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Labour

07 May 2001
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Meeting Summary

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Meeting report

LABOUR PORTFOLIO COMMITTEE
8 May 2001
LABOUR BUDGET: BRIEFING

 

Chairperson: Mr Manie

Documents handed out

Presentation by the Department of Labour

SUMMARY
Service delivery is a new program. The Department envisages a shift in emphasis from policy development to policy implementation. Accordingly, the service delivery programme has had funds shifted to it from head office programs to the provincial office service delivery programs. This means that there are decreases to other programmes.

There has been under-expenditure in the Department under the category of personnel. This was attributed to the major restructuring process which the Department embarked upon in 1999. This process required the Department to conduct business process re-engineering and to design new job profiles that is consistent with the strategic direction of the Department.

Also, according to the new regulatory framework from the public service all vacancies must be subjected to job evaluation and job profiles before that vacancy can be filled. This contributes to a very lengthy process.

MINUTES
Presentation by the Department of Labour (Mr Ketteledas, Dr Nkosana, Director-General Ramashia, and Mr Haasbroek) respectively.

Annual report - Summary of presentation by Mr Ketteledas
There are various labour policy programmes. The achievements in the following categories include the following:

Employment and Skills Development Services

- A National Skills Development Strategy was held
- 25 Sector Education and Training Authorities were established
- Skills development levies have been collected by SARS
- Research on domestic workers and their employers completed
- Retrenchment support teams were established in all the provinces to provide counseling to retrenchees, motivating them to job-hunt again

Unemployment Insurance Fund (UIF)
- Regulatory changes aimed at targeting benefits more effectively at the poor.
- Improving the financial management of the Fund
- Increased contribution collection and benefit payments through electronic means

Labour relations
- Regulations to the Employment Equity Act were amended
- The Act was popularised through engaging in visible campaigns
- Draft code of good practice on HIV/AIDS and employment was released
- 80 collective agreements were published
- Certificates of accreditation for 21 bargaining councils were published
- Bargaining Council consultative forum was held during November 2000

Internal Management and Operations Programmes - Summary of presentation by Dr Nkosana
The Departments achievements in the following programmes include:

Occupational Health and Safety (OHS)

- Consolidation of Integrated Inspection and Enforcement Services units at provincial offices
- Conducted inspections at three prisons
- 10 060 inspections were conducted
- 4 new factories were licenced

Compensation Fund
- Electronic enquiry functionality is currently being piloted at the Gauteng North provincial office
- Procedures in respect of compensation were marketed

Human resources Management
- 22 Departmental HRM policies were reviewed and aligned accordingly
- An Employment Handbook was developed, adopted, and distributed to all staff members
- HIV/AIDS preventative strategy developed and implemented

Service delivery
- They have created a programme that is dedicated to service delivery

Key Objectives
(Presentation by Advocate Ramashia - DG)
The Department has clustered its activities. The first one relates to the balance between security and flexibility. This is something that the Department has to monitor on a yearly basis in terms of the impact of their labour market policy on the broader objectives of government.

In this regard the Labour Relations Act and the Insolvency Act which have been tabled at NEDLAC for discussion will be finalised and tabled in Parliament during this year.

Employment creation - Learnerships will be created. This is designed for those who complete matric but cannot get jobs because of a lack of experience. The Department is going to introduce learnerships so that matriculants can get experience and enter the workplace.

The Department also intends to promulgate code of good practices for workers on job creation skills. There are certain schemes that government is involved in with the intention to create jobs. The problem is that there is no synergy between what that Department (whichever Department is trying to do this) is trying to achieve and the labour market policy. The Labour Department intends to create that kind of synergy and ensure that they are able to contribute to the broader objective of government of creating jobs.

These learnerships will contribute to the Skills Development Strategy as part of the human resource strategy that the President announced at the opening of Parliament. Part of the Labour Department's contribution toward that is to issue bursaries in scarce skills such as Mathematics, Science, and Technology. In this way the Department will contribute to the growth of the economy and to the creation of jobs.

The bulk of the Employment Equity law has been promulgated. There is a lot that has happened in terms of the employment equity registry. This year they will launch the HIV/AIDS code which has already been debated at NEDLAC and has been approved by social partners. The Department must still arrange it publicly and ensure that employers start to use it.

The code on disability has been published a few weeks ago for public comment. It is only when the Department receives those comments that they will incorporate them and it will be formally launched. The Department intends to consolidate the Employment Equity Registry and ensure that they have a good case management system for the purpose of compliance. The enforcement strategy on employment equity will be wrought out, concentrating on procedural compliance at this stage and then later on it will be a question of substantive compliance.

Ongoing advocacy to make employers aware of what rights and obligations they have in respect of the Act is taking place. There are sections dealing with procurement which have not yet been promulgated even though they are part of the law. They wanted to understand the law of the land first before they could draw out that aspect. This will relate to companies who want to do business with the State. They will have to meet certain employment equity related objectives in order for them to get tenders. The Department wants to ensure improved compliance within the public sector so that they lead by example in that regard.

The key issues relating to protection of vulnerable workers would be the publication of the investigation on farm workers and domestic workers. The reports have been finalised in a draft form and issued out for public comment so as to inform the Minister at what rate there should be sectoral determination for those sectors which are very vulnerable.

The next key objective relates to adequate social safety nets. In this regard there are two programs, the unemployment insurance aspect and the compensation aspect. In preparation for the Bill becoming an Act the Department has already embarked upon administrative changes within the UIF environment. This includes the issue relating to preparing for collection with regard to domestic workers.

The promotion of stable labour relations relates to registration of labour organisation, oversight on the CCMA, facilitating support for bargaining councils and monitoring of collective bargaining trends. The issues are routine but critical in promoting labour relations.

Social partnerships are important for giving support to strengthen statutory bodies. There are a number of these organisations that the Department works with. The optimal utilisation of the strengthening of civil society fund is important. This fund is administered by the Department and it is distributed to organisations that are involved in advancing the interest of workers and the interest of the programs of the Department. Through the participation of NEDLAC structures at the NEDLAC summit for instance they adopted a code that binds all social partners to promote SA as a first destination of choice for investors.

International relations deal primarily with issues relating to the ILO (International Labour Organisation) and SADC, the Social Charter for Fundamental Rights and the conventions which come out of that. A very important aspect on occupational health and safety is the draft report for policy options for integration of OHS competencies across government. This will not be tabled this year. This is where the Department of Health, the Department of Minerals and Energy, and the Department of Labour are working together towards harmonising the OHS competencies. It is something that has been talked about for a long time. Fortunately now the Department of Labour is in a position and will soon be able to table a report for policy options this year.

The improvement of stakeholder collaboration and the awareness on OHS issues is important. Recently there have been tragedies which indicate that a lot of workers are not aware of their rights regarding health and safety in the workplace. Similarly there are many workers (especially in the small industrial park industries) who violated OHS standard without even being aware of it. The Department has intensified the awareness campaign which will continue throughout this year. In this context the Department will agitate for the establishment of health and safety committees in every workplace and they will employ additional inspectors to ensure that where there are areas of habitual non-compliance that they are able to enforce the law.

In terms of the Compensation fund the Department is going to allow a decentralisation process to move people from head office to labour centres. This is so that they are able to interface directly with clients who need services at that level.

The Department is also embarking on a program to improve the efficiency of the processing of claims. At this stage the feedback they are getting from their social partners indicates that they are not doing very well in that regard and therefore they are going to improve on that.

In terms of administration the Department is going to upgrade and integrate their IT system across the two different funds, the head office of the Department, the ten provincial offices, and all the labour centres. They are embarking on a public private partnership in order to ensure that they approach this in a cost-effective way.

They are going to consolidate the implementation of the PFMA.

In terms of human resource development the Department is going to continue with staff development through training. They are especially committed to this because they are the custodians of the Skills Development Act. On the downside, the Department has become a poaching ground. Other departments who want competent staff turn to the Department of Labour and they deplete them.

In terms of the rolling out of the employment equity plan the Department feels that this is an area where the Department has no choice but to lead by example. They must do this by ensuring that they train their staff.

Regarding provincial operations the Department is moving resources from head office because they have done the bulk of policy work which was based at head office. The focus now is on service delivery. They are demonstrating this by moving resources to labour centres where the action is taking place.

The Department is also going to launch the provincial skills development plan for each province and implement the social plan through the rapid response teams. These teams deal with people who are getting retrenched or companies which are facing the possibility of closure. The teams assist these people or companies with a turnaround strategy and try to mitigate the impact of retrenchment if that has to happen.

Last year the Department reported about integrating inspectorate services. Now they are consolidating that process in order to improve on their service delivery.

They are trying to improve the turnaround time in respect of UIF benefits. There have been complaints that sometimes it takes a long time for a person to get the money from the time when a person becomes unemployed and lists for UIF. They are addressing this by tightening their administrative systems in order to ensure that they improve on that.

They are also improving on the process regarding compensation for professional injuries and diseases. They are also providing resources, namely human resources, accommodation, IT, and so forth to improve the capacity of labour centres so that they can provide comprehensive services.

Presentation by Mr Haasbroek - Budget 2001/2002
There has been growth in the budget over the MTEF period but the growth has not been substantial.

For the year 1999/2000 and 2001 there was under-expenditure in the Department.

Mr Haasbroek explained this by referring to the expenditure of standard items, specifically the standard item personnel expenditure. This contributes R 38million to the R 41million of under-expenditure. Why has there been under-expenditure? In 1999 the Department started a major restructuring process especially with regard to provincial operations. This process required the Department to conduct business process re-engineering and to design new job profiles that is consistent with the strategic direction of the Department. They are now in a position to recruit the necessary skills and expertise that will enable the Department to improve its ability to render services in order to better serve clients in that area.

Another reason for under-expenditure is due to the cumbersome processes of filling vacancies that arise from resignations and from transfers. According to the new regulatory framework from the public service all vacancies must be subjected to job evaluation and job profiles have to be revisited before that vacancy can be filled. This contributes to a very lengthy process.

There has also been a relative high staff turnover in certain job categories where there are critical skills and a high demand in the private sector and in government at large for people with that type of skills. The Department is not only losing people to the private sector but also to other State Departments. They attribute this to the fact that the Department makes a very serious effort to train their staff and to ensure that their staff comply with the necessary skills requirements.

When one fills vacancies it is very important to manage the process very carefully because if one fills a post there are knock-on costs. For every person employed there are administrative expenses. One must look at accommodation, IT infrastructure, vehicles, and so forth. These things have to be factored in. If one only concentrates on personnel one can easily overrun the budget. There must be planning for the knock-on costs. The Department ensures that whatever they do they will never over-expend, they will rather err on under-expenditure before they go into the position of over-expending on their total budget.

Service delivery is a new program. This is where they envisage to shift their emphasis from policy development to policy implementation.
The service delivery programme has had funds shifted to it. Therefore there are decreases to the other programmes. This is due to the fact that they have shifted resources from head office programs to the provincial office service delivery programs. Service delivery gets the biggest amount, then labour relations, then employment and skills development services, and thereafter administration.

The Department only allocated R1000 to the beneficiary services program because the unemployment insurance and the compensation fund functions are managed on an agency basis. This means that the funds will finance that area in terms of personnel as well as administrative expenses.

Inspection and enforcement services takes up the bulk of the money, R 106 million in that area.

The increase in the budget is gradual, 6% in total. Personnel expenditure amounts to 37% of the total budget.

From the year 1997 to 2002 there is a growth in transfer payments. The reason for the increase in 99/00 is because in that year Treasury allocated funds to the training of unemployed persons as well as the National Skills Fund, this is why there is a peak there.
Regarding the spread of the transfer payments between the various spending units and public entities, the bulk of the Department's funds (56%) is allocated to the CCMA. The budget allocated to public entities (transfer payments) is governed by the PFMA. The Department has to ensure that each public entity that will receive funds from the Departments vote, that those operations are carefully aligned with the strategic direction of the Department. Those public entities play a very important role in assisting the Department to fulfil its obligations and to meet its objectives.

According to the PFMA each public entity has to submit annually a business plan as well as a fully motivated budget to the Department's accounting officer. At the end of a financial year they have to compile an annual report. The Treasury regulations describes very carefully how that report must be put together. The Department feels that it is managing this area very efficiently. They cannot afford to transfer funds to an entity or an organisation that is not going to meet the objectives of the Department of Labour.

Skills Development levies kicked in during the year 2000/2001. The estimated income for this current financial year is R2.8 billion. There is a gradual growth up to
R 3.2 billion. The reason for the substantial increase from the first year to the second year is because the levy rate has increased from 0.5% to 1%. It is very close to doubling that amount.

Discussion
Mr Sithole (ANC) commented that a lot of money goes to the CCMA. He asked how the labour centre training programmes and campaigns which the Department has impacts upon the CCMA in terms of finances.

The Department replied that the establishment of the CCMA takes away from the bulk of work that the Department used to do prior to the CCMA being created. While the CCMA is concentrating by default on dispute resolution the mark of its success should be in terms of what they do with regard to dispute prevention. You measure dispute prevention on the basis of what has not happened and not on the basis of what has happened. If they have brokered a deal and there was no mass action and no disruption of the workplace then people generally do not know about it. It is like preventing crime, when it has not happened one does not know but when it does happen then it is reported. They are not dispelling the problems but a lot of good work has been done.

This does not mean that the Department should relax in terms of interacting with social partners and ensuring that there are representative processes. In many instances employers flout labour laws out of ignorance and in some instances workers do not enforce their rights because they are not aware of those rights. So in terms of the Department's labour centre programs there is a big focus on that and the Department would like to intensify it.

Ms Thabethe (ANC) reminded the Department that at a previous meeting a question on sexual harassment came up in the context of occupational health and safety. The Department was supposed to come back with information on this. She asked where the requested information was.
She suggested that the committee get regular reports of the service delivery so that they could follow the progress of the new program.

Mr Clelland (DP) requested information on the backlog of the incident register status (on occupational health and safety). He wanted to know what number of incidents are outstanding and awaiting investigation. The figures released in June last year indicated that there was a massive backlog concerning this. He would like to know if that has been relieved somewhat in the last financial year.
He commented that a lot of money is coming in from the Skills Development Levy. He requested data from the Department regarding which companies are claiming money back, how much money has been claimed back, and whether the training is actually happening?

Mr Olifant (ANC) made the following questions and comments:
- The Occupational Health and Safety programme needs strengthening. He asked for clarity on the Department's plans to strengthen this programme. He asked how the strengthening impact s on the integrated inspection that the Department is looking into. For instance, how does it relate to other departments (such as Minerals and Energy)?

- He also asked how the issue of poaching could be dealt with. He commented that the Department pays its inspectors less than what they are being paid in the mining industry for example. This is a contributing factor to staff loss. He emphasised that the Department must do something about this.

- It is commendable that there is a service delivery program. The Department must unpack it and say what is happening at provincial levels (in each province). The committee needs to know this so that they can monitor the process of implementation.

- On the skills development side he commented that prior to the promulgation of the Act there were grave problems that were taking place in certain provinces. He asked for progress reports on those projects.

- Finally he asked for more details on the number of vacancies that exist and what is the process for filling those vacancies. He asked how soon the Department could deal with the vacancy problem so that they do not come before the committee in the future complaining that they could not implement certain things because they did not have enough personnel.

A committee member commented on the service delivery program. When one hears that money is going to the provinces then the committee must keep a close watch as to how the provinces will utilise the money.

The member also referred to the comment in the presentation that HIV/AIDS is impacting on the labour market. He asked what the statistics were in this regard. The DG said that the Department is going to launch the HIV code. Parliament passed a law to the effect that there will be no HIV pre-testing before employment. In light of this he asked what the nature of the HIV code would be (in relation to the law that was passed in Parliament).

Another committee member asked about transferred payments (there is money allocated for sheltered employment). He asked the following:
- Is there a progress report in this regard?
- Is the Department happy about that expenditure?
- Is it doing the work that it is supposed to be doing?
- What is the link between this and the Skills Development programme?
- Also, give clarity on the learnership program.
- Is there effective awareness to the learners and the school-leavers?

Mr Manie (ANC) also commented on sheltered employment. This area is an area hanging in-between the Department of Labour and some other departments. He asked if the future of this particular program is with the Department (has it been sorted out now). He observed that in terms of the Employment Equity requirement disabled people are drawn into the mainstream of the labour force. This is something that the Department should regard as a very important area. If these Centres that exist can be utilised then it can act as a basis from which the labour market could draw certain skills from. The people in this program (in the various Centres) have indicated that there is uncertainty as to the future of some of these institutions. It is important for Parliament to know why they are allocating money to this if there is no certainty as to what the money is being spent for. He indicated that the Department did not have to respond now, they could respond later to give the committee a better idea as to how this is being managed.

[Due to technical problems the rest of this discussion period is not recorded]

 

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