In a virtual meeting, the Committee was briefed by the Department of Employment and Labour on its 2021/22 Annual Performance Plan and Budget. The Committee ratified the International Labour Organisation Convention 190 concerning the elimination of violence and harassment in the world of work. The Minister provided a briefing on the ILO Convention 190.
Members heard that the Department of Employment and Labour strives for a labour market which is conducive to investment, economic growth, employment creation and decent work. It has annual targets across key programmes namely: Administration; Inspection and Enforcement Services (IES), Public Employment Services and Labour Policy and Industrial Relations (LP&IR).Significant annual targets include ensuring that vacant funded posts were maintained at 3% or less every quarter, 296 904 employers were inspected per year to determine compliance with employment law and 800 000 work-seekers were registered on employment services of South Africa per year. A total reduction to baselines across the medium-term of R1 180 630 000 has been effected. The reductions will result in the provinces not affording to pay for operating leases and property payments amongst other commitments; this will negatively affect the programme’s support to the core functions within the provinces.
On the budget cuts, the Minister said that the Department was in the process of ensuring that resources are allocated to meet political priorities and to make sure that the quality of spending is done within sustainable fiscal limits. Through the process of budgeting, a large number of institutions plan, collaborate, negotiate and decide together on the comprehensive plan for spending the resources.
Members were generally concerned about budget cuts but more specifically concerned about provinces abolishing certain positions due to those reductions in the budget. Out of concern for employees they asked ‘If it does happen, will it only be applicable to provinces or will the National Department have to look at cutting down on employees’? The devastating effect of the pandemic on the unemployed was noted with the key question being how the development partners would help the unemployed workers find new jobs and new career paths. Members asked ‘What support does the Department need around unemployed workers once they have been brought on-board’; ‘What policies and strategies can help to solve the problem’? And what will be done to ensure that there is a creation of conclusive development for investment and job creation’? Members raised concern about business and its strategic lack of target setting and felt that the Committee should look into this. The Committee was worried about the vulnerability of the Unemployment Insurance Fund by virtue of the role it has played and asked ‘What is the state of affairs now’? Members asked what had been done to minimise the propensity of fraudulent activities.
On fraudulent activity in the Department, Members heard that the SIU had started investigations into fraudulent activity and the COO and CEO who were under suspension, were brought back as their suspension was premised on the fact that it is a precautionary suspension pending the outcome of the investigation. The CFO was charged and they are now awaiting the outcome of the disciplinary process. Regarding the issue of abolishing posts, the Committee was informed that the Department had indicated that they would look and see which posts should be prioritised. This would not only affect the provinces but also the Department. The Department informed Members that even though they had experienced the budget cuts they wanted to maximise the limited resources that they had to make sure that they continued to do their work.
Members were briefed by the Minister on the International Labour Organisation (ILO) Convention 190 concerning the elimination of violence and harassment in the world of work. This was done with the hope to gain support for the ratification from the Committee before approval from the two Houses. In response to the provisions of the ILO Convention 190, the Department has developed a code of good practice which provided clarity on the interpretation and implementation of the Employment Equity Act pertaining to the prevention and elimination of violence and harassment in the world of work. Given the Department’s stance that the workplace should have a culture where victimised employees were able to report it without fear of reprisal; it is expected that employers have clear rules, policies and procedures prohibiting all forms of violence and harassment as well as any other forms of unfair discrimination. Members welcomed the presentation and commended the Department on the conclusion of the ILO Convention. The Committee voted to ratify the ILO Convention 190.
The Committee Secretary began firstly by recognising the Members that were present and stated that there was a new Member, Mr A De Bruyn (FF+, Free State). There was one apology from Ms B Mathevula (EFF). The Chairperson recognised the Members that would be joining the meeting later due to prior engagements.
The Chairperson welcomed the officials from the Department of Employment and Labour as well as the Minister and Deputy Minister. He extended his welcome to the Members of the Select Committee.
The Minister’s Remarks
The Minister of Employment and Labour, Mr Thulas Nxesi, said that one of the purposes of this engagement is to obtain the approval of the Select Committee, with the view to submit the International Labour Organisation Convention concerning the elimination of violence and harassment in the world of work( Convention 190 of 2019) , for ratification by government. The Convention 190 provides a clear framework for action to shape a society based on dignity and respect free from violence and harassment. In order to strengthen the implementation of the provisions of ILO Convention 190, the Department of Employment and Labour has developed a code of good practice on the prevention and the elimination of violence and harassment in the world of work. The code provides a framework and clarity on the interpretation and implementation of the Employment Equity Act pertaining to the prevention and elimination of violence and harassment, including gender based violence and harassment as a form of discrimination. It provides a human resource policy and practice related to the violence and harassment that is based on equity, dignity, health and safety and non-discrimination. The Department maintains that a workplace culture should be created wherein persons affected by violence and harassment may bring a complaint without fear of reprisal and with the assurance that their complaints are not trivialised or ignored. Employers are thus required to have clear rules, policies and procedures prohibiting all forms of violence and harassment and other forms of unfair discrimination in the world of work. The policy should make it clear that such complaints are regarded by the employer as a very serious form of misconduct which may result in a dismissal. The Department of Employment and Labour conducts employment equity roadshows throughout the country. These workshops will serve as a tool to promote awareness concerning the adoption of Convention 190 and the Code of good practice and prevention and elimination of violence and harassment in the world of work.
Section 231(2) of the Constitution provides that an international argument such as the ILO Convention 190 binds the Republic only after it has been approved by a resolution by both the National Assembly and the National Council of Provinces.
He said that they trust that the Select Committee will support the ratification of Convention 190.
In the immediate short term, the Department is seized with the response to the pandemic, on matters of health in the work place as well as supporting the implementation of the Economic Reconstruction and Recovery Plan. He highlighted that this takes place within the longer term strategic mandate of the Department which includes the development and enforcement of policy. The focus is on the health, safety and equity in the world of work, the provision of a social security net through the Unemployment Insurance Fund (UIF) and the Compensation Fund as well as safeguarding workers’ rights.
The Department has some way to go in terms of conceptualising and reconfiguring its scope to incorporate the mandate of employment which it received in 2019. The focus is to leverage existing resources, principally from the UIF and Compensation Fund as well as programmes such as the Labour Activation Programme, to preserve and create employment. The Department also works with the Presidency to implement the employment programmes and to coordinate efforts particularly for the youth.
Briefing by the Department of Employment and Labour on its 2021/22 Annual Performance Plan and Budget
The Director-General, Mr Thobile Lamati, presented the Annual Performance Plan and the Budget. He said key annual targets under its administration programme were:
-Ensuring that vacant funded posts maintained at 3% or less every quarter;
- 45% of SMS positions occupied by women;
- Increase systems availability to 98%;
- 93% resolution of reported incidents by disciplinary and criminal interventions;
- Number of Annual Financial Statements (AFS) and Interim Financial Statements (IFS) compiled per year that comply with guidelines issued by the National Treasury and
- 100% reporting of the detected occurrences.
Key targets in the Inspection and Enforcement Services (IES) programme were:
-296 904 employers inspected per year to determine compliance with employment law;
- 90% of non-compliant employers of those inspected served with a notice in terms of relevant labour legislation within 14 calendar days of the inspection;
-65% of non-compliant employers received by Statutory Services referred for prosecution within 30 calendar days; and
-two to four advocacy sessions conducted per year to increase awareness of employment law.
Key annual targets in the Public Employment Services were:
-800 000 work-seekers registered on Employment Services of South Africa per year;
-100 000 employment opportunities registered on the Employment Services South Africa per year;
-230 000 of registered work-seekers provided with employment counselling per year; and
- Registered employment opportunities filled by registered work seekers per year.
Key annual targets under the Labour Policy and Industrial Relations (LP&IR) were:
- EEA amendments finalised by 31 March 2022;
- 2020-2021 Annual Employment Equity Report and Public Register published by 30 June 2021;
- Code of good practice on elimination of harassment and violence in the world of work published by 31 March 2022;
- Review of the National Minimum Wage level by 31 March 2022;
- 100% of collective agreements assessed and verified within 180 working days of receipt by 31 March 2022;
- 100% of labour organisation’s applications for registration approved or refused within 90 working days of receipt by 31 March 2022;
- Reports on the implementation of bilateral cooperation and multilateral obligations signed off by the Minister annually;
- Annual labour market trend reports produced and
- Research reports and 2 data collection instruments in line with RME Agenda produced by 31 March 2022.
[see presentation attached for further details]
The Department’s programmes have been affected by budget cuts across all the programmes. However the Department has laid out the mitigating strategies relating to the effects of the budget cuts on their programme plans.
A total reduction to baselines across the medium-term of R1 180 630 000 has been effected. The reductions will result in the provinces not affording to pay for operating leases and property payments amongst other commitments; this will negatively affect the programme’s support to the core functions within the provinces. The current dilemma of reducing budget on Compensation of Employees (CoE) and Goods and Services will cripple the work of the Branch which is currently battling a low compliance rate of employers. This will impact directly on the Decent Work of the Department who is a signatory to the Decent Country Work Programme together with the ILO. This will further impact on the Programme who is working towards achieving the current instruction of Government to target OHS in the informal sector which incidentally, is the target for Government over the next five years. Together with this, there will be a direct impact on the transformation agenda of the country as well as an influence on the changes that were required for women, youth and the people with disabilities. Overall, the decent work Agenda will be directly impacted upon. A reduction in the Compensation of Employees will have a direct impact and a concomitant impact of 20% on Goods and Services (G&S) for the same number of affected employees. A big chunk of G&S goes towards travel expenses, i.e. a car is needed by an inspector for him/her to do inspections. No car will equate to an idle inspector. An idle inspector gives rise to wasteful expenditure. For a COE budget cut that is above 20% there is a risk of the provinces not affording to fund their structure, including salary adjustments and bargaining council agreements (OSD for officials qualifying in the MTEF period) and also the OD processes that may have outcomes such as upgrades. Ignoring implementation of bargaining council agreements may lead to labour disputes which may have legal implications. The ability to undertake programmes that can assist work seekers with their job search activity will be severely curtailed. The planned ESPs’ capacity building, which is crucial for improved placement of work seekers, will be impeded. The provinces will be forced to consider the probability of abolishing posts.
Ms H Boshoff (DA, Mpumalanga) commended the Department on the conclusion of the ILO Convention 190, as she said that the ILO Convention is something that should have been passed long ago. She said that she hopes that the constitutional amendment will be fast tracked so that they can see equality in the work place. With regard to the budget cuts, she stated that she had a problem with the inspections; once the ILO ratification has been passed, who was going to ensure that the policies that have to be drawn up by the employer were implemented. This was in reference to what was said in the presentation regarding the inspections and the tools of trade being minimised.
Regarding provinces abolishing certain positions due to budget cuts, which would mean that people will be added to the unemployment rate; ‘should it occur, will a report be provided to the Committee’? If it does happen, will it only be applicable to provinces or will the National Department have to look at cutting down on employees’? On programme 1, under number three (see presentation); she asked why there were no indicators for quarter one and quarter three.
She stated that certain officials had been suspended due to the R40 million and R30 million that went missing in the UIF, and she had been led to believe that the CFO and the CEO of the UIF are now back at work. She asked the Minister if he could provide the Committee with a report on whether the necessary disciplinary steps were taken and what was the outcome of those steps.
Mr M Mmoiemang (ANC, Northern Cape) said that the key question is how the development partners will help the unemployed workers find new jobs and new career paths, given the devastating nature of the pandemic on the country’s economy. ‘What support does the Department need around the unemployed workers once they have been brought onboard’? ‘What policies and strategies can help to solve the problem’? He stated that he was raising the point being mindful of the importance of partnership between the private sector and the government. ‘What will be done to ensure that there is a creation of conclusive development for investment and job creation’? He said that the issue around the contribution of the three parties - labour, government and business - was an issue raised previously with regard to their contribution towards the Economic Recovery Plan. It was important to get a sense of what was happening at that level; what are the risk conventions of use in terms of infusing their input, particularly that of business in relation to the ERRP. He highlighted that during the governing party’s NEC Lekgotlha, the former President raised a point about the absence of targets set by business in relation to their contribution. The strategic nature and the creation of the Department in terms of ensuring that there is a convergence and correlation of the contributions around reconstruction and recovery is important so that there is a movement from the point of characterising the ERRP as a vision to become an implemental tool. He stated that it is important because there is a lot that is expected in terms of the role that the Department plays given this new mandate. More than that amongst this programme is a public implemental service. They are mindful of the planned targets that were put before them and amongst them; the issue of work seekers in the employment service providing counselling to 230 000 workers, filling 50 000 registered employment opportunities and registering 100 000 work opportunities. He expressed that the role that the Department must play in this regard is important. They were raising the issue informed by the fact that it is important that it must be complimented with the inspection and reinforcement of the labour enforcement services in the functional areas that were put across by the Department. They are also mindful of the provincial targets that were outlined in terms of the inspection across all the provinces as it put the Select Committee in a better position to understand where the Department is moving, particularly in the context of the propensity by some of the employers to trample on workers’ rights.
He said that the targets under Priority 2 appeared to be unimpressive, to which he proposed that the Department should look into them; he raised this in view of what they had raised in the previous year being mindful of the Department’s presentation around the respective areas.
He said it is important to get a sense of the vulnerability of the Unemployment Insurance Fund by virtue of the role it has played. ‘What is the state of affairs now’? ‘The challenges that were raised around the system, what has been improved to make that the propensity of fraudulent activities are minimised’?
Lastly he said that the incubation system in the Commission for Conciliation, Mediation and Arbitration (CCMA) was worrying. When the DG made the presentation about the implications of the budget cuts, one of the areas he highlighted was the influence it had on the Information Management System and the Communication Technology System. He asked if this concern would be applicable to the CCMA. He said that they expected the CCMA to play a critical role of being the defenders given the vulnerability of workers during this pandemic.
The Minister was not able to respond to any of the questions as he had left the meeting. The Deputy Minister, Ms Boitumelo Moloi, was then asked to respond to the questions that were directed at the Minister in relation to the UIF officials that were suspended.
The Deputy Minister asked the Director-General to respond to the questions regarding the suspension as he had more details.
The Director- General said that when the Special Investigating Unit (SIU) started the investigation they indicated that as and when they complete a certain portion of their investigation, they will let the Department know what the outcomes were. They started with seven officials that were involved in the supply chain issues. There were clear recommendations from the SIU that the disciplinary process must commence and indeed the Department did that. There was no need for the Department to suspend some of those officials. Those that were suspended, the CFO and the CEO, the SIU also concluded the part of the investigation that related to them. Based on that, the Department brought them back as their suspension was premised on the fact that it is a precautionary suspension pending the outcome of the investigation. The investigation was concluded and there was no wrongdoing on the part of the COO. With regard to the CFO, there were areas that she needed to answer to, and as a result there were charges drawn up and they are now awaiting the outcome of the disciplinary process. The matter that involves the Commissioner has not been finalised. They have received the report on Friday and they will have to consult it in order to make a decision; once that has been done they will share the information with the Committee.
Regarding the issue of abolishing posts, the Department had indicated that they will look across to see which posts should be prioritised. This will not only affect the provinces but also the Department as well. They indicated that even though they had experienced the budget cuts, they want to maximise the limited resources that they have and make sure that they continue to do their work. Therefore, the inspectors are still required to enforce the policies that they administer as a Department. He highlighted that the people that are supposed to comply with these policies have a responsibility morally and legally to comply. So it is expected that they play their part and comply with the laws of the country.
He welcomed the appreciation by Ms Boshoff regarding the completion of the ILO Convention as it had been a difficult week for the Department. He said that they will share the information with the Committee regarding the cutting down of posts.
They are currently working on a concept called the Pathway Management Network, championed by both the Presidency and the Department. It involves working closely with other network providers and private network providers. One of the functions of the Department is to register private employment agencies and temporary employment agencies. With the Pathway Management Network, young people will get access to a network, across the board; not only the public network system but also other networks that are controlled by private network providers so that young people are not limited to the networks they use. If somebody is registered with a private network and there is vacancy in the employment service system that the Department administers, through this agreement the young person will be able to access the vacancy. This will increase the prospect of being absorbed into employment.
Regarding the contribution of social partners in the Economic Reconstruction Recovery Plan, he said that when they started it was an issue. As government they complained that there was little that business was putting on the table as its contribution. In the Economic Recovery Action Plan there are clear areas where business will contribute as well as clear areas for contribution by Labour and the community. As far as reporting is concerned, as government, they will then report on their areas that they had agreed upon. There is a focused of look at how each social partner is contributing to the ERRP.
The issue of the vulnerability of the Unemployment Insurance Fund is something that they had raised with the Committee in the previous year. If for instance they continue to extend the Covid 19 test benefit perpetually, they will reach a state where the fund will cease to exist because it will not have funds to run its affairs, as the money would have been spent on one programme. He said that they understand the importance of the programme and they have seen how the benefit has contributed to the lives and livelihood of workers as well as saving a lot of jobs that would have been lost as a result of Covid 19. Currently, the Department is waiting to see whether there will be demands for the extension of the Covid 19 Test Benefit beyond 15 March, but they have indicated the financial implications to the social partners; that it will stretch the fund’s financial position. The revenue that the fund currently receives is far less than what it used to get. So they want to make sure that they are able to recover, but most importantly, they want to make sure that they have money to pay in the event that there are retrenchments.
Regarding the Compensation Fund, they have a number of challenges which they laid bare during their appearance before the Standing Committee on Public Accounts (SCOPA). As a result, the Minister is taking a number of steps that include a forensic investigation, as well as looking at the organisational review that will overhaul the structure of the entity. He reiterated that they were indeed facing challenges with regard to the Compensation Fund as pointed out by the Auditor-General audit outcomes.
Regarding the CCMA system he said that everyone in the Department needed to reassess how they were going to provide services to the people. Given the fact that they all have a responsibility not only to service the client but also protecting their employees; they all took a decision to automate a lot of their processes. They took that decision mindful of the fact that they may be alienating a number of their beneficiaries who would ordinarily find it easy to access their services. However, they have put a system in place where in instances where system does not have an office; it can make use of the space in the Department wherever the office of the Department is located. People can then go to the office and lodge complaints and find out about their cases. Secondly, the system that the CCMA is using, their officials have access to it so that they are able to check the status of the cases that have been lodged with the CCMA so that people do not have to go to the offices of the CCMA; they can use the Department’s offices to check the status of their cases. He stated that this has been largely influenced by the budget cuts that the CCMA has experienced and they have had to explain that in as much as they understand the impact of the budget cuts on the CCMA, they are pleased that the CCMA has made an arrangement in a way that their key functions have been retained. There are areas where the CCMA has reduced targets but the Department is content that they will be able to do their work. The Department will be watching to see that in the event that they are really struggling as the Department had done in the past, they will go to National Treasury and ask them to allow the Department to move funds from the Department in order to assist the CCMA.
DEL DDG: Corporate Services, Ms Bahumi Matebesi said that the reason they only have targets for quarter two and four, is because they are looking at the beginning of the year and the fact that their turnaround time for the filling of vacant posts is four months. So they decided that, instead of measuring within three months if there is a vacant post at the beginning of the financial year; rather give a leeway wherein they start measuring at quarter two and in the same way in quarter four. The fact is that by the end of the financial year they should have met the target they had set as an annual target.
DEL DDG: Inspection and Enforcement Services, Ms Aggy Moiloa, commented on Mr Mmoiemang’s comment regarding the targets unimpressive state. She stated that she agrees with him, however, when looking at the previous year, their target was at about 188 000 per annum; and when looking at was presented, they have gone up by almost a 100 000. The main driver was the additional resource that they were able to secure. She also stated that when the Department embarks on target setting they take a few things into consideration. They first look at the resource space that they have which they currently have just over 2200 inspectors in various disciplines. They also take into consideration the whole element of trying to balance quantity with quality. At the end of the day whilst it would be desirable to increase the number of inspections conducted, they also do not want to throw out numbers for the sake of it. So invariably, some of the inspections will take more time than others due to the extensive nature of the inspections. They also hold the view that resources will never be enough so they look at the resources at hand and base their targets on that.
DEL DDG: Public Employment Services, Mr Sam Morotoba, stated that unemployment especially amongst the youth is a national problem that required national efforts across the board. The Department’s role has been to make sure that they assist government in collecting all interventions across through the Pathway Management Network from the private sector initiatives and across government. They are able to see if they are making meaningful progress and to augment the information that is provided by Stats SA.
The EU-Africa academic partnership is a partnership with the European Union, which involves Basic Education and Higher Education Departments. They are working in collaboration to make sure that they assist in the transition from school to work and provide those in basic and higher education all the necessary information to enable them to enter the labour market. There are quite a number of platforms that enable people to provide the Department with information then they gather information about opportunities. The Department calls in people for screening which shortens the time it takes for the employer to do the recruitment and placement. All of this is done free of charge.
ILO Convention Ratification
The Chairperson tabled the ILO Convention for ratification.
The Select Committee considered the request to ratify the International Labour Organisation (ILO) Convention concerning the Elimination of Violence and Harassment in the World of Work Convention, 2019 (No. 190)
The Committee voted in favour of the ratification of the Convention.
Closing remarks by Ministry
The Deputy Minister thanked the Committee for the opportunity to present. She said that the Department is always ready to come before the Select Committee to account; also pledging the Department’s support of the work of the Select Committee. She expressed that they will continue to cooperate with the Select Committee in all the matters.
If there were issues that the Department may have not adequately addressed, she requested that if possible, the Committee Secretary be allowed to send them to the Department in order to respond to within seven days.
Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on Budget Vote 38: Tourism
The report was considered and adopted.
Adoption of Minutes
The Select Committee adopted the minutes of its meetings on 11 and 18 May 2021.
The Chairperson thanked the Members and adjourned the meeting.
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