

Enforcement must not be disintegrated -- it must be integrated. Beneficiaries must never be in conflict over where to go when there is a problem. There were numerous cases since 1 January 2019 that were stuck due to issues of interpretation on whether they should be sent to court or the CCMA because they were new, or should continue with the Department. There must be coherent integration of enforcement because that burden should not be on the beneficiary.

Members of the Committee must know that there had been an issue of blatant disregard of the awards.

The various entities must not work in isolation. A memorandum of understanding (MOU) had been created with the Employment Equity Commission, Productivity SA, the SAHRC, etc. This closes the gap for beneficiaries who have grievances to be able to approach various platforms before they run out of time to lodge a complaint. If there was an integrated programme, wherever a complaint goes, that entity of government should be able to assist.

Legal hurdles

Various labour legislations prescribe various methods of dispute resolution that must be followed. The prerogative of the legislation was to create equity, but had that been achieved? There had been no evaluation of the legislative impact, and whether or not the current legislation did not already cover the arising problem. For example, the NMW was interlinked to the BCEA, but was it not possible to incorporate that into the BCEA because being part of another statute did not make it less of a law? The multiple legislations that were linked had created interpretation problems. Now there were debates over jurisdiction, and the use of terminology was different, even though they were saying the same thing. A lot more time was spent on jurisdictional disputes than the actual issues. There must be a synchronisation of the multiple statutes.

The Kylie v CCMA matter, as it related to sex workers, succeeded in the labour court not because she was an employee, but a worker, which was drawn from the Constitution and not from the statute. This did not mean the law promoted sex work, but it was the definition given by law which was protected by the Constitution.

Referring to the relationship between entities and boards, he said entities such as the CCMA had been created by statute, but there was an issue of governance. When board members were appointed, whose interest were they serving -- those of the entity, or those that they represented? There needed to be clarity on this matter.

The impact of the language and culture embodied in Section 13 and 31 of the Constitution had to be taken into account. At a conference previously attended in Canada, an American delegate said one should never underestimate the role and weight and importance of language and culture in dispute resolution. For example, if the Commissioner of the CCMA was black and spoke a native language that both the parties could understand and speak, would it not be advantageous to both parties to express themselves in that language, instead of frustrating them with having to speak English, where they would struggle to articulate themselves or even understand the process. It would assist in solving the dispute and understanding the process better. Having 11 official languages should not be a token, but should contribute in practical terms to dispute resolution, because people would understand the dispute in the language of their choice.

Access to the CCMA was also a key factor, in that all the branches were mostly located in towns, which was then a burden on an individual who had been dismissed and was unemployed. Justice needed to be more accessible. Sometimes disputes were not resolved because the person did not understand, not because they were resistant. The argument around using other languages in disputes was that it was costly. Another argument was that judges would not understand awards that were made in another language, which meant the judiciary was not transformed.

The CCMA had almost 200 000 cases. Minimum wage cases were drowning the CCMA, with people complaining that they were not being paid the minimum wage. People were either ignorant about the minimum wage or were afraid of dismissal should they raise it with their employer. There were six million people that needed to be reached. If those people could not be reached, then what was the point of the minimum wage? There was a movement regarding discrimination on the basis of the differentiation in the minimum wage. There should be equality in the minimum wage.

In terms of the case load of the CCMA, that was not an accurate representation because there was the bargaining council and statutory councils, etc, which were not part of those statistics. Thousands of cases did not represent success, but rather highlighted the problems in society. There were 200 000 people who were aggrieved, which excludes cases from the bargaining council and the labour court.

How many cases were pending in the labour court that were subject to review, and their awards had not been executed? One of the components the CCMA was involved in was called “job saving.” Only large-scale retrenchments come to the CCMA in terms of section 189A, but there were other retrenchments that the CCMA was not informed about. So the statistics were only were a reflection of Section 189A.

When there was an individual job loss, it affected an entire family and all its dependants. All the family’s expenses were affected by that job loss. Even though a retrenchment may be faultless, it was still a form of dismissal.

A “Return to Work” index had been developed. The best award was being reinstated, compared to receiving compensation, because the person would be highly indebted, and that money would vanish -- and they would remain unemployed. Section 193 of the LRA created two things -- reinstatement and re-employment. Both of these were “Return to Work” principles.

There was a problem pending with the NMW. The NMW was subject to review in terms of section 185. The labour court had a backlog because of the shortage of judges. If a matter was put on review now, it was mostly likely that it would be heard in three years’ time. In Duma v Minister of Correctional Services and Others, the matter took seven years based on an award given by the CCMA. There is no expeditious resolution of a dispute if the time to resolve it takes this long. The issue was not fairness -- it involved technical objections on whether the award had prescribed or not. Some of these complaints die while waiting for the legal process to conclude. What does it mean that the award is final and binding? If it takes that long, is that what the legislature had in mind? Why is the minimum wage subject to review? The debate is simple -- have you complied or not? Why was it being dragged to court? There was an Australian approach that suggested creating an internal appeal system which would then be final. One cannot wait three years to be paid R150.

There was no implementation of policy changes on Constitutional Court judgments. Those judgments have far-reaching effects that create new laws, which was the judicial law-making power of the courts. For example, a traditional healer wanted to go to a traditional school, and applied for leave. The leave was denied due to the employer’s lack of understanding of the culture and practice. She took sick leave, and was dismissed. The matter went to the CCMA, and was awarded in her favour. It was challenged up to the constitutional court. The court held that no one could question the logic of culture and custom in terms of Sections 30 and 31 of the Constitution. It was ordered that the employee be reinstated. Since that judgment, how many workplace policies had been amended to reflect this judgment? Further, the BCEA had also not been amended to reflect that.

Mr Morajane concluded by asking what happened to cases when there were not enough resources. It affected service delivery. How was that balanced? One had to cut down on one the work in order to meet budgetary requirements 

Discussion

Mr M Bagraim (DA) commented that despite its financial constraints, the CCMA Commissioners were doing commendable work. The CCMA had introduced conciliation telephonically, which saved time and money, and was finding better ways to settle disputes. The NMW had added to the workload. The claims for financial resolution used to go to the Department, but now they were with the CCMA, it should be recommended to the DG to move some of the staff to the CCMA to cope with its increased workload. Those complaints were not being settled at the Department, but now were being settled at the CCMA.

Mr Bagraim concurred on certain aspects as they related to the longevity of the cases and the workload of the CCMA, and having internal appeal processes. He disagreed on the language aspect, arguing that English was a universal language. He added that matter itself could be argued in whatever language was convenient, but then the award should be written in English.

Regarding the NMW, according to researchers 150 000 jobs had been lost due to the introduction of the minimum wage. Small-scale retrenchments were much larger in numbers than the large- scale retrenchments.

The Chairperson added that to the points made by the Mr Morajane on the tediousness of the disputes surrounding awards, because employers wanted to evade responsibility. The Committee was supposed to assist and create an enabling environment. There were people who died without receiving houses and other amenities of life. The Committee had to engage with the departments to find solutions on enforcement issues. Labour was about law, but it was about law within the context of changing the social conditions of the people.

Mr N Hinana (DA) asked the whether the LRA had the responsibility for securing jobs. Legislation was passed to fulfil a mandate -- had the LRA fulfilled that mandate, because unemployment was increasing?

Because of the failure of parties to execute awards that they had been given, were there other remedial actions available should the award not be executed in order to assist the employee who had been abused. Litigation was expensive and even though it was accessible to everyone, not everyone had the financial capacity to do so.

Mr M Nontsele (ANC) pointed out that it would be helpful if the Department came up with ideas on how to address challenges where disputes were prolonged. Was it to the benefit of the aggrieved party to delay an award?

With regard to foreign nationals, the state had a duty to protect them, and not doing that was in contravention of international standards and national law. The Department needed to properly regulate the use of foreign nationals as a replacement for local labour, and also to avoid abuse.

In terms of the NMW, parties were allowed to apply for exemption. Applications for exemptions should not be abused or used to frustrate parties, and there was a need to ensure that the exemption was not to the detriment of the other parties. Timelines should be created for employers who required exemptions, to assist them to transition and be able to meet the requirements of the NMW.

CCMA’s response

Mr Morajane responded on the matter of review and exemption, and said that in terms of the NMW, employers were allowed to apply for exemption. If granted, in 12 months there was a review to see if the position was still the same. If a worker came to the CCMA because they were not being paid the NMW, and the Commissioner had made an award, that could not be taken to court because it was a factual dispute of whether one paid the R20 or not, which was a different process in terms of Section 145.

The CCMA had introduced an app where one could check one’s case status. The plan was to expand the content of the app in order to expedite disputes, using social media as a tool. Information communication technology (ICT) had been tasked to develop ways to make the dispute resolution easier and faster. Telephonic dispute resolution had been very successful. The issue in terms of expansion was budget.

The Australian and Canadian way of internal appeal systems should be the way forward. They had been found to be ultra vires in doing things that were not provided for in the Act. The LRA was not failing -- it was the people who were executing who were failing. When the CCMA first started in 1996, it had started with 64 000 case and now there were almost 200 000 cases. There had been a lot of victories because of the LRA. The amendment of 2015 stipulated that one must provide security if one wanted to amend an award that was an attempt to curb reviews. There had been many reviews to stall the process. Workers who had no union representative or legal representative had to sit out this stalling. Organised labour had to support its workers after the award was given, because of their responsibility to the worker.

The conciliation proves in bargaining councils and the CCMA expects both parties to be present for it to be effective. The LRA works when both parties are present -- it is when one party is absent that there cannot be conciliation. The state also needed to be exemplary in this regard where it also acts as an employer.

 

Productivity SA

Ms Nandi Dabula, Executive Manager: Marketing and Communication, Productivity SA, said the mandate of Productivity SA which was aligned to the policy mandate of the Department of Employment and Labour (DEL), and described its structure, its functions and value propositions and the implications of the name change from DOL to DEL on its daily operations and strategic focus. She also referred briefly to the partnerships and collaborations, the challenges that Productivity SA currently faced, its performance and limitations, what was still outstanding and where the Portfolio Committee could assist.

Discussion

The Chairperson advised that when there was a budget vote, they should set up a stall in order to see the work of Productivity SA that would compel members to support its work. They had been unable to honour their oversight visit.

Ms N Nkabane (ANC) commented on the physical capacity and financial constraints that Productivity SA faced, and commended it on its unqualified audit. The Auditor General (AG) had raised key factors for the year 2017/18, so she wanted to know what the turnaround strategy had been to improve the current situation.

Referring to the presentation, she said there 13 were indicators, of which seven were achieved and six were not. What were the challenges had prevented achievement? How were they planning to improve the overall performance of Productivity SA?

The entity had indicated that they had developed a comprehensive business model that was adopted around 2017/18. Had it been implemented? What had its impact been? What had been the progress on its multiple revenue generating avenues?

Mr Hinana added that a downward spiral was showing, as the numbers had been dropping since 2016. What were the reasons for this decline?

Ms Dabula responded that realistically, the 50% achievement would have been 70% if the Turnaround Solutions (TAS) programme was not suspended. The TAS could not be taken out of the annual performance plan (APP) when it was suspended, and that was the reason why the numbers had dropped.

Mr Hinana clarified that it had been happening prior to the suspension of the TAS programme.

Ms Dabula further explained some of the issues they faced were due to incapacity, as they had lost experts and specialists because of financial resources. It was therefore difficult to provide their services, and their footprint was also limited because they were not adequately funded.

The business model had been approved by the board in 2018, but had not been implemented due to funding. The business model would be implemented in only 2019, and then a report would be given of their successes in the next financial year.

There was a project that they would currently like to implement in the Western Cape. The Western Cape government had approached them to look at their municipal account defaulters, to assess all the companies that defaulted. They had promised to pay R2 million where Productivity SA would be able to do 30 assessments. However, they would be unable to implement interventions due to financial constraints. Some of the work they received became constrained because of financial challenges.

Ms Nkabane referred to a previous question she had asked about 20 findings, and Ms Dabula explained that some of the findings were in relation to the UIF funding that was used for another purpose. The money for UIF had been used to pay staff. There had been an investigation and an carried out, and it had cleared Productivity SA. However, it had affected the audit findings.

Mr Nontsele enquired whether or not it would be helpful for Productivity SA to continue to seek the support that it desired for such institutions, and suggested it could be linked to the added mandate of the Department.

Ms Dabula described various projects they had embarked on in the Western Cape where they had been able to generate more income.

 

National Economic Development and Labour Council

Ms Nobuntu Sibisi, Head: Programme Operations, National Economic Development and Labour Council (NEDLAC) explained the purposes of the organisation, its functions and the work that they had embarked on, and the challenges they faced.

Discussion

Chairperson wanted clarity on reports that had not been considered. How did NEDLAC ensure that community chambers were verified as being the proper representatives for the community? What would happen to Mr Makalipi’s previous post at the UIF? Would go he go back to it when the current vacancy had been occupied?

Ms Sibisi replied to say that Mr Makalipi currently occupied both posts and would go back to his previous position when this one had been filled.

With regard to the question on community chambers, the names were verified through the constituency office. No-one came in their own capacity. Regarding the governance task team, there was a process to check whether there was a need to change the Act to dig deeper into that process.

NEDLAC was looking to establish a closer relationship with Parliament. A NEDLAC report was submitted to keep the Committee up to date with whatever had been reported on.

Public Employment Services

Mr Sam Morotoba, Deputy Director General (DDG): Public Employment Services (PES), summarised the work of the PES, its mandate and instructions given by the President to report to the Portfolio Committee on all the legislation they would like to table before Parliament. The Minister of Public Enterprise would make an announcement with regard to a direction government must take to review the 600-plus public entities, including how some had developed a life of their own and become draining and in need of bail outs. Furthermore, it was working with other entities such as Department of Justice and the CCMA to table its concerns and consolidate them into something that could be bought forth to Parliament.  

Conclusion

The Chairperson summarised the highlights of the past two days of the workshop, and said the Committee would monitor the progress of the Department on the various issues the entities had presented. One of the purposes of the workshop had been to assist with information as they prepared to do oversight visits during the year.

The former Speaker of Parliament had commissioned a high level panel that was led by former President Kgalema Motlanthe, to ask communities about the impact of legislation on their day to day lives. The Committee had not looked into that, although it may seem that Parliament was out of touch with the communities.

The meeting was adjourned.

 

 

 

 

 

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