DEL, Nedlac & PSA 2019/20 Quarter performance; with Minister

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Employment and Labour

11 March 2020
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

The Portfolio Committee met for a briefing by Department of Employment and Labour on the performance of the National Economic Development and Labour Council (Nedlac) and Productivity South Africa during the second quarter of the 2019/20 financial year. Members were generally satisfied with the reports from both of these entities

Members asked Nedlac about the situation at Eskom and independent power producers (IPPs). Were there were any measures in place to notify beneficiaries that they had to claim benefits? What were the operational risks that Nedlac was facing?

Productivity SA was questioned about the financial constraints it was facing, and what measures were in place to ensure its mandate was achieved.

Concerns were raised by the Committee about some of the wording in the draft reports. There was consensus that there was a need for all sectors to work together to support Nedlac.

Meeting report

NEDLAC performance report

Ms Lisa Seftel, Executive Director, National Economic Development and Labour Council (NEDLAC), presented the entity’s performance review for the second quarter of 2019/20.

Reporting on the performance per programme, she said administration had achieved 86% of its targets, core operations 100%, and constituency capacity building funds 100%, which had resulted in the overall performance being 94%. Administration achievements were the convening of a successful annual summit in September 2019, the completion and submission of the annual report for 2018/19, and the achievement of an unqualified audit opinion. In terms of the overview of performance achieved, the Jobs Summit had achieved progress towards the implementation of the Jobs Summit Framework Agreements, as the President, the Deputy President and the Minister of Employment and Labour, had committed to the process. The first meeting had been held on in September.

Mr Jonas Shai, Chief Financial Officer (CFO), Nedlac, referring to risks and remedial action, said the founding documents which guided the work of Nedlac had not undergone a comprehensive review, leading to a misalignment between the current operating environment and the demands of the country. He added that the operational risks had been hugely affected by the technology platform, and they were working on improving their information technology (IT) capacity.


Dr M Cardo (DA) asked about the government task team that had been set up in 2017, and whether it was operating separately from the organisation.  What had caused the delay in the implementation of the previous report?

Mr N Hinana (DA) said that there was a need to know what was being done about Eskom and independent power producers (IPPs).

Ms A Zuma (ANC) asked about unclaimed benefits, and whether there were any measures in place to notify beneficiaries that they had to claim benefits.

Mr X Nqwezi (IFP) said that he was interested in timelines, as there was budget allocated, and a further explanation about the operational risks described in the presentation.

The Chairperson said that it would not be fair on Nedlac to expect a response, because there was no final report about risk yet. It would be unfair to put them under the spotlight.

Department’s response

Mr Thulas Nxesi, Minister of Employment and Labour, said that he wanted to confirm the report from Nedlac, and said that the organisation had to go beyond its traditional role when it was formed.

The electricity situation was also having an effect on jobs and affecting the crisis of unemployment. The President had met with stakeholders on every first Monday of the month in order to pave the way forward regarding the issues. There was a need for an approach that would deal with all the state-owned enterprises (SOEs), and not only Eskom. Clarity was also needed on the future of IPPs, and at one stage everyone who was working with Nedlac had attended a meeting in order to find a way forward.

There were good labour laws that dealt with labour issues, but the problem now was implementation. The Minister also highlighted the need to enhance social dialogue.

Ms Seftel responded to the questions that had been raised by the Members, and said that Nedlac was fit for purpose, and that the Minister had also addressed some of the grey areas involving it. The unclaimed benefits issues was not a matter of the beneficiary not knowing that they had to claim benefits, but in some instances the children and the relatives were the ones who did not know and were not well informed about claiming.

Productivity South Africa Performance Report

Mr Mothunye Mothiba, Chief Executive Officer (CEO): Productivity SA, said the overall performance for the second quarter of 2019/20 had been 75%. He also highlighted the areas of non-performance and the strategy to deal with them.

There had been a 100% performance in terms of small and medium enterprises (SMEs) that were paid within 30 days of receipt of invoice. The target for the number of education, training and development practitioners, and skills development facilitators, trained was 60, and 133 had been achieved. He also highlighted Productivity SA’s financial performance, and mentioned that there was inadequate funding. In anticipation of the shortfall, an application for financial assistance would be submitted to the office of the Director General for consideration during the third quarter.


Mr M Nontsele (ANC) said that he would like details on the expenditures of Productivity SA, as well as the number of staff it employed.

Dr N Nkabane (ANC) referred to the financial constraints that the entity was facing, and asked what measures were in place to ensure its mandate was achieved. There was a need to know about the turnaround strategy that was going to assist the entity.

Mr Mothiba said that Productivity SA received funding from the Department of Trade and Industry (DTI), but its expenditure was below budget. The entity had not been appropriately funded, because in 2015 the Employment Services Act was promulgated, and a number of additional services were implemented Productivity was more about job creation and the protection of jobs. Funds had been diminishing. The issue of self-generated revenue depended on a number of resources. There had been continuous engagements with the Director General, and there was hope that the situation would change.

The issue of self-generated revenue depended on the number of resources that were available on the ground, as there were vacancies that still needed to be filled in the service delivery department. The strategy was to support government programme that had the potential for employment growth. There had been discussions with the Department of Trade and Industry (DTI) regarding the sector master plan, and they had signed a memorandum of understanding (MoU) with the International Labour Organisation (ILO) in order to implement the Sustaining Competitive and Responsible Enterprises (SCORE) programme.

There had been a progressive improvement because of the partnerships, and the emphasis was on what could be done for small and medium enterprises. He was confident in the coming five years, in terms of moving forward, Productivity SA was back on track.

Mr Notsele asked for clarity about the financial position of the entity from the Director General.

Ms Zuma said that at the next meeting, Productivity SA should incorporate the interventions and turnaround strategy that they had in place so that the Committee could do its own oversight.

The Director-General said the Department was dealing with the issue of single source funding, and by 1 April they would have resolved the situation. The entity had written to National Treasury for funding, and the proposal had been approved. By 15 March, the employees of the entity would be be paid.

Minutes of workshop

The Chairperson asked Members to adopt the minutes of the workshop which was held on 4 and 5 February.

Mr Nqwezi said that in certain instances, the report stated that Members had deliberated on issues, but it did not specifically state what the issues were. There was a need for clarity in the report.

Dr Cardo said that if the minutes were going to be detailed and reflective of what took place in the workshop, they must capture the views of the Members. He suggested that the report should be revised until all the views were incorporated.

There was a general consensus that the minutes could not be adopted because they did not articulate and cover everything that had taken place at the workshop, and there was a need to revise them.  

The minutes were not adopted.

The meeting was adjourned.

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