ATC121022: Report of the Portfolio Committee on Labour on the study tour to Germany, dated 11 September 2012

Employment and Labour

Report of the Portfolio Committee on Labour on the study tour to Germany, dated 11 September 2012

Report of the Portfolio Committee on Labour on the study tour to Germany , dated 11 September 2012

The Portfolio Committee on Labour, having conducted a study to Germany , specifically to Berlin and Nuremburg, from 18 to 23 March 2012, reports as follows:

1. Introduction

The Portfolio Committee on Labour undertook a study tour to Germany from 18 to 23 March 2012. The purpose of the study tour was to assess and learn more about Germany ’s Active Labour Market Programmes ( ALMPs ), especially the Public Employment Services (PES), since South Africa is in the process of establishing a similar programme through the Public Employment Services Bill that is under discussion at the National Economic Development and Labour Council (NEDLAC). Following the NEDLAC process, the Bill will be tabled before Parliament. In addition to its PES, Germany ’s labour market performed better when compared with other countries in Europe during the economic crisis, even though it has been labelled as having an overregulated labour market.

The Committee met with the following institutions: Confederation of German Trade Unions (DGB), Friedrich-Ebert- Stiftung Foundation (FES), Confederation of German Employers (BDA), Federal Ministry for Social and Labour Affairs, Parliamentary group for Committee of Labour and Social Affairs, Institute for Employment Research (IAB) and German Public Employment Services.

2. Delegation

Mr ME Nchabeleng , Chairperson (ANC) (Leader of the delegation)

Ms L Makhubela-Mashele (ANC)

Ms H Line (ANC)

Mr E Nyekemba (ANC)

Mr T Maserumule (ANC)

Mr S Motau (DA)

Mr D Kganare (Cope)

Mr L Nxelewa (Committee Secretary)

Ms S Mkhize (Committee Researcher)

3. Day 1, 20 March 2012

3.1 Meeting with the Confederation of German Trade Unions (DGB)

The DGB is an umbrella organisation for eight German trade unions. The union represents approximately 6.3 million employees across the country, and the number varies from sector to sector. However, the representation of the union is dominant in the metal and car industry. The DGB coordinates joint demands and activities within the German trade union. It represents and coordinates activities of member unions with the government authorities, political parties and employer’s union. The DGB has close relations with the National Union of Metalworkers of South Africa (NUMSA), and thus has relations with South Africa . Compared to South Africa , Germany has very low strike rates, although the net gain of the German wages has not risen in the past ten years.

Germany has a relatively low unemployment rate. However, there are huge growing challenges of skills shortages that are experienced by all developed economies. The country’s unemployment rate is slightly higher for immigrants. In addition, due to a declining and aging population, Germany has experienced low labour force participation but that has been countered by an increasing participation of older persons and women.

To minimise impact of this challenge, unemployment benefits were released to employees whilst still at work and simultaneously skills of employees were being upgraded so as to re-integrate them (employees) back into the labour market. To address the challenge of skills shortage, post secondary school learners would be submitted for training to a particular employer. After the training, the employer would determine whether or not to employ the trainee permanently. For the purposes of re-integrating employees into labour market, the employer is responsible for further training of employees. There is a special training offered to disabled person in order to integrate them into the labour market.

The contributions to the unemployment insurance are self administered. The Government has no control over the manner within which unemployment benefits should be managed. There is a board responsible for determining distribution of social benefits. The legal framework in Germany is not formulated in consultation with the social partners but by Parliament. Social benefits are determined in terms of the stipulation of the law.

Compared to South Africa , Germany does not have a high prevalence of private agencies, for example labour brokers. However, following a long period of being banned in Germany , they were again allowed to operate in 2005. Whereas there are well-known challenges regarding these agencies, there are also benefits such as placing highly specialised trades where suitably qualified workers are not easy to find. Unlike in South Africa , in Germany the public sector dominates the employment services industry. The introduction of the private agencies has assisted in improving the efficiency of the public service through competition. As a result, the public employment services are constantly under pressure to accelerate the re-integration of the unemployed back into the labour market.

Labour agencies in Germany are managed by employees and trade unions. The German Federal Employment Agency provides vouchers to private employment agencies as a way of addressing unemployment. The private labour agency would only receive the voucher once a job seeker has been successfully placed for employment. The process is monitored by the Federal Employment Agency.

The Confederation of German Trade Union (DGB) is not in support of the system of private employment agencies based on following grounds:

· there is a lack of transparency in the process;

· private labour agencies advertised all jobs through the internet, which some people do not have access to, particularly those residing in remote areas;

· the fact that there is a private deal between the employer and the employee implies that there is a lot of secrecy in the system, and that contradicts the DGB’s principle of openness;

· private labour agencies focus on precarious jobs whilst there is a high rate of unemployment;

· Many private labour agencies are selling temporary employment to the people.

3.2 Meeting with Friedrich-Ebert- Stiftung (Ebert Foundation)

The Friedrich-Ebert- Stiftung is a German political foundation associated with the Social Democratic Party of Germany, yet independent of it. It was established as the political legacy of Friedrich Ebert. It is the oldest German organisation formed to promote democracy, political education and promote students of outstanding intellectual abilities and personalities. Today, the main goal of the organisation is to promote political and societal education of people from all walks of life in the spirit of democracy and pluralism, and to work towards international understanding and cooperation.

According to the organisation, Germany has a challenge regarding the private employment agencies. In this regard, there is a current discussion in Germany on how unions can intervene to address the issue of private employment agencies. German Public Employment Services has a skills training component which can be adopted by South Africa in order to address unemployment. The German Public Employment Services focuses on transferring employees to other sectors for skills training. In this regard, it (German Public Employment Services) puts emphasis on training people to adapt to the changing labour market. This means that people are being trained to adapt to the future changes in the labour market.

The organisation proposed that to maintain economic stability, Public Employment Agencies and Private Employment Agencies should coexist in order to complement each other. It indicated that should the Private Labour Agencies be abolished, that would compromise the principle of competitiveness in the labour market, and the public employment system could be open to abuse. For the Private Employment Agency to function better, it needs strict regulations. For example, agencies should strictly deal with placements of jobseekers and there should be no contract between employee and the private agent. In order to address challenges of abuse of workers, private agencies must adhere to strict regulations in turn setting very high standards. The organisation indicated that Germany has good labour laws, although implementation in certain areas is still a challenge. The organisation recommended that South Africa needs to build capacity and regulate labour brokers in order to stop exploitation. It further recommended that social organisations and the media need to play a watchful role over the implementation of the labour laws.

3.3 Meeting with Confederation of German Employers (BDA)

The BDA is the umbrella organisation of private sector employers in the manufacturing industry, commerce, banking, insurance, small scales crafts, agriculture, transport and the newspaper industry. It affiliates the central trade associations and the multi-industry land associations. It represents about 1 million businesses that represent about 20 million workers.

According to the organisation, in Germany there is a self-governing Board which comprises representatives of the public employment, employers and employees. The Board is involved in strategic decisions. There is an Executive Board that is elected by the members of the Self-Governing Board. The social partners, trade unions and employers have a strategic role to play in German labour market.

Following the major labour market reforms of 2005, the German social security system is divided in two. Firstly, there is the unemployment insurance which is collected through contributions from both employers and employees, and which caters for workers who lose their jobs. This is similar to the South African unemployment insurance benefits that are administered by the Unemployment Insurance Fund (UIF). The social benefits are generated by deducting 3% from the gross salary of the employee. Currently, the balance is €40 billion in the unemployment insurance fund.

Funds generated by the system are administered by the Public Employment Services (PES) situated in Nuremburg. More social benefits are allocated to people with children and the unemployed. The Federal Government has a final say in terms of spending funds in support of the labour market. There are 186 local agencies that process placements and unemployment insurance benefits payments.

Regarding negotiating labour policy, the Minister of Labour lays down the foundation for the legislation. The Federal Government drafts legislation and invites employer’s organisations and experts to make comments. There would be some kind of agreement amongst stakeholders prior to passing the legislation. The employer’s organisations convene informal meetings to identify challenges in the legislation drafted. In the legislative process, the employer’s organisation has no effective power to negotiate, government decides but they can influence implementation of the legislation. In Germany there is no structure similar to NEDLAC. However, the Board of Governors (employers and trade unions) needs to get consensus, particularly on Public Employment Services issues. Within the Public Employment Services there are local public employment agencies responsible for the implementation of legislation.

Private employment agencies do not play a prominent role in the German labour market in that not even 2% of employment is facilitated by them. The challenge in Germany is long term employment and availability of jobs requiring low skilled workers. In this regard, it is difficult to integrate low skilled workers in German labour market because most companies require highly qualified personnel. As such, the current big debate in Germany is centred on the role of private agencies in placing long-term unemployed people, given that two-thirds of all people employed through these agencies are long-term unemployed. Whereas South Africa ’s challenges emanate from the triangular work relations between the labour broker, client and the employees, in Germany the employment contract is always between the employee and the company. The German private agencies have an association that is registered with the BDA. These agencies have an important role to play, as they give companies flexibility during economic hardships. They are therefore are viewed as important role players in the economy.

The Confederation of German Employers always reminds its members about the responsibility to re-skill unemployed people. Due to the shortage of skills, the retirement age has been lifted to 67 years in Germany so that they can contribute to the economy. €28 billion is spent on skills development and training annually. Tertiary institutions in Germany are owned by the state. However, employers’ organisations influence them (tertiary institutions) to align courses to the current labour market. Apprenticeship also assists in terms of skilling students who recently completed their studies. Furthermore, students spend o ver two to three years on the job training with a firm, but also spend one to two days a week at school. Social partners have a huge influence in the development of the curriculum for these institutions.

The Confederation of German Employers (BDA) does not support the wide-ranging minimum wage policy that has been introduced in Germany . However, the BDA supports sector-specific minimum wages for vulnerable sectors such as the domestic or construction sectors. According to the organisation, minimum wages have to consider varying levels of skills and qualifications.

4. Day 2, 21 March 2012

4.1 Meeting with the Federal Ministry of Social and Labour Affairs ( Bundesministerium für Arbeit und Soziales )

The Federal Ministry of Social and Labour Affairs is a top-level agency of the federal agency of the Republic of Germany , headed by the Federal Minister of Labour and Social Affairs as a member of the Cabinet of Germany.

In terms of the Ministry, the German labour market policy is based on the following principles:

· Transparency in labour market related activities;

· Active labour market policy;

· Qualifications are most important in stimulating active labour market.

In Germany there is a 2% unemployment rate for those who completed their university studies and a 25% unemployment rate for those who have not completed vocational training or tertiary education. The labour administration is responsible for assisting learners who have not completed vocational training, and those who have not achieved good grades, by bringing them back to training or school. Public institutions not belonging to the state are responsible for distributing social security benefits.

While the majority of European countries had rising unemployment figures, Germany ’s figures were 6.6 per cent (a fraction compared with Spain ). Given the European economic challenges, German’s economic performance has been fairly positive compared with its neighbouring countries. In terms of its labour market performance, unemployment decreased by 82,000 to 3,028,000 from February to March 2012. In seasonally adjusted terms, unemployment decreased by 18,000. According to the Federal Ministry of Labour and Social Affairs, when compared to the previous year, the number of unemployed persons declined by 182,000 in Germany . In order to save jobs, Germany developed a concept of tripartite burden sharing. The concept entails short-term work programmes. Employees had to forfeit part of their income and the State took a lot of burden in subsidising the wages (wage subsidy) and labour agencies got to play a role in terms of finding people jobs. It encouraged co-operation amongst various relevant stakeholders in the labour market and it says workers should work for few hours and entitled to 50% of the previous working hours. The tripartite burden sharing has been pointed out as a reason for success of the German economy.

Germany also invests more on social security benefits through contributions by employee and employer in order to stimulate economy. People with children are entitled to a larger share of social benefits than others. The normal entitlement to unemployment benefits is 12 months. To be entitled, an employee has to contribute for 2 years. If an employee has contributed for longer time he or she is entitled to benefits for more than 2 years. If an employee has contributed for 12 months, he or she is entitled to 24 months benefits. Special regulations apply for seasonal workers.

In strengthening the German economy, the Federal Ministry considers the following critical:

· Recognising the growing demand for skills in Germany ;

· More investment for skilling women to access more job opportunities in the labour market;

· Minimise the number of young people who cannot complete vocational training;

· Acknowledge qualifications of immigrants in order to absorb qualified people from other countries;

· Allocate more funds to qualify young people;

· Craft law that makes job training to be compulsory.

Whereas the majority of countries are faced with the crisis of youth unemployment, Germany ’s main challenge is the aging workforce. Currently there are 41 million people employed in the country. However, the workforce is expected to decrease by 6.3 per cent in 2025, hence the growing demand for young people to get skills training. A domestic solution has been to raise the retirement age from 65 to 67.

4.2 Meeting with the Parliamentary Group within the Committee of Labour and Social Affairs

Instruments that the German Parliament proposed during the economic downturn:

· Reduction of the working hours (short time scheme);

· Job training by Federal Employment Services;

· Provision of social security to unemployed people;

· Central objective to ensure that people do not lose employment;

· Ensuring skills and mobility.

Tripartite burden sharing as means of stimulating economy entails the employer paying 90% of salaries and government paying the remainder. Working hours were reduced and simultaneously workers were entitled to social benefits. Now that economy stabilised, employers no longer contribute to the social security system.

During the recession, a short-term work scheme cushioned employees from being laid off. The companies had to apply to the Federal Employment Agency to implement the short-time scheme. Most companies had financial interests in short time scheme. If the company failed to apply for implementation of the scheme, its reputation would be on the brink of being tarnished, and that would also invoke the Industrial Relations Act. The short-time scheme applied to all employees until the economy picked up.

5. Day 3, 22 March 2012

Meeting with the Research Institute of the Federal Employment Agency (IAB)

Founded in 1967 as a research institute of the German Federal Labour Office, the IAB studies the labour market in order to advise on active labour market policy making. Its organizational proximity to the Federal Labour Office enables scientific information to flow directly into political opinion making and labour market policy.

The IAB was been commissioned by the government to conduct research on the labour market from the perspective of a variety of disciplines in order to enable a better understanding of the labour market, and to develop solutions to those challenges.
Currently, the institute is not confined only to assess the effects of instruments aimed at promoting employment, but also the effects of the basic income support scheme for job seekers. The mandate of the institute emanates from the Social Code.

The IAB conducts research on the labour market on the basis of the two statutory mandates that are specified for the area of unemployment insurance in the Social Code Book. It also conducts research on the basic income support scheme for those in need of the income support and capable of working. The social code contains parts of the social security law which is financed out of tax money as state welfare benefits, and which do not have the character of insurance.

The statutory mandate of the IAB to conduct labour market and occupational research was initially formulated in the Employment Promotion Act. However, section 280 of the Social Code currently stipulates that the IAB must conduct labour market and occupational research. The Federal Agency’s role is to:

· monitor, examine and evaluate the status and developments in employment and labour market according to the specific occupations;

· monitor effects of the active employment creation, which is done by compiling statistics, conducting labour market and occupational research and producing reports.

In defining the substance, nature and extent of labour market and occupational research, the Federal Employment Agency must consider its own needs for information, and that of the Federal Ministry of Economy and Labour. It must also take into account the needs of the Federal Ministry of Health and Social Security in as far as this concerns the occupational inclusion of people with disabilities or severe disabilities. The Federal Employment Agency must communicate the need for the research with the Federal Ministry Economy and Labour at least once a year, with the participation of the Federal Ministry of Health and Social Security. Moreover, the IAB is entrusted with the task of conducting the research. Examining the effects of the Employment promotion is the central focal point of the labour market research. The research should be conducted well in advance, and it constitutes an ongoing task for of the IAB. In addition, the analysis must be carried out according to different regions to understand the dynamics involved.

Part of the institution’s work includes projects on the effects of activation policy and basic income support reforms and the extent to which activation is really being implemented in practice and if the desired economic and societal objectives are being achieved . Where it is deemed appropriate, impact research may be delegated to third parties. With this, a link to the previous working area of the IAB has been established. Where it is deemed appropriate, impact research may be delegated to third parties. With this, a link to the previous working area of the IAB has been established. Extensive synergies with the research can be achieved in particular with regard to the impact analysis of labour market policy instruments, research on specific groups of persons such as the young and the elderly, as well as analysis of regional and macroeconomic effects.

The research of the IAB also focuses on examining the dynamics and structures of low income households that are receiving transfers in accordance with the Social Code Book and other public transfers. The research analyses the impact of household composition, its income resources, and the labour market participation of its members on the amount and duration of benefit reception. The analysis of the employment and benefit history of needy households forms part of the analysis of individuals within the system and their capacity to earn their own living. The IAB is building a large database on benefit and employment histories of households in need stemming from administrative data available through the Federal Employment Agency. The study also makes use of national micro data on population characteristics and income like the Labour Force Survey, Social Assistance Survey and the Income and Consumption Sample to explore the social background of low-income households and their labour market participation.

In order to address youth unemployment, Germany has vocational training where the youth enrol. Upon completion of the training, a candidate is issued with a certificate which is recognised and acknowledged by employers and trade unions. Apprenticeship is another mechanism used by Germany to address youth unemployment. The certificate issued here as well is recognised everywhere. The Chamber of Commerce and the Commission of Employers play a role in developing the courses relevant to the labour market.

6. Day 4, 23 March 2012

6.1 Meeting with the German Public Employment Services

The German Public Employment Services (PES) or the Bundesagentur für Arbeit (BA) is the labour market’s biggest service provider and as a public body with self-governance. It acts independently but within the framework of applicable law. The PES is made up of the head office in Nuremberg ; 10 Regional Directorates; 178 Employment Agencies and approximately 610 branch offices. The PES is headed by the Executive Board. The board manages and administrates its businesses. It represents the German Public Employment Services in and out of court. The Board of Governors as an institution of supervision and legislation monitors the work of the full-time Executive Board and advises on current labour questions.

The main duties of the German Public Employment Services are:

· placement in training centres and workplaces;

· vocational guidance;

· employer counselling;

· promotion of vocational and further training;

· promotion of professional integration of people with disabilities;

· benefits to retain and create workplaces;

· compensation for reduced income;

· conducting labour market and occupational research.

There is a Federal Board of Governors that forms the core of the structure of self-governance. Representatives of employees, employers and public institutions serve without remuneration in the governing bodies. The role of the bodies becomes evident through their suggestions for changes in organisational goals and decisions on major activities. Members of the board are also expected to provide the German Public Employment Services management with ideas for new solutions that reach beyond the immediate needs of the day.

Currently, the German Public Employment Services focuses on the following topics:

· The challenge of an aging population and its effects on the labour market;

· Shortage of a skilled labour force, particularly in electronics and health sector;

· Considerable number of people who are dependant on social security programmes and not available to participate in the labour market;

· The electronic filing is the major topic that the German Public Employment Services is currently considering. This entails all the social security files being archived electronically. Currently, the PES has 3 billion hard copies of files that will be scanned and converted to electronic documents.

The German Public Employment Services is responsible for the social security benefits and is being distributed through 156 local offices. The social security system is designed to provide benefits to the unemployed people. The social security system is financed through 3% contribution by the employers and employees that is approximately €30 billion annually. Given the history of divisions between East and West Germany , the PES has been able to use its programmes to integrate and provide equal services to both sides.

The active labour market policy entails a process where PES intends to assist job seekers to get employment by assessing the profile of such a person for current and future employment. Subsequent to that, sufficient time is allocated for assistance of the job seeker by the job counsellor. Alternatively, a meeting would be set up on-line between the job seeker and job counsellor to save travelling costs. Approximately 43 minutes is allocated for the first interview of the job seeker. The main objective of this system is to ensure that the counsellor spends as much time as possible with the client. This is quite different from the South African labour centre setup where clients spend maximum time in the queues and minimum time with the counsellor.

There are PES local offices that have their own strategies to implement active labour market policy because of the different dynamics involved. German Public Employment Services local offices were also responsible for allocating their own budget based on their needs and objectives. The head office of the German PES monitors the performance of the local offices and continually ensures efficiency through service level agreements by holding monthly engagements with local centres.

Previously there was no competition between PES and private labour agencies but due to reforms, the competition was emphasised in order to stimulate the labour market. However, in some cases the German Public Employment Services can seek cooperation with Private Employment Agency. One way is the granting of a placement voucher. It enables the job seeker to get support in finding a job from private placement agents. If the private placement agent successfully places the unemployed into a new job, then the placement voucher will be paid. For the first half, €1000 will be paid as soon as employment has been going for six weeks. For the second half, another €1000 will be paid after the employment has run for six months. The unemployment grant will be denied if the unemployed person:

· does not cooperate actively in seeking a new job;

· does not accept a decent offer;

· refuses further training to gain employability.

In Germany , the unemployed are registered in two systems which are legally based on Social Code III (active employment promotion, unemployment insurance) and Social Code II (basic income support for job seekers). Usually after 12 months, when their insurance claims are exhausted, the unemployed move from the insurance system (Social Code III) to the tax-financed basic income support system (Social Code II). The share of unemployment in the insurance system is usually tied more closely to the business cycle because these people have better formal qualifications, fewer health restrictions, and find a new job more quickly (approx. after 3 to 4 months). According to the Bundesagentur für Arbeit (BA), this is why the crisis as well as the recovery affected the insurance system more than the basic income support system. Long-term unemployed persons with little or no work experience must be found in both systems, but mainly in the Social Code II system.

The German PES has contributed to improving the transition from school to working life in terms of professional orientation, counselling, financial support and matching for positions as apprentices. In terms of the German PES the young unemployed person must get employment within the period of 14 days and this will be reflected in the system. Disabled people are referred to special training in order to be integrated into the labour market. Being the first person to register for employment does not necessarily mean getting first preference. The employer has the discretion to appoint a suitable candidate for a job. However, the job counsellor would also make a recommendation to the employer, based on his or her assessment of the job seeker. Germany considers education as a long term investment for the state, particularly in stimulating the labour market.

The German PES confirmed the fact that private agencies play a minor role in the German labour market, and its market share is estimated at 2%. In contrast, the PES has a market share of approximately 98%. The big population of Germany does not have confidence in the private labour system. German labour laws require the employee to register for employment with PES three months before retrenchment, failing which this would lead to the cut-off of unemployment insurance benefits. The employer should inform employees at least six months prior to the retrenchment.

6.2 Recommendations of the German Public Employment Services to the Portfolio Committee

The German Public Employment Services recommended that:

· there is a need for cooperation among employers, employees and trade unions in order to resolve labour disputes expeditiously and to avoid unnecessary industrial action;

· allocation of resources should focus on continuous improvement of the labour market system;

· the Portfolio Committee should facilitate international assistance for the Department of Labour in order to address the issue of the problematic information technology system (IT). In this regard, the German PES committed to provide assistance in terms of availing IT experts if it is requested;

· the Department of Labour should have a clear strategy in outlining what it seeks to achieve;

· the Department of Labour should develop methods of dealing with the massive number of people that are in the informal sector. In addition, government should ensure that people in the informal sector also benefit from some form of social security net;

· compulsory and good education should be introduced in order to keep children out of the streets and prepare them for future employment. This calls for more investment in good education in order to enhance participation in the labour market.

7. Observations by the Committee

The Committee made the following observations:

· Firstly, Germany ’s and South Africa ’s labour markets, though they share certain similarities, are also vastly dissimilar. While the German labour market is characterised by a highly qualified labour force, South Africa has an oversupply of unskilled and under qualified labour force.

· Secondly, Germany ’s unemployment rate is below 7 per cent, compared to South Africa ’s 25 per cent. Labour demand is very high in Germany whereas South Africa ’s labour absorption rate is very low. For Germany , this explains the high rate of success of its PES.

· Thirdly, whereas South Africa is faced with a huge challenge of youth unemployment, Germany on the other hand is in desperate need of youth participation in the labour market. Germany’s population is aging and diminishing and this has led to the shrinking of the workforce, hence there are various measures, for example, raising the retirement age, to encourage women and older persons to be active participants in the labour market. On the other hand, South Africa has a fairly large youth population that cannot be absorbed into the labour market.

8. Additional issues for consideration

The following additional issues were raised:

· Whether, similar to Germany , job seekers who refuse to accept a vacancy that has been identified by the case worker/career counsellor will have sanctions imposed on them. If so, what form of sanctions? If not, how will the PES deal with “serial quitters” (people who perpetually drop their jobs) after numerous resources have been invested in search for work?

· Whether the PES will draw expertise from the private sector to place the hard-to-place jobseekers, like in Germany . If not, how will the PES deal with this category of job seekers?

· How will the PES recruit and retain skilled professionals and how will it ensure efficiency of the labour centres? In Germany , they target agreements with centre managers on the maximum period placement of job seekers.

· How will labour centres prepare statistical data for the PES?

· Whether, similar to Germany , the PES will link with other social security programmes from other departments, especially Social development, to ensure that people who receive social assistance are closely monitored and their behavioural patterns are studied to ensure that they actively look for work and leave the social assistance system.

9. Recommendations of the Portfolio Committee

The Committee made the following recommendations:

· The South African Public Employment Services Bill will have to take into account the needs of and the disparities within the country’s population, not only based on skills shortages, but geographic disparities between urban and rural areas. Therefore, it should be able not only to identify these gaps but also address them while still efficiently providing quality service.

· Skilled job seekers should be able to access self-service for employment opportunities from labour centres. Self-service for employment opportunities can be used for the newly unemployed people and people who are capable of looking for jobs on their own. However, provision for unskilled and illiterate work-seekers should be considered and this group must have efficiently trained personnel to assist them.

· One of the successes of the German PES and the labour market has been the ability to collect accurate labour market-specific data in order to make a correct diagnosis and apply appropriate measures to deal with those challenges. Based on the engagements with various organisations, the Committee recommends that in developing a suitable PES model for South Africa , the Department should consider establishing an entity or a division within the PES to collect and analyse statistical data. This entity or division should be staffed with highly qualified professionals to collect statistical data and write research reports.

· There should be a link between the PES with the Further Education and Training (FET) colleges. Similar to Germany , the PES should be a conduit for graduates into the labour market.

Report to be considered.


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