Director-General Reviews; Skills Development Act Amendment Bill; Vulnerable Workers: briefings by Employment Conditions Commission & Department of Labour

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Labour

27 May 2008
Chairperson: Mr T Anthony (ANC)
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Meeting Summary

The Department of Labour (DoL) briefed the workshop on the Skills Development Act Amendment Bill 2008. The purpose of the Bill was to provide a broader and more flexible framework policy to accelerate the delivery of crucial skills and to support the national fiscal growth. It would establish links between economic growth policy and skills development policy. The provisions of the Manpower Training Act were to be incorporated, and the Quality Council for Trades and Occupations was to be established. The Bill would also focus on development of artisans. The legal status of the National Skills Fund and Productivity South Africa would be clarified. The Bill contained a number of additional implementing structures. The regional labour centres and provincial offices would be empowered, and their position clarified, in relation to employment services. He highlighted the provisions for development of artisans and the Skills Development Institutes, as also the provisions relating to the Quality Council. This Bill would complement other Department of Education bills. The National Skills Fund was discussed.

The Employment Conditions Commission briefed the meeting on the work of the Commission, which was geared towards easing the lives of vulnerable workers. The legislative mandate, work plan, composition, public hearings and accomplishments were outlined. The Commission acted as an advisory body, dealing with basic conditions of employment, children’s issues, trends in collective bargaining, and similar matters. The work in the past included determinations in respect of domestic workers, the taxi sector, farm workers, private security and contract cleaning, learnerships, civil engineering, wholesale and retail, small businesses, and children in the performing arts. Its regulatory achievements lay in the sectors of child labour, clearer definitions of remuneration, a 40-hour report and a remuneration schedule. Current investigations were in the sectors of  farm workers, welfare, domestic workers, forestry workers and the private security sector. The challenges facing the Commission included policy and processes and the need to find an alternative to public hearings.

The Department of Labour outlined the Director General’s reviews carried out from 2006 to date. These were in terms of Section 43 of the Employment Equity Act, which empowered the Director General to conduct reviews of any designated employer to identify whether there had been compliance with the Employment Equity Act. In 2006 reviews were performed on six companies, of whom five were complying with the recommendations given, and one had been referred to the Labour Court for refusal to comply. The reviews in 2007 were conducted in respect of 26 holding companies and their subsidiaries, and feedback was being received on the implementation of recommendations. In 2008 60 employer companies would be reviewed. Common findings had included lack of consultation, employment equity plans not complying with Section 20, and that fact that employment equity was not a key objective for businesses. Insufficient monitoring by trade unions and lack of referral of disputes to the Commission for Conciliation, Mediation and Arbitration were problematic.

Members discussed the position of the provinces in the light of the proposed amendments, whether this would interfere with the Sector Training Authorities, raised technical issues around the wording of the amendments, examined the reasons for non compliance with the legislation,
questioned the source of the statistics used by the Employment Conditions Commission, and noted that mindsets of employers needed to change, but this should be backed up with effective enforcement mechanisms.

Meeting report

Skills Development Act Amendment Bill 2008 (the Bill): Department of Labour (DOL) Briefing
Dr Florus Prinsloo, Senior Executive Manager, DOL, briefed the workshop on the proposed Skills Development Amendment Bill. He noted that the purpose of the Bill was to provide a broader and more flexible framework policy to accelerate the delivery of crucial skills and to support the national fiscal growth. It would pursue the initiatives of both  the Joint Initiative for Priority Skills Acquisition (JIPSA) and Accelerated Shared Growth Initiative (ASGISA). The Bill would be aligned to the National Industrial Policy Framework, and tried to establish links between economic growth policy and skills development policy.

Dr Prinsloo added that another feature of the Bill was the transfer of the provisions of the Manpower Training Act of 1981. Another feature that was highlighted was the establishment of the Quality Council for Trades and Occupations. The Bill would also aim to develop artisans and clarify the legal status of the National Skills Fund and Productivity South Africa.

Additional implementing structures would be Productivity South Africa, Provincial Skills Development Forums, a national artisan moderating body, skills development institutes, accredited trade test centres, Provincial Department of Labour (DOL) offices and a quality council for Trades and Occupations.

Dr Prinsloo referred to Clause 23, relating to Employment Services, and said that it was intended to clarify and empower the regional labour centres and provincial offices in relation to employment services. He added that placement opportunities for the employment services system were equivalent to learning, vacancies, self employment or community service.

He made reference to Chapter 6A and spoke of the development of artisans that would be promoted through this Chapter. HE also referred to the specifics of clauses 26 onwards, pointing out that these would set up the National Artisan Moderating Body, deal with listing of trades; a National register of artisans and trade tests.

Dr Prinsloo went on to discuss Skills Development Institutes. He noted that there was  a weakness due to the lack or training capacity in the country. He added that the Minister was given authority to give resources to institutions to ensure national capacity, and that these could be Institutes of Sectoral or Occupational Excellence (ISOE).

He referred to Chapter 6 which established the Quality Council for Trades and Occupations (QCTO), which would need to be established as a juristic person. There would have to be a Joint Policy Statement on the Review of the National Qualifications Framework (NQF). This Chapter complemented the Department of Education (DoE) Bills: namely the National Qualifications Framework Bill 2008, the Higher Education Act Amendment Bill 2008 and the General and Further Education and Training Quality Assurance Act Amendment Bill 2008.

Dr Prinsloo also noted that there were further aspects on Workplace Productivity and Competitiveness, and noted that Productivity South Africa (PSA) would be established, with its functions, financing and power to make regulations being set out.

The National Skills Fund was discussed, and he noted that a maximum of 2% of the income received from the skills development levy was used to administer the Fund. It was also noted that a more flexible approach was necessary for the Minister to administer the limit of funds and that a National Skills Authority (NSA)-developed strategic framework would determine the limit.

Dr Prinsloo said that the National Skills Fund (NSF) needed to account for and report on all income received. It operated as an entity and the income and spending needed to be separate from the DOL’s reporting mechanisms. The Director- General (DG) was an authority accountable in terms of the Schedule to the PFMA, but was not the accounting officer. The DG would retain  fiduciary duties.

Dr Prinsloo referred to the regulations section of the Bill, and emphasised the additions that were intended to empower the provinces. He noted that the Minister could, after consultation with the NSA, make regulations on the establishment of skills development forums for provincial offices. He added that the composition, operation and function of the forums needed to be specified.

Dr Prinsloo then referred to Schedule 2A and discussed some of the transitional provisions, including the National Productivity Institute (NPI) transition to PSA, the listing of designated artisan trades and contracts of apprenticeship.

Vulnerable workers: Briefing by the Employment Conditions Commission (ECC) on progress on the changing of lives of vulnerable workers
Professor Evance Kalula, Chairperson, Employment Conditions Commission, briefed the workshop on the progress made on changing the lives of vulnerable workers. He outlined the legislative mandate, work plan, composition, public hearings and accomplishments of the Employment Conditions Commission (ECC). He noted that the mandate was derived from a Ministerial Plan of Action covering matters set out in Chapter 9 of the Basic Conditions of Employment Act (BCEA). In essence, the ECC acted as an advisory body, dealing with basic conditions of employment, children’s issues, trends in collective bargaining, and similar matters.  
The Commission was in consultation with
National Economic Development and Labour Council (NEDLAC) and comprised three members, including specialists in conditions of employment, vulnerable and non-organised workers. 

The Council had thus far made determinations in respect of domestic workers, the taxi sector, farm workers, private security and contract cleaning, learnerships, civil engineering, wholesale and retail, small businesses, and children in the performing arts. The ECC set out regulations on hazardous forms of child labour as well as establishing regulations on what were regarded as the worst forms of child labour.

The ECC had managed to provide additional protection to the vulnerable by providing a clearer definition of remuneration, a 40 hour report and a remuneration schedule. The social security benefits had extended with regard to provident funds for contract cleaners and the private security sector.

Professor Kalula went on to identify the ECC’s current investigation, which were in the sectors of  farm workers, welfare, domestic workers, forestry workers and the private security sector.

The challenges that the Employment Conditions Commission (ECC) faced related to policy and processes, implementation and enforcement. He added that an alternative to public hearings was necessary and that the current approach to the hearings was being investigated.

Director General Reviews: Current position: Department of Labour (DOL) Briefing
Mr Thembinkosi Mkalipi,
Executive Manager: Collective Bargaining, DOL, briefed the workshop on the Director- General (DG) reviews, as provided for in Section 43 of the Employment Equity Act (EEA). The Director General was empowered to conduct a review of any designated employer in order to identify that employer’s compliance with the Employment Equity Act. The Director General had the right to request the Employment Equity (EE) plan or any other relevant information, as also the authority to request a meeting with the employer to discuss the plan and its implementation.

In terms of Section 44, the DG could approve an employer’s EE plan or make written recommendations to promote employer compliance with the EEA. Should the employer fail to comply with recommendations, Section 45 gave the Director General the authority to refer the matter to the Labour Court.

Mr Mkalipi stated that the first implementation of the Director General reviews had taken place in 2006/2007, when six large employers were selected from the Johannesburg Stock Exchange (JSE) listings. They were the Medi-Clinic Group, Comair Ltd, the Omnia Group, Verimark, Prism Holdings and Khumba Resources.  All of those six employers were non-compliant. Recommendations were given to all six employers and only five complied. Comair Ltd had not complied with the recommendations. The Comair Ltd matter was referred to the Labour Court and that was currently awaiting determination.  The other five employers were progressing, except for Verimark, who had been downsizing.

On the second implementation in the 2007/2008 reviews, seven employers were selected from the JSE listing. They included the ABSA Group, Investec, Woolworths, Anglo Platinum, the Nedbank Group, Tiger Brands and Bidvest. There were twenty six employers in total in this group of seven when the subsidiaries were taken into account.  All of them were given DG recommendations at the beginning of 2008. Mr Mkalipi noted that the DOL was currently receiving feedback on the implementation of their recommendations, and that the feedback on the status of the compliance would be given in August 2008.

Mr. Mkalipi noted that there were common findings emerging from the first and second Director- General (DG) reviews. These included a lack of consultation, EE plans not complying with Section 20,  and Employment Equity (EE) not being a key objective for businesses. He also stated that there had been insufficient monitoring by the Trade Unions and that no disputes were referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) on any consultation matter. The Trade Unions were not engaging on the content of documents as referred to in Section 17.

Mr Mkalipi then set out the plans for the next Director-General reviews in 2008/2009. Sixty employers had been identified from the JSE listing of the top 100 companies, and he read out the list.

Discussion
Workshop Members asked the Department to deal with concerns raised around the amendments dealing with the position of the provinces. The amendments stated that the Minister could, after having consulted the National Skills Authority (NSA), make regulations pertaining to the establishment of skills development forums in the Provincial Offices. Members wished to know what the future would be of the Skills Education and Training Authorities (SETAs), and whether these forums were likely to pose any threat to the SETAs.

Dr Prinsloo responded that the SETAs were not training facilities. They were structures that defined what the needs of the various sectors were, and would then provide monitoring and funding in those sectors. The addition of the forums would thus not pose any threat. He said that there was in fact a need for more training organisations and that the Further Education and Training (FET) Colleges should not be over-burdened.

Mr B Mkongi (ANC) noted that the addendum section should explain certain terms in the Bill.

He noted that clause 2 should refer to “Purposes of the Bill” and not “Purposes of the Act”.

Mr M Mzondeki (ANC) asked the Employment Conditions Commission to explain the reasons for the non compliance of the taxi organisations.

Prof Kalula responded that the problem was due to the employer’s non compliance; it was not a case of non compliance by the employees. Non-compliance often had to do with a broader spectrum of issues than work issues alone. For instance, the ECC would also note concerns regarding social security and the protection of vulnerable workers.

A Member raised concern on the source of the statistics used in the Employment Conditions Commission (ECC). 

Prof Kalula responded that the Commission was using all existing statistics.

Members expressed the view that compliance with employment equity in the workplace was of great concern, and that not only did mindsets need to be changed, but the law should be used to enforce compliance. The fact that certain companies’ employees were not allied to trade unions made compliance even more difficult.

Mr Mkalipi raised the question of lack of skills in relation to the employment ratios at managerial level. This came to light during the Director-General (DG) reviews of 2006-2007, when the Department had expressed concern about the employers who were unwilling to take the risk of employing black and coloured workers in senior positions. The Department had said that employers who gave white males a chance in senior positions should do exactly the same for black graduates. Mr Mkalipi said that the employers needed to prove to the Department that they were not putting unskilled males of one race in senior positions at the expense of those of other races.

The concern was raised whether the Department of Labour (DoL) had the capacity to analyse the 60 JSE listed companies in its next Director-General (DG) review cycle.

Mr Mkalipi said that the DOL did have this capacity. 

Members raised the issue of non compliance of companies due to their forthcoming Charters, and decided that the compliance with the law should take precedence over any forthcoming matters.
 
The meeting was adjourned.

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