Employment and Labour Budget: Committee Report

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Employment and Labour

26 May 2020
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

Video: Portfolio Committee on Employment and Labour,26 May 2020
Audio: Employment and Labour Budget: Committee Report 

The Committee considered the Report on Budget Vote 32. Members raised numerous issues regarding the ability of the Department of Employment and Labour to fulfill its expanded mandate and the failures of the Compensation Fund, Unemployment Insurance Fund, and the Commission for Conciliation, Mediation and Arbitration (CCMA) as well as Productivity SA.

The outcome of the meeting was that Members would make submissions on the report that would be circulated. The Chairperson asked the Members to consider those submissions and provide their input that they would consider at the next meeting to be discussed and either accepted or rejected.

Meeting report

Ms N Ntlangwini (EFF) proposed that if the Chairperson encountered any connection problems that prevented her from continuing with the virtual meeting, she should give permission upfront to the Whip of the Committee to chair the meeting.

The Chairperson agreed and commended the proposal for being progressive.

The Chairperson proposed that they progress through the report page-by-page and if the Members had any comments they could raise them but emphasised that the main focus was on the observations and recommendations. Her first proposal in relation to the Annual Performance Plan (APP) of the programme was that they do not begin each statement with “to” at the beginning.

Mr M Nontsele (ANC) moved that they make that amendment.

Mr Nontsele firstly commended the excellent work done on the draft report. He contended that point number 6.1 of the report did not capture the sequence of events well. He proposed that the Members dealt with the recommendations after reading the observations so there was a balance between the two elements.

Ms Ntlangwini agreed with the point covered by Mr Nontsele.

The Chairperson responded that the Committee was not dealing with recommendations yet so if there were any recommendations that Mr Nontsele wanted to reflect on, he should note them, as they were dealing with the draft report – so that the secretariat understood exactly what changes to make.

Mr Nontsele agreed to the Chairperson’s suggestion and emphasised that he would prefer to do them in between so that there was a better flow.

The Chairperson emphasised that they would start with observations so as not to confuse the Committee and be able to pick up any disjuncture while going through the recommendations.

Dr M Cardo (DA) proposed an observation on point 6.1.1, that the Department of Employment and Labour was constituted in 2019, after previously being the Department of Labour. Its new expanded mandate included a focus on job creation. It was not entirely clear how the employment focus was incorporated into the Department’s formal structures and programmes. His proposal was formulated in the meeting chat. This observation was even more relevant and important to make now that the country was facing an unemployment crisis of unprecedented proportions, with three-to-seven million people joining the ranks of the unemployed. The Committee needed to make a statement about whether the Department was fit for the purpose of addressing the huge unemployment crisis.

Mr Nontsele proposed that they make amendments to points 6.1.1 to 6.1.4 to the effect of ensuring that in as much as the labour inspectors would deal with the core functions already defined by the Inspection and Enforcement branch, they should also refer to the challenges encountered by COVID-19, particularly the implementation of the directives issued by the Minister in line with the Disaster Management regulations.

The Chairperson clarified that in summary, Dr Cardo’s point was to question whether the Department of Labour was currently fit for its purpose. She noted that the Committee was expecting the Department of Labour to say something on the issue of labour but asked the Members whether it was not too early to ask that question. The Committee was still waiting on the modalities and it was her understanding that the Department was not meant to employ people but rather meant to create an enabling environment in which to employ people. Should the Committee reflect on the new amendment of the mandate and if we do, how should it be structured?

Mr S Mdabe (ANC) pointed out that it was not the first time that the matter was being raised before the Committee; it was raised when the Committee was dealing with the 2019/29 financial report. The Minister had said they were still working on the matter and they would finalise it and present it to the economic cluster. He said that the Department facilitated and coordinated an environment conducive for employment to be created by both the public and private sectors. The matter would be presented to the Committee after the economic cluster deliberations. Over and above that, there were current interventions happening in various entities that addressed employment issues. He provided two examples. One was the Productivity SA on small businesses in the rural economy. In the previous Committee meeting, a coordinated approach was proposed with other departments such as the small business development and they provided an example of the intervention they had in Limpopo on two enterprises. The second example was the Unemployment Insurance Fund (UIF) only by activation programme which addressed the issue of retrenched employees which sought to bring those employees back into the productivity sphere. The second matter was that of rescuing Edcon, where over 150 000 employees would have been retrenched; they needed an intervention to keep those jobs. It is understood that the Department has a broad mandate, but there had been examples of proactiveness by the Department in dealing with the issue.

Mr M Bagraim (DA) suggested reasons as to why the Department had failed. Before COVID-19, South Africa had the worst percentage of unemployed people, reaching about 10.3 million or possibly double that figure. He stated the two enterprises mentioned by Mr Mdabe were well-intentioned but the Committee needed to specify that the Department had failed. It failed in terms of inspection and enforcement despite the 500 inspectors it was trying to claim – there was no proof that they were online as yet. There had been a wholesale non-registration of staff for UIF across the country before COVID-19; there was a good percentage of about 50% of staff who were not registered for UIF across the country. He expressed that he was uncertain how many workers across the country had letters of appointment and that his experience had been that at least one out of two people in South Africa did not have a letter of appointment and they had never had any inspections or enforcement interventions with regard to that. Concerning the economics cluster, they had done nothing for a year and the Committee needed to say something about the failure of the Department. Looking back on the previous year, the Committee had had no results or intervention at all on this matter. In the previous year, the Committee intervened and implemented the minimum wage policy yet about 150 000 people were retrenchment. It was wrong for the Committee to be silent about these failures.

Ms Ntlangwini proposed that they add more substance to the draft report. The report had to indicate if the Department was failing to fulfill their mandate, especially in terms of its struggle with the inspectors. She urged the Committee to not cover it up and rather address it as the Department was directly linked to servicing the communities and their constituencies. She felt that more substance could be added to their observations on the CCMA and UIF based on the presentations they previously received from those respective entities. She proposed that the researchers and drafters add more substance based on what the Members elaborated on in the meetings.

The Chairperson reminded the Members that they must focus on the observations point by point and when they were at each point, a Member may raise an issue and propose how to amend the drafting so that the Committee could deliberate on the issue and determine if they agree or disagree. She urged that they maintain that process so that the drafters were able to follow the flow of the amendments. She advised Ms Ntlangwini that the Committee would deal with the issues she raised once they discussed the recommendations.

Mr Nontsele elaborated on Dr Cardo’s comments and proposed that they amend their approach with their observations so that they incorporate elements in the particular areas where the Department addressed where they seek to expand their mandate. He specifically drew the Committee’s attention to point 2.3 to elaborate his point with the economic transformation and operations section as well as government’s priorities expressed as increasing jobs through the presidential youth employment intervention and investment in accelerated inclusive growth.

The Chairperson proposed that when the Committee should reflect on its core observations in the report; Members must submit their formulations so that the Committee could determine whether it agreed with them or not. She proposed that the Members’ formulations be reflected as an observation.

Mr Ndabe proposed that the formulations be put as observations.

Mr Nontsele seconded the proposal.

Dr Cardo agreed that he would formulate an observation and read it to the Committee in due course.

The Chairperson ruled that Dr Cardo and Mr Ndabe must formulate their observations succinctly and once the Committee had dealt with the observation part in reviewing the report, they would read those submissions and determine if the Committee was in agreement with them.

Mr Nontsele questioned to what extent Productivity SA was able to respond to the current challenges that were faced by a number of entities. What have they started to do? In the strategy that had been developed, there had been a focus on the private sector and Productivity SA was silent on what role it could play to assist in the general strategies, considering the expanded mandate of the Department. He proposed that they factor Productivity SA into their recommendations.

The Chairperson asked if Members agreed with this proposal. On being met with silence from the rest of the Committee, the proposal fell away.

She asked Ms Ntlangwini to resume expressing her concerns regarding the UIF and how there was only one sentence addressing it and it looked as if the Committee was covering up for the Department.

Ms Ntlangwini responded that her submission was misunderstood. She claimed that some recommendations needed more substance but agreed to make her submissions in writing, considering that she did not have her notes with her at that point. She emphasised that it would not do justice to the Committee to submit a report for public consumption while it lacked substance.

The Chairperson reminded the Members that they were dealing with the draft version of the report and requested that they put their amendments and recommendations into writing so that it would make it easier for the Committee to reflect on in their next meeting to determine whether they agreed or disagreed with the amendments.

Ms Ntlangwini agreed and committed to formulating her amendments and getting back to the Committee.

Ms H Denner (FF+) expressed that she received many complaints about the Compensation Fund. There were people who had legitimate claims who treated workers every day and were going to stop treating workers because they could not submit their claims without struggling with end user problems on the CompEasy system.

Mr Bagraim expressed similar complaints with the Compensation Fund, saying that he had been receiving and expressed that the Compensation Fund was inadequate.

Mr Mdabe suggested that they make submissions on reformulations so that it would broaden the areas that spoke to UIF, Compensation Fund and Productivity SA so that the Committee reflected on the repurposing of both funds to meet current challenges, as they had implications on the recommendations the Committee had made.

The Chairperson stated that the Committee needed to get those formulations before moving on to point seven. She also reminded the Members that they were given a presentation by the Compensation Fund and out of those deliberations the Committee planned to have a special agent who would facilitate an oversight visit to the office of the Compensation Fund; this was carried out. She expressed that it was unfortunate that some of the Members were not present to determine for themselves what was being done for the migration from Umkhelo to CompEasy. She recounted that in the last meeting with the Committee, the Commissioner of the Compensation Fund claimed that it was a fallacy that people were claiming that they were not being paid. The reason there were so many external complaints was because the CompEasy system was closing the tap which was the cause of the arising problems. The Members had the constitutional rights to challenge the fund but when the Commissioner presented to the Committee, no Members exercised those rights. She believed that the Committee should debate its oversight report at an appropriate time. She thought the Members who had serious problems with the administration of the fund, Mr Bagraim and Dr Cardo, would avail themselves to see what was being done by the fund and challenge it on the basis of what they observed. The problem was the timing and how the issues were raised. She emphasised that when Parliament was asked to respond, the Commissioner responded without fear or favour on the matter.

Mr Bagraim responded that he did oversight and wrote to the Department at least once a week, and the outstanding claims dated back from ten to fifteen years. He expressed that despite the Chairperson’s dislike that he and Dr Cardo were expressing the complaints in this meeting, he could not agree that the Department was doing its job; it has failed and its system was inadequate. If the Committee did not take into account any of the claims, the claimants suffered because they could not go to private hospitals or see private doctors. The Committee would receive more claims like these in the future for COVID-19 but it had been seen for the last twenty years. He apologised for not attending the one oversight visit but qualified it was one visit, whereas he visited the Department at least once a week. He said that he would start sending the complaints to the Chairperson, although she was not happy with him sending them at an earlier stage.

Mr Ndabe expressed that in the last meeting whereby Mr Bagraim and Dr Cardo invited health professionals and middle men to make submissions on the issues, they believed the Department was not attending to the Committee to date still did not receive a report to that effect. These individuals were facilitators between the employer, the injured workers and the health facility When Mr Bagraim raised the issues he raised equally in this meeting, the Commissioner responded that all incomplete forms were returned to the applicants. Some employers and injured workers claimed that they were not aware of the middle men who were claiming to represent them. Mr Ndabe proposed that the Committee agree to not incorporate these issues into the report but rather that Mr Bagraim make a submission of all the claims he had received, to the Chairperson – who she take it upon herself to determine how she would process them, henceforth. His proposal would remove all the fissures they were experiencing. In the previous meeting, the Committee agreed that the Minister must institute a forensic investigation with the cases that were raised.

Ms Denner reiterated and proposed that the Committee should include the Compensation Fund matter in the current report as the Members could not excuse it within the Committee because there were claims that the ‘taps were being closed’. The fact remained that people were struggling with legitimate claims and would stop treating workers who were then going to suffer because of the Compensation Fund and, to a larger extent, due to the Committee because the Members would not listen to their complaints. It was the Committee’s responsibility to do oversight and to look into the matter and write it into its observations in the report.

The Chairperson responded that the Compensation Fund matter was not about what she liked. When the Department, led by the Minister, was presenting to the Committee, it was the Committee’s responsibility to challenge the Department. The Members should have argued what they were arguing in this meeting when the Commissioner claimed the Compensation Fund was closing the tap and there were complaints because CompEasy removed people off the system if specific requirements were not met. Members wanted to discuss an oversight report but some of the issues they were raising as recommendations for must be done with the Compensation Fund were items that that must be put into the Committee’s Oversight Report work. The Compensation Fund was also an entity that had had a disclaimer for five years but this was not the Committee’s concern.

She proposed that the Committee should not debate and amend the recommendations on the basis of what the Members saw when they attended the oversight visit, but rather deal with those observations when they deal with the oversight report. It was better if they deal with the oversight report sooner rather than blaming each other as if there were certain Members who did not care about the issues. As a Committee, the Members had the responsibility to recommend what they thought was to be done, without fear or favour. The Committee took a decision to have an oversight visit which was completed and she did not appreciate Mr Bagraim threatening to have those complaints sent to her. She proposed that they put the matter of the Compensation Fund aside as they could not raise issues they did not raise with the Department; it was unfair because the Department would be unable to respond to those concerns. She concluded that the Committee would not include issues about the Compensation Fund that were raised by the Members into the current report.

The Chairperson articulated Dr Cardo’s formal proposal that he also composed in the meeting chat.

Mr Ndabe asked if he could articulate his submission to the Committee to determine whether they agree with it.

Mr Nontsele pointed out that the submissions would get lost in the articulation of it. He proposed a different process: starting with the proposals submitted at the beginning of the meeting in the order they were submitted. Alternatively, Members could submit their proposals and agree on a process of commenting so that their time did not expire.

The Chairperson clarified that when Members submitted their proposals they had deliberated on and upon which the Committee agreed in principle, the emerging points of empowerment would be listed as observations. She stated that the Committee would listen to all the submissions and decide which ones they were going to accept. They must complete the observations then move on to recommendations; the discussion would be completed at their next meeting if there was a need for it.

Mr Nontsele proposed that the Members should circulate their submissions and be given time to consider all of the submissions.

Mr Ndabe seconded the proposal of being given time to consider the submissions. 

The Chairperson stated that they could not go into the recommendations without having a mutual understanding on observations. She requested that the Members look over the recommendations and offer their own inputs on the issues so that when they reconvene at the next meeting they could determine as a Committee whether they agree or disagree on the submissions.

Mr Ndabe commended the proposal as being progressive.

The Chairperson emphasised that she did not want the submissions to be lost during the deliberations, but the Committee must have listened to each Member.

Ms Ntlangwini seconded Mr Ndabe’s proposal of considering the submissions together and reconvene at the next meeting to discuss them.

The Chairperson informed the Committee that at the next meeting they would also be dealing with the minutes from two prior meetings.

The meeting was adjourned.

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