Mobility / Exit Mechanism & Employee Initiated Severance Package: Department briefing

DEFENCE PORTFOLIO COMMITTEE
13 November 2007
MOBILITY / EXIT MECHANISM & EMPLOYEE INITIATED SEVERANCE PACKAGE: DEPARTMENT BRIEFING

Chairperson: Mr F Bhengu (ANC)

Documents handed out:
SANDF Military Exit Mechanism and PSAP Employee Initiated Severance Package

Audio recording of meeting

SUMMARY
The Department of Defence briefed the Committee on the two voluntary exit mechanisms operating within the Department, explaining that the Mobility / Exit Mechanism applied to uniformed personnel and the Employee Initiated Severance Package to Public Service Act Personnel . The legal background and intention of both was summarised and illustrative comparisons were tabled showing the benefit structures of the mechanisms, the number of personnel affected, their ranks and gender and race profiles. It was noted that other exit mechanisms also operated. The process was moving along steadily and was subject to continuous evaluation. Members asked for a breakdown of the costs and timeframes for these mechanisms, and some were of the view that years of service and rank should also be taken into account. They suggested the need to fast-track the programmes, whether the funding was sufficient for re-skilling, what training was available, and commented that there seemed to be many white males exiting while few were being recruited. The options were explored, as well as options for re-skilling. Problems with lack of documentation for former non-statutory force members were highlighted, and the Committee was concerned that there were recurrent qualifications in the audit report on this and other issues, and there was a need for the Department to sort the matter out with the Auditor General and, if necessary, call for assistance from National Treasury. The Committee asked that the Department amplify their responses in the following week.

MINUTES
Mobility / Exit Mechanism (MEM) and Employee Initiated Severance Packages (ESIP) for Public Service Act Personnel (PSAP) of the South African National Defence Force (SANDF): Department of Defence briefing
Brigadier General A de Wit, Director, Human Resources, Department of Defence, briefed the Committee on the two voluntary exit mechanisms operating within the Department. The Mobility / Exit Mechanism applied for uniformed personnel and the Employee Initiated Severance Package (EISP) applied to Public Service Act Personnel (PSAP). Brig Gen A De Wit (SANDF) provided an outline of the legal background and intention of the MEM, noting that it was a voluntary process intended to lead to a tangible rightsizing, realistic succession planning, guard against exodus of scarce skills and advise Members on career progress. The EISP mechanisms had been introduced into the Department of Defence (DoD) in May 2006. It provided pension benefits and was employee-initiated. The benefit structures for each were tabled in detail, and there was a full breakdown of the departmental statistics and approvals. Brig Gen de Wet indicated that there were also exits for other reasons, including termination of contracts, death, departmental transfers, discharge and medical discharge and resignations and retirements. He concluded that the process was moving along steadily and was subject to continuous evaluation.

Discussion
Mr M Monareng (ANC) asked how much the schemes were costing the DoD, as well the average timeframe of these mechanisms. He asked whether it was envisaged that at some point there would be a balance reached between new (Military Skills Development System) personnel and former force personnel. Mr Monareng added that years of service should also be considered when offering the MEM to soldiers and that it should work with rank, forming a dialectical relationship in order to identify members who had reached a ceiling and could progress no further.

Brig Gen De Wit (SADF) stated that these mechanisms cost R180 million per annum and that he could provide a breakdown.

Mr R Shah (DA) asked about the figure discrepancy between 3 and 7 November. He asked that the statistics show specific skill sets and musterings, per service, that had been affected by the exit of personnel. He stated that the current retention strategies did not seem to be working and asked whether there was any way to fast-track a part of their programme. Mr Shah questioned whether the R13 000 allowance was sufficient for re-skilling personnel.

Brig Gen De Wit replied that the discrepancy was due to the constant revision of the statistics. He stated that he would provide the per- service skill set information in writing. On the question of the funding, he said that R13 000 was found to be adequate, but an increase was going to be implemented. Re-skilling was done in line with market place demands, and this included the inception of the Works Regiment aimed at facility maintenance, as well as at providing soldiers with building skills. He stated that fast tracking programmes would be necessary to provide adequate replacements.

Ms P Daniels (ANC) asked what re-training would be available to the exiting personnel. She asked what happened when a member refused to exit due to lack of external job prospects.

Mr L Diale (ANC) asked whether any females were part of the other exit mechanisms stated in the presentation.

Brig Gen De Wit replied that he did not have the information with him and that he would provide it in writing.

Mr M Moatshe (ANC) stated that the race discrepancy was still large and asked whether the DoD was solely reliant on these two exit mechanisms. He asked how long these mechanisms would take to achieve their objectives.

Mr J Schippers (ANC) asked whether there was any preference amongst members choosing one of the two medical provision options. He asked whether individuals who left the service could reapply at a later date and whether the government contributed to these schemes.

Brig Gen De Wit replied that members tended to choose the Gratuity and Annuity option and that this was encouraged as it was viewed as being the better option. He stated that the medical scheme required a once-off payment from the member and that the State contributed a two-thirds portion of the total required. Members could not join once they had left the forces and it was generally encouraged that they join the scheme at inception.

Adv H Schmidt (DA) stated that 70 –80% of exiting members were white males, and asked how that affected overall re-composition figures.

Brig Gen De Wit replied that a ratio of 76% black to 24% white ratio was envisaged. MEM exits were being coordinated to ensure synchronisation.

Lieutenant General Derrick Mgwebi, Chief Human Resources, DoD, stated that there were no timeframes as the mechanisms were voluntary, and as such it was difficult to project the figures. He stated that a challenge at the lower levels was the absence of young white recruits, whilst these were over- represented in the middle ranks. He acknowledged the challenge of bringing the white community on board.

Mr Monareng expressed his view that the exiting of white personnel and their lack of joining was not a problem.

The Chairperson asked whether the DoD had evaluated reasons why whites were reluctant to join.

Lt Gen Mgwebi replied that no specific reason had been identified, but the Department had observed a general feeling that whites did not have a future in the SANDF, as well as the problem of socialisation, citing the matter of one white soldier in a squad of 30 black soldiers, who reported feeling lonely and left out due to cultural and language differences. He stated the need to begin actively recruiting at formerly-white schools to show whites that they did have a future in the SANDF.

Mr Monareng stated that those who had exited created the impression that their exit was under duress and that it portrayed the SANDF in a negative light.

Lt Gen Mgwebi stated that there was an issue with stagnant members in the 25-year age bracket, due to a less lucrative pension fund compounded with the challenge of outside employment. He stated that the DoD had negotiated with trucking companies and border control divisions to employ ex-military personnel, who had the appropriate training.

Mr Monareng stated that duration of service should also be used as a determinant in selecting MEM candidates.

Mr M Booi (ANC) brought up the issue of a lack of documentation for former Non-Statutory Force (NSF) members, leading to them being incorrectly ranked as well having a negative impact on their pensions according to the duration of their service in NSFs. He stated that this had not yet been addressed and that it seemed that the MEM was targeting former NSF members.

Brig Gen De Wit stated that PSAP personnel currently stood at 18% of total DoD staff and that this was acceptable as the envisioned target was 21%. He stated that the SANDF was composed of seven former forces, but the SANDF component was becoming the largest. According to the former force breakdown , the majority of MEMs were former SA Defence Force personnel. He stated that they knew exactly where there NSF personnel were and how many years they had served.

Mr Shah stated that the problem with the MEM was that it led to a haemorrhaging of skills and that the Military Skills Development System (MSDS) was not providing adequate replacements. He observed that according to the data it appeared that the majority of exiting personnel were white, and that the MEM was not intended to target former NSF members or whites.

The Chairperson stated that the DoD had already outlined the need for balance.

Mr Booi reiterated the NSF issue and stated that the exit mechanism did not talk to the 94 632 posts within the SANDF. He asked why they were so difficult to fill.

Mr E Schoeman (ANC) asked what the unintended consequences of these exit mechanisms were and how they related to the skills issue.

Mr Monareng interjected by stating that there would always be a skills loss with the loss of personnel.

Lt Gen Mgwebi stated that a rank revue process of 284 personnel had been done and that the information was available but that he did not have the original documents with him.

Mr Booi stated that it was a qualification issue and asked how they substantiated their records.

Lt Gen Mgwebi acknowledged the problem but explained that in some cases the information did not exist on paper and that originals were often non-existent.

The Chairperson asked why he had not told the Auditor General this as it could have prevented qualification.

Lt Gen Mgwebi replied that the Department had had a meeting with the Auditor General. The qualification had already been raised, and the DoD had indicated the document state to the Auditor General’s office. They had provided the Minister with an outline of the situation and were awaiting condonation of the situation..

Mr Booi stated that according to the Standing Committee on Public Accounts the DoD could not provide adequate documentation.

Lt Gen Mgwebi stated that this information had been provided to the Auditor General’s office two to three weeks ago.

The Chairperson replied that this was after the fact, and that their annual report was submitted in September, thus they still had received a qualification. He stressed the need to bring both parties together to resolve this recurrent issue. The Chairperson stated that he believed the Internal audit to be very weak and stated that National Treasury could provide the Department with assistance if only they asked. Failure to comply indicated a defiance of parliament.

Mr Shah stated that if, due to a lack of documentation, a former NSF member’s new rank was compromised then it was vital that the Department must determine who was responsible for this information.

Mr Booi stated that this was a recurrent issue and that the Auditor General’s office had requested a political solution. He felt that the DoD was not being completely honest with the Committee.

The Chairperson requested that the Committee meet on the following Wednesday for their responses, and stated that they could continue interacting over lunch.

The meeting was adjourned.