The Committee convened virtually to receive a briefing from the Department of Employment and Labour (DEL) on its Strategic Plan 2020-25 and Annual Performance Plan 2022/23.
Minister Thulas Nxesi opened the meeting by emphasising the Department’s national footprint. He also emphasised the Department’s renewed commitment to providing jobs for people with disabilities by gradually increasing the size of supported enterprises where they have not been doing well. Additionally, there are new indicators in ‘Priority Two: Economic Transformation and Job Creation’ in and ‘Programme 2: Inspection and Enforcement Services’. There is an increase in the size of the inspectorate and targeted inspections for this year.
The Strategic Plan for 2020-25 will focus on six of the seven priorities. Priority Five, which is the District Development Model, is not directly applicable to Department. The Department aims to create a labour market, which is conducive to decent employment. Also, highlighted in the Annual Performance Plan (APP) 2022/23 is an annual target is to ensure 50 additional persons with disabilities employed in factories that fall under Supported Employment Enterprises; a 10% annual increase in sales revenue, and seven customer agreements entered into by the end of March 2023.
The total budget allocation for 2022/23 is R3.956 billion, 2023/24 is R3.983 billion, and 2024/25 is R3.772 billion. The total current payments over the medium-term expenditure framework are R4.250 billion. The total transfers in 2022/23 are R1.638 billion, R1.712 billion in 2023/24 and R1.399 billion in 2024/25. This totals R4.750 billion over the expenditure framework period.
The Department assured the Committee that they are setting to include women through two approaches: internal target and externally (ensuring compliance with Employment Equity). Mpumalanga is the only province without a Supported Employment Enterprise. Additionally, inspectors will have to determine whether there is compliance with legislation and non-compliant employers will be served a notice. Inspectors that do not reflect the values of the Department will be dealt with decisively.
With the social compact, there is no need for extra resources because they are using the current budget; there are different timelines on how the claims are finalised. On the issue of procurement of the youth and people with disabilities, the Department said that it has been engaging with the departments affected.
The Minister said that the Department will have to follow up on the number of questions raised by providing further explanation of what they have done to correct some of the issues.
Opening Remarks by the Minister
Mr Thulas Nxesi, Minister of Employment and Labour, thanked the Select Committee, on the behalf of the Ministry and the Department, for the opportunity to present their Strategic Plan 2020-25 and Annual Performance Plan (APP) for the financial year 2022/23. He values the input of the Committee, and affirms their commitment to the principle of parliamentary oversight on the Executive of the Ministers and Officials. Although it is uncomfortable at times, it is done to keep them on their toes. To be responsive to the needs of the people, the Officials of the Department, led by the Deputy-General (DG), will provide a detailed presentation.
He stressed the Department’s national footprint across every province, with offices in all nine provinces, 125 labour centres, 30 satellite offices, 41 service centres, and 447 visiting points.
Concerning Priority Two: Economic Transformation and Job Creation, he said that there are new indicators in the new Strategic Plan, and Members should take note of them. The indicators emphasise job preservation and creation, particularly concerning the youth. This will, in no way, compromise the Department’s traditional role in promoting decent work, inspecting and enforcing legislation of basic and minimum conditions of employment, health and safety – including Employment Equity and providing social equity to employees through the UIF and Compensation Fund.
Regarding the APP, he reported that, with ‘Programme Two: Inspection and Enforcement Services’, Members should take note of the increase in the size of the inspectorate and targeted inspections for this year. He acknowledged that it is still not enough, but emphasised the Department’s renewed commitment to providing jobs to people with disabilities by gradually increasing the size of supported enterprises where they have not been doing well. He said that the officials will provide more details on the points he highlighted in the remarks.
Briefing by Department of Employment and Labour: Budget Vote, Annual Performance Plan and Strategic Plan
Ms Marsha Bronkhorst, Chief Operating Officer (COO), Department of Employment and Labour (DEL), listed the programmes and entities at the Department. She said Programme One is Administration, and it includes the Ministry; Deputy Minister, Director-General’s Office; Corporate Services (CS), Chief Operations Officer (COO), and Chief Financial Officer (CFO). Other programmes include:
Programme Two: Inspection and Enforcement Services (IES)
Programme Three: Public Employment Services (PES)
Programme Four: Labour Market Policy & Industrial Relations (LP&IR)
Programme Five: Unemployment Insurance Fund (Schedule 3A Public Entity)
Programme Six: Compensation Fund (Schedule 3A Public Entity)
She then reflected on the following entities:
Commission for Conciliation, Mediation and Arbitration (CCMA)
National Economic Development and Labour Council (NEDLAC)
Productivity South Africa (PSA)
Supported Employment Enterprises (SEE)
Regarding the 447 visiting points that Minister Nxesi spoke about in the opening remarks, she said that the visiting points are scattered across the country and serviced at intervals by Officials of the Department. Some points are serviced once a month, some every two weeks, some weekly, and some twice a week or more. It will depend on the need for the services at a particular point. Most of the 447 visiting points are in the very deep rural areas of the Department and Country.
Strategic Plan 2020-25
The Department will be focusing on six of the seven priorities. Priority Five, which is the District Development Model, is not directly applicable to DEL. However, it is supported through provincial offices and Labour Centres. The Medium-Term Strategic Framework (MTSF) priorities include:
Priority one: a capable, ethical and developmental state, which is supported by the DEL, all public entities and administration programme;
Priority two: economic transformation and job creation is supported by IES (Inspection and Enforcement Services); PES (Public Employment Services); LP&IR (Labour Market Policy & Industrial Relations), SEE (Supported Employment Enterprises); UIF (Unemployment Insurance Fund); CF, CCMA; Productivity SA, and NEDLAC (National Economic Development and Labour Council);
Priority three: education, skills and health is supported by IES; PES; UIF; CF, and Productivity SA;
Priority four: consolidating the social wage through reliable and basic services is supported by IES, UIF and CF;
Priority six: social cohesion, safer communities is supported by LP&IR;
Priority seven: a better Africa and a better world is supported by LP&IR;
The goal is to realise a labour market that is conducive to decent employment.
Priority one: a capable, ethical and developmental state
There are new targets under priority one. The Department wants to maintain its vacancy rate at eight percent. They want to improve the information security status of the Department. For this indicator, they have developed a three-year cybersecurity roadmap. Another new indicator is to transition legacy systems to modern integrated SAP Platforms. All targeted legacy applications are to be replaced by SAP4HANA, as per the roadmap.
Priority two: economic transformation and job creation
In terms of numbers, nothing has changed regarding priorities two and three. The Presidential Job Summit agreement has 275 000 jobs created per year, which is monitored and reported. The Department wants to create one million youth jobs by 2024 through the Presidential Comprehensive Youth Employment interventions, to which the DEL will contribute 256 050; the PES 190 000; SEE and Designated Groups 1 000; UIF (LAP) 61 050; and CF 4 000 – through their programmes. Additionally, they are busy with public hearings to develop and implement an Employment Policy by 2024.
The five-year target for employment equity inspections is ‘18 420 workplaces inspected and transformed’, including 1 812 reviews by the DG. Concerning inspecting workplaces, the Department plans to have inspectors visit 838 560 workplaces over the next five years to ensure compliance with labour legislation.
Priority three: education, skills and health
There will be additional occupational health and safety inspections. Also, there are additional inspectors of 500 occupational health and safety legislation inspectors have been recruited and appointed. 23 844 inspections will be done in year one, which will be exponentially increased to 421 620.
Priority four: consolidating the social wage through reliable and basic services
The Department would like to provide comprehensive social security coverage for employees by increasing the compliance of 131 580 employers to the UIF and the Compensation for Occupational Injuries and Diseases Act (COID Act).
Priority six: social cohesion, safer communities
The target is to have the Employment Equity Act amended, enacted and enforced by 2024. Additionally, they target to have at least 50% of middle and senior management are African by 2024. Another sector target is to achieve about 2.5% of employed adults between the age of 15 and 65 will be persons with disabilities by 2024. By the end of 2022, an Income differential data collection tool (EEA4 form) for designated employers should have been developed and implemented.
Priority seven: a better Africa and a better world
The Department is hoping to fulfil 90% of international obligations and participate in international organisations to advance South Africa’s national interests. The job summit is an example of what the Department is using to show the world what they do in South Africa.
Annual Performance Plan (APP) for the Financial Year 2022/23
Ms Bronkhorst assured the Members of the Committee that the APP 2022/23 was subjected to auditing by the AG and internal audit to ensure it aligned with the Government priorities, MTSF, Minister’s performance agreement, Strategic plan, guidelines provided by DPME and National Treasury (NT). Additionally, it would comply with the SMART principle of indicators and be aligned to the budget to output.
Programme one: administration
Budget Allocation is R1 044 005 000 because of the ICT procurement and expenses. The Department wants the vacant funded posts maintained at eight percent or less for every quarter. Additionally, 45% of SMS positions should be occupied by Women. This will be increased to 50% at the end of the Strategic Plan lifecycle. To improve the information security status of the Department, they plan to appoint a managed information security service provider to do assessment security environment reports, implement key controls and approve the cyber-security strategy and roadmap.
They will be replacing the IES and PES systems with SAP4HANA. She said that they will ensure that they are ready and live by the end of quarter four. Additionally, there will be a rollout of the ethics management plan for the year. Moreover, they are targeting to reach 93% resolution of reported corruption incidents by disciplinary and criminal interventions. However, some might be too complex to have resolved in this financial year.
The number of Annual Financial Statements (AFS) to be finalised are one annual financial statement (AFS) by 31 May and three interim financial statements (IFS 30 days after each quarter. Things like the financial statements; unathorised, irregular, fruitless and wasteful (UIFW) expenditure appear to be operational, but the Department put it in their APP to ensure that they comply with the Public Finance Management Act (PMFA) and financial statements. Additionally, they want to ensure that they take care of their fruitless and wasteful expenditure.
The inability of the modernisation programme to meet intended objectives;
Structural deficiencies or inadequate organisational structure to service the Department;
Increase in the vacancy rate.
Programme one is cross-cutting for every manager and programme in the Department, and every province. Provincial specific information will not be provided because everyone has to manage the indicators in programme one.
Programme two: inspections and enforcement services
The budget allocation is R657 167 000. The annual target for inspections is 298 104 will be done by inspectors. Additionally, 95% of non-compliant employers with inspections will be served within 14 calendar days of the inspection. The annual target for non-compliant employers, who received by statutory services settled out of Court or CCMA or referred for prosecution within 30 working days, will be 65%. The Department hopes to do formal advocacy by having four seminars and two conferences to inform its stakeholders about their duties, rights and employment law.
Inspections per province:
The inspections are resources based. The total number of annual inspections is 298 104. The breakdown is as follows:
Eastern Cape: 31 884
Free State: 26 628
Gauteng: 61 236
KwaZulu-Natal: 63 720
Limpopo: 27 780
Mpumalanga: 21 528
Northern Cape: 12 636
North West: 19 680
Western Cape: 32 724
Head Office: 288
IES Inspection per legislation:
Basic Conditions for Employment Act (BCEA)
Occupational Health and Safety
Employer Audit Service for the UIF
Non-compliance by employers and users with labour legislation;
Unreliable performance information.
Ms Bronkhorst said that they have had some unreliable information in the past about the IES. Also, branches have worked very hard to take care of the findings.
Programme Three: Public Employment Services (PES)
The allocated budget for the programme is R630 462 000. Their annual target plan is to have 850 000 work-seekers registered on Employment Services of South Africa per year; 105 000 employment opportunities will be registered on the Employment Services; 240 000 registered work-seekers provided with employment counselling; and 55 000 registered employment opportunities filled by registered work seekers per year.
Additionally, 22 partnership agreements will be concluded, and one policy will be developed and approved. The number of work-seekers registered on Employment Services of South Africa per year per province is an accumulative target. For example, the Eastern Cape should have reached 102 000 by Quarter Four.
The number of registered work-seekers provided with employment counselling per year per province will also be based on the resources they have on the ground. The total annual target is 55 000. Moreover, the number of registered employment opportunities filled by registered work seekers per year in the Northern Cape should reach 3 358 and 3 763 in the North West.
Insufficient placement of registered work-seekers in registered opportunities
Programme Four: Labour Policy and Industrial Relations
The allocated budget is R1 280 451 000. The bulk of the money in this programme goes towards transfers, CCMA and NEDLEC. The amendments to the Employment Equity Act and 2022/2023 Annual EE report and Public Register developed are to be published by 31 March 2023. Additionally, the 2021/2022 Annual EE report and public register are to be published by 30 June 2022. There is no target for the Income differential data collection tool interventions because it has already been developed.
There has been a minor change with the national minimum wage reviewed and approved by the Minister of Employment and Labour by 31 March each year. The investigation will be published by November 2022 and the new minimum wage will be published by 31 March 2023. Additionally, 100% of collective agreements where parties are not representative will be assessed and verified within 120 working day, and where parties are representative assessed and verified within 60 working days of receipt, by 31 March 2023.
All labour organisations’ applications for registration are to be approved or refused within 90 working days of receipt by 31 March 2023. In addition, two reports on the implementation of bilateral cooperation and multilateral obligations are signed off by the Minister annually.
The Department aims to produce an Annual Labour Market Bulletin as well as the Job Opportunity and Unemployment report in the SA labour market. Ms Bronkhorst said they have previously indicated that they will be cooperating with Stats SA. The Department will use the information from the Annual Industrial Action report and administrative statistics to produce reports. They aim to do four research reports, and the Branch is in the process of identifying research reports to finalise in this financial year.
Insufficient labour market research was conducted in terms of monitoring the impact of legislation.
SEE Strategic Plan: 2020-2025
A total of 25 additional persons with disabilities are to be employed in the SEE factories. This is to come to the 1 000 mentioned earlier in the medium-term expenditure framework (MTEF), and the other entities funded by the Department by subsidising people with disabilities in the labour market.
To ensure the SEE is financially viable and sustainable in its growth, it wants it to generate R61 million and receive R141 million in transfer funding. She reminded the Members that the SEE has been struggling with its financial viability for some time. The target is to have an annual increase in sales revenue from goods and services of 10%, by the end of March 2023. To become the sole provider, SEE has entered into three customer agreements. By March 2023, seven customer agreements would have been entered into.
Annual Performance Plan: 2022/23
The annual target is to ensure 50 additional PWDs employed in SEE factories, a 10% annual increase in sales revenue, and seven customer agreements entered into by the end of March 2023.
SEE Risk Mitigation Plan: 2022/23
The key risk is the inability to generate work opportunities for people with disabilities.
Mr Bheki Maduna, CFO, DEL, took Members through the information – see presentation attached for details
The G-Tech Management Network
Mr Thobile Lamati, Director-General (DG), DEL, said that they had indicated in the last financial year that part of the Presidential initiative is to ensure that all young people have access to the networks that exist in the country. The presentation reflected on the registration of work seekers. The current setup the Department had, which led to the establishment of the Pathway management, meant that work seekers had access to the employment opportunities sitting on the employment services system. With the Pathway Management Network, the Department is opening all the networks that exist in the country whether private or public. Therefore, if someone is on the employment services network, they have access to the job opportunities network in the country. For instance, if one is in the Harambee/YouthMobi Network, they can access whatever is in the employment services system – hence the current allocation.
Additionally, the allocation for the CCMA has been a contentious matter that is often raised. The CCMA has not been given enough money, and Committee Members should note the increase in the allocation to the entity throughout the MTEF.
Mr T Apleni (EFF, Eastern Cape) had concerns about the issues relating to decent work. During the presentation, the Department tried to emphasise decent work. His concerns stem from the reality that there are many cases of workers being exploited, especially in farms and shops owned mostly by foreign nationals. Additionally, people who are cleaners and work on farms are not always regarded as doing ‘decent work’. They are treated in a bad manner. This brought him to his next question.
Regarding the issue of inspections, he said that most of the issues the Department has are because the majority of inspectors often refer to having so many relations with the employers to a degree that it is hard for them to speak to the workers. Workers see inspectors go in and out, without knowing what they are there to do. Workers know that inspectors visited but they do not know what they were there to do or if an inspection was done nor have they spoken to them. Mr Apleni hopes the Department looks into those issues because it happens a lot, especially in the Eastern Cape. He added that those who sit at labour desks in his organisation often come across such cases. It would be better if the Department had ‘teeth to bite’ in most cases.
He added that they have been talking about issues concerning people with disabilities, visas and balance of race for the past 25 years. These are problems that still come up. The numbers are not balancing and not meeting the targets. It is time that some things are being enforced. He said that those with disabilities understand the pain of what many people with disabilities are going through when they are treated like they have leprosy and cannot do anything. A disability is a disability. It does not mean you cannot do something. It is time for the issue of people with disabilities to be pushed very hard. There needs to be a talk about balancing the numbers. He said that it cannot be that in many companies there are White people in manager positions – even those without qualifications – yet the majority of black people in these companies become general workers. The Department needs ‘teeth to bite’ and push to balance the numbers.
Mr K Mmoiemang (ANC, Northern Cape) first welcomed the presentation. He then asked about the progress of the latest court case that ruled for a Provisional Inquirer that did not apply to the domestic workers in terms of their ability to claim. Given the retrospectivity of the judgement in terms of the applicability to domestic workers since 1994, he asked for the Department to provide them with a case in terms of the load, and the number that is coming through. Those numbers will provide a display of the level of backlog around the application towards the case of domestic workers.
Under programme one, the Department made emphasis on dealing with the ageing ICT infrastructure, which was exacerbated by the Covid-19 pandemic. He asked for the timeline to deal with the ICT infrastructure. There are instances where some of the tools they use are obsolete, making it difficult for the Department to be agile about knowledge management and information systems. What is the timeline for ensuring the matter is attended to? Additionally, the Department talked about improving its cybersecurity, which is an important area.
He said that, under Programme Four, there are issues with the reports that are going to be produced regarding the targets set. What is outstanding is the impact of thereof?] What is the market intelligence that will be deducted from the research reports produced by the Labour Policy and Industrial Relations Programme? He asked about the potential policy impediment that would negatively reduce the potential of small businesses from creating more decent jobs for the people. Additionally, he asked the Department to share some of the important statistical information coming out of the research produced in finding the root causes that contribute to the limited success of enforcing labour legislation and the slow performance of labour market transformation. What are the lessons the country can learn from participating in the bilateral and multilateral obligations with International Trade and Economic Blocs as well as labour organisations – taking into account that the country is hosting the ILO summit in the coming week?
Ms H Boshoff (DA, Mpumalanga) asked about the decentralisation of the UIF to provinces, Labour Centres, Thusong service centres and visiting centres. She asked for the exposition of the outcomes regarding the finalisation or speeding up of claims. How long does it take? How many days does it take? Regarding the visiting centres in the most rural areas, she wanted to get an indication of where in the rural areas, what times and which days the Inspectors/Department go to the places.
Are there outstanding UIF Covid-19 Temporary Employee/Employer Relief Scheme (TERS) applications? If so, what is the value of the claims? What is the reason for the outstanding claims not being paid out? She requested a report on fraudulent claims and their monetary value. Additionally, she asked about the amount the UIF receives from memberships compared to the money paid out per month.
The Department talked about reducing unemployment, but Stats SA indicated that unemployment continues to grow. Based on that data, she asked the Department for a report on the structural reforms and interventions that are in place. Ms Bronkhorst said, during the presentation, that they will create about a million jobs, which is 20-24% by 2024. Ms Boshoff asked for a plan on how the Department plans to create a million jobs. And, what is the Department doing to attract business confidence?
In the past, there have been repeated claimants and claims by deceased people. Does the Department have a detection mechanism in place? She said the target for the Inspect IES is too broad. If the Department were to break it down to a quarterly basis, per inspector and per province, is the Department able to provide a report quarterly? What happens when the inspection targets are not reached?
With matters concerning people with disabilities, she said that she had a soft spot for such people, having worked with them for 15 years in the past. Is there a SEE in every single province? If not, is the Department planning to establish such an entity in each province to show people with disabilities that they are cared for?
Concerning the seven customer agreements that were going to be entered and finalised by 2023, how many agreements have been entered into and finalised, with the SEEs? Regarding the shedding of jobs by 2023/24, she asked for information about whether discussions have already taken place to know which sections of the Department the job shedding will take place, because they would have to look at exit interviews and other stuff.
Mr M Dangor (ANC, Gauteng) highlighted that the President spoke about the issue of social compacts in his State of the Nation Address. Looking at the big picture, is there enough budget for facilitating both the new and old social compacts?
The Chairperson asked about matters relating to the priorities, under economic transformation, he was of the view that the 30 day payment period was not in the APP, and it should be in the APP under Priority Two: Economic Transformation. With the 30 day payment period, some Departments often say it is a normal thing and does not need a target on it because it is something that is taking place. He reckoned that it should not be taken for granted. He added that they once complimented a Department but the DG said that, while appreciated the compliment, they had not met the 30 days. That is why the Committee would like to see it as part of the targets to be achieved. Also, it should be one of the priorities, particularly Priority Two, to ensure that there is a baseline. With the priorities, there is a baseline, but with the APP there is no baseline.
He talked about another issue that should be in the APP under Economic Transformation and Programme One. He said that they sometimes deal with other departments, not just the Department of Employment and Labour. They also look at best practices. There might be a department of procurement. For example, on 09 August 2019, the President said that 40% of procurement will be allocated to women. Therefore, in line with what the President said, some departments are sticking to that target, and some are just below that 40% target announced by the President. However, the Committee would like to see it even if it is just 25, 30 or 40%. The Chairperson said that they would ideally like to see the Department meet that 40% so that they are not in deficiency of what was said by the President. He suggested that it should be included in the Priorities, under Economic Transformation, and as part of Programme One, under Administration.
He highlighted that ‘Priority Six: Social Cohesion’ talks about Employment Equity and the issue of Africans and People with Disabilities. However, there is nothing about women. In terms of a target and baseline, he said that the priority should have something about women. The APP has an outcome indicator of Gender Responsive Recruitment with a target of 45%. Some of the Indicators and APPs flow from the Priorities. However, the matter is in the APP but not in the Priorities. There should be an alignment between what is the APP and the Priorities. Employment Equity also includes women, not just Africans and People with Disabilities. Therefore, the matter of women should be under ‘Priority Six: Social Cohesion’. The Chairperson highlighted that, as two Committees, they monitor about seven departments. Considering the Department of Employment and Labour still has a target of 45%, it is far behind compared to Departments the Committee has met with before. Some departments are at 50% and above regarding the target SMS. As a Labour Department, it should take a lead on the matter. It is worse when it is an MTSF target.
The Chairperson highlighted there is no percentage target towards procurement that goes to youth and people with disabilities. Some departments are usually specific about the percentage towards procurement that goes to youth and People with Disabilities. If all Departments and state-owned entities would have a specific percentage target, the SEE would benefit from the percentage allocated to people with disabilities. That is why the Committee monitors Departments and Entities regarding the percentage toward procurement of People with Disabilities.
In the APP report tabled last month, the was a target that was not achieved - SAP Go/Goal Live/Life. Is it the same thing as the SAP4HANA system? If not, can the Department explain the SAP4HANA system? If it is not the same, why is the SAP Go-Live not in the current APP?
On Programme Two, he asked for a breakdown of the IES. He said that he could see the provincial numbers, but the point raised by Mr Apleni shows that there could be numbers not in terms of quantity, but in quality. Are there resolutions to the visit to issues of employees? He said it would be better to have targets for the issue of inspection, enforcement and statutory (matters that cannot be resolved in the Department and are referred to the statutory processes). The Chairperson added that he gave up on the matter regarding a retail shop in East London. A visit was made by the Department for about four years, but the matter has still not been resolved. He said that it could be that an inspection was done but there is no indication of the outcome of resolving the problem. The Chairperson said they might be happy that there are thousands of visits but there are not many outcomes to them. Therefore, a breakdown would be nice. Is the Department doing an operational plan? The Chairperson expressed that he would be happy if the Department would have an operational plan to address the issue of the quality of inspections.
Does the Department know the period in which work seekers are placed? Is it one day? Two days? Three months? A year or permanent? This relates to the issue of creating jobs but then there is an increase in unemployment. It is a vicious cycle to have people on the database who are placed for one day but then back in the database. The Chairperson said that there could be a monitoring of the work seekers that are placed and the period of their placement.
With the transfers and subsidies in the budget, he said he needed clarification on the transfers that say R1.7 billion but the total breakdown totals R1.6 billion. Additionally, he was shocked by the drop in the compensation of employees. There were talks about abolition, which the Chairperson was not sure if it was another term for retrenchment. Are there going to be retrenchments in the year 2023? When looking at the compensation of employees in 2022, one can see that there is a drop in 2023. The Chairperson expressed that it is a shock because he does not think there should be retrenchment in the public service. After all, they need the employees.
Last year’s SEE report talked about the viability of R25 million, which went to salaries and benefits. Will it be the same situation this year? Will the APP have a virement for salaries and benefits on the SEE?
Mr Lamati said that they do not know if there is a likelihood of a virement of R25 million towards salaries and benefits on the SEE. The only reason they did that last time was that the SEE did not sell as much as what they had projected to sell. Therefore, their initial projected revenue did not materialise. They projected more sales, but they sold less than what they had budgeted. This created a need for an R25 million transferred from elsewhere in their budget. The Department is monitoring closely the performance of the entity. Additionally, somewhere in their APP they speak of contracts and MOUs being signed with other Departments and entities, which is to ensure that there is work allocated to them. There are many agreements signed so far, but they are not sure yet.
Regarding the abolishment of jobs, the allocation in the outer year is always subject to a review. He said that he hopes that the reduction in the compensation of employees in that financial year (2023) will be reviewed. He explained that it is indeed when one has many warm bodies working but a low allocation to compensation, because it raises the question of where the money to pay them would come from. However, if indication that they might have vacancies before the year of the allocation, then they must begin to prioritise and fill vacancies of serious priority for the Department. The rationalisation should commence in this financial year. As a result of the use of technology, there might be redundancies and they should be able to identify where in the organisation the redundancies are located. It should be a priority in the event of not filling a vacancy in an area where there are likely to be redundancies.
On the Social Cohesion, regarding the inclusion of women in the targets, there are two ways in which one can look at it. The first is the internal focus approach, which they are setting to achieve 45%. The Department cannot say it will be 50% now because they know they will not be able to achieve that target. There are already people occupying a number of the positions, and the Department does not want to mislead the Committee by saying that they will have 50% in the next financial year. Currently, women constitute 40% to 46% so that, every time there is a vacancy at the SMS level, they try to appoint a woman to get to 50%. In the long run, the target is 50%. Externally, the number of inspections in terms of the DG review, where they report on social cohesion, all the reviews inspections unpack the representation of women in the workplace. The presentation reflected the number of inspections the Department wants to do to ensure the representation of women and men. Women are covered in the employment equity inspections planned for this year.
On the nature of the placement of worker seekers, he reminded the Committee that, for every time the report, specifically in this area, the Department reflects on the nature of the place. There will be an indication of whether the placement is temporary, permanent or learnership. There is information about that and is readily available for sharing. With the retail shop in East London, he said he will follow up to get more details on the case.
Regarding how they will determine the outcome of an inspection, Mr Lamati said that in the presentation the Department did reflect on the inspection, compliance and statutory referrals targets. The outcome will be provided by inspectors who will reflect on whether there is compliance with all pieces of legislation. If there is noncompliance, the inspector is duty-bound to issue a notice of noncompliance. If the notice is not complied with, the notice is referred to statutory services so that they can refer the matter for prosecution to the CCMA and Labour court if it is an OHS (occupational health and safety) matter.
Part of the reports the Department generates is pieces of legislation they administer. They can provide information about the level of compliance per province per quarter. Mr Lamati said that inspectors prefer to have good relations with employers and they do not speak with unions. The Inspection and Enforcement Services has a code of conduct. Every inspector has to comply with the code of conduct. In the instance a Member is aware of a particular inspector that did not speak to the employees; the Department would want to know those inspectors. Such inspectors would be transgressing the code of conduct they have been trained in and do not reflect who they are as a Department. The matter is taken very seriously by the Department because such behaviour is uncalled for, and the Department would deal accordingly with the issue.
On SAP4HANA, the Department missed the ‘GoLive’ target, which is why it was not included as a target this year. Although they missed the GoLive target, they achieved a technical GoLive in that inspection and public employment services could transcend the system. The tender was not finalised for SAP maintenance, hence they did not go live. The delay was on the Department’s side, not from the service provider. They have only just finalised the tender and will be contracting to get a service provider to assist with SAP maintenance. SAP used to handle the maintenance themselves, but National Treasury instructed that it should go on a tender because SAP could not prove they are the sole provider of the service. They are not on track to ensure they do not miss the target for this year. The reason it was not included was that the technical go-live was achieved and a technical matter. In this financial year, they will meet the target.
The issue of the 30-day payment period was included in the work plan of the departments of finance and supply chain unit headed by the CFO. The DG gets a monthly report on the matter and they can provide a report to the Committee if they want one on how they are doing in paying service providers within 30 days. Since they have been doing it for so many years, they thought it was best to put it in the work plan of finance.
With the social compact, there is no need for extra resources because they are using the current budget. They will finalise the process by June and are engaging with social partners to ensure the finalisation of the social compact. The budget is not a challenge.
Mr Lamati said that he does not have a report on the number of SEE agreements finalised, but he will make the report available to the Committee. The job shedding is due to budgetary constraints but they will determine which positions. A budget for the coming financial year is a useful planning tool so that one knows where they are. That is how they are taking the reduction in the COE for that financial year.
He said that the only province that does not have a SEE is Mpumalanga. However, they are planning to open a factory there. The only challenge is that the entity has not generated enough revenue for them to have a new workshop or factory in Mpumalanga. He appealed to the Members of the Committee to use their influence to ensure the entity gets the support it requires and supports the people with disabilities.
Additionally, the Department provides reports on the inspections they do. Managers managing inspectors deal with inspectors that do not reach their targets. Consequence management is implemented. Steps are taken to deal with senior managers regarding not meeting targets.
Mr Lamati said that they work closely with other government departments, employers and organised labour to deal with issues that affect the relationship between businesses and government and improve business confidence. As a government, they need to create an environment where businesses can create jobs. He said that they need to work hard to improve business confidence. They are also currently reviewing the current labour market policies they have as announced by the President to provide policy certainty and ensure business confidence.
In the report on structural reforms and how they plan to create jobs, he reminded the Members of the reason the President wanted a social compact to deal with the issue of unemployment and poverty. Additionally, the social partners and government agreed on an economic recovery plan to advance economic recovery. They are all working hard to ensure the commitments in the plan are implemented and jobs are created. More than R11 billion has been made available by the President to support public employment services. Those are jobs that are not sustainable but they are initiatives that will induce jobs in areas with no jobs and keep the youth engaged through the job opportunities offered by the programmes. Another way they plan to create jobs is through the pathway management network, which will provide young people with access to job opportunities.
Mr Lamati said that he currently cannot provide a report on the outstanding TERS claims and fraudulent claims, but the information is available and can be made available to the Committee. Regarding the visiting points, he said they will also provide information on where the points are located. On the decentralisation of UIF, speeding of claims and finalising claims, he said that there are different categories of claims. There are ordinary and maternity benefits, which all have different timelines on how the claims are finalised. For example, ordinary benefits take five weeks to finalise claims.
On the impact of the LP&IR reports or market intelligence produced as it relates to policy development, and Industrial Action Report by the Department tells them how market players, the employers and organised labour work. What the Department can do to reduce instability in the labour market. CCMA has a programme to prevent disputes before they occur. The intelligence they use comes from the information generated by the Department. Additionally, the information helps them develop evidence-based policies. Moreover, some of the administrative data generated are sometimes used by Stats SA to generate the quarterly labour force survey.
Regarding the timeline for providing new infrastructure, the Department will provide information regarding the matter. In the presentation, they just focused on issues in the APP. However, there are plans to refresh their ICT infrastructure. With the COID Act, the domestic workers' case, the court ruled in favour of the domestic workers, and the Department did not contest it because they believed that domestic workers should have been included in the COID Act. Additionally, the Department agreed on the prospectivity of the coverage and the Compensation Fund has set money aside to deal with claims related to the matter. Mr Lamati said he currently has the data of how many claims have been logged but will ask the Compensation Fund to make the information available.
There is a lot of work the Department does concerning employment equity, specifically with young people and people with disabilities. The report reflects the amendments to the Employment Equity and what they intend to do.
Mr Maduna, CFO, said that, on the issue of procurement of the youth and people with disabilities, they have been engaging with the departments affected. They are procuring companies owned by the youth and people with disabilities, but this was discovered after the fact. He added that, at the CFO forum, the process needs to be improved, starting from the supplier database. He said that the companies need to be coded so that, when they procure, it is a directive rather than checking at the end whom they have procured from. For instance, he said that he does not know if the SAPC company is owned by youth or people with disabilities. There is a technicality that still needs to be sorted because they currently would have to further research if a company is owned by youth or people with disabilities. Apart from the legality, even with the supplier database, he said they have asked for assistance from CFOs to know which companies those are so that they can direct the spending to companies owned by people with disabilities and youth – sorting the problem with the affected departments, National Treasury and Procurement Officer.
Mr Lamati reminded the Committee they currently took a company Huawei to court because they did not comply with the Employment Equity Plan they had provided the Department. The company requested to settle out of court, which they did. They were able to settle with a useful agreement that indicated they will transform. Additionally, they will provide young people with training, especially graduates. Some graduates will be provided with IT training and absorb some. At a given time, they will ensure the company reflects the demographic of the country. He added that they are also taking some big banks to court because they have not been compliant with employment equity. The Department is doing what it can by making a statement by leveraging the resources it has. They are taking the big companies to task, which will send a message to the smaller ones that non-compliance with employment equity will not be tolerated.
On the amendments, they are making provisions for the Minister. The Department wants Section 53 to be promulgated. The section gives government the authority to deal with companies that do not want to transform by refusing to do business with those companies. They are currently waiting for the signing of the bill into law. A part of the bill gives the Minister authority to set sectoral targets, which is not in the current legislation. The bill helps ensure transformation and general compliance with employment equity. The issue of people with disabilities is part of the general issue of noncompliance. With the legal powers in the proposed Employment Equity Bill, there will be huge strides in improving compliance. He added positive media against the government not selling, which is why there was not much noise about this. But, as far as he could remember, the matter was on the SABC and in a few newspapers.
The Chairperson asked the DG to respond to the outstanding questions through a report. He asked the DG to come up with a timeframe.
Mr Lamati responded that they will provide the information this coming Friday.
The Chairperson clarified that with the inspectorate issue he was referring to the level of prosecution, which is where the delay is with the retail shop (Spar) in East London. He expressed he is happy with the cooperation with the Head of the Department in the Eastern Cape province. On the issue of the migration policy, she has been sharing the information that the Chairperson has been sharing with the people in the WhatsApp group.
Next week the Employment Equity Bill will be tabled. The House will consider it on Tuesday, 17 May 2022, together with COID Act.
Mr Apleni added that he had concerns about contracts. He said that, at times, one finds that it is a government issue. For instance, the teacher's assistants are in the process of signing their contracts for the third or fourth time. He asked if there is an expectation to employ the teacher's assistants full-time. He has concerns that it might be the government breaking the law in this matter by continuing to renew the contracts. There might be a need to employ them full-time. He requested the views of the Department on the matter.
Mr Lamati responded by highlighting that the teacher's assistant is a public employment programme with a duration. The deeming provision states when there is a clear timeframe of when the contract will start and end, then they would not apply the provisions as they would in ordinary circumstances where the contracts did not have a specific ending date. Secondly, there is a justification to expect that they will be employed on a full-time basis because it is in the interest of all of them to be employed full-time. However, it is a matter of whether they can take the test at the CCMA or Labour Court. The programme is not any different from the EPWP Programme. It is a skill-based programme. The issue is that skill-based programmes are viewed as employment because people get paid and regard it as remuneration. Whereas, it is a stipend. Like any other public employment programme, it is governed by provisions in the contract of when it starts and ends. It is renewed regularly, and it therefore does not make it a normal employment programme. The teacher's assistant programme contracts have been renewed because there is an allocation given to the Department of Education as part of the Presidential Employment Initiative.
Closing Remarks by the Minister
Minister Nxesi said that the plans presented are the ones they are putting in the APPs and Strategic Plans. He said they have noted all the Members' concerns. However, what is important is that the Committee holds the Department accountable by monitoring what they want to implement. The Department will have to follow up on the number of questions raised by providing further explanation of what they have done to correct some of the issues. Minister Nxesi was hoping that the comments during the discussion were intended to enrich their plans, not ‘shoot them down’. That means the Department has to take the recommendations positively, which is what they are going to do.
The Chairperson thanked the Minister, Deputy Minister, DG and officials from the Department. He also thanked the Members of the Select Committee, staff of the Committee and Parliament, particularly those from the Communications Department, for ensuring the proceedings are seen by the public, social media and the television channel of Parliament.
The meeting was adjourned.
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.