Budget & Programme: briefing

Meeting report

LABOUR PORTFOLIO COMMITTEE
7 February 2000
BUDGET & PROGRAMME

Documents handed out
Presentation on Programme and Budget for 2000 (See Appendix 1)
Labour Budget (Vote 22)
Media release - Department of Labour's Programme and Budget for 2000

Chairperson: Mr MS Maine

MINUTES
The Director General, Advocate Rams Ramashia, accompanied by senior officials of the Department: Deputy Director General, Les Kettledas; Chief Director: Administration, Dr Dean Haasbroek; Chief Director: Financial Management, Chris van der Merwe; Chief Director: Labour Relations, Lisa Seftel; and Chief Director: ESDS, Adrienne Bird, presented the briefing on the Department of Labour's Programme and Budget for 2000 (see Appendix 1).

Discussion
Q. Mr S Rasmeni (ANC) asked about workplace forums, what work has been done regarding these and what sectors are lagging behind.

A. The Act sets up the forums, it says that forums are places of information sharing and extensive consultation. They have to be triggered by representative trade unions and there is a provision that they can only be set up in workplaces where there are more than a hundred employees. It is not every workplace that may have a forum. All sectors are lagging behind.

Q. On the matter of international trade relations, whether labour challenges could be foreseen when international agreements are implemented.

A. There needs to be closer relations between the Trade & Industry and Labour Departments, as of now the Labour Department has not taken part in the talks. Initiatives are being looked at to ensure that there is synergy between what is being done by Trade & Industry and Labour policy.

Q. There was a request for clarification on the Social Plan.

A. The Social Plan was agreed on at the Job Summit. It envisages a retrenchment response team that gives guidance to workers facing retrenchment. The plan is also piloting a scheme giving people a training ticket to use to obtain guidance about employment opportunities.

Q. Mr G Oliphant (ANC) asked whether the four month transitional funding comes from donor funding or the Department's budget.

A. The transitional funding will come from the Department of State Expenditure and an advance to the Sector Education and Training Authorities will be made - to be refunded before the end of the financial year. There is no risk of defaulting repayment because the money will be reclaimed through the levy fund.

Q. Regarding learnerships, what would be the access criteria?

A. The key access criteria would be influenced by the definition of target groups in the Employment Equity Act.

Q. Mr D Sithole (ANC) wanted to find out how the government would deal with institutions that had historically had their own training centres and what would be their status.

A. There is a number of ways to deal with institutions. SAQA would require accreditation of these. Also they would be required to identify projects before training is undertaken in relation to Sector Education and Training Authorities. SETAs are referees not players they oversee the quality of training that occur.

Q. Can companies that do computer-based training claim from the fund?

A. These will benefit from the grant if they meet requirements such as naming of skills development facilitators, submitting a skills plan and report, etc.

Q. Mr RJ Heine (DP) asked whether ordinary inspectors without specialist knowledge of machinery would be able to carry out inspections properly. How would the training of the inspectors be done, considering budget limitations?

A. This is a misrepresentation of the intention of the Department - there is no plan to phase out specialist inspectors; there is room for these. The Department says it would like to avoid a situation that provides for different types of inspectors to do inspections in terms of different laws. Where generalist inspectors cannot deal with a situation, specialist inspectors would take over.

Q. The Chairperson asked whether the Director-General would be entering into performance contracts with his managers; whether it is envisaged taking performance contracts to lower levels of management.

A. A high level panel would be set up to work with managers on appraising staff performance. Salary increases and bonuses will be based on performance. The plan is to have performance contracts cascaded to lower levels as well.

Q. Mr R Ndou (ANC) asked how the Department is faring with its financial management because if one looks at departments in general it would appear that there is a lot of poor financial management. Does the Medium Term Expenditure Framework not worsen the situation?

A. There has been an improvement in unauthorised expenditure but the Department is still not happy because it is still there. An internal select committee was set up for officials to account for unauthorised expenditure in their sectors. To encourage better financial management in the provincial departments a trophy award has been established. The director-generals in provinces will be appraised on the management of finances in their departments and the best would be awarded the trophy. The team responsible for managing finances in the provincial department would be sent on a motivational team building workshop.

Q. Is performance management provided by the Department for Public Service Administration or Labour?

A. DPSA provides the framework and the Department of Labour works according to that framework.

Q. Whether the establishment of State Information Technology Agency had an impact on the Department's ability to come up with IT plans.

A. The Department is interested in public/private partnerships in the area of IT. It has been engaged in consultation with SITA in this regard and has encountered no problems.

Q. Mr Sithole asked what powers in law do the inspectors have.

A. The powers are spelt out in various laws and consolidated in the Basic Conditions of Employment Act. These include entering of private premises, whereby they may approach the Labour Court if they feel entry is unreasonably being denied.

Q. Mr Heine asked what the staff complement of the Department is.

A. It is around 45 000 people which includes Unemployment Insurance Fund and Compensation Fund employees who are deemed to work for the Department.

Q. Clarity was required regarding moves to phase out sheltered employment centres.

A. Due to lack of employment opportunities for the disabled, people were staying in the scheme year after year. This does not coincide with the purpose of the Department. The Minister of Labour set up a task team to advise on how to change these into training centres.

Q. There are allegations that the Commission for Conciliation, Mediation and Arbitration is concerned mainly with petty cases which is the cause of the delays in getting cases finished.

A. There is no truth in such allegation because approximately 90% of the cases that come before the CCMA are set down within 90 days and usually decided within four months. About 80% of these matters deal with individual unfair dismissals.

Q. The Chairperson asked if the Department was voted approximately R300 Million for personnel and the expenditure amounted to about R200 Million, what accounts for the under-spending?

A. In 1999 a work study exercise was undertaken on the delivery of services to centres. It was found that in order to deliver services a number of vacancies would have to be filled. But the Department decided to postpone the filling of those vacancies to avoid having to relocate people pending restructuring of the Department. The vacancies are there and have not been filled and this is what accounts for the under-spending. Upon completion of the transitional arrangements these vacancies are going to be filled.

Appendix 1:
DEPARTMENT OF LABOUR PROGRAMME AND BUDGET FOR 2000
Presentation to Labour Portfolio Committee - 7 March 2000

AGENDA
Key activities and outcomes for 2000 for the following programmes:
Employment and Skills Development Service
Labour Relations
Occupational Health and Safety
Compensation Fund
Unemployment Insurance Fund
Labour Market Policy
International Relations
Administration
Human Resource Management
Budget

Introduction
Programme of Action for 2000 is guided by
Government priorities
Minister's 15 point programme
Five Year Strategic Plan of Department
Programme will be implemented mindful of
need to promote labour market efficiency
new Public Finance Management Act
need to deliver professional and client orientated service

Employment and Skills Development Service
· The objective of the ESDS is to promote and regulate the skills development strategy and render employment services.
· Key areas of work relate to the implementation of the Skills Development and Skills Development Levies Act.

Skills Development Act: Progress so far
· National Skills Authority launched on 13 April 1999 and has met eight times
· National Skills Development Strategy being prepared for launching in November 2000
· Skills Development Planing Unit
· 25 Sector Education and Training Authorities being established and 33 industry training boards being dissolved.
· Workshops held with skills development facilitators who will prepare workplace skills plans.

Sector Education and Training Authorities
what accounts for the under-spending

Electronics & Telecom
what accounts for the under-spending
· Mining and Minerals
· Manufacturing, Engineering, Motor Assembly & Service
· Police, Security, Legal, Correctional Services
· Primary Agriculture
· Public Service and Admin.
· Secondary Agriculture
· Services
· Tourism and Hospitality
· Transport
· Wholesale and Retail

Skills Development Levy: Progress
· SARS systems and capacity is in place to receive payments on 1 April 2000
· Funding regulations published regulating how firms can claim back levy.
· National Skills Fund established.
· Projected income for 2000: R500 million
- R100m from fiscus
- R160m from levy income
- R 15m from EU and other e.g. poverty relief.

Employment service
· Guidance and placement service restructured to align with
- new Act
- restructuring of provinces
· Greater focus on placement and linkages with initiatives such as SDI's, provincial growth strategies and local economic development initiatives.

Learnerships and skills programmes
· 15 000 learnerships funded by Business Trust and Department of Labour
· Implementation of learnership guidelines published
· Draft regulations on learnerships published for public comment
· Standards for trainers developed.

The steps ahead …
· Dissolution of ITBs and Establishment of SETA 23 March 2000
· Transitional financial support to SETAs for 4 months
· Official celebration of SETAs - April 2000
· Learnership regulations - April 2000
· Sector Skills Plans - End September 2000
· National Skills Strategy - November 2000
· Marketing Strategy to be launched April 2000
· NSF support for projects initiated from provinces and SETAs
· IMPACT evaluation

Labour Relations Programme Labour Relations
The objectives and key areas of the Labour Relations Programme are to:
- ensure employment equity, particularly in respect of blacks, women and disabled.
- improve the conditions of employment and wages of vulnerable workers
- promote stable labour relations and collective bargaining.

Employment Equity
· Outcomes for 2000 include:
- Publication of Code of Good Practice and technical assistance guidelines in respect of:
· HIV/AIDS
· Disability
· Human resource policies and practices
- Establishment of registry of reports from employers and give feedback on extent of compliance.
- Advocacy and publicity on new law.

Protection of vulnerable workers
· Outcomes for 2000 include:
- Sectoral determinations for:
· domestic and farm workers
· retail, hospitality, clothing, civil engineering
· learnerships in hospitality industry
- Release of survey on nature and extent of child labour and revision of programme of action
- Completion of investigation into feasibility of reducing hours to 40 per week
- Support to small businesses.
- Basic Conditions of Employment Amendment Bill.

Stable labour relations
· Outcomes for 2000 include:
- Promotion of LRA including:
· bargaining councils
· workplace forums
· small business
- Ongoing registration of labour organisations and extension of agreements to non-parties.
- Oversight of CCMA.
- Monitoring of labour market events and trends.
- Labour Relations Amendment Bill.

Occupational Health and Safety
· The object of OHS is to promote an efficient and effective regulation of OHS services to the labour market through a nationally integrated service underpinned by prevention strategies and policies.
· Key areas relate to:
- policy development
- integration
- support to stakeholders
- service delivery.

· Policies to be developed to improve protection of employees in the small business and informal sectors
· Cabinet decision to integrate OHS competencies of Departments of Labour, Health and Mineral and Energy Affairs implemented. Will require business re-engineering and a communication strategy.

· Support to stakeholders will include:
- High profile awareness campaign to prevent accidents and diseases
- Establishment of management support systems such as central database for electrical safety
- Programmes of sectors such as small business and construction to comply with regulations.

Compensation Fund
· The object of the Fund is to compensate workers in the event of occupational accidents and diseases
· The key areas of work relate to:
- Policy changes to adapt to new challenges
- Improved service delivery.

Policy
· Policies to be developed include:
- Compensation of workers who contract HIV/AIDS during a workplace accident
- Compensation for post-traumatic stress including sexual harassment
- Reviewing the merit rebate system
- Extending coverage to domestic workers
- Inflation linked increases in respect of pensions

Service delivery
· Service delivery to be improved through:
- automation e.g. electronic document management
- decentralisation
- integration with Department of Health in respect of occupational diseases
- exploring relationships with private agencies such as Rand Mutual.

Unemployment Insurance Fund
· The object of the Fund is to provide short term insurance against the risk of loss of income due to:
- unemployment
- illness
- death
- maternity
- adoption of children under the age of six.
· Key areas of work relate to:
- legislative and regulatory change
- improved management of Fund.

UIF:Legislative and regulatory change
· New Bill introduced to improve:
- enforcement and compliance
- financial viability of Fund
- coverage and accountability
- co-ordination with social security initiatives.
· Regulations and guidelines to be improved to improve management of Fund.

UIF: Service delivery
· UIF Fund plans to maximise the use of information technology, communication and human resource development and training to:
- improve delivery and accessibility of services
- increase compliance
- minimise fraud
- ensure automatic cash collection and payments.

Labour Market Policy
· The objectives of Labour Market Policy are to
- Monitor, analyse and disseminate labour market information and statistics
- Conduct research to assist in the monitoring, review and formulation of labour market policies.
· Ongoing activities include:
- Gathering and dissemination of strike statistics
- Support for Job Summit structures
- Publications
- Assistance to Programmes.
- Co-operation with Statistics SA.

· Key projects include:
- Finalisation of Mesebetsi survey on labour force experiences
- Research on
· Absorptive capacity of new professionals in the SA economy
· Casualisation including in hospitality and retail sectors

International Relations
· The objective of International Relations is to use international expertise, resources and experiences to ensure the successful implementation of our labour market programme.
· Key areas of work relate to:
- Africa
- International Labour Organisation
- Technical Co-operation

· In respect of Africa, the Department will:
- Advocate for the establishment of a common regulatory framework on labour, employment and related social issues
- Promote the adoption of a SADC protocol on labour relations issues
· Contribute to strengthening the capacity of:
other labour administrations,
independent trade unions and employer organisations
· SADC Employment and Labour Unit.

· In respect of technical co-operation, we will ensure that:
- Technical co-operation complements national resources
- South Africa benefits from ILO technical co-operation resources
· In respect of the ILO, we will support:
- increased supervision and implementation of core labour standards
- reform within the ILO.

Administration
· The objective of Administration is to create business excellence by improving the internal efficiency of the Department through the provision of services, systems and procedures.

Ongoing activities
· Administration's ongoing activities include:
- Communication
- Legal services
- Financial management
- Information technology
- Tender administration and provisioning
- Office administration and management information
- Parliamentary services

Key focuses
· Communication:
- Promoting of the Minister's 15 point programme
- Communicating the work of the department to the public
· Financial management:
- Implementation of Public Finance Management Act focusing on developing the skills of managers
- Development of MTEF for 2000 - 2004 that is aligned with strategic thrust of the Department.

Key projects
· Information technology
- To enter into a Public Private Partnership to design, build, operate and maintain an Electronic One-Stop Service Infrastructure which will include call centres and remote access terminals.
· Legal services
- To establish a unit to support inspectors enforce legislation.

Human Resource Management
· The objective of Human Resource Management is to provide an efficient and effective human resource and management support service to the Department.

Ongoing activities
· Ongoing activities include:
- performance management
- job evaluation
- strategic planning
- management of reporting and evaluation system
- promotion of sound internal labour relations
- development and implementation of internal human resource policies.

Key projects
· Development of first Employment Equity and Skills Development plans for the Department
· Establishment of effective HIV/AIDS programme including employee assistance.
· Facilitation of Strategic Plan for 2000 - 2004.

BUDGET FOR 2000

MTEF ALLOCATIONS
[Graph not included]
The 1999/2000 allocation was R789.3 billion. The 2000/01 allocation has gone down by 5.2% to R748.3 billion and in the 2001/02 the estimate shows a further decrease of 3.5% to R722 billion. The estimated allocation for 2002/03 is R764.1 billion.

Budget Programmes
1. Administration
2. Occupational Health and Safety of Persons
3. Social Insurance
4. Employment and Skills Development Services
5. Labour Relations
6. Labour Policy
7. Auxiliary and Associated Services

BUDGET PER PROGRAMME
[Graph not included]
Vote: 2000/01
Program R'Millions %
ADMIN 154.6 20.7
OHS 36,5 4.9
SI 21,4 2.9
ESDS 274,4 36.7
LR 212,8 28.5
LP 33,3 4.5
AUX 15,3 2.0
TOTAL 748,3 100,0

BUDGET PER PROGRAMME PROJECTED EXP. 99/00 vs BUDGET PER PROGRAMME 00/01
[Graph not included]
Vote: 2000/01
Program R'Mil %Increase
ADMIN 154,6 9.7
OHS 36,5 41,3
SI 21,4 3.7
ESDS 274,4 (18.0)
LR 212,8 3.9
LP 33,3 42.1
AUX 15.3 (55.9)
TOTAL 748,3 (5.2)

BUDGET PER STANDARD ITEM
[GRAPH NOT INCLUDED]
STANDARD ITEM R'MIL %
PERSONNEL 299,4 40.0
ADMINISTRATION 59,4 7.9
INVENTORY 18,9 2.5
EQUIPMENT 24,8 3.3
LAND 1,3 0.2
PROF 38.8 5.2
TRANSFERS 284,6 38.2
MISC 20,1 2.7
TOTAL 748,3 100

PROJECTED EXP. 99/00 vs BUDGET PER STANDARD ITEM 00/01
[GRAPH NOT INCLUDED]
VOTE: 2000/01
STANDARD ITEM R'MIL %INCREASE
PERSONNEL 299.4 39.5
ADMINISTRATION 59,4 44.2
INVENTORY 18,9 58.6
EQUIPMENT 24,8 23.0
LAND 1,3 100
PROF 38,8 (3.4)
TRANS 285,6 (37,2)
MISC 20,1 13.2
TOTAL 748,3 (5.2)

TRANSFER PAYMENTS
[GRAPH NOT INCLUDED]
YEAR R' MIL
97/98 298,6
98/99 312,2
99/00 441,9
00/01 285,6

TRANSFER PAYMENTS: 2000/2001
[GRAPH NOT INCLUDED]
INSTITUTION R'MIL
CCMA 125,0
NEDLAC 6,7
UIF 7,0
NPI 19,3
SHELTOR EMPLOY 20,7
NSF 100,0
SANCB 0,2
DEAFSA 0,1
NCPDSA 0,1
STR CIVLI SOC 6,5
TOTAL 285,6

DEPARTMENT OF LABOUR MAIN CROSS CUTTING LINE ITEM INITIATIVES

ADDITIONAL BUDGET INFORMATION

SKILLS DEVELOPMENT LEVIES
[GRAPH NOT INCLUDED]
R' MIL
99/00 789,3
00/01 748,3
SKILLS LEVY 1,400,0