COIDA Bill: NCOP Amendments; DEL Quarter 3 2021/22 Performance; Report on Oversight Visit to Eastern Cape; with Deputy Minister

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Employment and Labour

31 August 2022
Chairperson: Mr M Nontsele (ANC)
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Meeting Summary


Tabled Committee Reports

The Portfolio Committee convened in a virtual meeting to review and adopt amendments to the Compensation for Occupational Injuries and Diseases Amendment Bill (COIDA), and to consider a report on its oversight visit to the Eastern Cape in April. It was also briefed by the Department of Employment and Labour (DEL) on its third quarter performance for the 2021/22 financial year.

A decline of performance was noted in the third quarter, which was attributed mainly to understaffing during the September period. The Department reported areas of non-achievement related to vacancies, the late submission of financial statements and the National Minimum Wage (NMW) review, and a failure to conduct the required business inspections in the provinces. However, it also reported that R26 million had been recovered from employers and returned to workers.

The Committee expressed concern regarding the compensation of suspended staff, the performance of the Department's inspection and enforcement services, the reliability of the data collected for the NMW report, employers not registering their employees for the Unemployment Insurance Fund, and the continued investigation and remedial action required to combat issues of fraud and corruption.

Meeting report

Due to the Chairperson's absence, Mr M Nontsele (ANC) was elected as the Acting Chairperson.

Ms Boitumelo Moloi, Deputy Minister of Employment and Labour, said that though the targets discussed in the presentation by the Department of Employment and Labour (DEL) were debatable, it was paramount that the DEL achieve the targets. To achieve them, the DEL must have the necessary capacity. The importance of this would be stressed during the assessment of the work done by the Department.

Draft Committee report on COIDA Amendment Bill

The Acting Chairperson took Members through the amendments to the Compensation for Occupational Injuries and Diseases Amendment Bill (COIDA) made in the previous meeting.

Mr Zolani Sakasa, Committee Secretary, took Members through the draft report on COIDA.

The Acting Chairperson invited comments and motions for adoption.

Mr M Bagraim (DA) said that he accepted the amendments, though the DA rejected the Bill overall.

Mr S Mdabe (ANC) moved to adopt the Bill with the amendments.

Ms A Zuma (ANC) seconded the adoption.

The Acting Chairperson asked Members to formally adopt the draft report.

Mr Mdabe moved for the adoption of the draft report.

Ms Zuma seconded the adoption.

Committee report on oversight visit to Eastern Cape April 2022

The Committee Secretary took Members through the report, which had been presented in the previous meeting.

Mr Hinana said that the DA rejected the adoption of the report.

Mr Mdabe moved for the adoption of the report with amendments.

Mr M Wolmarans (ANC) seconded the adoption.

DEL's third quarter performance report 2021/22

Overview of performance per quarter

Ms Marsha Bronkhorst, Chief Operations Officer (COO), DEL, took Members through an overview of the DEL's performance in the first three quarters of the 2021/22 financial year. She noted that 73% of the targets were achieved in the first quarter (Q1). This number increased slightly, before dropping to 67% of targets achieved in the third quarter (Q3). The DEL noted this as an annual trend due to staff taking study and personal leave in Q3, which was similarly observed in December.

Comparative analysis per programme for Q2 to Q3

The DEL said that there was a small decrease in administrative targets achieved. This was attributed to financial statements which were not submitted before the deadline. Inspection and enforcement services improved their performance from 50% to 75%, while Public Employment Services and Labour Policy and Industrial Relations decreased in performance.

Programme 1: Administration

Ms Bronkhorst reported that filling vacant posts remained an unachieved target, and the 3% or less target for vacancies, as submitted in the annual performance plan of 2021/22, was not achieved. This was due to the large quantity of applications received, which caused delays when capturing the information.

The Department had been challenged with finalising disciplinary cases within the timeframe due to outsourcing some services to other departments and experts. Corporate Services had decided that Employment Relations must specialise in resolving the many cases. The Anti-Fraud and Corruption Unit would detect and investigate cases before handing them over to Employment Relations.

Referring to the annual financial statements (AFS) and interim financial statements (IFS), she said that due to the late tabling and audit of the annual reports, the IFS could not be submitted by 31 October 2021, and had been submitted on 12 November.

Programme 2: Inspection and Enforcement Services

The Inspection and Enforcement Services (IES) failed to meet the target due to the number of workplaces inaccessible because of COVID. Administrative inspections took place, but they were insufficient to reach the cumulative target.

Programme 3: Public Employment Services (PES)

On the placement of work seekers, the Q3 target of 37 500 people to be placed in income opportunities was surpassed, as the DEL had placed 48 638 people. The area of non-achievement in this programme was the number of partnership agreements concluded with various stakeholders. Only 13 of the 15 targets were met because of the ongoing internal verification processes which had to be finalised.

Programme 4: Labour Policy and Industrial Relations

The target for the National Minimum Wage (NMW) Review was not achieved, as it was intended to be published by 31 October 2021, but was completed only on 17 December. This was attributed to challenges faced during the research processes, including changes in how Statistics SA collected data and discrepancies in wage data. To counter this, the NMW Commission published a notice inviting written representations concerning possible adjustments to the minimum wage.

The mid-term report on bilateral cooperation and multilateral obligations failed to meet the targeted deadline.

Money recovered

The DEL said that they had to focus on the NMW and the Basic Conditions of Employment Act (BCEA), as in the quarter under review, they had been able to put nearly R26 million back into the hands of workers.

Work seekers registered by age groups and province

Ms Bronkhorst highlighted that 60% of the registered work seekers were under 35. 54% of these work seekers were young women. 72% of the registered work seekers were counselled by the employment service.

Budget information

Mr Bheki Maduna, Chief Financial Officer (CFO), DEL, said that overall, 92% of the programme budget was spent.

He said that 60% of the budget was spent on administration, Inspection and Enforcement Services (IES), Public Employment Services (PES) and labour policy and industrial relations. The economic classification of the expenditure indicated that expenses had been divided to compensate employees and acquire goods and services.

The CFO said the overall transfers in 2021/22 amounted to 65%.


Mr Bagraim said the DEL was notorious for having insufficient inspectors. The Department needed four to five times the amount of inspectors employed. He felt that pressure must be put on the Minister to acquire a larger budget for IES, as it was a crucial oversight measure.

He said the indicator target achieved on IES and PES per province was inaccurate, as the Eastern Cape reportedly had not been inspected. Was the Department looking to resolve the IFS and AFS issues mentioned by the Auditor-General (AG) in the past?

Regarding remedial action to repay expenses incurred by the Department, he questioned whether this was the best approach. He felt that suspension and dismissal were more appropriate actions. He felt it was unfair for suspended employees to receive a full salary for months on end. He recommended that the disciplinary hearings should be held internally.

On PES, he asked if National Treasury could inform Members of the costs of creating permanent jobs. He believed it was significantly cheaper for the private sector to create permanent jobs than the government.

He asked how reliable the data collected on the NMW report was.

Regarding job creation, he said that during COVID, many people applied for the Temporary Employer/Employee Relief Scheme (TERS), placing significant pressure on the Unemployment Insurance Fund (UIF). Though thousands of businesses placed claims, they had not registered their staff for UIF. This created problems when retrieving money from employers for non-claimed UIF. He asked why the DEL had not done anything about this during the COVID period, and whether it was too late to institute action.

On work seekers registered by age group, he asked whether the research on registered job seekers had helped to place them. Was it known if applicants were qualified and how would they be placed?

Ms P Makhubele-Marilele (ANC) appreciated the comparative analysis of the programmes, especially the improvement of IES. However, due to the low number of targets, she felt that IES should achieve 100% of their targets each quarter.

Commenting on performance trends, she asked the DEL why there had been no decrease in performance observed in Q3 of 2020/21, though there was a decrease observed in Q3 of 2021/22. Regarding the IES and PES performance per province, she asked why Gauteng and Mpumalanga had failed to reach their targets.

Ms Zuma said she was shocked at the IES performance in the Free State and the Eastern Cape provinces. IES performance was paramount, so she wanted to know what had happened in the Free State and Eastern Cape to attribute to their non-performance.

She also asked what measures had been put in place by the Department to monitor the performance to improve service delivery, and what the reason for the slow spending during the period under review was.

Ms C Mkhonto (EFF) commented that she hoped the DEL would not regress further regarding inspections. She said more inspectors should be employed to address the issues of under-staffing and poor service delivery.

The Chairperson related the issue of delays affecting performance to the vacancies mentioned in the presentation. Considering these two factors, he asked the Director-General (DG) whether the "almost achievements" militated against the outside expectations.

He used the example of the slowdown period, which was a particularly tough time for work seekers with families trying to find employment, to indicate where the impact of non-achievement lay. He further related it to the issues of corruption mentioned in the presentation. He asked for these matters to be addressed. The challenges with financial statements had to be dealt with to avoid future submission delays.

Department's responses

Mr Thobile Lamati, DG, DEL, agreed with the Chairperson's comments, and said that the executive department has considered the issues he had mentioned. He felt the 67% performance was unacceptable. It indicated poor planning within the Department, especially when the capacity decrease was expected. The DEL should plan for this, knowing that many officials write exams during September. Steps have been taken to address the underperformance in these areas. Consequence management had been used to provide warnings to colleagues that if they did not address the issue, they would no longer form part of the Department.

The same attitude had been taken towards vacancies. If the posts were not filled, they would be used in other areas and for positions with greater needs. The DEL felt that these measures were justified.

He said the DEL had limited resources to conduct investigations into fraud cases. It needed external resources to assist them in dealing with capacity constraints. They were now making provision for this.

The DG said that the number of cases reported to the anti-fraud hotline had been increasing, with most cases located in the provinces. He agreed that justice delayed would be justice denied.

On AFS, the Department would work with the AG to ensure that this did not recur.

Mr Lamati agreed that the DEL needed more inspectors, but this was subject to the availability of funds. He repeated that the funds allocated to vacancies which remained unfilled could rather be distributed to employ inspectors. The Department tried to use its limited resources effectively to limit the impact of constrained capacity. Effectively utilising limited numbers of inspectors would help make a meaningful impact. An example was when inspectors were moved to specific focus areas for assessment.

IES performance was monitored strictly in the Department for instances of non-performance, and the appropriate action was taken. In the Eastern Cape, the non-achievement was attributed to poor planning for the exam period, and many inspections were cancelled because they did not meet the DEL standards. The inspections of unsatisfactory quality were not mentioned in the presentation. The DEL had migrated to a new system of checks and balances, so inspections had become much stricter.

The DG said that the slow spending in Q3 was due to an allocation of R238 million for a pathway management network in the middle of the quarter. The funds were not spent as control measures had to be developed and memorandums of understanding (MOUs) had to be signed with the National Youth Development Agency (NYDA), the Government Technical Advisory Centre (GTAC) and the Presidency. The DEL also had to set the exact use of the money, with milestone targets. It was agreed upon that the money would be transferred once those milestones were met.

On anti-fraud, corruption and remedial action, steps had been taken to obtain the services of external entities to mitigate the limited resources in the Department.

Referring to the Q3 decrease in performance, the DG said that the targets set must be achieved, and in instances where they were not, programme managers had to be accountable. He supported the assertion that more funds were required to get the necessary inspectors. He said that the Eastern Cape was a diligent province, ensuring that the work was done.

Currently, there is only one staff member on suspension in the Department. The previous suspensions mentioned were related to issues with the UIF, although after conducting disciplinary hearings, those staff members had returned to office.

On outsourcing chairpersons, the DG said limiting the candidates only to internal Department staff would prolong the process. This method would also interfere with objectivity and fairness during the selection process.

He said that the DEL would provide Members with the costs of creating jobs in the private sector compared to public sector job creation.

On COVID19 tests, the DEL had claimed the money back from employers and was still in the process of collecting the funds. Collaboration with law enforcement agencies had yielded positive results, with people having come forward and admitting to guilt for taking funds. In a recent case on the matter, a person was sentenced to 135 years in jail for defrauding the fund. This had created a ripple effect among people coming forward to confess, alleviating some of the burden on law enforcement agencies. The DG said that even normal revenue collection had improved as a result.

He said that placement was taking place, though at a slower rate.

Ms Bronkhorst said that the third quarter 2020/21 performance seemed to be comparatively better due to an improvement as the stages of lockdown were relaxed.

On Eastern Cape and Free State performance, she said the two unmet targets were related to inspections and preparing legal documents for prosecution, although these matters had later been corrected. The process had been delayed at the time as a crucial post was vacant. The issue was further exacerbated at the time because the DEL was strict in ensuring that the IES documents were competent.

The performance of the provinces was closely monitored monthly. After each quarter, in instances of non-achievement, heads of provinces received letters on progressive discipline to ensure that performance improved. Ms Bronkhorst commented that this method had been effective in the provinces.

Mr Thembinkosi Mkalipi, Chief Director: Labour Relations, DEL, answered a question regarding the reliability of the information on slide 34. He indicated that the research on the minimum wage was reliable, as it had been conducted by the Development Policy Research Unit (DPRU) based at the University of Cape Town. There had been no delay in the review of the minimum wage, although it was released late.

Ms Makhubele-Marilele asked that more clarity and detail be provided on slide 13 -- specifically how many cases were referred to employment relations, and what was meant by dating cases referred to the South African Revenue Service (SARS). She asked if criminal cases had been opened, and whether Members could receive the relevant case numbers.

The DG said he would have those details sent to Members on Friday.

Mr Bagraim clarified his question on the UIF. He applauded the Department for its work so far. He said there had been an opportunity during COVID to find employers who had failed to register with UIF. He suspected hundreds of employers had claimed funds, though they were not registered for UIF.

The DG agreed with Mr Bagraim. He assured Members that the DEL was using the opportunity to their advantage, because they had a greater sense of who these employers were and the necessary inspections which had to take place to collect outstanding contributions. This also forced those businesses to register with the DEL and declare their employees now that there was an awareness of the situation.

The Chairperson congratulated the Department on the recoveries that had been made, and the large amount of money which had been returned to workers.

The meeting was adjourned.

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