Department Budget: hearings

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Employment and Labour

31 May 2004
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Meeting Summary

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Meeting report

LABOUR AD HOC COMMITTEE
1 June 2004
DEPARTMENT BUDGET: HEARINGS

Chairperson: Mr M Manie

Documents handed out:

Umsobomvu Youth Fund presentation
National Skills Fund presentation
Unemployment Insurance Fund presentation
Compensation Board
National Productivity Institute presentation
Commission for Conciliation, Mediation and Arbitration presentation

Umsobomvu Youth Fund website
National Productivity website
Unemployment Insurance Fund website
Compensation Board website
Commission for Conciliation, Mediation and Arbitration (CCMA)

SUMMARY
Various entities allied with or funded by the Department of Labour presented an account of their spending and future plans in preparation for approval of the Department's budget allocation by Parliament. Submissions were made by the Umsobomvu Youth Fund, the National Skills Fund, the Compensation Fund and the Unemployment Insurance Fund. These were followed by the National Productivity Institute and Commission for Conciliation, Mediation and Arbitration.

These entities provided an overview of their activities, achievements and challenges and gave details of their budgets and expenditure. The discussion that ensued covered many topics such as:
- the apparent lack of accessibility of the UYF to the youth,
- the fact that the NSF had a considerable roll-over of funds.
- the need for the UIF to canvas the concerns of farm and domestic workers
- that compensatory money for work injurues was mostly absorbed by medical costs.
- the need for NPI to adequately market itself
- the delays in the CCMA in finalising cases.

MINUTES
Umsobomvu Youth Fund (UYF)
Mr Kekana said that the vision of the UYF was the enhancement of the active participation of SA youth in the mainstream of the economy. He saw the UYF as a catalyst for the promotion of youth development programmes. The UYF essentially had three focus areas:
- Contact, information and counseling,
- Skills development and transfer,
- and Entrepreneurship

Mr Kekana presented an overview of the UYF programmes, their achievements and challenges as well as detail on future plans (see document).

Discussion
Mr D Olifant (ANC) raised the point that the youth often complain that funds are being made available for youth development, yet they have no access to these. He asked for an explanation.

Mr Kekana noted that the UYF's criteria for the funding of young entrepreneurs were not the same as those of other financial institutions. Many banks require years of experience and the lodging of collateral before considering providing finance. The greatest challenge to the UYF was improving its accessibility. Mr Kekana pointed out that the UYF could be accessed via Itala Bank.

Prince N Zulu (IFP) asked where the youth advisory centres were located. He was concerned that SA had many highly trained youths that were unemployed. He asked what was being done about placing these individuals.

Mr Kekana listed the following locations for youth advisory centres: Ipeleng in
Soweto, the West Rand, Bushbuck Ridge, the Northern Cape, Athlone in the Western Cape, Limpopo, Polokwane, Durban, Empangeni and Port Shepstone. He said that it was not feasible for the Fund to rollout their own centres; it made more sense to use existing Labour Department centres.

The issue of highly skilled unemployed youth was seen as a major problem. Mr Kekana noted that there was a lag between training and finding jobs. He noted that similar problems in
Sri Lanka had led to the outbreak of riots.

Mr L Maduma (ANC) asked for clarity on accessibility of local councils. He also asked what role the UYF played in the development of disabled persons.

Mr Kekana said that the UYF had launched a "take it to the people" programme. It would be linked to an integrated development plan or a local economic development plan.

Mr Kekana noted that the Potchestroom youth centre was the first to be run by a local council. He pointed out that disabled persons had been employed in UYF call centres. It had come to light that the UYF had funded many disabled entrepreneurs. Nevertheless he felt that more could be done.

The presenters agreed to the Chair's request that they provide the contact details of their representatives based in the provinces.

An ANC Member asked what the UYF's next step was once youth had contacted them. He also asked whether the "school to work progamme" relied exclusively on university graduates or were school dropouts also considered. A question was asked whether the UYF entered into partnerships with development corporations.

Mr Kekana conceded that in the past the UYF had not taken the details of youngsters that had contacted them. The oversight had since then been corrected.

Mr Kekana said that accessing the youth was a difficult task. The UYF was in the process of launching a "South African Youth Card" which would allow youngsters to obtain discounts for purchases and for travel. The aim of the programme was to build up a database of youngsters.

Mr Kekana explained that the "school to work program" was currently focused on graduates and matriculants. He noted that there was a youth strategy programme which had its focus on dropouts. Dropouts were being trained on road construction etc.

Mr Kekana pointed out that the UYF had links with various institutions. He noted that they were currently working with nine Sectoral Education and Training Authorities (SETAS).

Mr G Oliphant (ANC) asked the UYF to provide the Committee with a database of its offices. He noted that in the past concerns had been raised about the pace of delivery with regard to the training of young people. He said that access to the UYF could be improved if they linked up with constituency offices. He proposed that the UYF co-ordinate their efforts with other organizations in order for there to be a "one-stop-shop" for youth.

Mr Kekana noted that communication with Parliament would be improved given the recent appointment of a UYF parliamentary liaison officer. He said that co-operation with the provinces was taking place and that relationships were evolving.

Ms L Moss (ANC) asked where the UYF's offices were situated in the
Northern Cape. She also asked how the efforts of the UYF overlapped with that of the National Skills Fund.

Mr Kekana said that the UYF office in the
Northern Cape was situated in Kimberley. He noted that discussions with the National Skills Fund were ongoing on issues such as skills training and providing support to SETAS.

Mr N Godi (PAC) asked if the UYF had strategies for the challenges that they face.

Mr Kekana reacted that the UYF had strategies, many of which depended on external factors, that is, the continued funding of the Fund.

In reply to an ANC Member asking where the youth advisory centre was located in the
West Rand, Mr Kekana said that it was located in Kagiso.

National Skills Fund (NSF)
Mr J Du Preez presented the Committee with a brief background to the National Skills Fund. It was noted the NSF may only fund projects identified in the National Skills Development Strategy. The Committee was given an overview of its funding windows amongst which were the following:
∙ Provincial offices
∙ Strategic projects
∙ Bursary schemes (scarce skills)
The Department, SETAS and the National Student Financial Aid Scheme (NSFAS) were the respective disbursing agents for each of the respective funding windows.

Detailed figures were given on the activities and achievements of the Fund in addition to the disbursements made. Mr Du Preez noted that there had been a steady increase in the income and expenditure of the NSF. He noted that the NSF was always engaged in trying to balance the two. He concluded by highlighting some of the key challenges the NSF faced: the identification of new funding windows, streamlining the NSF and reviewing or strengthening the management capacity of the Fund.

Discussion
Prince Zulu said that the objective of skilling individuals was to make them employable. He asked if the objective included the skilling of illiterate persons.

Mr Du Preez replied that illiterate persons were not excluded. In the past illiterate persons would first be enrolled in literacy programmes before being enrolled in skilling programmes. Basic literacy programmes have currently been incorporated into skilling programmes.

The Chair asked how the Fund interacted with the National Skills Authority and SETAS. He wanted a distinction between their various roles. He also asked for clarity on the roll-over of funds.

Mr Du Preez answered that the process of role classification was being dealt with. He said that the National Skills Act mentioned the National Skills Authority in an advisory function to the Minister. The NSF's function was to identify funding windows and to make funds available for disbursement. SETAS were the actual disbursers of available funds. They were regarded as the implementing agents for the NSF.

Mr Du Preez conceded that the NSF had a considerable roll-over of funds. He explained that it was sometimes necessary to build up funds for multi-year commitments. He agreed that the NSF should ensure the flow of funds to where they might be needed.

Mr M Mzondeki (ANC) requested that the Committee be given more information on strategic projects as well as on the funding of bursary schemes. Mr Du Preez agreed.

The Chair asked whether the monies disbursed to SETAS were allocated from a percentage of levies that were collected.

Mr Du Preez noted that an NSF allocation to SETAS was not based on standard weighting. The NSF had developed a rigorous framework in this regard. Parameters of skills development had been taken into consideration and the framework had been based on a project approval process.

Mr Maduma asked what the NSF's criteria were for the identification of opportunities.

Mr Du Preez replied that where an opportunity arises for persons to be involved in a project - for example, an non-government organisation (NGO) launched a project where 100 individuals would be required - the NSF would step in to skill these individuals.

Mr G Oliphant asked for details on the sources of the NSF's funding. He was curious as to whether international donors were funding the NSF. He asked about the relationship between the NSF and the UYF.

Mr Du Preez replied that the NSF only received R36m from the fiscus. The European Union had donated R50m but it was to be utilized for a much broader project. He regarded donor funding not to be a sustainable source of funding. The work of the NSF and the UYF often overlapped. He pointed out that 56% of the NSF's beneficiaries were the same beneficiaries of the UYF.

Unemployment Insurance Fund
Mr S Mkhonto (UIF Commissioner) spoke on the Fund's performance since its inception two years before. He discussed the processes informing the Act, desired restructuring of the fund and income and expenditure. Innovations included the implementation of an "affordable benefit regime", constituting the use of a sliding scale, whereby people at the bottom of the income scale would receive more benefits. Actuarial evaluation of the UIF was to be introduced and an actuarial database created in order to provide the Minister and Director General with advice, so that benefits and contributions could be adjusted as necessary.

An employer-employee database was to be created. Regarding performance, the payment cycle was supposed to take 28 days, but in some cases payment was taking up to 80 days. Improvement was needed. Changes in claims patterns and the reasons for them were presented.

New initiatives included a pilot project, based in Polokwane, with TEBA Bank whereby the "unbankable" could bank. Thus far workers without bank accounts had had to receive their cash through FNB (First National Bank). FNB had provided a poor service: workers had to appear at
7am in the morning, and were dealt with only for the next hour. If they were late they would have to wait a month until the next pay day. TEBA Bank was providing beneficiaries with electronic debit cards which could be used at Checkers, Pick 'n Pay, ATMs and various other points. Workers involved in the pilot project in Polokwane had begun banking as a result. This initiative also eliminated the need for cheque funds, vulnerable to cheque fraud. It was likely that big banks would follow TEBA in this initiative.

Discussion
Mr Manie noted that farm and domestic workers formed the highest sector of contributors to the UIF and that there should be extensive discussion regarding their concerns. Mr Mkhonto assented that more research on farmworkers was required.

Mr Manie asked how women were discriminated against by the UIF. Surely a woman on maternity leave was being discriminated against if her maternity leave benefits were deducted from her general UIF benefits? How did this impact on the viability of the UIF?

Mr Mkhonto replied there had been a revolution in this area: maternity benefits were no longer deducted from the worker's credited benefits, but were additional. All workers were entitled to four months maternity leave if their previous employment had exceeded four years. If not, they were not entitled to the full four months, and there was not a 100% replacement rate. This system was based on a funding module; hopefully there would be permutations in the following year with the increased solvency of the UIF.

Mr Mzondeki (ANC) asked what suspension entailed.

Mr Mhkonto replied that a contributor could be suspended if it could be proven that he had submitted falsified information. If so, benefits would be recovered.

In reply to a question on whether employees had the right to check whether their employers had registered them, Mr Mkhonto said that they did but that they must produce their ID document in order to do so.

Compensation Commission
Ms S Magojo (Commissioner) spoke about the Commission's achievements, challenges and priorities (see document)

Discussion
Mr C Lowe (DA) asked for contact details for the Compensation Commission and for information about PSTD (post-traumatic stress disorder) in the SAPS (South African Police Service), specifically how stress was managed in the SAPS. He asked, too, how HIV/AIDS affected claims.

Ms Magojo responded that PTSD must be traceable to a specific event in order to qualify for compensation and that there were guidelines for claiming. Regarding HIV/AIDS, it was difficult to claim that its contraction was work-related. The question of HIV/AIDS was most pertinent to health workers. HIV tests were required by COIDA. It was noted that HIV complicated other cases and tended to lead to higher medical expenses, the responsibility for which was not clear-cut.

Mr L Maduma (ANC) asked what the objective of compensation was, expressing concern that some workers do not directly benefit. Rather, compensatory money was absorbed by medical costs. He noted that a work accident may have an impact on an entire family; this required attention. Also, workers were not clear about their rights, and the entire process of compensation might itself be traumatic.

Ms Magojo noted that they did have rehabilitation centres in
Gauteng and KZN where lost functionality might be regained. The restoration of lost functionality should be the end result of compensation. Perhaps there should be training for new skills in the case of functionality being lost. Regarding medical fees, these were paid directly to doctors and were assessed to make sure they were regular.

Mr N Godi (PAC) noted that medical costs took up nearly half of the revenue generated. He asked whether this reflected the high costs of medicine, the state of occupational health or the size of the workforce.

An ANC MP asked what happened when a mineworker became ill after leaving the mines, as with the asbestos problem, and what timeframe was there within which to claim compensation after one had left one's employment?

Ms Magojo responded that there was no time limit. Regarding asbestos, a medical complaint could occur 20-50 years after minework (in some cases, the company may no longer even exist). Consequently, COIDA forms required occupational history.

Mr Manie noted that there was the danger of the employer's responsibility simply translating into a contribution and said there needed to be a radical review of this narrow concept of responsibility. Questions of fairness were very important. He also asked what was done to prevent occupational ill-health and hazards and what the Commission's responsibility was regarding laws about working conditions and their enforcement.

Mr Mzondeki (ANC) thanked the Chair for making this important point and asked what influence COIDA had in this sphere.

Ms Magojo noted that employees must stick to regulations and that they could refuse to work under hazardous conditions. There was a programme for the elimination of silicosis.

Mr Manie noted the complexity of the Commission's pamphlets and forms, suggesting jokingly that they were enough to put anyone off being sick. He stressed that although he appeared to speak light-heartedly this was a very serious issue indeed.

Ms Magojo responded that the forms referred to were to be filled in by employers and doctors and that employees simply filled in a notice of accident.

National Productivity Institute (NPI)
Various senior members of the Institute, including the executive director and the head of the programme, presented an audio-visual presentation of the Institute's three-year business plan, focusing on the Institute's performance since its inception two years ago. The Institute's mandate was to develop productivity. Unfortunately many plans were limited to pilot schemes due to monetary constraints. However, they had received the
United Kingdom's Investors in People Award and had attained other considerable achievements.

Discussion
Mr M Mzondeki (ANC) commented that the NPI was not well advertised. He asked what they were going to do about this and also who they were using as project managers.

The NPI claimed that their mandate to expand was hampered by financial constraints, and that they had worked with the SABC and through various other channels. The chief delegate from the NPI agreed that marketing was a challenge. She mentioned their use of billboards, and the creation of "productivity month" (October). Last year they had promoted themselves at taxi ranks.

An ANC MP questioned the Institute's emphasis on technological research, recalling the destructive use of technology during the apartheid era and asking what use would be made of this technology (supposedly now redundant). Mr Manie interjected to congratulate the NPI on its presentation, noting that a great deal of progress seemed to have been made. He then identified four keys areas that the Committee would need to address:
- job creation/the prevention of loss of jobs
- poverty reduction
- skills
- general equity.

He noted that employing labour-intensive means of production was fundamental to the creation of jobs. However the need to be globally competitive encouraged a focus on and the use of a great deal technology, and that these two interests appeared to conflict.

A delegate from the NPI responded that technological research was important and that project management was competent (a reply to first question?). He noted that the NPI was committed to minimisation of all conflict through its promotion of collaboration with others, for example COSATU and DTI (the Department of Trade and Industry). He mentioned future forums. Another NPI delegate noted the need for a channel effect in order to influence legislators and policy makers. An ideal way of increasing capacity was through linkages between projects. In this way a better balance between productivity and job-creation would be ensured. He noted that technologies were transient by nature, and also, the need to go abroad for developed markets. Enterprises worked with were linked with developed markets.

Commission for Conciliation, Mediation and Arbitration (CCMA)
The Director, Mr Edwin Molahlehi, and the National Registrar, Ms Sue King, briefed the Committee on the Commission's performance, mission and innovations. They had initiated a system for dealing with conciliation and arbitration on the same day, which had cut costs. The pilot project in KwaZulu Natal was successful and the system would be implemented in other provinces. The facilitation of retrenchments had been improved since the introduction of a new section, Section 189(A), whereby redundancy was anticipated and prevented. Dispute management and prevention were discussed and a profile of cases was given by issue, sector and province. The CCMA's strategic focus for the next three years was also presented.

Discussion
Mr L Maduma (ANC) complimented the CCMA on their presentation and then asked if the fourteen days they had referred to were allocated for both mediation and arbitration or only for arbitration. He noted that mineworkers tended to be aware of the CCMA on account of their being unionised, and asked how the CCMA represented themselves to the non-unionised. Did they use posters and pamphlets and where were they placed?

An ANC MP pointed out that although the agricultural sector constituted only five percent of the CCMA's cases, farmworkers were notorious victims of malpractice. What documents were there to make farmworkers aware of CCMA, and were they easily comprehensible?

It was noted that there were many disputes, a number of them outstanding, in the West Coast area and asked that a CCMA office be situated there (specifically in the north), pointing out that it was an economic growth area.

Mr G Oliphant (ANC) suggested, based on his own experience, that the CCMA was "punitive" towards workers without unions, and asked how this could be addressed.

Mr Godi (PAC) asked how the CCMA could prevent workplace conflicts.

Questions were also asked about the processing of complaints and what the role of Members of Parliament should be when dealing with the CCMA. It was noted that there was the belief on the part of workers that employers tended to work with the
Labour Court, a time-consuming affair, rather than the CCMA in the hope that cases would be abandoned. He asked what the relationship between the CCMA and the Labour Court was like.

The CCMA responded that MPs could assist workers in making sure complaints were processed; a complaint system could be set-up. A number of Provincial Constituency Offices (PCOs) were involved in ensuring this, particularly in
Gauteng and KZN. Regarding the problems with the courts, this was the province of the Labour Court. Many workers came back to the CCMA wanting to know what was happening and why their cases were not moving. Section 143 provided for a good working relationship with the Labour Court. If a worker had submitted a Section 143 the case could be tracked and the worker told where his case was in the legal process. Regarding delays, a complaints process system had been set up. Their briefing document showed that 82% of conciliations were completed within one year. Part of the problem rested with the plaintiff and a lack of follow-up on their part. An example was given of councillor from a PCO notifying the CCMA that a worker had been waiting for word on his case for three months; as it turned out the worker had not followed up since conciliation.

Mr Manie (ANC) commented that these delays were a "huge" issue. He pointed out that dismissal in the retail sector constituted a large proportion of the CCMA's cases and said this should inform the CCMA's procedures. He suggested, too, a sifting procedure, whereby the degree of complexity of each case could be evaluated and the simpler cases dealt with more quickly.

Mr Molehlehi responded that he met on a monthly basis with the association of retailers. Generally, programmes were reviewed on a quarterly basis. As for ensuring that cases were distinguished, a screening process had been implemented whereby workers could be sent to the bargaining council. This was a new system.

The CCMA noted their need to work together with the NPI; the usefulness of working together with other organisations had been learnt in the past. He replied that the fourteen days pertained to the issue of arbitration awards. He commented too that a party had seven days from notification in which to submit heads of argument. There was a case against a commissioner for taking 22 days to make an award (check tape) at the moment. Regarding the issue of mediation, thirty days were given for conciliation. This was an improvement. Thence there were 90 days in which to conduct arbitration. The commissioner was advised if a case was not resolved through conciliation, and the next step was arbitration.

Regarding non-unionised workers, Ms King commented that most workers were not represented by unions, and that community radio in all South African languages was used to reach rural workers. The use of community radio had begun in 1996, and was effective. The CCMA also had outreach programmes including user forums and stakeholder breakfasts. Disseminating information through secondary organisations, such as labour advice offices and other community-based advisory offices, was effective. The Commission produced a lot of inexpensive material to promote itself, chiefly a simple A4 black-and-white page on workers' rights that was widely circulated. They had recently implemented a call centre, and had been flooded with calls, 15 000 to date. They had a website and a research unit and their front desk staff were trained in broader legal issues.

The CCMA noted that 23% of their calls were from domestic workers. He commented that South Africans appeared to be trapped into a culture of litigation, and noted that
New Zealand offered an effective alternative to this, and that a more "inquisitorial" culture predominated there. He noted that if a lawyer was present for a CCMA case their right of questioning was restricted; only the arbitrator could cross-reference. Legal representation was generally prohibited by Section 25 in the CCMA Rules but there were loopholes through which this could be bypassed. Lawyers would join employers' associations and thus assert their right to be present. Judge Landman had declared that it was not unconstitutional to exclude lawyers. Despite this, the CCMA might presently be taken to the Constitutional Court once again.

Regarding the agricultural sector, there was a need for facilitation between farm unions and employers. More people needed to know their rights; here illiteracy needed to be addressed.

Many delays were the result of workers living in informal settlements. Non-appearance and non-attendance frequently occurred with this category of workers; because they had no physical address and tended to move often so they could not be tracked and informed. It had been discovered that many of these people had cellphones. A new system was being implemented whereby workers were given case receipts, stating where and when their case would be, via SMS. If a worker did not know that his case was being heard and consequently failed to appear, the commissioner dismissed it.

On the issue of sifting for complexity, domestic workers were distinguished from group (for example, corporation) cases. Complexity was a factor in deciding on hearings. Ms King said that Small Medium Enterprises (SMEs) were provided with a lot of material - CCMA had produced generic disciplinary procedures and a draft employment contract, produced in hard copy as well as posted on the CCMA website. Their call centre provided assistance and they also provided SMEs with workshops. MPs could assist with providing numbers for further information.

Regarding non-jurisdictional cases, the front-desk staff were knowledgeable enough to guide workers about their complaints. There was a case every minute and CCMA was a production line; therefore they could not have problems with their front-desk staff providing inadequate customer service. There had been problems with their front-desk staff, these had been very promptly corrected.

Mr Manie concluded by thanking all the presenters and noting the significant amount of progress that appeared to have been made. However, there had been insufficient focus on problems, challenges and short-comings in the submissions. These needed to be addressed, and he emphasised that the Committee was a forum for doing so, and did not merely exist for the purposes of representation and monitoring. Greater interactivity was needed. The Committee was a resource, not just a police-body, and a co-operative relationship must be set up. MPs travelled a great deal and should use this to spread the word of services offered by the various organisations. Constituency offices should become more involved in marketing material. Also, interaction between Committee, Department and organisations should not be restricted to summons to Parliament. When necessary, meetings with the Committee and chairperson should be requested. It was very useful for all organisations to invite people at a provincial level, the constituencies and such like to become involved and offer their views, experiences, feedback. The Chair strongly urged thinking that focussed on involvement and interaction with the larger community. It was not enough simply to have a conference where somebody made a speech and a nice dinner was had. Lastly, he requested that the organisations supply all relevant contact details to the MPs, and vice-versa.

Meeting adjourned.

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