Department of Labour Budget and Strategic Plan 2007- 2010

NCOP Public Enterprises and Communication

18 March 2008
Chairperson: Ms M Themba (ANC, Mpumulanga)
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Meeting Summary

The Committee was briefed on the Department strategic plan and budget for the period 2007 to 2010. There had been a change to the organogram. The Compensation Fund and Unemployment Insurance Fund Commissioners were now at DDG level. The Department outlined the strategic objectives of the Ministerial Programme of Action 2004-2009 and highlighted the Department’s recent achievements during the 2007 year, giving statistics and full reports in the attached document. It was noted that services were being decentralised, and the Minister had recently signed a  delegation of authority in regard to human resources. Service delivery was detailed in the area of job seekers, placement opportunities, assessment and placement of youth, bursaries to the disabled, workplace inspections, and investigation of complaints. The statistics on achievements highlighted in terms of the National Skills Fund were set out. In terms of Labour Market policy implementation, sectoral determinations were reviewed. There had been awareness raising activities on child labour. Research was conducted on the reduction of working hours, bargaining councils, the Council for Conciliation, Mediation and Arbitration (CCMA) and the labour market. Other work included calling for public comments, joint policy statements, draft legislation, commencement of the review of Sector Education and Training Authorities, and development of the Decent Work Country Programme. The strategy for better service delivery would focus on employment services, inspection and enforcement, delivery standards and providing staff with the ‘tools of the trade.
It was reported that the allocations to the Department had increased by R34, 526 million to R1, 732,911 for the year 2008/09. The annual allocation for the Umsombomvu Youth Fund was effectively terminated in anticipation of the impending merger of the Fund with the National Youth Commission (NYC).

Members asked questions around casualisation of employment, staff vacancies in the context of the gender equity policy, the future of the Umsombomvu Youth Fund, and the processes required to dissolve it. Other queries related to the functions being decentralised to local offices, the target for disabled access, the increasing numbers of people being employed on a contract basis, language issues in cellphone technology, the Department’s marketing plan, and whether a list of non-compliant companies was available. Members also asked about the jobs created by the Youth Fund, a gender and disability breakdown for those assisted in finding work, the social insurance budget, improvements to the working conditions of farm workers, and the monitoring of foreign workers. The contribution to the Accelerated Shared Growth Initiative was also discussed, as well as the financial qualifications, and the future of the Sector Education and Training Authorities, conditions in the hospitality sector, and the role of inspectors.

Meeting report

Department of Labour (DOL): Budget and Strategic Plan 2007 to 2010 Briefing
Mr Les Kettledas, Acting Director General, Department of Labour, noted that the Department’s Strategic Plan covered the period 2007 to 2010 and most of the delivery therefore was still to come. He also noted that the Department was acting in the final year of the current Parliament and Government, and of the Minister’s five year Programme of Action. He reminded members of the Department’s vision and mission that emphasised the promotion of economic growth in the context of skills development and the respect of worker’s rights. He highlighted a change to the Department’s organogram. The Compensation Fund and Unemployment Insurance Fund Commissioners were now at DDG level.

He outlined the strategic objectives of the Ministerial Programme of Action 2004-2009 and highlighted the Department’s recent achievements. These included contributions to employment creation, enhancing skills development, promoting equity in the labour market, protecting vulnerable workers, strengthening of bilateral relations and strengthening social protection. Statistics and precise details were set out for each (see attached document).

Services were being decentralised to provincial and labour centre level to speed up delivery and to work more efficiently with limited resources. This included delegating certain functions and decision-making authorities to the local level. The Minister had recently signed a delegation of authority in regard to human resources, which was circulated to all local centres.

Service Delivery achievements highlighted were:
- 94 038 job seekers and 7 726 placement opportunities were registered and 2,838 job seekers were placed between April and December 2007
- 3 770 youth were assessed and placed on national Youth Service programmes out of a target of 5 000.
- 19 people with disabilities were given bursaries to the value of R205 462
- 40 387 youth were trained and 28 837 were placed in employment in collaboration with the Umsombomvu Youth Fund
- 148 297 workplaces were inspected between April and December 2007, of which 76% complied with labour regulations within 90 days
- 14 055 workplaces in high-risk health and safety industries were inspected
- 81% of the 162 101 labour related complaints were investigated and concluded within 90 days

Statistics on achievements highlighted in terms of the National Skills Fund were set out. These included uploading of scarce and critical skills on the DOL website, assistance to learners in these skills to enter the workplace. Other achievements included:
- 75 251 people, of whom 54,960 were placed in jobs, were trained on 1,945 social development skills projects at a cost of R199, 809,405.
- 19 903 unemployed learners were registered on ABET programmes
- 30 042 unemployed learners were enrolled on other programmes and 11 812 completed
- 1064 learners were enrolled on Provincial Strategic Projects at a cost of R114 million.
- 1 438 Small, Medium and Micro Enterprises (SMMEs) NGOs and Co-ops were supported by SETAs
- 11 225 employed learners were registered on ABET programmes with 7 834 completing
- 66 974 employed learners were enrolled on other programmes and 53 567 completed
- 947 learners were registered on New Venture Creation programmes
A draft framework for implementing the Quality Council for Trades and Occupations (QCTO) was developed.

In terms of Labour Market policy implementation a number of achievements were noted. Sectoral determinations were reviewed and published for private security, contract cleaning, civil engineering and hospitality sectors. Awareness raising activities on child labour was conducted in all provinces. Research was concluded on the reduction of working hours, bargaining councils, the Council for Conciliation, Mediation and Arbitration (CCMA) and the labour market.

The Department would continue to support the Government’s key policies through strategic interventions. The employment services system would be enhanced through job matching, career guidance, information, skills development referrals and special services for designated groups.

Key policy developments were also noted. Public comments on the draft employment services regulations that compelled all employers to register vacancies were published in August 2007. A joint policy statement on the Review of the National Qualifications Framework was tabled to Cabinet in August 2007. The annual Skills Conference was held in October 2007. A New Economic Development and Labour Council (NEDLAC) Review of Sector Education and Training Authorities (SETAs) was initiated. A draft Skills Development Amendment Bill was published for comment on 28 February 2008. This aimed to amend SETA quality assurance functions, repeal the Manpower Training Act of 1981 and list the National Skills Fund (NSF) as a public entity.

The Decent Work Country Programme (DWCP) would be developed in collaboration with the International Labour Organisation (ILO) by April 2009 and would be based on the four pillars of workplace rights, employment opportunities, social dialogue and social protection.

The strategy for better service delivery would focus on employment services, inspection and enforcement, delivery standards and providing staff with the ‘tools of the trade’ such as vehicles and IT infrastructure. Access to services would be improved by exploring new delivery channels such as a multimedia call centre, fully resourced mobile labour centres to visit the more remote rural areas, cell phone based information and web based interactive questionnaires. The Department would rollout a range of information technology systems to enhance all aspects of its work through a Public Private Partnership (PPP).

Mr Kettledas noted that the Human Resource plan supported the strategic goals and would be addressed through a Skills Audit to identify gaps and future training needs, filling vacancies in line with the recruitment and selection Policy, tackling staff attrition via career management and succession planning, implementing a uniform job grading and remuneration system, implementing the Employment Equity plan, adopting a holistic staff wellness approach and ensuring an efficient performance management scheme.

Mr Kettledas clarified the situation regarding the former Chief Financial Officer (CFO). Mr Van Der Merwe had applied for voluntary severance and this had been approved with effect from the end of March 2008. He was currently absent on special leave and therefore Ms Pule Tsatsi was filling his role as the Acting CFO.

Ms Tsatsi reported that the MTEF allocations to the Department had increased by R34, 526 million to R1, 732,911 for the year 2008/09. The breakdown in terms of administration, service delivery, skills development, labour market programmes and social insurance were given. The annual allocation for the Umsombomvu Youth Fund (UYF) was effectively terminated and only a small maintenance amount of R5 million was given. This was in anticipation of the impending merger of the UYF with the National Youth Commission (NYC).
Additional funding was granted, however, in respect of risk and asset management, employment services capacity and a feasibility study of the Small Enterprise Foundation (SEF).

Discussion
The Chair asked about the increasing casualisation of employment and cited security guards as an example she had come across.

Mr Kettledas replied that the issue revolved around the nature of the employment relationship, and whether a worker was legally classified as an employee in terms of both the ILO (2006) guidelines and South African Labour Relations Act (LRA). Some companies in Kwazulu Natal, for example, were attempting to circumvent the LRA by forming worker co-operatives, comprising of members and not employees. The DOL was in discussion with the Department of Trade and Industry (dti) about finding ways to close this loophole.

The Chairperson asked about the issue of staff vacancies in the context of the gender equity policy that had been finalised last year. She wondered if it was still on the agenda, given that the policy’s main champion had left. She asked for copies of the policy to be made available to the Committee.

Mr Ganga Tsengiwe, Senior HR Manager, DOL,  assured the Chairperson that the work would continue into 2008/09 with the implementation phase. An internal audit to check current practice in relation to gender sensitivity and procurement procedures was under way. Policies would be strengthened and targets adhered to.

Mr D Gamede (ANC, KZN) asked for clarification on the future of the UYF. Given that DOL was the lead department, he asked why had they not produced a clear plan with timeframes. He wanted to know if they were engaging with other departments on the issue. He also asked, since the UYF was founded by Act of parliament, whether it would not require a parliamentary process to dissolve it.

Mr Sam Morotoba, Deputy Director General, DOL, replied that the UYF was not created by Act of parliament, but arose out of a de-mutualisation process. There were also problems associated with the decision to merge it with the NYC to form the new National Youth Agency. It was not possible to transfer assets currently to a body like the NYC. A task team had been established to clarify the new Agency’s terms of reference. The DOL would look at international examples and conduct a literature review. Stakeholders would be consulted and a report presented to the Minister by July 2008.

Mr Gamede asked which functions were being decentralised to local offices.

Mr Kettledas replied that it was a complex issue. The discussion document itself ran to 170 pages in length. Sometimes there were also specific legal or capacity constraints to contend with. However, the number of local offices offering a full UIF service had increased from 14 to 34 and the target was for all 125 offices to offer such functions.

Mr Gamede asked why there was no breakdown or target for access by disabled people.

Mr Kettledas replied that a detailed breakdown had been given at the annual Skills Conference and the DOL targets were in line with the national guidelines of 85% black, 54% women and 4% disabled people.

Mr Gamede noted that increasing numbers of workers were being employed on a contract basis without job security or benefits. He asked what plans did DOL have to address this development.

Mr Kettledas replied that the issue was relevant to the ongoing discussions at NEDLAC and that a meeting was scheduled for the 11 and12 April 2008 to look at the Decent Work Country Programme. In collaboration with the ILO, the Department would look at a range of legislative and non-legislative interventions.

Mr Gamede referred to the DOL proposal on using cell phone technology to enhance service delivery and asked if thought had been given to the language issue.

Mr Kettledas confirmed that it was a constitutional obligation to take account of a citizen’s mother tongue requirements and that it would be taken on board.

Mr W Douglas (ACDP, WC) congratulated the DOL on its commitment to using ICTs to enhance service delivery. He asked whether there was a marketing plan, including budgets and rollout timelines.

Mr Kettledas replied that marketing was an ongoing activity that included regular media statements, the annual Skills Conference and publications as well as special campaigns on the Compensation Fund and the Unemployment Insurance Fund.

Mr Douglas asked about non-compliant companies and whether the Department could supply the Committee with a list of them.

Mr Kettledas responded that it was hard to give a definitive list as this was always changing. The Department’s strategy with non-compliance was based on progressively applying more pressure. They started with advocacy, moved on to a compliance order and only in the last resort went to the labour court.

Mr Douglas asked if the jobs created through UYF were short or long term. He also asked how the target of 5 000 National Youth Service placements was arrived at. He wondered if it was a pilot programme as the number was rather low.

Mr Morotoba replied that the UYF jobs were mostly short term. He also explained that the 5 000 target was based on the submissions received by National Treasury from various government departments.

Mr J Sibiya (ANC, Mpumalanga) asked for a breakdown in terms of gender and disability for the people assisted to find employment or placed on learning programmes by the Department.

Mr Morotoba replied that it varied considerably depending on the specific assistance programme. A national breakdown was available but on average, targets in relation to black people were being met. In the case of women the average was only 39% and for disabled people only 2.1%.

Mr Sibiya asked how the budget allocation for social insurance for public servants was calculated.

Mr Kettledas replied that it was hard to budget accurately since the allocation was to compensate workers suffering injury and accidents at work. The better the health and safety record the lower this should be, so it was one allocation in which it was a good thing to underspend. In general the size of the allocation each year was based on previous experience.

Mr Sibiya asked what improvements could be made in the working conditions of farm workers.

Mr Kettledas replied that a new sectoral determination was due in February 2009 and that public hearings would be starting soon. He encouraged Members to persuade their constituents to participate fully in these hearings.

Mr D Mokono (ANC, EC) asked about the numbers of workers coming into South Africa from other countries, and asked what monitoring was being done.

Mr Kettledas replied that the situation varied considerably between provinces, both in terms of the numbers and the countries from which those workers came. In Limpopo, for example, most foreign workers were from Zimbabwe, in Mpumalanga they were from Mozambique and in the Free State from Lesotho. The DOL did not discriminate between SA and non-SA workers in terms of service delivery. The Department of Home Affairs was responsible for monitoring the situation in terms of illegal migrants. As long as workers from other countries were in South Africa legally they were entitled to DOL services. In terms of job placements, it was the responsibility of companies who wanted to employ foreign workers to show that the skills required were not available locally. There was a close working relationship with the Department of Home Affairs to ensure that work permits were only given where such labour shortages applied.

The Chairperson asked for clarification on the numbers of learners enrolled on Provincial Strategic Projects.

Mr Morotoba replied that the reported figures only referred to year one of a three year programme. At the same time certain provinces had been very slow in rolling out their projects. He singled out Mpumalanga, North West and the Northern Cape. The DOL had offered additional support and technical assistance. Where this still did not produce results, funds had been, and would continue to be, transferred to other provinces.

The Chair asked what was the DOL contribution in term of the Accelerated Shared Growth Initiative for South Africa (ASGISA).

Mr Morotoba replied that all the Department’s programmes, and those of the public entities and agencies it was responsible for, were aligned with ASGISA’s goals. This included, for example, the SETA’s sector skills plans and the provincial growth and development strategies. In addition, the skills development strategies of the DOL were aimed at maximising the ability of those in the so-called second economy, being women, youth and the disabled, to take up the opportunities represented by the ASGISA projects.

Mr Gamede noted that the Department’s previous financial statement had not been without qualifications and that the Auditor general had identified certain irregularities. He asked what measures had been taken by the Department and whether any monies had been recovered.

Mr Kettledas replied that there had been specific problems with recording and valuing assets and that an Asset Review Team had toured the country updating the Asset Register. A report had been presented to Standing Committee on Public Accounts (SCOPA) on 30 January 2008 and the 2006/07 Audit would be finalised by July 2008.

Mr Gamede asked what was happening in relation to the future of the SETAs.

Mr Morotoba replied that there had been no less than nine independent research and review processes under way with regard to the SETAs, both within and outside the DOL. The Department had therefore proposed that NEDLAC take on a co-ordinating role and produce a report with recommendations. This had now been completed. At the same time the National Skills Authority (NSA), a policy advisory body to the Minister, had been discussing the SETAs in terms of sectoral alignments, numbers and possible future clusters. The DOL was encouraging linkages and synergy between the processes as they both involved broadly the same sets of stakeholders. The current licences of the SETAs were due to expire in April 2010 and any proposed changes would have to be finalised by a year before that.

Ms L Ntembe (ID, NC) noted the often-reported cases of rural workers being abused and exploited by farmers. She asked what actions were being taken by the DOL in this regard.

Mr Kettledas assured members that if formal complaints were received from workers they were investigated and action was taken accordingly. He pointed to the statistics highlighted in his presentation.

Ms Ntembe asked about conditions in the hospitality sector, particularly in restaurants, where waitrons had often worked for tips only. She also asked for clarification on how the DOL inspectors carried out their duties.

Mr Kettledas confirmed that, since the sectoral determination in July 2007, working only for tips was no longer permitted. With regard to the inspectors, he explained that they carried out a mixture of routine and ‘blitz’ inspections, with the latter often targeting industries with poor health and safety records.

The meeting was adjourned.

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