Employment and Labour Budget: Committee Report

Meeting report

Draft Budget Report on Vote 31: Department of Employment and Labour and entities

The Chairperson said the Committee Secretary received submissions from Dr M Cardo (DA), Mr M Nontsele (ANC), and Mr S Mdabe (ANC). Mr M Bagraim (DA) also submitted comments on the day. The Chairperson said the Committee will go straight to the recommendations.

The Committee Secretary, Mr Zolani Sakasa,  said he has not received any submission from Mr Bagraim. He read Dr Cardo’s observation, saying the Department of Labour was reconfigured and reconstituted in 2019 with an extended mandate including a focus on job creation. It is however not entirely clear how the employment focus is incorporated into the Department’s formal structures and programmes.

Mr Nontsele said the proposed amendments on the observation sections flows from the submission of the Department set out in Section 2.3.  In this Section, the Department spells out both its Strategic Plan and its Annual Performance Plan (APP) for the period 2020-2025. The issues are outlined in this. There are many public employment programmes housed in various departments and entities which intervene in a crisis before the current crisis [Covid-19]. He demanded a repositioning of these programmes. The shape, form, content and value, and location of various skills training programmes were looked at before Covid-19. This work must be cleaned up and mitigated. This speaks to a point brought up earlier on, regarding a skills mismatch. The Department is developing an employment policy, supposed to provide an overarching framework. One of the branches the Department has is Public Employment Services. This is where supported employment enterprises are housed. The Public Employment Services gives assistance to unemployed work seekers, actively sourcing all available opportunities. There is an attempt to reach out to employers to create jobs through the Public Employment Service, which plans to have 30 partnership agreements.

There is also an enforcement and inspection branch determining compliance with employment law. It conducts formal awareness advocacy sessions to increase awareness of employment law. The inspection and enforcement services inspect adherence to rules and regulations in the workplace ensuring amongst other matters, the implementation of health and safety. Workplaces far outstrip the number of inspectors. This is why the Department recruited and appointed additional 500 labour inspectors. Covid-19 Occupational Health and Safety directives ought to buy the executive authority, not only accentuated and heightened, but demanded speed and precision. The 500 additional inspectors came in handy.

The Chairperson said there are two views on the observations, according to the new mandate of the Department.

Mr Bagraim said he does not support many of the observations made by the opposition.

The Chairperson said Mr Bagraim cannot be general and must indicate which submissions he disagrees with.

Mr Bagraim said his report was emailed to the Committee Secretary that afternoon, but he can go through it if necessary.

The Chairperson said Mr Bagraim’s submissions were late.

Mr Sakaza said he just received Mr Bagraim’s submissions and it has not been circulated to the rest of the Committee.

The Chairpersons said it must be circulated to everyone and asked Mr Bagraim if these submissions only refer to the employment side of the Department.

Mr Bagraim said it talks to employment and the other submissions.

The Chairperson said Mr Bagraim is making it difficult for the Committee.

Mr Nontsele said he is not sure what Mr Bagraim is saying, but it is unimaginable there is a proposal countering everything presented. Mr Bagraim must rather say he has his own proposals as amendments, instead of counter to what was already presented. He said he has not seen it and is listening to it now.

Dr N Nkabane (ANC) raised a point of order and said consistency is very important when dealing with these very critical issues. This is the continuation of the meeting set this week. The Chairperson ordered every Member to make submissions through the secretariat.

Dr Nkabane said she is disturbed about the Committee entertaining submissions coming in now, as Members did not had enough time to go through it. The Committee cannot tolerate submissions which only come in now.

The Chairperson said the Committee must remember it is debating a report. As much as there will be different views, what is important is for the Committee to try, by all means, to be tolerant of each other. Mr Bagraim is unacceptably plunging the Committee into a crisis. At the previous meeting the Chairperson said Members must submit within two days, giving Members time to see the submissions.

On the other hand, it will be unfair to Mr Bagraim, but he is still being unfair to the Committee. The Chairperson said she is trying to find a middle ground so she is not perceived as trying to suppress other people. The Committee cannot waste time on submissions during the meeting, and truth be told, Mr Bagraim is being unfair.

Mr S Mdabe (ANC) said Mr Bagraim is being very unfair to the Committee. Members were all given two days to make submissions. All Members worked tirelessly to adhere to the protocols and the rules agreed to as a Committee. What is worse is, Mr Bagraim did not even submit before midnight at latest. He waits to submit the report during the meeting, and the Committee is expected to entertain this. It is ill-discipline. He said he supports Dr Nkabane in the Committee not entertaining the submission now.

Ms A Zuma (ANC) said she also joins other Members and agrees the Committee cannot tolerate what is happening now. Mr Bagraim’s submissions must be put aside for another meeting and not this one.

Ms N Hermans (ANC) said the agreement at the previous meeting was, when the Committee meets on the current day, all submissions must already have been made. Mr Bagraim only sent his submissions now. The issue is he comes and says he is not agreeing to issues of Members, which are not yet discussed.

Mr Bagraim said the Committee has just heard a submission which took half an hour of the meeting. Members still want to debate the submission and if it wants to debate it, it must hear his submission to it. He said he will make his submissions orally during the debate process if need be. Members cannot submit observations and then not have it debated.

The Chairperson asked Mr Bagraim to not always mention he is not the majority, and asked him to find a way to deal with it as all Members of the Committee must accommodate each other, but this does not mean Member’s have to accept everything for the sake of it, just so the Committee can be united.

The Chairperson said all Members were given the same opportunity to submit and Mr Bagraim cannot border into threatening the Committee. The Committee must debate issues and the process it agreed upon is a process to ensure minimising the time. Mr Bagraim must understand he has not complied with what the Committee agreed. This emphasises again, it is unfair on the Committee. She said if he wants to make an input on a specific point, he must say so.

Mr Mdabe said Mr Bagraim is saying he did not make a submission and he is replying to the submissions made by Mr Nontsele from point 6.1.1 up to point 6.1.6. He said this means Mr Bagraim is engaging on the report before the Committee was given an opportunity by the Chairperson. Mr Bagraim has a counter on the submissions already made. 

The Chairperson said the only challenge with Mr Bagraim’s process is the Committee did not have his submissions. She asked Mr Bagraim if he is not agreeing with what was tabled.

Mr Bagraim said he does not agree with a lot of the submissions and he is commenting on this. The Committee must debate, and he chose to put his debate points in writing.

The Chairperson said she is chairing the meeting and must wait for her to chair the process.

Dr Nkabane seconded the notion to accept the submissions made by Mr Nontsele with the exception of 6.1.1, where the sentence starts with: It is not entirely clearly how the employment has been incorporated. She proposed the Committee remove this part and join the sentence with 6.1.2.

Mr Bagraim said if the Committee takes out the second sentence of 6.1.1, and accepts what is said in 6.1.2, it negates the whole submission made by Mr Cardo, and this he does not accept.

The Chairperson said she hopes the Secretary is listening attentively so when the Committee gets to the end of the report, it will have to take this into consideration.

Moving on to the next point, Mr Nontsele said the next proposal he wants to make is on 6.2.3, which says the Commission for Conciliation Mediation and Arbitration (CCMA) stepped in to the emotional land question to facilitate land disputes according to Section 25 of the Constitution. This can be found in its Strategic Plan.

Mr Nontsele said, 6.2.4 says the CCMA has an enforcement strategy which was a point of contestation regarding the awards the CCMA gives out.

On 6.2.5 he said, compliance with the Arbitration Award is one of the challenges, but the CCMA aims to improve on this. Speaking on 6.2.6, he said the CCMA is grappling with the changing nature of work. It is an overall challenge which needs the legal framework which regulates employment for the CCMA to adapt. It must think through how it adjusts and must provide solutions instead of allowing the labour market to stay in an adversarial mode. There are a number of strategies it has not put forward.

.Mr Bagraim said, regarding 6.2, he does not know what the problem is with the CCMA not being able to enter places of work. The CCMA never sends officials to private workplaces. This is done by the inspection and enforcement services. It is not part of the CCMA’s mandate. In 6.2.2, it says the CCMA is struggling to take its service to where the people are. He said from his understanding the CCMA is actually getting it right. It is opening offices in every little town and wherever its services are required, it goes there.

He said 6.2.3 is correct. The CCMA has stepped in to the emotive land issue. It is important because it will facilitate land disputes.

He agreed with 6.2.4.

He said 6.2.5 is correct, but he does not understand what is meant by issuing two percent.

He also agreed with 6.2.6.

Mr Mdabe says the issues raised by Mr Nontsele are correct and he supports it.

The Chairperson said what she is getting is Mr Mdabe formally moving for those submissions. She asked for a seconder.

Ms Zuma seconded Mr Mdabe.

Mr Nontsele said the Committee was given a report by the Director of National Economic Development and Labour Council (Nedlac) on its five year Strategic Plan. It has to do with the changed environment, therefore Nedlac plays a pivotal role in the coordination of policy on social and economic matters, and also labour legislation regarding labour market policy.

On 6.3.2 he said, Nedlac, Programme Two, is named Corporations. This Programme contributes to the achievement of the National Development Plan priority Number One. This priority is economic transformation and job creation. Nedlac is also working towards embracing a rounded approach to manage its corporate identity by ensuring it stays sincere, transparent, and maintains regular interaction with its stakeholders.

Mr Bagraim said Nedlac does not represent the unemployed and the disabled. Secondly, Nedlac has a policy at the moment resisting other parties joining. There are many players in government and business saying Nedlac might not be relevant anymore. When it makes submissions, it does not mean government will follow it.

The Chairperson said, she thinks Nedlac has realised it is being questioned regarding its fitness for its purpose. This is why it is engaging on a number of programs to ensure it addresses this. She said she does not remember the Members asking in the Constituency Chamber, if unemployed and disabled people are represented. The Chairperson said she does not want the Committee to reflect on issues it did not ask the entity on, because it will be unfair to make an observation on a matter the entity did not speak about.

Mr Bagraim said Mr Cardo raised it with the Commissioner at the meeting. The answer was, it was looking at this, but the Commissioner believes the communities constituencies must talk on behalf of the unemployed and disabled. It was an observation made at the meeting and must be in the minutes.

Mr N Hinana (DA) said on the issue of Nedlac, one of the objectives is it has to be very inclusive, because one of its principles is to strive to promote the goals of economic growth by economic decision making and social equity. This is one of its objectives, and there are people who are still excluded. It must be raised here, so it can be incorporated as a final verdict of what was agreed upon.

Mr Nontsele said the presentation by Nedlac spoke to the issues of representation, but he said it was incorrect of it to represent a particular view arising from this particular debate.

The Chairperson said it must note Nedlac is still having problems relating to representation, both in the Labour Chamber and the Constituency Chamber. Regarding the issue of South African Federation of Trade Unions (SAFTU), there has not yet been an amendment.

Mr Nontsele moved for the amendments made and Mr Hinana seconded it.

Mr Mdabe said, while the Committee is on the topic of Nedlac, the Chairperson has not looked at the formulation of recommendation on the amendments on Nedlac.

The Chairperson asked him for assistance to formulate the amendments, and said, while he is still thinking about this, the Committee will move on the next point.

Mr Mdabe (as this was his submission) said, as part of the over-arching report on employment, it looked at the issue of how it will address the employment part, which was implicit on the Department of Labour and explicit regarding the new formation of the Department.

The core function of Productivity South Africa (PSA) is to promote the culture of productivity in the workplace. Point 6.4.2 says the enterprise support programme of PSA is designed to promote a productivity and entrepreneurship culture and consciousness to promote decent work involving opportunities for work which is productive and delivering fair income.

Point 6.4.3 says, PSA is aimed at preventing job losses and also undertakes productivity related researches.

The Chairperson opened up the matter for debate.
Mr Bagraim said he would remove the word “decent” from work. There is a minimum wage in South Africa and PSA must concentrate on creating work. Adding the word “decent” leads to something unknown and asks what decent work is. If decent is in terms of minimum wage then it need not be added because legislation is there to ensure that.

Mr Nontsele said the issue around decent work is first and foremost government policy. Decent work is part of the global platform created by the International Labour Organisation (ILO), whose protocols apply to South Africa as a member state. He moved to accept the proposal made by Mr Mdabe.

Ms Hermans seconded this.

Mr Nontsele said the points the Members are putting forward as a proposal flow from the Strategic Plan and the annual priorities the Department has. It is thus able to develop appropriate monitoring mechanisms, meaning, when it does oversight, it has in fact firmed up the areas critical to this, which is responding to Covid-19 and creating employment by the Unemployment Insurance Fund (UIF).

Point 6.5.1 says there are employers who do not contribute to the UIF. Many of these were found wanting during the Covid-19 pandemic. UIF is planning on increasing the number of newly registered employers. The other observation is, in the 2020/21 financial year, the UIF is planning on registering 700 000 new employees.

Point 6.5.3 says the UIF has committed funds into funding its employment creation schemes.

Point 6.5.4 speaks of plans to create 5000 jobs through UIF and investment activities.

Point 6.5.5 sets out, UIF has planned to support 30 co-operatives and 15 Small, Medium, and Micro Enterprises SMMEs.

Point 6.5.6 says there is a plan by the UIF to increase the number of youths, particularly on public employment, for enhanced employability.

Dr Nkabane moved for the adoption of the submissions made by Mr Nontsele, as it is the true reflection of what the Committee observed.

Mr Bagraim said he thinks it must be noted that the UIF had ongoing problems for over a decade with its administration. The UIF has not been able to finalise its computer systems properly. This is for a few years now. Finally the creation of jobs versus the amount of money spent is pitiful and wrong and he wants to make the observation, all of this showed up while the UIF tried to handle the Covid-19 pandemic. It has shown the serious faults of the UIF.

Mr Mdabe seconded the proposal of Dr Nkabane, supporting observations as presented by Mr Nontsele.

Mr Mdabe read his submission on the Compensation Fund. The Committee will recall there were a number of engagements with this entity. The Committee heard its five year Strategic Plan as well as its APPs. However, there are areas which need to be beefed up.

Point 6.6.1 sets out the governance component of the Compensation Fund such as medical benefits and rehabilitating services.

Point 6.6.2 speaks of claims registration, pensions, accident insurance, employer registration, return of earnings and compliance and audits. The reason this is put up is for it to be visible. The Compensation Fund is not only responsible for the payments and compensation of workers injured on duty, but other services as well which must be reflected in its observations.

Point 6.6.3 says operations in medical benefits include services which are procedure authorisation and specialisation claims processing.

Point 6.6.4 says rehabilitation services refer to Vocational Rehabilitation Programmes, Clinical Rehabilitation Programmes, and Social Rehabilitation Programmes.

6.6.5 sets out the Compensation Fund has complex operations. Its functions need varied skills and expertise. The Compensation Fund operations cannot be performed manually. A high performing Information Technology and Communication (ITC) is what could simplify the most complicated operations. This is the reason the Compensation Fund started its modernisation journey and came up with compensation made easy for the client known in short as CompEasy. Before CompEasy, the Compensation Fund was using a management system called Umehluko which was weak in controls leading to opportunities to defraud the Fund.

It was easy for any User to have access into the system, create fictitious claims and make medical invoices. It even allowed medical service providers to submit invoices with non code reads and in some cases duplicate claims.

One must qualify this statement related to what was presented by the Commissioner in both 6.6.5 and 6.6.6.

The Auditor-General raised a number of issues around the control measures within the IT system of Umehluko, which has almost contributed to declaimers the Fund received over a period. Therefore, the issue of changing the system was of paramount importance.

Point 6.6.7 sets out in the CompEasy system, rules were put into the system to prevent invalid and inaccurate invoices from entering the system.

Point 6.6.8 sets out, in the CompEasy system, only authentic and duly dedicated users can use claims. Medical service providers are not able to submit medical invoices on it.

Point 6.6.9 says some of the challenges encountered on CompEasy includes incorrectly configured automatic workflow. This resulted in workflow flowing into incorrect internal users. Also, external users were affected by Sita downtime for about 4 weeks between November and December 2019. This prevented it from accessing the system. The Fund was briefed by the Commissioner who said using CompEasy took a number of days to reskill and retrain workers.

Point 6.6.10 sets out the workflow issues resolved in January 2020.

Point 6.6.11 says CompEasy is currently fully functional.

On 6.6.12 it says the entity is still unable to take itself out of the trouble of the disclaimers, in as far as the audit claims are concerned. The Commissioner raised issue, saying some of the information is still sitting with Umehluko. It has not yet been cascaded properly within the programmes of CompEasy, but the Fund is working on this.

Point 6.6.13 sets out, the Compensation Fund has the action plan as a tool to amongst others, turn around poor audit outcomes.

6.6.14 says the entity is also closing gaps regarding some pieces of legislation.

Mr Bagraim says he does not agree with about three quarters of this information. The Compensation Fund was dysfunctional for about 20 years, maybe a bit longer. The CompEasy system is not working and has not been properly taken over from the previous system. The CompEasy system has not been structured at all and is unable to cope with claims.

Ms H Denner (FF+) says she wants to confirm something with the Chairperson. She says, in the previous meeting the Committee said it was not incorporating the oversight report into this report, yet the majority of these points look like oversight. She said she completely disagrees with point 6.6.11 because she has again spoken to people who were not able to submit claims. To say CompEasy is fully functional is completely wrong. That point must be taken out.

The Chairperson says there is nothing wrong with raising an issue, but there is everything wrong in contesting something when it was replied to and no one challenged the Commissioner. The Committee is not discussing an oversight report and it is not going to discuss one now. The Committee is discussing issues raised by the Commissioner in the report.

Ms Denner said she thinks there is confusion. The Commissioner is correct in saying payments are made, but how can a payment be made when invoices are not being submitted. The Commissioner does not know about those invoices because it cannot be submitted on the system, because the system is faulty.

The Chairperson said the Committee is not going to discuss the oversight report by default. It reflects what was tabled to the Committee the previous week and what the Department replied to. These issues must be raised when the Committee is discussing the oversight report.

Ms Bagraim and Ms Denner said he and Ms Denner are challenging the Commissioner.

The Chairperson called for order.

Mr Bagraim said he and Ms Denner are certainly challenging the Commissioner at every single meeting. What the Commissioner is doing is wrong and to ignore it is like an ostrich with its head in the sand. The people who are injured are not getting money and to say it is all fine is to have ones head in the sand.

Dr Nkabane says it is true the Commissioner said the system was fully functional. No one challenged it and the Commissioner further said there is no way to submit claims or invoices in the system if it did not meet all the criteria before the process of claims submission. All documents must be uploaded into the system before a claim is allowed. The whole Committee was present in the meeting and no one challenged the Commissioner. She said the Members must wait for discussion of the oversight report to be tabled to raise these issues.  She asked the Chairperson not to allow Members she did not recognise to just do as the Members please in the meeting. The Committee must be respected, and the Chairperson must be respected.

Ms Hermans said Dr Nkabane highlighted some of the areas she wanted to touch on but what she will say is, to move for the acceptance of the submissions made by Mr Mdabe.

Ms Zuma seconded and moved for the presentation made by Mr Mdabe.

Mr Nontsele said his proposal on the recommendations will be to incorporate 7.1.1 as it currently stands but with an amendment at the end. It will read: The Department must provide a clear plan on how the employment focus will be incorporated into the Department’s formal structures and programmes.

There is a new 7.1.1.1 which reads: A process of repatriating the Public Employment Programmes from all over the place, to a single point of coordination, and importantly an impact may have to be seen moving with the Department of Employment and Labour playing a major role.

Point 7.1.1.2 reads: Public Employment Services Branch needs to undergo restructuring to enable it to be one the depositaries of some or all of the public employment programmes.

Skills Training Programmes must move to the Department of Employment and Labour for the country to have a clearer picture, and more importantly for positive impact. The Department must continue to inspect and enforce adherence to all its labour laws. Covid-19 means joint operations with other Departments and entities must be regulated to ensure effective co-ordination.

What remains is 7.1.1 with subsets, which is 7.1.1.1, (which is currently 7.1.2). On 7.1.3, there is 7.1.1.2.

The Chairperson said the Committee gets it and he need not continue.

Mr Nontsle carried on with the recommendations and said 7.1.13 will read: There are Departments and possibly entities the Department of Employment and Labour must rather partner with. Those Departments are the Department of Trade, Industry and Competition, the Department of Higher Education, and the Department of Science and Technology, amongst others. Also, the Department may have to work closer with Statistics South Africa. This section as whole is to give more capacity and resources to the Department in light of its expanded capacity.

Mr Bagraim said many of the observations he reported on has not been accepted by the Committee, so it very difficult for him to accept any of the recommendations. He said in line with his recommendations, he will not accept the recommendation as it stands.

Dr Nkabane moved for the acceptance of these recommendations.

Ms Hermans seconded the move.

Mr Nontsele said, on 7.2 is the CCMA.

7.2.1 is as is, and 7.2.2 is a new addition saying means must be devised to capacitate and empower vulnerable workers through workshops, roadshows, and outreach programmes, amongst others. 

The Chairperson said the Committee must go straight to the proposals.

Mr Nonstele read 7.2.4, saying in the advancement and deepening of digitisation of the CCMA, the CCMA must develop clear concise strategies in such a way, it ensures the agility of this entity to the changing world. 

7.2.5 says the Portfolio Committee, as part of its oversight work will monitor the implementation of CCMA’s enforcement strategy.

7.2.6 says the Portfolio Committee, as part of its oversight work will monitor the progress made to improve compliance with arbitration awards.

The Chairperson went to 7.2.5 and said the Committee cannot be repetitive. It must delete the words Portfolio Committee on both 7.2.5 and 7.2.6.

Ms Zuma formally moved for the adoption of the recommendations.

Ms Hermans seconded the motion.

Mr Nonstele referred to 7.3, which is on Nedlac, and said 7.3.3 says Nedlac may have to ensure decisions taken on its platform filter through and down to the ground. Further, it must factor the issues of attendance to the issues relating to the questions raised earlier regarding Nedlac being fit for its purpose.

Ms Zuma moved to adopt the presentation made by Mr Nonstele.

Ms Hermans seconded the motion.

Mr Nonstele said 7.4.2, which is a new addition, sets out PSA must be utilised and encouraged to work with other entities to intervene in submerged State Owned Enterprises (SOEs) and others struggling to stay afloat.

Ms Zuma supported the presentation made by Mr Nontsele.

Ms Hermans seconded the motion.

Mr Nontsele, again on behalf of Mr Mdabe, said there are four new proposals related to the UIF.

Point 7.5.1 says, in the normalisation of the new normal, UIF must not only be repositioned and repurposed, but also be reinforced and further capacitated to play a role in the social security net.

7.5.2 sets out electronic systems aimed at rendering service to the clients must be effectively developed, administered, and utilised to meet its intended missions.

7.5.3 says UIF must improve its communication with fellow South Africans.

7.5.4 says investments development in nature must be the ones considered.

Ms Zuma moved for the acceptance of this presentation.

Mr Bagraim seconded the motion but maintains he opposes the rest.

Mr Nonstele moved to 7.6 and said 7.6.1 sets out the Compensation Fund must ensure it does not slide back, but keeps on improving.

7.6.2 says the Portfolio Committee commits to closely monitor the implementation of the Compensation Fund action plans.

7.6.3 provides for an appropriate investigation on the outcomes from the Compensation Fund, which were disappointing.

7.6.6 says the Compensation Fund must improve its communication with all South Africans.

7.6.7 says investments development in nature must be the ones considered.

The Chairperson says that on 7.6.2 the Committee will remove the words Portfolio Committee.

Ms Hermans moved for the acceptance of the submissions made by Mr Nontsele.

Mr Mdabe seconded the motion.

The Chairperson said the Committee is at the end of its deliberations and asked for a Member to move and a Member to second the Report, including amendments, corrections and deletions.

Mr Mdabe moves for the adoption of the Report with amendments.

Ms Denner asked for her objections to be noted and said the FF+ objects to the Report.

Ms Hermans seconded the motion of Mr Mdabe.

Ms N Ntlangiwini (EFF) said the EFF will also reject the Report.

Mr Bagraim said, on behalf of the DA, he also rejects the Report.

The Chairperson said the Committee is in a difficult situation and thanked Members. She said the Committee will submit the Report with all the comments.

The meeting was adjourned.