Employment patterns in Tourism; with Deputy Minister of Employment & Labour


30 November 2021
Chairperson: Ms M Gomba (ANC) (Acting)
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Meeting Summary


The Department of Employment and Labour (DEL) briefed the Tourism Portfolio Committee on employment patterns in the sector and migration trends. Foreigners made up 7% of the workers in the South African labour force. Migration patterns showed that since 2000 there had been a “dramatic influx” of undocumented migrants. DEL said it is working on policy and amendments to the legislation to address the deficiencies in the Act in dealing with recruitment and labour migration to and from South Africa.

The Committee was concerned about the preference for foreign nationals over South Africans in the tourism sector especially with so many unemployed citizens due to the pandemic. Some Members cautioned about the xenophobic undertone in the meeting.

The Committee requested that the Inter-Ministerial Committee on Migration report to it for accountability.

DEL said that research showed that foreign nationals had a better command of foreign languages required in the tourism sector. The Auditor General had raised a query about paying UIF to undocumented foreign nationals but DEL noted that the UIF Act obligated it to pay benefits to those who contributed to UIF whether documented or undocumented.

The Committee requested the Department submit a report indicating by province how many tourism sites DEL had inspected over the past four years.

Meeting report

Deputy Minister’s remarks
Deputy Minister of Employment and Labour, Boitumelo Moloi, acknowledged the DEL delegation and gave an apology on behalf of the Minister. She hoped the Department would be able to answer the Committee’s questions and if not the Department would appreciate another opportunity to come back and answer those.

Employment patterns in tourism sector
Mr Sam Morotoba, Deputy Director-General: Public Employment Services, said South Africa’s labour migration policy should achieve a balance between its population's expectations about accessibility to work for South Africans, given the worsening unemployment and the perception that (undocumented) foreigners are distorting labour market access. He spoke about South Africa’s labour market needs, in particular the need for critical skills not locally available. In accordance with international standards and guidelines, migrant workers and their families had to be protected. He also referred to regional integration and cooperation imperatives.

Migrants constitute about 4% of the population and 7% of the labour force. Especially since 2000, the influx of largely undocumented migrant workers has increased dramatically in an ever-expanding range of sectors. There was a need to deal with the absence of a streamlined policy framework and a fragmented and inconsistent approach to labour migration. The existing institutional frameworks were not aligned. Insufficient regulatory frameworks on recruitment led to irregular labour migration and non-acquisition and retention of critical skills by South Africans.

Ms Tendani Ramalongo, DEL Director, said that the statistics DEL obtained from the research were primarily aimed to inform the policy development. DEL observed that the research showed disproportionate numbers of foreign migrants in precarious low skilled jobs. The researched confirmed that foreigners were diverse in terms of country of origin. There was the existence of migrant labour in the hospitality sector. The focus was not only on tourism but also included security, wholesale and retail. In hospitality, the trends showed migrants workers were diverse in terms of skills and gender.

Working with Statistics SA would ensure credible and official statistics. The migration policy will help the country to secure official statistics on labour migration. The point picked up from the research was that employers were interested in foreigner workers as they had a better command of the foreign languages required. The foreigners had higher education levels and higher educational skills but were paid low wages. The education was high but the job was categorised as a low skilled job.

The policy would help with working conditions as the research showed that conditions in the hospitality sector were bad and workers were easily replaced. The jobs were part time and casual, though the positive aspect was the safety conditions. But there was non-adherence to working hours as the workers worked long hours.

Mr Tibor Szana, DEL Chief Inspector: Occupational Health and Safety, said that the work of Inspection And Enforcement Services (IES) encompassed inspection, enforcement, and advocacy and was based on the Occupational Health and Safety Act. In terms of enforcement, the hospitality sector and beverage sector improved compliance moved from 50% to 56% which was not close to the compliance desired.The type of environment in the hospitality sector does bring in the need to prosecute.

Several COVID-19 directives had been published with the last in June 2021. Each sector was given details on compliance and the legislation was clear. Certain industries relied on consultants to assist in complying with labour law. Some of these consultants were not worth their salt. There was challenge about the consultants used in the tourism sector.

Acting UIF Commissioner, Adv Mzie Yawa, said a major headache for the UIF was the Auditor General. Employers have to insure their employees for UIF and the UIF did not focus on whether the employee was legally in the country or not, but simply paid benefits. However, the Auditor General as a Chapter 9 institution said it is expected to strengthen the constitutional democracy and ensure the law is applied. In the extension of the Covid-19 UIF TERS, it was discovered that some employees insured only a few of their workers and other did not insure them at all. DEL was working on mechanisms to ensure that every employee was covered.

Mr Teboho Thejane, UIF Chief Director: Labour Activation Programmes , quoted Section 48(1) of the Unemployment Insurance Act: The UIF Board may advise the Minister of Employment and Labour on policies for minimising unemployment and the creation of schemes to alleviate the effects of unemployment; Section 18: The Director General may refer UIF beneficiaries for vocational training as a pre-condition to qualify for unemployment benefits; Section 5(d) of the Unemployment Insurance Amendment Act: The Fund must be used for financing of the retention of contributors in employment and the re-entry of contributors into the labour market and any other scheme aimed at vulnerable workers.

The three objectives are to enhance employability, enable entrepreneurship and preserve jobs.Training of the unemployed for employability. The intervention may be anything. DEL/UIF fund such interventions and expect that the participants will be absorbed after the funding. An employer who commits to giving job(s) must also sign a contract to give effect to the commitment. The contract reflects that if the candidates are not absorbed the funding must be paid back.

Mr P Moteka (EFF) asked why employers preferred foreign workers over South Africans, was it because foreigners offered cheap labour?

Ms H Winkler (DA) questioned the xenophobic undertone that employment in the tourism sector seemed to be skewed towards foreigners. Anyone in the country with the relevant documentation who was willing to work hard should have access to employment. She warned that the country must guard against a xenophobic approach and that SADC countries must work in unity.

Ms L Makhubela (ANC) appreciated the report by the Department of Employment and Labour.

Ms S Xego (ANC) appreciated that the Ministry had honoured the Committee’s invitation. A lot was gained from the presentation. The influx into South Africa was not just a result of the borders being porous but also other role players had not played their role. What COVID-19 has taught the world is that everyone must come up with interventions against job losses and for job creation. She requested that the Inter-Ministerial Committee on Migration come and report to the Portfolio Committee.

In the Western Cape most of the petrol attendants were foreign nationals. She asked if the foreign nationals were documented? Did they enjoy benefits? Do they offer special skills that South Africans do not have? Were there monitors from the Department to check if the workers were not exploited? All workers should be protected even if they were foreign nationals, and that was one of the things that the Committee guarded against.

Ms Xego said the research conducted showed that foreign nationals offered international languages more so than South Africans. That posed a challenge to the country. Other languages should have been included as was done with Mandarin. Fingers could not be pointed to just DEL but also to DOT to provide such skills to South Africans so that the tourism labour market could attract South Africans instead of foreigners? The biggest question was if the foreign nationals were documented? If not, then the Department of Home affairs the South African Police Service and the International Relations Department should have played their role to avoid this instability and vulnerability for South Africans.

Statistic SA is due to release its Quarterly Labour Force Survey today with statistics on employment. She did not think that it would be a positive report but they should rather wait and see. Collective responsibility must be taken for what was happening in the country. Compliance monitoring and labour law enforcement could have prevented such challenges. The presentation had been an eye opener and the Committee would look for a way forward. Other role players would be invited.

Mr H Gumbi (DA) thanked the Department for the presentation and said he had no questions.

Ms Mpushe (ANC) echoed the request for a report from the Inter-Ministerial Committee on Migration on its work. The Committee needed to have followed up on legislation that was passed by Parliament to address the needs as tabled by the DDG. She noted there was only one tourism company that stood to benefit from the programme presented. Was that due to a lack of awareness or were there underlying reasons that only one company has been awarded this? On job preservation and Temporary Employee Relief Scheme for companies in distress, are there awareness programmes for how companies could benefit from the Scheme? She asked about fraudulent TERS claims. How did DEL measure the effectiveness of the training programmes provided by DOT? On their visit to DEL, the manager responsible showed less interest in learnership programmes saying they were not effective based on beneficiaries lacking the will to complete the programme. The beneficiaries focused only on the incentives they received from the programme.

The Chairperson was pleased that DEL continued to provide training in communities that needed the training and that the Department of Higher Education through each Sector Education and Training Authority (SETA) provided the training as well. However, from the inception of COVID-19 there was a lot of SETA training that collapsed due to the pandemic. A lot of contracts came to an end before the completion the training and learners that relied on the stipend no longer received it from the service providers. What was the DEL intervention to ensure that training was reinstated until completion?

The Chairperson noted that the DDG stated that it was not easy for foreigners to disclose their status, however when the inspections were done then the employees would have been checked for registration as well as registration for UIF and Workman’s Compensation and COVID-19 compliance.

There are places that operate without complying with the Occupational Health and Safety Act, No 85 of 1993. Have the unregistered hotels and B&Bs been checked for health and safety compliance? These illegally operating companies are affecting the economy because they had not been paying tax and the unregistered employees had not paid PAYE. The economy of the country was collapsing as the Labour Department was not functional in its inspections. This then collapsed the municipalities because those illegal companies did not contribute rates and taxes. Yes, it was true that foreign nationals were distorting the labour market. What is the DEL plan to improve employment in the tourism sector and South Africa as a whole? This could not be left unresolved by DEL. Closing boarders alone could not fully assist but the enforcement of labour regulations and policy might have assisted. Non-compliant employers and employees had to be reprimanded.

DEL said that the policy framework for recruitment is insufficient or absent, what was being done about that? Was it just left or was policy going to be drafted? With 50% of the South African population unemployed something needs to be done. She worried that DEL had no plan in place but simply presented its challenges. The Department of Tourism was working hard on training and providing the required skills to people. However, upon completion of training, the people were not recognized by the sector. She did not believe that South Africans had no skills but that they had better skills. There was training and development such as for tour guides so saying people were not skilled was just an excuse.

There is legislation that is sufficient for oversight purposed by the Department of Labour. Was DEL able to deal with the challenge of foreigners being underpaid and unfairly dismissed by their employers. Was DEL able to deal with employee complaints or were they simply dismissed as the complainants were not registered? Casinos fall under Tourism. Recently some casino employees of 20 plus years were told that due to COVD19 they were part time workers. Is that allowed according to labour law without following any procedure?

DEL response
Mr Sam Morotoba replied that the Department has worked on policy and on an Amendment Bill upon the realization that there was a deficiency in the Act. A presentation was made to Cabinet on the proposed Amendment Bill that will go out for public comment and culminate in the Amendment Bill being tabled in Parliament for it to pass the necessary legislation. DEL would love to speed up the process but unfortunately certain processes had to be followed before legislation came to Parliament. This legislation needed to complement legislation by the Department of Home Affairs which was reviewing the Citizenship Act because of the many deficiencies in the Refugees Act and Immigration Act. There were several cases where Home Affairs was taken to court by either human rights group or international bodies or other people. The courts had pronounced what actions should be taken by government.

DEL is trying to find the right balance for a difficult issue so that the approach does not seem xenophobic. One challenge is the noise made by South Africans working on migration. There are those who benefit from the ill-treatment of foreigners and who see nothing wrong with underpaying foreign nationals as they believe foreign nationals have no rights. DEL was working with Home Affairs to ensure stiff penalties for anyone who employed foreign nationals without the necessary documentation. This challenge was common across the world that when a country enforced such laws it was seen as being xenophobic. One cannot go to neighbouring countries and just do as one pleases. Entities could be blamed but they need to have been strengthened support is needed from Parliament.

Whether a person is documented or undocumented, the problem was alignment where a person had not been paid the minimum wage. The law required that there be back pay from when the employee started working. But the employer who benefited knows that the employee will be deported once the case got to court. Then the case will be thrown out due to lack of evidence. Court cases take too long so there is a need to speed up the prosecution process.

He welcomed the idea that the individual departments be called to account for the work they were doing. For instance, the Department of Justice faced problems with prosecuting someone in the language that was understood by the person. There are several departments that were part of the Inter-Ministerial Committee on Migration. The President was shocked when he called the departments because he knew that every department has a stake.

Ms Ramalongo added that the research findings unfortunately pointed to loopholes that existed in the labour market. The aim of asking for a migration policy was to tighten the loopholes which foreigners exploited. The language skill was just an excuse why South Africans were not used in the market as well as the reason that South Africans were lazy. Migrant workers would work longer hours without complaining because they were undocumented. If they complained to their employer the police would be called to avoid paying the worker before the month ended. She wanted the Committee to note the reason that undocumented migrants were hired was for exploitation, for the business to benefit at the expense of foreigners.

South African laws were there to cover everyone regardless of nationality. The research revealed to the Department those areas that needed to be tightened and DEL was busy tightening these. She cited the amendments that were made to the Labour Relations Act that prohibited contracting to address casino workers.

Mr Morotoba aid the Department had 1500 inspectors and Home Affairs had 700 and that is a capacity challenge. DEL will find innovative ways to deal with its inspection challenge. It was trying to come up with self-inspection to reward companies that were compliant and to have other inspectorate companies accredited by the Department to assist with inspection. Another challenge was covering the length and breadth of the country. Some companies did not comply with displaying boards about employee rights hence there were prosecutions.

Another challenge with the Department of Justice was that court cases took long, and some employees would think that the labour laws did not apply. When conducting an inspection there were protocols to be followed. Inspectors could not just show up without appointments and that was one of the problems. DEL was not allowed to do raids unless it was a joint operation with the police and there were reasonable grounds to believe that the employer was not cooperating with Home Affairs.

On Occupational Health and Safety compensation, there were workers who died, got sick or received serious injuries at work and some went back to their countries. Then there would be complaints from neighbouring countries that their nationals came back sick and died.

The various entities had to work together because those non-compliant companies benefited from the process. They maximized on profits and undercut labour costs. There was no capacity hence they were working with trade unions for extended eyes and ears for the Department to enforce compliance.

Adv Mzie Yawa replied that there had been companies in the tourism sector that were involved in fraudulent activity. They would check the books for actual examples. They adopted a ‘follow the money’ for TERS to find bogus organisations who claimed fraudulently. On the point that DEL raised problems rather than solutions, he disagreed saying that down the line the concerns would be taken care of by the policy that had been developed. The Auditor General had questioned if the Department was right to pay vulnerable workers who were in the country without proper papers. In reply, DEL said that the UIF Act empowered the Department to protect every contributor and did not say "provided the contributor was in the country legally".

Mr Thejane replied that the SETAs had their own mandate and his inclination about the learnership stipends from a contract management point of view was that when COVID kicked in there would have been engagement between the two parties in the contract and amendments to the funding agreement so that the contract did not expire. In the DEL Labour Activation Programme (LAP) in such instances, COVID-19 stipends were introduced, and learners continued receiving this stipend outside of the learnership. That is how the Department intervened. The DEL sign an undertaking with funded partners so that the remainder of the programme could be finalised as there were no financial implications.

The Department dealt with Productivity South Africa that provided a basket of services and there were offices in four provinces that were clustered to deal with regions. There was advocacy and marketing through the Productivity SA website, the DEL website and the communications unit and advocacy sessions and interviews were conducted. He was recently on Power FM and Legwalagwala FM talking about the Labour Activation Programme (LAP), along with CCMA and Productivity SA on the services the Department provided. DEL was working with communications unit on an opinion piece on the Labour Activation Programme (LAP) which would be issued shortly.

On the effectiveness of the LAP, since 2010 until 2020 the Department relied on the SETAs because that was their forte. But there was a change, a LAP revamp workshop was held from 16 to 18 November initiated by the DG where LAP was repackaged in terms of expectations. The LAP Committee had conducted oversight of the East London project at the end of September and looked at its impact. It then informed the Department how to deal with reconfiguration. There would be discussions on the revamp and reconfiguring certain aspects.

Any company that might undergo a Section 189 retrenchment was supposed to approach the CCMA. A committee was set up constituted by social partners, business and labour including LAP and CCMA and compliance officers. The committee looked at challenges and proposed solutions. The committee sat every Thursday. That is when CCMA cases would be received and then quantified and stratified according to the number of employees.

In answer to Ms Mpushe, Mr Thejane replied that so far only one tourism company had submitted. Tourism companies should have submitted as TERS is across the border and not for a specific sector.

The SETAs were responsible for training. Since 2010 until recently the Memorandum of Agreement (MOA) that the LAP entered into with SETAs was based on 50/50 so the responsibility from LAP was 50%. With the stipend, an amount would be contributed by LAP and UIF and the remaining amount would be the SETA's responsibility.

The Chairperson requested that DEL submits a report on the four previous financial years that shows accountability for its oversight mandate. The report must indicate how many tourism sites DEL inspected over the last four years to check on health and safety compliance with the regulations for Act 85 of 1993. There must be a province breakdown for each year to check DEL concern for the safety of tourists and also submit statistics of South Africans working in the neighbouring countries. The time frame for this report submission was two months.

The Chairperson thanked DEL for honouring the meeting, minutes of the previous meeting were considered and the meeting was adjourned.

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