ATC130715: Report of the Portfolio Committee on Labour on the Oversight Visit to KwaZulu-Natal Province, dated 26 March 2013

REPORT OF THE PORTFOLIO COMMITTEE ON LABOUR ON THE OVERSIGHT VISIT TO KWAZULU-NATAL PROVINCE , DATED 26 MARCH 2013

The Portfolio Committee on labour, having conducted an oversight visit to KwaZulu-Natal on 29 January to 1 February 2013, reports as follows:

1. Introduction

Parliament derives its powers from the Constitution of the Republic of South Africa . Section 42(3) bestows oversight of executive action function to the National Assembly. Section 55(2 )( b) empowers the National Assembly to provide for mechanism to maintain oversight of the exercise of national executive authority, including the implementation of legislation and any organ of state.

One of the functions of oversight listed in the Oversight and Accountability Model is to ensure that policies announced by government and authorised by Parliament are actually delivered. This function includes monitoring the achievement of goals set by legislation and the government’s own programmes.

In compliance with the above, the Portfolio Committee on Labour resolved to undertake an oversight visit to the KwaZulu-Natal’s provincial office of the Department of Labour ( DoL ). The focal point of the visit was to monitor the performance of the labour centres and other entities of the DoL . The purpose of this report is to highlight issues raised by staff, clients and observations that were made by committee members during the oversight visit and to make some recommendations.

2. Background

In July 2011, the then newly appointed Director-General (DG) of the DoL conducted provincial consultation with the DoL’s provincial offices and labour centres. The main objective of the DG’s provincial consultations was to assess the services provided by the DoL , the extent of the demand for services and the major challenges faced by the DoL in discharging its mandate and servicing its clients and to:

· Examine the unique driving economic factors for each of the provincial offices which would have direct bearing on the demand for service delivery by the DoL .

• The extent to which each of the provincial offices is ready to meet their specific economic needs: structurally, systemically and operationally.
• Generally assess the capacity of the provincial offices to implement and enforce the policies and legislation of the DoL .
• Gauge staff sentiment and be able to make an analysis of the state of health of the DoL as an organisation.
• Devise informed intervention mechanisms to the challenges faced by the DoL .
• Mobilise necessary resources to deal with these challenges by leveraging the current financial allocation of the DoL and/or requesting additional funding from the National Treasury.

Consequently, the DoL team identified some challenges that were common to most of the labour centres that were visited.

3. Objectives of the visit

The objectives of the visit were as follows:

· To ascertain challenges experienced by the provincial office in executing its mandate.

· To hear from the provincial office staff; staff in labour centres; Productivity SA Durban branch; and Commission for Conciliation, Mediation and Arbitration, about the kind of support they need from the Portfolio Committee.

· To interact with clients to determine the quality of service and treatment they receive from labour centre staff and managers.

4. Delegation

4.1. Portfolio Committee on Labour

The delegation comprised the following Honourable Members:

Mr ME Nchabeleng (Chairperson of the Committee and leader of the delegation (ANC)).

Mr B Manamela (ANC).

Mr E Nyekemba (ANC).

Mr FT Maserumule (ANC).

Ms H Line-Hendricks (ANC).

Mr A van der Westhuizen (DA).

Mr S Motau (DA).

Mr DA Kganare (COPE).

Mr M Mncwango (IFP).

The following support staff accompanied the delegation:

Mr ZC Sakasa , Committee Secretary.

Ms P Ntabeni , Committee Assistant.

Ms S Mkhize, Researcher.

Mr S Ngcobo , Content Adviser.

4.2. DoL Provincial Office

At all points of the visit, the DoL was represented by the following:

Ms T Nene- Shezi , Chief Director: Provincial Operations KZN.

Mr E Khambula , Deputy Director: Provincial Operations KZN.

4.3. DoL National Department

The DoL National Department/ Ministry was represented by:

Mr X Mnene and Mr D Mkono .

Day 1: Tuesday, 29 January 2013

5. Presentation by the Chief Director: Provincial Operations KZN

The Chief Director provided the general statistics of the province, including:

· KZN has the second largest population in South Africa , after Gauteng .

· About one third of the KZN population stay around Durban .

· Percentage distribution of the population by population group is: African – 86.8%, Coloured – 1.4 %, Indian – 7.4% and other – 0.3%.

· About 78% of the population speak Zulu.

· One third of the population is under 15 years.

· Migration is as follows: 180 000 outflow and 250 000 inflow .

· Only 3 million people are attending educational institutions.

· Provincial unemployment rate is 33%.

The vision of the DoL is to strive for labour market which is conducive to investment, employment creation, economic growth and decent work.

DoL provides the labour market with services and programmes which are deployed through the following Business Units:

· Public Employment Services (PES).

· Inspection and Employment Services (IES).

· Beneficiary Services: Unemployment Insurance Fund (UIF) and Compensation for Occupational Injuries and Diseases Act (COIDA).

· Labour Market Information and Statistics.

· Management Support Services: Human Resources Management (HRM) and Finance, and Office Administration.

The services offered by the Business Units are as follows:

Public Employment Services

· Services for job-seekers.

· Registration, matching and placement services.

· Careers information and guidance services.

· Referral to skills development and job opportunities.

· Referral to special employment programmes.

Employer Services

· Canvassing of vacancies and marketing of Public Employment Services business unit.

· Registration of jobs and other placement opportunities.

· Recommendation on foreign labour.

· Registration of Public Employment Agencies.

· Workplace inspections to monitor and enforce compliance with the labour laws.

· Advocacy to empower both workers and employers and to prevent labour disputes.

· Investigation of complaints (the target is to resolve 70 % of the complaints).

· Investigation of workplace incidents.

Beneficiary Services

· Process unemployment insurance claims.

· Process compensation for occupational injuries and diseases claims.

· Process maternity benefits claims.

· Process dependency allowance applications.

· Provide information and forms – Stamp forms for proof of attendance.

KZN provincial office is piloting the decentralisation of Beneficiary Services.

Labour Centre Key Functions

· Provide the full spectrum of DoL services.

· Provide advice and information on all DoL services.

· Plan, organise, lead and control utilisation of resources at labour centre level, satellite offices, visiting points, Thusong Centre and mobile labour centres.

· Data collection on all services.

6. Oversight at the Durban Labour Centre

The Committee members took a walk-about at the centre whereby it interacted with staff and clients of different business units. The following challenges were identified:

Applications Section

· Staff complained that computers were off-line most of the time.

· They also complained that the printers were not enough and sometimes had to walk to other floors to print documents.

· The air-conditioner was not in working order or could not be operated because of flooding.

· There was flooding at the ceiling, which happened about two years ago and has not been fixed.

Administration Section

· The staff told members that they did not have problems with the condition of computers, except that they did not have enough of them. The only problems that they sometimes experienced were network related.

· The challenge was that the manual system was still being used parallel to the computerised system.

· Members were informed that the centralised nature of COIDA was creating a delay in the processing of applications.

· Staff also complained about a shortage of copy machines.

· There was a complaint about the lack of managerial support from Head Office.

Interaction with organised labour

Members of the Portfolio Committee interacted with some members of organised labour. From the interaction, the following issues were raised:

· There were complaints that targets set for client service officers were unattainable given the tools of trade at their disposal.

· The challenge of the inspectors was that they were not respected by the company managers. Some of the possible factors could be that they wear poor quality uniforms. Sometimes they are issued with uniforms that do not fit properly.

· Inspectors have difficulty in obtaining warrants of arrest for non-compliance.

· They (Inspectors) also have a challenge in dealing with foreign national employers. The challenge stems from difficulty in verifying ownership of businesses. In most cases the person operating the business would deny owning it and claims to be employed by the owner who is abroad.

· There was a complaint of salary disparities among inspectors doing similar jobs but earning different salaries.

· Inspectors specialising on health and safety were perceived to be receiving preferential treatment.

· There was a complaint about incompatibility of the system that is used at the Durban Labour Centre (Lesedi) to that used in other centres.

· While Employment Services South Africa (ESSA) was recognised as a good system, the uploading of data into the system was identified as a challenge.

· The mileage requirement for the issue of subsidised vehicles was posing a challenge in view of the centre jurisdiction.

6.1. Presentation by the DoL in response to issues raised by Members of Parliament after the walk-about

The meeting between the Portfolio Committee Members and the DoL staff reconvened after the walk-about. The DoL reported as follows:

· It was reported that the shortage of computers was caused by floods. However, the computers were ordered and some have been received.

· Six fax machines were ordered, one for each floor. There was a problem with the supplier who submitted questionable quotes.

· Some photocopiers expired in July, August and October respectively. Head Office instructed centres to stop leasing photocopiers as there was going to be a new contract in December. It is hoped that photocopiers will be available by March 2013.

· Uniforms were ordered but came in wrong sizes.

· All inspectors with subsidised cars had their boundaries collapsed to allow them to make the kilometres required by the Department of Transport.

· Structural problems were communicated to the Department of Public Works.

· Appointments of labour inspectors were made in accordance with job profiles and salary levels were accordingly determined.

7. Oversight visit to Productivity SA ( Durban )

The Committee Members were met by Mr B Coka , the Chief Executive Officer (CEO) at Productivity SA, who introduced them to his staff. Committee Members were then taken through the activities and operations of this entity.

On operations of the Productivity SA, members were informed as follows:

· Productivity SA secures clients through marketing and word of mouth.

· The entity does not deal with individual companies in rural areas. It deals with groups of companies.

· The majority of Productivity SA clients come from the manufacturing sector.

· The type of intervention in distressed companies is determined by outcome of assessment.

· Productivity SA uses service providers in turn-around solutions.

The main challenges identified related to:

• Issues regarding funding not coming on time, particularly on turn-around solutions.
• Shortages regarding staff compliment. Members were informed that Productivity SA is going through a restructuring process to address under-staffing.
• Centralisation of Information Technology (IT) system in Midrand was identified as one of the challenges to service delivery.
• Staff turn-over was high but has been reduced through closing the gap between market related salaries and those paid by Productivity SA.

Day 2: Wednesday, 30 January 2013

8. Oversight visit to Port Shepstone Labour Centre

Ms L Nongena-Sigedle , the Acting Assistant Director: Labour Centre Operations at Port Shepstone , gave the Committee a brief presentation on the operations at the centre.

The Committee Members took a walk-about at the centre whereby it interacted with staff and clients of different business units. The following challenges were identified:

• The building in which the centre is housed is in a bad state and air-conditioning which had burst recently was not yet fixed and was still leaking and, in addition, there were health and safety concerns raised regarding the wiring.
• Water and electricity was cut off at the labour office in Park Rynie , and the Department of Public Works has been informed of these defects but have not responded yet. The office has been without water for approximately two years. Members of the Committee were informed that the Park Rynie office is opened between 9 and 12. When working in Park Rynie , staff members have to use the ablution facilities in the nearby filling station. The building is in a bad state and is a health hazard. It was neglected after the municipality moved out.
• The Inspectorate is not functioning as they should because of a shortage in cars (only two available for six inspectors).
• Negligence regarding the handling of issues as forms keep getting lost.UIF compensation system is slow, taking almost two years to get a COIDA number.
• COIDA applications are processed manually.
• Staff complained about unrealistic targets for Public Employment Services. It is difficult to reach the targets because the employers are unwilling to use the services of DoL since it does not do reference checks. The unwillingness was reported to also arise as a result of DoL not using its own services, instead it advertise vacant posts in newspapers.
• Labour Inspectors complained of lack of career- pathing .

The Committee requested copies of correspondence with Public Works regarding the situation at Park Rynie and also resolved to have a look at the Park Rynie office. The provincial office was asked to compile a list of problems that they are experiencing with the Department of Public Works and forward it to the Committee Secretary.

9. Oversight visit to the Sheltered Employment Factory at Jacobs

Mr R Moodley , the Manager at the Sheltered Employment Factory in Jacobs, near Durban , welcomed the delegation and introduced the management team. Mr S Nondwangu the CEO, briefed the delegation on the operations at this particular factory which specialises in making furniture for schools among other things. The Members of the Committee were informed that the Jacobs factory has an establishment of 97 members. The salaries range between R380000 and R4400 ,00 . Currently, the factories have contracts with the Eastern Cape Department of Basic Education and the Western Cape Department of Health to build desks and supply hospital linen. When in full operation, the factory has potential of making approximately R1 million a month.

He (CEO) argued that he would like to propose a new name for the industry viz , Protected Employment Enterprise.

The delegation took a walk-about at the factory, interacting with staff and getting first-hand experience of the activities at the factory floor.

The CEO briefed Members of the Committee on the turn-around strategy for Sheltered Employment Factories (SEF), which entails:

· Setting up of the project office.

· Marketing of SEFs .

· Lobbying for long term contracts from national and provincial departments.

· Establishment of new factories in Limpopo and Mpumalanga .

· Closing the gap between SEFs and the disability sector.

· Concluding an agreement with Productivity SA to enhance productivity of the SEFs .

The major challenge identified:

• The factory struggles in getting a buy-in from perhaps the Ministerial level for them to get major support from government departments, only the Department of Health in the Western Cape has been making offers in the form of huge orders.

Day 3: Thursday, 31 January 2013

10. Oversight visit to Pietermaritzburg Labour Centre

Ms S Zungu , Head of the labour lentre in Pietermaritzburg, welcomed the delegation and introduced her team before taking the Committee through the operations at the centre.

After a walk-about of the facility, the Committee went back to plenary and deliberated on the following challenges:

• Client Service Officers (CSO) complained that they were promised to be upgraded as some of them have been working at the same level for more than 15 years.
• There are no proper channels for career- pathing for team-leaders who also remain stuck on salary level eight for a long time.
• The Human Resource Management does not pay out incentives like performance bonuses on time.
• There is a need for satellite venues or permanent personnel posted in surrounding areas like Richmond , Underberg, Ixopo , etc., instead of sending someone from Pietermaritzburg on designated days.
• The building has structural defects which limit access in and out of the building as there are no lifts and parking for staff is also limited.
• Citrix, the IT system used has problems and when off-line, it becomes a struggle getting back on-line.
• Policy doesn’t allow for stock to be kept on location as a result the centre has to order every now and then.
• There are no telephones for Inspectors and at times they even have to share computers and cars.
• Shortage and poor quality of uniforms and shortage of name tags.
• There is a shortage of cars for inspectors (only 6 cars are available for eighteen inspectors).
• Inspectors complained of being expected to meet unrealistic targets with limited resources. They are required to conduct 22 inspections per month.

Following a walk-about the offices and meeting with staff members, the Committee noted the following:

· That there was a general perception that staff and managers have good relations.

· That the front desk or registration desk has a CCMA office. Therefore, it assists in avoiding delays in information sharing with the public and ensures that members of the public are not sent from pillar to post while trying to find the right channels to lodge complaints.

· That there is high staff turnover within the IES due to poor salaries and lack of tools of trade.

· That the centre has an up-to-standard storeroom but does not have a smoke detector.

· That the building does not have a lift, therefore inaccessible to people with disabilities.

· That there was not enough parking space for staff members.

11. Oversight visit to Estcourt Labour Centre

Mr Ntonga , the Assistant Director: Labour Operations at Estcourt , received the delegation at the labour centre. The delegation took a walk-about at the centre whereby it interacted with staff and clients of different business units. The following challenges were identified:

• Six inspectors have to cope with high targets despite a shortage of vehicles (there are 4 cars - 2 subsidised and 2 shared).
• Processing of applications for subsidised cars takes years and this is demoralising the inspectors.
• Cable theft hinders communication when inspectors have to make appointments with

farmers in the surrounding farms.

• In many cases inspectors have experienced difficulty verifying credentials of businesses, especially those owned by foreign nationals.
• There is no dedicated cleaning company for the labour centre since November 2012;
• Five inspectors are sharing one computer.
• The process of registration of companies for COIDA is slow.
• Overseeing foreign business owners is the biggest challenge for the IES. The majority of them do not comply with legislation and it is difficult to identify genuine business owners who should take responsibility when there are issues of transgression.

Day 4: Friday, 1 February 2013

12. Oversight visit to the Elinem Construction Project in Newcastle

Mr S Pillay, the Manager of the Elinem Construction Project welcomed the delegation. The construction project was established in September 2012 through a joint agreement between Unemployment Insurance Fund (UIF) and Manufacturing, Engineering and Related Services Seta ( Merseta ). The Elinem Project was allocated 90 learners (30 in boiler-making and 60 in Welding). 70% of learners are persons who contributed to the UIF and 30% are non-contributors. There is no age restriction for admission to the project. Learners are assured of work on completion of training.

13. Oversight visit to the CCMA offices in Newcastle

Ms N Khan, the national Director at CCMA presented to the Committee on the operations at the Newcastle office of the CCMA, which was established in 2010. Most issues referred to the office come from the Textile Manufacturing Industry and involve unfair dismissals and workplace disputes. The Chinese Chamber of Commerce have since agreed to work and cooperate with the CCMA. The Newcastle office was reported to have a settlement rate of 73%. The turn-around time for conciliation is 22 days and for arbitration 48 days.

The following KZN statistics were provided to the Members of the Committee:

• There were 340 000 referrals since 1996.
• There are approximately 20 000 new cases per year.
• Thirty thousand cases were scheduled and heard.
• Fourteen thousand cases were settled.
• There were about 50 pre-dismissal arbitrations.
• One thousand two hundred back to work agreements were concluded.
• Two thousand and fifty jobs were saved.

The following challenges were identified:

• There is a rise in unprotected strikes in the mining, farming and other sectors in the Newcastle region.
• Many employees believe they era exonerated from compliance with Labour Relations Act (LRA) procedures and this placed additional pressure on commissioner resources in dealing with unprotected strikes in Northern KZN.
• Clients have to take their enforcement orders to Durban Labour Court .

14. RECOMMENDATIONS

The Portfolio Committee on Labour recommends that the Minister of Labour consider the following:

· Realistic targets that take consideration of available tools of trade e.g. green cars, subsidised vehicles, lap tops, etc., have to be set for labour inspectors.

· Professionalism Project Plan for labour inspectors has to be put in place.

· IT services for Productivity SA should be decentralised and the funding model for Productivity SA should be put in place.

· The DoL has to liaise with the Department of Public Works to ensure that the Park Rynie office is provided with electricity and water.

· The military veterans need to be involved in the operations of the SEF as was the case with the Second World War veterans.

· The DoL should come up with a strategy for marketing the products of SEF to government departments. The DoL has to ask Productivity SA to assist the SEF to boost productivity and generate revenue.

· The Department has to fast track decentralising COIDA services.

· The Department has to address the IT challenges and ensure that the IT system that is used in KZN is aligned with the system that is used nationally.

· The post of a cleaner should be created at the Estcourt Labour Centre.

The Department of Labour should report back to the Portfolio Committee on Labour on progress made with regard to the above-mentioned recommendations within three months of the adoption of this report by the House.

Report to be considered.