CCMA, Nedlac & PSA Q1 2022/23 Performance; with Deputy Minister

Meeting report

First quarter performance reports

Commission for Conciliation, Mediation and Arbitration (CCMA)

Mr Mthembeni Ncanana, Executive: Corporate Services, CCMA, said that the Commission had a strategy premised on five programmes. These were:

• administration;
• proactive and relevant labour market interventions;
• special interventions and support;
• efficient and quality dispute resolution and enforcement services; and
• effective strategic management and government.

In the 2022/23 first quarter, the CCMA had nine non-financial performance targets. At the time of reporting to the accounting authority, seven targets had been achieved and two had not been achieved. The first target that was not achieved dealt with issuing awards within 14 days, as legislated, while the second was focused on the quality award index. He said the CCMA did quality assurance, and at the time of reporting, the evidence of 99% of what had been reported could not be verified, so the internal audit decided to put a "0" against these two targets. However, the evidence provided had since been validated and the 99% confirmed, so these two targets could be reported as achieved.

Regarding high-impact labour market contributions, Mr Ncanana pointed out that during the period under review, a total of 43 129 referrals had been received by the CCMA, which was an increase of 8% compared to the first quarter of the previous financial year. All the conciliations heard were within the average turnaround period of 22 days, with a settlement rate of 80% and a postponement rate of 6%.

In the quarter under review, the CCMA had a budget of R269 million, of which R236 million had been spent. The entity was financially healthy and within the allocated budget. No new irregular expenditure cases were identified. Three cases with a total value of R396 948 submitted to National Treasury for condonement have since been condoned and accounted for. As of 30 June 2022, the total balance of possible fruitless and wasteful expenditures had been R117 161, and the loss and control committee was considering all the cases.

Please see presentation attached for full details

National Economic Development and Labour Council (Nedlac)

Ms Lisa Seftel, Executive Director, Nedlac, highlighted that there had been developments since the last presentation, which had seen the labour law reform getting underway with an independent facilitator, technical support for the parties, and a drafting team. Further, the Nedlac Covid-19 Rapid Response Task Team (NRRTT) had concluded extensive deliberations on the Department of Health's (DoH's) draft Covid-19 regulations, with a significant alternate proposal.

There had been challenges, including very poor progress by the Unemployment Insurance Fund (UIF) sub-committee of the NRRTT in finalising the backlog of grants due to Covid-19 Temporary Employer/Employee Relief Scheme (TERS) beneficiaries and employees impacted by the 2021 July unrest. Due to vacant posts, there had also been capacity constraints experienced in the programmes department. She assured the Committee that mitigation measures had been put in place to respond to these challenges.

All the performance indicators had been met, except for one which was related to information technology (IT). This was related to users being unable to navigate the applications, and to new engineers hired by the IT service provider who did not understand the Nedlac system.

There had been a significant improvement  -- an increase of R2.7 million -- in the expenditure for the quarter, compared to the same period the previous year. There were savings of R577 000 due to four vacant posts, and these were in the process of being filled. Actual goods and services spending had amounted to R3.972 million, compared to the year-to-date budget of R6.848 million, which had resulted in an underspending of R2.867 million. Some areas where underspend had been noted were consultancy fees, audit fees, and constituency capacity building.

Please see presentation attached for full details

Productivity South Africa

Mr Justice Tshifularo, Executive Manager, Productivity South Africa (PSA), said that in terms of the entity's strategic objectives for the first quarter, there were nine targets, of which seven (78%) were achieved. Most of the targets were accumulative, so although they may not have been achieved within the quarter, they could still be achieved within the financial year.

PSA had a financial deficit of R4 million, and still hoped for the implementation of a single source funding model, which would go a long way to alleviating the financial challenges faced by the entity, including further support for the enterprise development and support programmes that had been tabled in the report.

Please see presentation attached for full details

The Chairperson welcomed the presentations, and opened the floor for discussion.

Discussion

Dr M Cardo (DA) referred to Nedlac’s establishment of the Labour Law Reform Task Team, and asked who served on the drafting team and what the scope and mandating timeframes were, and if any representatives from small businesses were involved.

Regarding the governance task team, he asked for clarity on whether the redrafting of the Nedlac founding documents, including the entity’s Act, had been completed. He asked for a way forward on this issue.

He noted that in the presentation, it had been highlighted that the UIF sub-committee continued to exercise oversight on addressing backlogs of the Covid-19 TERS payments. What form did this oversight action take to reduce the backlogs, as there were many complaints from members of the public about delayed payments?

Dr Cardo also asked what Nedlac was doing in response to the load-shedding crisis, specifically the impact of load-shedding on business performance, which had resulted in a rise in unemployment.

Mr M Bagraim (DA) said that he hoped Nedlac had taken note of the State of the Nation Address (SONA) delivered by the President, specifically on supporting small businesses, and therefore asked for feedback on how many of the promises that had been made would be kept by Nedlac.

He asked about the state of the Productivity South Africa board members, including the investments that were going to be made from the UIF and the Public Investment Corporation (PIC). Was the board member still a member of PSA? What progress had been made in regard to the UIF investments which had gone astray?

Ms C Mkhonto (EFF) wanted to know how far the CCMA was with the process of requesting offices from the municipalities and the traditional leaders, as it had been promised that the entity envisaged taking its services to the communities, including the rural areas.

In the presentation, many sectors had been mentioned, but in which sector did the CCMA classify petrol attendants, as there had been complaints from them?

Productivity SA had presented accumulative targets which were not achieved in the quarter. She asked for clarity on what this meant, as targets were set within a specific timeline, so why were unachieved targets accumulated?

Mr S Mdabe (ANC) raised concern concerning the national minimum wage (NMW), as the CCMA presentation had not given a clear idea of which sectors were unable to meet the NMW, nor included its magnitude.

He asked the CCMA if there were any repeat offenders in specific sectors, and if those sectors had applied for exemption.

Was the employment of foreign nationals as truck drivers and in the hospitality industry being deliberated at Nedlac, and if so, what were the outcomes?

Mr M Nontsele (ANC) asked for more detail on the areas that had led to the non-achievement of PSA's business turnaround and recovery (BTR) targets. Also, what were the entity's interventions in terms of saving jobs?

Responses

CCMA

Mr Ncanana responded to the question about requisition of offices from municipalities and traditional leaders. He said the CCMA had a memorandum of understanding (MoU) with the South African Local Government Association (SALGA). It was working closely with SALGA and using its offices to conduct hearings. The relationship between the CCMA and SALGA helped vulnerable users in rural areas to access the CCMA's services through the location of the municipal offices.

He said the petrol attendants fell under the National Bargaining Council (NBC) for the chemical industry.

Some of the quarterly targets were not achieved at the time of reporting because they were cumulative. At the time of reporting, a 99% achievement was reported but the evidence provided for quality assurance could not be verified. The accounting authority had advised that verifying the 99% achievement through an internal audit for assurance purposes was paramount. An internal audit verified and confirmed the 99% achievement. Mr Ncanana reassured the Committee that the two targets reported as not achieved at the time of reporting at the end of the first quarter, had been achieved.

Referring to the complaints, he said the complaints on the dashboard that had been received through the CCMA's information and complaints lines were due mainly to the conduct of a few commissioners. There were governance structures that had thoroughly dealt with these complaints, and action had been taken where it was merited.

Mr Xolani Nduna, CCMA Commissioner, responded to the question of the national minimum wage, adding that there were people who offended and did not meet the required wage as required by the Act. Such cases were dealt with, with all due diligence, and there had been positive feedback from various employees across the country.

All the disputes relating to petrol attendants were taken to the relevant bargaining council, including disputes about the national minimum wage.

Responding further on the issue of accumulative targets raised by the Committee, he clarified that when he had mentioned the issue of cumulative targets, it was not in the context of the reason for deviations, but to give assurance that targets that were cumulative in nature did not get dropped at the end of the quarter, as they were part of the annual plan. The entity was still responsible for the two targets that had not been achieved in the first quarter were still achieved within this particular financial year.

NEDLAC

Ms Seftel outlined the scope, mandate and time frame of the Labour Reform Task Team, including the participation of small business. She said that the team consisted of representatives of organised business, labour and government mandated by the Labour Market Chamber. A decision had been taken to look at labour law reform in various phases, with the first phase focused on collective bargaining dispute resolution, and the second on the codes of good practice for retrenchment and dismissal.

In terms of small business participation, it was up to organised business and government to determine who participated.

On the processes and the way ahead of the Governance Task Team, she said that a draft bill, the constitution and the protocol had been presented and agreed upon by the management committee (MANCO) and approved by the executive committee (EXCO). Nedlac was in the process of implementing the revised documents.

Regarding exercising oversight of the UIF sub-committee, she said this was a sub-committee of the Covid-19 rapid response team, with weekly meetings and regular reports on strategies employed to address backlogs and challenges with the IT systems. However, when the Covid-19 Nedlac Rapid Response Task Team closed the task team -- as its terms of reference had come to an end -- the UIF sub-committee also had to complete its work. A decision was made in Nedlac to have a further task team established, which was called the UIF Modernisation Task Team, which had taken over some of the work. The task team did not meet as frequently as the Covid structure. Ms Seftel acknowledged that there was a backlog, and said there was an attempt to engage with the UIF to attend to it.

To respond to the load-shedding crisis, Nedlac had an energy workstream which constantly monitored what was happening in the energy space. There have been several urgent meetings since January that focused on improving the load-shedding schedule to mitigate against the negative socio-economic implications of load-shedding.

On the promises made by the President in the 2023 SONA, she said the current report was focused on the first quarter, and not necessarily on what had happened subsequently. Therefore, she was not yet at liberty to comment on this.

Concerning the employment of foreign nationals, she said that at the end of 2021, the Department of Employment and Labour had tabled the employment strategy and made amendments to the employment services legislation on the regulation of foreign nationals. The Nedlac social partners had made initial comments on the matter, and the Department was considering them, as well as public comments, and would return to Nedlac for further engagement.

Deputy Minister's concluding comments

Ms Boitumelo Moloi, Deputy Minister of Employment and Labour, commended the presentations. On the issue of the investigation by the Minister, she requested that the Portfolio Committee be patient, as the Minister must first present to the President, and feedback would then be provided to the Committee. She gave an assurance that the Department was always prepared to answer any follow-up questions.

The Chairperson welcomed the responses and thanked the Department.

She announced that the meeting of 1 March would be hosted physically in Cape Town, and more details would be communicated to the Portfolio Committee in due course.

The meeting was adjourned.