Business Unity South Africa briefing; International Labour Organisation Report: adoption

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Employment and Labour

23 August 2004
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Meeting report

LABOUR PORTFOLIO COMMITTEE
24 August 2004
BUSINESS UNITY SOUTH AFRICA BRIEFING; ADOPTION OF INTERNATIONAL LABOUR ORGANISATION REPORT; ADOPTION OF MINUTES

Chairperson:
Ms O Kasienyane (ANC)

Documents handed out:
Business Unity South Africa submission

SUMMARY
Business Unity South Africa (BUSA) addressed the Committee on its role, vision and composition, the Business Trust, Employment Equity, training, the Broad Based Black Economic Empowerment Act (BBBEE) and the role of the National Economic Development and Labour Council (NEDLAC) in social dialogue.
The Committee asked a number of searching questions relating to the role of micro-enterprises, the relationship between the Sectoral Education and Training Authorities (SETAs) and business and the advances made in black empowerment. The Committee also discussed and adopted the International Labour Organisation report.

MINUTES

BUSA submission

Mr J Manyi (BUSA Social Policy Chairperson) addressed the Committee on the composition, vision, mission and objectives of BUSA. BUSA was about sustainable economic growth and black economic empowerment focusing on the effective implementation of the Growth and Development Summit (GDS), the Broad-based Black Economic Empowerment Act (BBBEE) and free enterprise friendly macro-economic policies. He discussed the role, vision, mission and focus of the Business Trust in job creation. This included support for the unemployed, community rehabilitation and enterprise development.

Dr E Strydom (NEDLAC Labour Market Chamber Business Convenor) discussed why and how BUSA supports Employment Equity (EE) and what the challenges of EE were, such as the alignment of employment equity plans with sector charters and the impact of HIV/AIDS.

Mr V Mabena (BUSA Committee on Education and Training Chairperson) discussed BUSA’s commitment to the GDS and Human Resources Development (HRD) as the cornerstones of successful economic growth and development. The broad challenges in training were to set realistic National Skills Development strategic objectives, adequate support for the South African Qualifications Authority (SAQA) and encouraging Small and Medium Enterprises (SME) to actively participate in the SETA processes.

Mr Manyi discussed the challenges of the BBBEE such as fronting and the problems with late payments of the SME’s by state institutions. He commented on the need for Public-Private Partnership (PPP) support for the structures of SME’s, as they played an important role in the future of the economy.

Mr K Moyani (BUSA Social Policy vice-Chairperson) discussed the necessity and structures of social dialogue, such as BUSA, the Commission on Employment Equity (CEE) and NEDLAC. He referred more specifically to the Labour Market Chamber and Section 77 Standing Committee in NEDLAC and encouraged other Ministers to become as involved in NEDLAC as the Minister of Labour was.

Discussion
Mr Lowe (DA) commented that a year after GDS, the targets set for job creation had not been met. He continued that SME’s were struggling with efficiency and job creation due to restrictive legislation and that training was only producing better-trained unemployed people. Black empowerment had failed to achieve empowerment on a broad base and he asked how BUSA could help change the situation.

Ms S Rajbally (MF) commented that owners of micro-enterprises, such as vendors, were being harassed and asked if BUSA was in any way involved in the informal sector and if it could prevent such harassment.

Mr Manyi answered that the authority with jurisdiction over harassment would be the local government as they allocated business sites.

Mr SM Rasmeni (ANC) asked for clarification on BUSA’s inclusion of micro-enterprises as it was supposed to represent all forms of business.

Mr Manyi replied that BUSA included the National African Federated Chambers of Commerce (NAFCOC), which represented all kinds of business, including micro-enterprises. They were therefore represented in BUSA. With regard to harassment, BUSA would represent the micro-enterprises but the incidents needed to be brought to BUSA’s attention.

Mr Mabena said that BUSA dealt more with national Issues and SME’s had problems with local or municipal governments. The organisations that SME’s were members of, such as NAFCOC, would deal with the local or municipal government.

Mr Rasmeni asked why reference was made to SME’s and not SMME’s (Small, Medium and Micro-Enterprises). He asked how BUSA assisted the Education, Training and Development Practices (ETDP) SETA in assuring that the shortage in trained practitioners was addressed. He asked what the specific challenges facing SAQA were and for clarification on the challenges around the BBBEE Codes of Good Practice. He asked what the entry points into BBBEE were and how small groups were assisted. What could be done to prevent the late payment to SMME’s and what was BUSA’s position with regards to who would meet with the State President.

Mr L Maduma (ANC) commented that the media projected a perception that government was passing investor unfriendly laws without including the role of business in its partnership with government. He asked how BUSA was assisting the development of SMME’s. He asked if the section 77 Standing Committee could deal directly with labour on issues such as retrenchment and establish structures to deal with the problem. He asked if legislation was necessary to deal with late payments to SMME’s and what the criteria and demography of school leavers’ training was.

Mr Lowe commented that there are 8.3 million unemployed people and asked what the Committee should do first to address this problem. He asked if the labour laws were preventing employment and were counter-productive. He asked how the Committee could create true economic development and empowerment. He asked how the Committee could empower SMME’s.

The Chairperson asked about the agencies set up for the creation of employment and protection of vulnerable workers and how they could be regulated to prevent them from exploiting workers.

Mr Manyi answered that BUSA had put together a team to make proposals on how to deal with the issue of micro-enterprises and that he would address this issue at the next meeting. He continued that with regard to meeting with the President, BUSA was the recognised voice of organised business in South Africa but that the President was free to meet with anyone, but they would not be recognised as representing organised business. The Codes of Good Practices each took different views from the relevant Charters, which caused discrepancies. The various points of entry into the BBBEE were:

Ownership
Control (number of Executive Directors)
Demographic representation at all levels of the organisation
Skills Development
Procurement
Enterprise Development
Corporate Social Responsibility

He continued by saying that government needed to follow the example of business, in that everyone was trying to work together and the opposition opposed in a manner that built constructively. He said that people who themselves did not invest in South Africa asked why there was no direct foreign investment. South Africa was a good place to invest in as it had managed its debt well and had inflation under control. All South African legislation was made in a good spirit taking international norms into account and people who did not want to embrace transformation and were part of the skills flight could leave.

The Chairperson asked Mr Manyi to please address the Committee as a unified body as it would deal with its own internal politics.

Mr Mabena said that too great an expectation had been created with regards to training and the SETAs - this had led to disappointment. The role and functions of the SETAs needed to be clearly expressed as they were facilitators and not providers of training. The infrastructure, which was incorrect previously, was being corrected. He continued that the number of trained practitioners kept fluctuating and that the ETDP SETA would be encouraged to focus on training more practitioners. The Public Finance Management Act (Act 1 of 1999) had been introduced to address corruption in the SETAs, and was doing so successfully. It unfortunately discouraged individuals from chairing SETA boards due to the personal liability it placed on them.

Mr OM Mogale (ANC) asked if the PFMA was a rigid law

Mr Mabena answered that it was not, but that it prevented certain individuals from chairing SETA boards. He said that 80% of SAQA’s funding came from International Donors and that the government only contributed 20%. This raised the question of how sustainable SAQA really was. The agencies that were created for employment and vulnerable workers were only launched in July and needed more time and support. People also needed to use regional labour centres. Training was not just to enable people to get work in the formal sector but rather to give them skills to be self-employed.

Mr Moyani said that the section 77 Committee had limited powers and could not force unions and companies facing retrenchment to use NEDLAC and the Committee.

Dr Strydom continued that retrenchments were a grave concern with severe socio-economic consequences but that legally they were matters of mutual interest and the section 77 Committee only dealt with socio-economic issues.

Mr Moyani said that agencies that exploited domestic workers were being curbed by the Employment Conditions Commission (ECC) under whose recommendation the Minister passed a sectoral determination setting minimum wages for all domestic workers.

Mr TG Anthony (ANC) asked how BBBEE ownership and control of assets in the mining sector was progressing and if the implementation of BBBEE was being monitored. He asked if the residuals, especially those of the mines, were being monitored.

Mr Mshudulu (ANC) asked what the status was with the social plan and how it was being affected. He asked how BUSA dealt with the fact that big business usually crowed out SMMEs and if BUSA would get its members to deal with local and district level government as that was the level at which jobs were being lost. He asked BUSA to communicate to its members how to deal with the Provident Fund Surplus Apportionment correctly. He asked about market failure as BUSA referred to itself in a market-orientated economy. He asked how best BUSA could give the Committee feedback on the sector summits in terms of the GDS. He commented that BUSA was established to transform and its mandate was to address the question of representation.

Mr Mogale asked how many provinces the road show had been to and how it was advertised. He asked who owned the Credit Bureaus and if BUSA could intervene as they were preventing people from being able to make a meaningful contribution to the economy.

Mr MJG Mzondeki (ANC) asked about the President’s call for a list of all unemployed graduates and how BUSA was assisting school leavers. He asked how business was assisting the SETAs in their mandate to train and not to place and if this was addressing EE.

Mr Rasmeni asked if BUSA monitored EE in the mining sector as there was a tendency for management to promote people and then force them into retiring.

Dr Strydom answered that the National Road Show was a joint effort with the Department, organised labour and the community and it had been to Gauteng, Bloemfontein, Kimberly, Port Elizabeth, Durban, Cape Town and Polokwane. It was only a short-term vision and further exposure would be considered once it had finished. The Social Plan was published in the Government Gazette four years ago and it required employers to inform the Department if more than 500 people were being retrenched. The Department could set up offices at the workplace to help to re-employ workers. BUSA was not involved as it was between the employer and the Department, but the Department was restructuring and the plan was back on the NEDLAC agenda.

Mr Mabena said that BUSA was not qualified to comment on the Mineral Resources Development Act, but the new act addressed employment equity. For companies to be able to renew their licences they had to prove that they were implementing EE. Most big companies were taking the new act very seriously. The National Skills Authority (NSA) was reviewing the 2009 strategy, which requires SETA to identify, list and assist unemployed professionals with degrees. Companies’ willingness to be involved with learnerships depended on the costs of the learnership and the reimbursement that the SETA’s gave. Grants needed to be awarded on a sliding scale dependant on the cost of the learnerships. The NSA gave a grant to train employee representatives but it depended on the willingness of companies to give shop stewards time off to train and the willingness of the unions to identify the correct people to be trained and to take their responsibility seriously.

Mr Moyani said that many businesses relied on the credit bureaux for information about individuals they would like to do business with. It was unlawful for a company to discriminate against a job applicant on the grounds of being listed with a credit bureau, except if the job entailed managing other people’s money. The applicant could approach the Commission for Conciliation, Mediation and Arbitration for relief.

Mr Mabena said that the SETA had a mandate to create a proper environment for training to take place and facilitate training. There was the debate that SETAs should train but it was not their function. They could monitor the training that would take place.

Mr Manyi said that the question of SETAs was contested as business said that SETAs did not pay and SETAs said that business did not claim. BUSA was busy dealing with this. He continued that there was still much room for improvement in direct black empowerment as there were only two of the companies listed on the Johannesburg Stock Exchange (JSE) that had black CEOs. The percentage of black owned companies was 5% or below. He said that forcing workers to retire would amount to a constructive dismissal that could be taken up at the CCMA but that workers needed to be empowered with information of their rights. The Minister of Minerals and Energy had been very visionary in answering the question of residuals.

Mr Mabena said that there was a gap between EE and learnerships as they were two separate programmes but that BUSA was trying to link EE with skills development. This would possibly be done through annual training reports linking EE and training and by giving grants to promote EE training.

The Chairperson thanked BUSA and said that the issues of skills development monitoring, employers meeting EE targets and the lack of women in top management were noted. She allowed them to leave.

The Chairperson asked if there were any recommendations on the ILO report.

Mr Mzondeki suggested that the term “maintain” be used with regards to observer status.

Mr Mshudulu said that it should remain the same as changing it would become very technical.

Mr Mzondeki said that it would be best to leave the clause as the Department traditionally took Members of the Committee with as observers.

The Chairperson said that it should remain the same and that there would be a workshop at which the Department would inform the Committee about the ILO Conference.

Mr Rasmeni responded that it needed to be clear and recorded so that the next Committee’s position in this matter was clear.

Mr Mshudulu said that it should be duly noted for the record in the annexure.

Mr Mzondeki suggested that the phrasing be ‘that the observer status of the Members of Parliament attending conference be maintained”.

Mr L Maduma asked how long Members would be at the Conference.

The Chairperson replied that funding was an issue and would determine the length.

Mr Mshudulu suggested that the Minister brief the Committee Members.

The Committee adopted the ILO Report.

The Chairperson reminded the Members of the 6 September workshop and the programme was adopted.

The Chairperson adjourned the meeting.




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