ATC141029: Budgetary Review and Recommendation Report of the Portfolio Committee on Labour, dated 28 October 2014
Budgetary Review and Recommendation Report of the Portfolio Committee on Labour,
dated 28 October 2014
The Portfolio Committee on Labour, having
considered the performance and submission to National Treasury for the medium
term period of the Department, reports as follows:
In terms of the Constitution of
the Republic of South Africa, portfolio committees have a mandate to legislate,
conduct oversight over the Executive and facilitate public participation.
The mandate of the Portfolio
Committee on Labour (the Committee) is governed by Parliaments mission and
vision, the rules of Parliament and Constitutional obligations.
mission of the Committee is to contribute to the realisation of a developmental
state and ensure effective service delivery through discharging its
responsibility as a committee of Parliament. Its vision includes
enhancing and developing the capacity of
Committee Members in the exercise of effective oversight over the Executive
The Committee is charged with the responsibility of holding
the Executive and related entities accountable through oversight of objectives
of its programmes; scrutinising its budget and expenditure (annually); and
recommending through Parliament what actions the Department should take in
order to attain its strategic goals and contribute to service delivery.
of the Money Bills Amendment Procedure and Related Matters Act, No 9 of 2009
(the Act) provides that the National Assembly, through its committees, must
annually assess the performance of each national department and these
Committees must annually submit Budgetary Review and Recommendation Reports
(BRRR) for tabling in the National Assembly. These should be submitted to the
Minister of Finance and the relevant Ministers.
of core functions of the Department.
The mandate of the Department is
to regulate the labour market through policies and programmes developed in
consultation with social partners, which are aimed at:
Improved economic efficiency and productivity;
Creation of decent employment;
Promoting labour standards and fundamental rights at
Providing adequate social safety nets to protect
Sound labour relations;
Eliminating inequality and discrimination in the
Enhancing occupational health and safety awareness and
compliance in the workplace; and
Giving value to social dialogue in the formulation of
sound and responsive legislation and policies to attain labour market
flexibility for competitiveness of enterprises which is balanced with the
promotion of decent employment.
the BRR Report
The Act set out the process that
allows Parliament to make recommendations to the Minister of Finance to amend
the budget of a national department. In October of each year, portfolio
committees must compile BRRR that assess service delivery performance given
available resources; evaluate the effective and efficient use and forward
allocation of resources; and may make recommendations of forward use of
resources. The BRRR are also source documents for the Standing/ Select
Committees on Appropriations/ Finance when they make recommendations to the
Houses of Parliament on the Medium-Term Budget Policy Statement (MTBPS). The
comprehensive review and analysis of the previous financial years performance,
as well as performance to date, form part of this process.
The Committee in reviewing the
work of the Department for the 2013/14 financial year placed emphasis on the
An overview and analysis of the Departments strategic
priorities and measurable objectives;
An overview of the overall performance of voted funds:
Consideration of the Auditor-Generals activities in
relation to the Department;
Committee key findings; and
The Committee, in
undertaking this process used a number of source documents, including the
2014-2019 Strategic Plan of the Department, Annual Report, Financial
Statements, 2014 Estimates of National Expenditure (ENE), briefings by the
Department and its entities during the course of the year, presentation by
Researchers from the Appropriations Committee, as well as the State of the
Nation Address. The Committee also used the Constitution as its basis.
The Committee held meetings with
the Department and its entities to receive presentations on their performance
against their annual plans. It also invited the Auditor-General to brief it on
its assessment of performance of the Department and its entities. These
meetings were held a week prior to the one set for compilation and adoption of
The limitation of this report is
that it could not assess the impact of the Departments initiatives to the
government priority of job creation since the Department is involved in creating
environment for job creation rather than
directly creating jobs.
the contents of the Report.
This report is comprised of the
broader government policy, which is enshrined in the National Development Plan.
It reviews the initiatives taken by the Department to ensure that the
priorities of the plan are realised. Furthermore, the report reviews the
recommendations made in the previous years BRRR to ascertain whether they have
been acted upon. It also looks at the recommendations made by the Committee
regarding the 2014/15 budget. The report assesses the financial as well as
service delivery performance to ascertain whether the budget allocated to the
Department was spent as envisaged in the Annual Performance Plan. Finally, it
the observations made by the Committee after
considering all necessary documents, presentations and oversight visits before
making recommendations aimed at improving service delivery.
Overview of the key relevant
policy focus areas
The National Development Plan
(NDP) has been identified as a roadmap to a South Africa where all will have
access to services and jobs.
The economy and employment
related priorities of the NDP, include increasing employment through economic
growth; reduce inequality; improve skills development and education.
Another relevant focus area for
the Committee is the reduction of income inequality, which involves an
investigation to the national minimum wage. The Committee has already initiated
this process through workshops on national minimum wage, which involved experts
in this area. The Committee intends following up with public hearings to be
held on a national scales to ascertain the views of the public on this subject
Improvement of UIF benefits to
better the lives of beneficiaries, especially women, is another key focus area
relevant to labour. These include:
Increased benefits to beneficiaries;
Increased benefits period from eight months to 12
Women on maternity leave to be paid at an income
replacement rate from 38 per cent to 66 per cent; and
Increase in the time for claiming UIF from six months
to 18 months for death benefits and 12 months for other benefits.
Amendments of the Unemployment
Insurance Fund Act are due for tabling in Parliament in a near future.
Summary of previous key financial and performance recommendations of
Having assessed the performance
of the Department in 2013/14, the Committee recommended that the Minister
In view of the fact that 57 per cent of indicators
were not well defined, it is recommended that the Minister ensures that the
Department develops clear policies and procedures for collection, collation and
reporting of key findings.
The Minister ensures that the Department investigates
the reason for failure to achieve the significant number of its targets and put
together a plan to address such failures.
The Minister should ensure that the vacant posts are
filled with suitably qualified persons within 12 months as required by the
Public Service Regulations.
The Minister should ensure that the Treasury
Regulations are strictly adhered to, particularly the Supply Chain Management
regulations and that there are consequences for failure to comply.
The Minister should ensure that the Department and its
entities adhere to the Framework for Managing Programme Performance Information
(FMPPI) in developing its performance indicators.
The Minister should ensure that sufficient resources
are made available to the Department, especially Inspection and Enforcement
Services programme, to ensure that compliance to legislation is monitored and
The Minister should ensure that the Department
implements its Performance Management System and performance bonuses are
The Minister should ensure the smooth hand over of the
IT services to the Department. In this regard, the Department is required to
report progress to the Portfolio Committee on a quarterly basis.
While the role of the Department through the CCMA in
facilitating the resolution of labour disputes is acknowledged, it should be
encouraged to play a more proactive role. It is therefore recommended that the
Minister ensures that the CCMA is financially capacitated to play a more
proactive role in dispute resolution.
The job creation initiative of the Unemployment
Insurance Fund (UIF) and the Industrial Development Corporation (IDC) is
commended. Further, the Minister should ensure that in its report, the UIF
reports on sustainability of jobs created in order to assist the Committee to
ascertain the impact of this initiative.
The Minister should ensure that the call centre of the
DoL and its entities is capacitated and its efficiency monitored.
The Minister should ensure that the increase in the
time for claiming UIF benefits is translated into an increase in payment of
The Minister should ensure that the Department devises
a mechanism to bring the businesses owned by foreign nationals in line with the
The Minister should monitor the implementation of the
turn-around plan put forward by the Compensation Fund and report to the
Committee regarding progress with implementation of the plan.
Committee Budget Report
After receiving the
presentation of the Department of Labour, the Committee recommended that the
Minister of Labour gives consideration to:
Expediting the process of building internal
Information and Communications Technology (ICT) capacity without delay;
Briefing the Committee on progress regarding
the organizational review and recommendations (
Ensuring that all vacant funded posts are
advertised and filled in compliance with the Public Service prescripts; and
Capacitating the Inspection and Enforcement
Services programme so as to ensure that the Department
its decent work mandate.
With regard to the
Compensation Fund, the Committee recommended that the Minister of Labour gives
Reporting to the PC on Labour on progress
with regard to the implementation of
processing system before the end of the second term (September 2014);
Briefing the PC on Labour on progress with
regard to the implementation of the decentralized structure before end of the
third term (December 2014); and
Building internal capacity so as to reduce
spending on consultants.
After receiving the
presentation on the UIF, the Committee recommended that the Minister of Labour
gives consideration to:
Investigating the possibility of using the
reserves of the UIF for job creation initiatives;
Investigating the possibility of using the
reserves of the UIF to improve on the benefits payable to beneficiaries as well
as the duration of payments, particularly better maternity benefits;
Reporting to the PC on Labour on the number
of unemployment insurance beneficiaries trained;
Briefing the PC on Labour on projects funded
through the UIF Social Responsibility Investments and beneficiaries on a
quarterly basis; and
Conducting advocacy campaign to make people
aware of the UIF benefits.
After listening to
the presentation made by the CCMA, the Committee recommended that the Minister
of Labour gives consideration to:
Briefing the Committee with regard to
progress on the establishment of the fund to assist workers in enforcing the
Ensuring that when planning to open new
offices, consideration is given to access by the disadvantaged users of the
services of the CCMA.
Ensuring that the Commission reports on case
postponement statistics and reasons for such postponements in its annual
Ensuring that the CCMA offices are accessible
to the physically disabled users of the CCMA services.
Financially capacitating the CCMA so as to
accomplish its mission to be the best dispute management and dispute resolution
organization trusted by its social partners.
In respect of NEDLAC,
the Committee recommended that the Minister of Labour gives consideration to:
Strengthening community constituency by
ensuring that the interests of the unemployed and the most vulnerable groups
are accommodated in decisions taken at Nedlac;
Financially capacitating Nedlac to
effectively play its role as a forum for social dialogue.
After receiving the
presentation of the Productivity SA, the Committee recommended that the
Minister of Labour gives consideration to:
Ensuring that funds are made available for
Productivity SA to be able to extend its services to areas where they are
currently not operating, marketing purposes and to ensure the entity is
rendered more visible.
Encouraging Productivity SA to work with
other entities of the Department, such as Nedlac and CCMA, in job saving
assessment of financial performance
of Vote allocation and spending (2010/11 to 2015/16)
and Enforcement Services
Policy and Industrial Relation
Department was allocated R1.6 billion in the 2013 financial year for
operational expenditure. The budget was adjusted upwards to R2.4 billion. The
increase in the overall budget was significantly as a result of upward
adjustment of the budgets for Public Employment Services and Labour Policy and
Industrial Relations programmes. The Public Employment Services and the Labour
Policy and Industrial Relations programme were increased from R246 million to
R400 million as well as R111 million to R764 million respectively.
2014/ 15 financial year, the Department received a total budget of R2.5
billion. The Labour Policy and Industrial Relations programme received the
largest share at R869 million. It was followed by the Administration programme
at R787 million.
Department of Labour had a 2013/14 available appropriation of R2.4 billion
which represented a nominal increase of R305.7 million or 14.3 per cent from
and Subsidies accounted for R823.4 million of the available budget and of this
amount the Department transferred R823.4 million or 100 per cent mainly to
departmental agencies and accounts. The total of R18.1 million of the
was for payment for financial assets, of which the
Department spent R18.1 million in respect of debts written off. This meant the
Department had an available budget of R1.6 billion for operations. Of this, the
Department had spent R1.5 billion or 95.4 per cent, the majority of which had
been used on compensation of employees as well as goods and services.
largest element of operational expenditure in 2013/14 was R776.2 million spent
under the Administration programme mainly on goods and services as well as
compensation of employees. The next largest element was R410.7 million under
the IES programme, followed by R246 under the PES programme, primarily for
compensation of employees whilst the Labour Policy and Industrial Relations
(LPIR) programme spent R97 million in 2013/14.
expenditure has grown at a nominal rate of 11.7 per cent or R160 million, when
compared to the previous financial year. Rand value expenditure growth was
greatest in the Administration programme, mainly driven by increased spending
on goods and services. The PES and IES programmes showed the next highest
growths primarily due to increased spending on compensation of employees.
1: A total of 50.7 per cent of operational expenditure in 2013/14 was on
Administration, representing R776.2, mainly for goods and services and
compensation of employees.
Expenditure under this programme
increased by R96.2 million or 14.1 per cent when compared with the previous
financial year, primarily due to additional spending on goods and services.
main cost drivers under this programme include operating leases under goods and
services and payments for capital assets due to the unbundling and
reclassification of the IT-Public Private Partnership to machinery and
equipment for computers.
2: Inspection And Enforcement Services Operational expenditure in 2013/14 was
R410.7 million, the majority of which was spent on compensation of employees.
Expenditure under this programme has increased by R16.1 million, or 4.1 per
cent, when compared with the previous financial year primarily due to
additional spending on these items. The reason for the increase in expenditure
is due to an additional funding of R32
million in 2013/14
appropriated in the 2011 MTEF for professionalization of the inspectorate,
mainly for the employment of specialist inspectors. Although on a quarter to
quarter comparison spending is high, the department has not filled all the
specialist inspector posts. As at the end of the fourth quarter, there were
still 118 vacant posts mainly Pupil Inspectors, Generalist Inspectors,
Specialist Inspectors and Principle Inspectors. Funding for these unfilled
posts was reduced in the 2014 Budget due to the delays in filling these posts
over the past 3 years.
3: Public Employment Services Operational expenditure in 2013/14 was R246
million, the majority of which was spent on compensation of employees.
Expenditure under this programme has increased by R38 million, or 18.3 per
cent, when compared with the previous financial year primarily due to
additional spending on these items. This is due to new appointments made and
upgrades from salary level 8 to level 9 for career counsellors.
4: Labour Policy and Industrial Relations Operational expenditure in 2013/14
was R96.9 million, the majority of which was spent on compensation of employees
and goods and services. Expenditure under this programme has increased by R9.7
million, or 11.1 per cent, when compared with previous financial year primarily
due to additional spending on these items, with the additional spending under
goods and services mainly on business and advisory consultancy services, and
stationery, printing and office supplies. Increased spending is not due to
additional allocations but to slow spending in the previous financial year.
There are delays each month in obtaining invoices from Travel with Flair as a
result of inefficiencies in the process which delays payments. Spending for
research projects done by consultants is higher as some projects run over two
Department received an unqualified audit opinion. However, the AGSA raised a
matter of emphasis relating to material underspending of the budget. The
Department underspend the budget to the amount of R73 803 000 or
three per cent. The underspending on current payments was mainly attributable
to less than anticipated payments under Administration programme to the
Department of Public Works (DPW), as incorrect invoices received from DPW were
returned to be corrected and not received back in time for payment. These invoices
amounted to R62 757 000, while less than anticipated payments under
IES programme for compensation of employees, amounted to R10 857 000.
also reported that the Accounting Officer of the Department did not take
effective steps to prevent irregular expenditure as required by section 38 (1)
(h) of the PFMA and the Treasury Regulation 9.1.1. The Accounting Officer was
found to not have effectively exercised oversight of IT security management
controls. There was also a finding of over reliance on the IT service provider
and inadequate development of business continuity plan and disaster recovery
Department received an appropriation of R2.5 billion in 2014/15, which
represents a nominal increase of R20 million, or 3.4 per cent from 2013/14.
and Subsidies account for R942.4 million of the available budget and of this
amount the Department has so far transferred R446.1 million, or 47.3 per cent,
mainly to departmental agencies and accounts. This means the department has an
available budget of R1.6 billion for operations. Of this, the Department has
spent R314.9 million, or 19.9 per cent, the majority of which has been used on
compensation of employees.
largest element of operational expenditure to the end of the first quarter in
2014/15 was R121.4 million spent under the Administration programme mainly on
compensation of employees as well as goods and services. The largest element
was R101.2 million under the Inspection and Enforcement Services (IES)
programme, followed by R71.5 million under the Public Employment Services (PES)
programme, primarily for compensation of employees. At the end of the first
quarter, R85.5 million (27 per cent) was spent on compensation of employees
under IES whilst PES spent R65.6 million (27.6 per cent) respectively.
expenditure has grown at a nominal rate of 8.6 per cent, or R25 million, when
compared to the same period in the previous financial year. Rand value
expenditure growth has been greatest in the PES programme, mainly driven by
increased spending on compensation of employees. The Administration and IES
programmes show the next highest growths primarily due to increases in spending
on compensation of employees as well as goods and services. Spending under the
Labour Policy and Industrial Relations (LPIR) programme has decreased mainly
due to lower spending on goods and services as well payments for capital
A total of
38.5 per cent of operational expenditure from April to June was on
Administration, representing R121.4 million, mainly for compensation of
employees and goods and services. Expenditure under this programme has
increased by R5.6 million or 4.9 per cent when compared with the same period
last year primarily due to additional spending on these items
cost drivers under this programme include compensation of employees due to
capacitating the office of the Chief Information Officer in order to establish
and enhance the IT operating model. The Department has started to run its own
ICT services in-house following the closure of the IT-PPP contract. Under goods
and services, spending is mainly driven by consultants who are used mainly for
specific technical tasks such as the implementation of the new IT operating
model, the organisational review and redesign project, and business advisory
services to the Chief Financial Officer.
Programme 2: Inspection And Enforcement Services
Operational expenditure to the end of quarter 1 was R101.2 million, the
majority of which was spent on compensation of employees.
Expenditure under this programme has
increased by R4.1 million, or 4.2 per cent, when compared with the same period
last year primarily due to additional spending on these items. The increase in
expenditure is as a result of filling vacant inspector posts. At the end of the
first quarter, there were 127 vacant posts mainly for Pupil Inspectors,
Generalist Inspectors, Specialist Inspectors and Principle Inspectors.
The Department may be unable to fill all the
vacant posts due to the funding being reduced by R68.5 million in the 2014
Budget. The budget cut was as a result of delays by the department in filling
these posts over the past 3 years.
Programme 3: Public Employment Services Operational expenditure to
the end of quarter 1 was R71.5 million, the majority of which was spent on
compensation of employees.
under this programme has increased by R15.3 million, or 27.2 per cent, when
compared with the same period last year primarily due to additional spending on
these items. This increase is as a result of the agency arrangement for the
payment of the salaries of staff from Supported Employment Enterprises
(previously named Sheltered Employment Factories) on PERSAL following the
absorption of these staff into the public service.
Programme 4: Labour Policy and Industrial Relations Operational
expenditure to the end of quarter 1 was R21 million, the majority of which was
spent on compensation of employees.
Expenditure under this programme does not reflect major changes when
compared with the same period last year primarily due to lower spending on
goods and services and payments for capital assets.
Low spending resulted from major events and
workshops that have not taken place such as the Employment Equity
, and Child Labour Day which
are scheduled for July. This affects spending on travel and venues. Research
projects which are budgeted for under consultants have not been undertaken due
to delays in the procurement process. Thus, spending will start to reflect from
the third quarter. Spending on capital assets is centralised within the
Administration programme and for the first quarter, no major purchases for
office furniture and equipment have been made.
allocation for 2015/16 is expected to increase to R2.6 billion, from R2.5
billion in 2014/14. The Labour and Industrial Relations receives the largest
allocation at R926.2 million, from R869.9 million in 2014/15. It is followed by
the Administration programme, which increases from R787.7 to R829.9 million
from 2014/15 to 2015/16 respectively.
comments on financial performance
Department received an unqualified audit opinion in 2013/14 financial year. The
matter of emphasis raised by the AGSA was material underspending of three per cent
of the budget. According to National Treasury, the Department spent the
majority of its budget on compensation of employees as well as goods and
services. The largest spending item was the compensation of employees at 56.6
per cent followed by goods and services at 39.4 per cent.
By the end
of the first quarter of 2014/15 financial year, the Department had already
spent 76.8 per cent of its operational budget on compensation of employees and
23.2 per cent on goods and services. A total of 58.6 per cent of expenditure
was under transfers and subsidies and payments for financial assets.
assessment of service delivery performance
delivery performance for 2013/14
The Administration programme set itself a
target of having 90 per cent final reports issued as per timeframes indicated
in the approved annual audit plan. The target was partially achieved since 87
percent (27 of 31) reports were issued. There was a deviation of 13 per cent
from the planned target.
The programme also set itself a target of
compiling four strategic risks monitoring reports within 30 days after the end
of each quarter. This target was achieved.
A 90 per cent of fraud cases received and
detected and finalised per year target was not achieved. Instead, a total of 40
cases were received and 70 per cent finalised. This amounts to a deviation of
25 per cent.
The programme set itself a target of
conducting 8 exhibitions per annum for profiling services of the Department.
This target was achieved.
A total of 12 opinion pieces were published
as planned. A target of publishing 12 newsletters was not achieved. Instead, 11
newsletters were published.
The target of reducing the vacancy rate by 6
per cent was not achieved.
the end of March 2014, the vacancy rate was 12.9 per cent. This translates to a
deviation of 6.9 per cent.
The target of training 85 per cent of staff
in line with the workplace Skills plan was achieved. A total of 4 542
employees were trained against a planned target of 5 152.
The programme planned to finalise 77 per cent
of misconduct cases in line with applicable prescripts. Sixty seven per cent of
misconduct cases were finalised translating to 157 cases finalised out of a
total of 233.
and Enforcement Services
This programme set itself a target of
conducting 120 employment equity inspections in the public sector but managed
to conduct 158. The private sector target was 220 and 277 inspections were
conducted. This translates to a variance of 57 inspections.
The programme planned to inspect 90 000
workplaces to determine compliance levels. It managed to conduct 129 259
workplaces. Of those inspected 75 per cent complied. A total of 31 733
workplaces did not comply.
The programme planned to resolve 75 per cent
of labour complaints within 14 days of receipt at Registration Services.
However, it managed to resolve 66 per cent within the specified period. This
translates to a variance of nine per cent.
A total of 59 700 workplaces were
targeted for auditing to determine their compliance levels in terms of
Occupational Health and Safety legislation. Only 35 174 were actually
audited. Of those audited, 74 per cent complied.
This programme planned to register
500 000 work seekers on the ESSA system. It exceeded its target by
registering 618 092 work seekers. This translates to a variance of
A target of providing 50 per cent of
registered work seekers with employment counselling was set but only 41 per
cent work seekers were counselled. A total of 15 570 registered work
seekers were placed in registered employment opportunities against a target of
19 000. A total of 98 829 work seekers were referred to registered
work opportunities against a target of 76 000. A total of 448 124 work
seekers were referred to other services against a target of 120 000. This
translates to a variance of 328 124.
A total of 2 427 employers registered their
vacancies on ESSA against a target of 1000. This translates to a variance of
1 427. 309 employment agencies were registered against a target of 500.
This is a negative variance of 191.
Policy and Industrial Relations
The target of amended EEA and its regulations
promulgated and implemented by March 2014 was partially achieved.
The amended Act was only assented into law on
14 January which resulted in delays in finalising the regulations. Public
comments and NEDLAC deliberations on the amended regulations could not start
prior to the EE Amendment Act being assented to.
The target of having amended BCEA and its
regulations promulgated and implemented by March 2014 was partially achieved. The
amended BCEA was assented into law on 4 December 2013. The BCEA regulations
were finalised in line with the amended Act. The regulations have not yet been promulgated.
The programme managed to review two sectoral
determinations, which are for the Hospitality Sector and the Funeral
The programme compiled and submitted five
reports to the ILO in terms of Article 19 (
and Article 22 (ratified) Conventions.
The programme partially achieved the target
of having the amended LRA and its regulations promulgated and implemented by
March 2014. The amended Act was not assented, resulting in slow process on
The target of extending 17 collective
agreements to non-parties within 60 days was achieved.
The target of producing and disseminating
four labour market trends reports by September was also achieved.
delivery performance for 2014/15
This section is based on the presentation by
the Department to the Committee on its first quarter performance.
In terms of strategic objectives, the
Department reported that it has achieved a score 24 out of 49 planned for the 8
indicators, translating to 49 per cent achievement.
The overall performance on its strategic
objectives is as follows:
Contribution to employment creation: 64 per
Promoting equity in the labour market: 67 per
Protecting vulnerable workers: 40 per cent
Strengthening multilateral and bilateral relations:
0 per cent
Strengthening social protection: 50 per cent
Promoting sound labour relations: 100 per
Monitoring the impact of legislation: 100 per
Strengthening the institutional capacity of
the Department: 50 per cent
The overall performance per programme was as
Administration: 50 per cent
Inspection and Enforcement Services: 55 per
Public Employment Services: 36 per cent
Labour Policy and Industrial Relations: 57
The Department reported its overall
performance during the first quarter to be 49 per cent. They identified the
following indicators as needing urgent and immediate attention:
Number of service delivery points branded and
signage displayed per selected province;
Number of entities audited per year in terms of
the OHSA; and
MOAs concluded with eligible designated
organisations, performance monitoring and funding transferred.
service delivery performance findings
the service delivery challenges identified by committee members during
oversight visits include:
Shortage of staff, especially labour
inspectors in Labour Centres.
Shortage of cars for labour inspectors, which
makes it difficult for them to execute their duties.
Labour inspectors are not provided with
proper quality uniforms so that they can be presentable and respectable
representatives of the Department.
They are not provided with other tools of
trade, including but not limited to, laptops and 3G cards.
COIDA; performance delivery has been
identified by the Auditor-General as being negative.
UIF services are still centralised resulting
in delay in processing and payment of claims.
comments on service delivery performance
There is a
lot of room for improvement in terms of service delivery. The Committee members
identified constraints in terms of staffing and tools of trade at service
delivery points during oversight visits.
Finance and Service
delivery performance assessment
Administration programme has 24 programme performance indicators. Of these 24,
18 were achieved, 4 partially achieved and 2 not achieved. In terms of
percentages, 75 per cent of performance indicators were achieved.
to the information received from the National Treasury, this programme was
allocated R785.3 million, which was adjusted upwards to R820.8 million. It
managed to spend R776.2 million, which is 94.6 per cent of its available
and Enforcement Services
and Enforcement programme identified 17 programme performance indicators. Of
the 17, 13 were achieved, 3 partially achieved and 1 not achieved. This
translates to 76 per cent of the performance indicators achieved.
programmes main appropriation was R465 million and came down toR425 million
after adjustments. The programme spent R410 million or 96.6 per cent of its
programme set itself 14 programme performance indicators. Of the 14, 13 were
achieved and 1 was partially achieved. This translates to 92.8 per cent
Employment Services main appropriation was R229 million and was adjusted
upwards toR246 million. The programme spent the 100 per cent of the available
Policy and Industrial Relations
Policy and Industrial Relations programme set itself 24 programme performance
indicators. Of the 24, 17 were achieved or 70 per cent and 7 were partially
programmes main appropriation was R116.4 million and was adjusted down to
R111.6 million. It spent R96.9 or 86.9 per cent of the budget.
evident from the above that the Labour Policy and Industrial Relations
programme spent and achieved the least.
upcoming NEDLAC summit on labour matters is welcomed and the Committee looks
forward to outcomes to improve labour relations.
Department and all entities tabled their reports as per requirements. There
were no technical errors identified in the reports. The information in the
reports was found to be of required quality and there were no complaints of
inaccessibility of any kind.
and operational issues
Committee is concerned with the position of the Head of the Department
(Director- General) not being filled. It has noted that it takes long for the Department
to fill crucial positions. An example is the position of the Labour Policy and
Industrial Relation programmes Deputy Director-General. The incumbent left
this position some years back but there is still no permanently appointed
incumbent. The fact that top management positions are occupied by incumbents in
acting capacities is a cause for concern. This issue needs to be given the
urgent attention it deserves.
issue of concern is the failure of the IT system of the Department. The Department
has been struggling with this issue since the period of the
Public-Private-Partnership, which did not lead to transfer of skills to the
Departmental staff. The Committee noted that the Department extended the EOH
contract by another six months (until 30 May 2014) after the initial contract
had expired in November 2013.The Committee hopes that the transfer of this
crucial function back to the Department is going to result to improvements.
Committee noted that the CCMA faces external challenges of volatile labour
markets as well as unpredictable cases arising from amendments of labour laws.
Committee acknowledges the achievements of the Department in terms of service
delivery. Achievements such as exceeding targets in employment equity
inspections are noted. The excellent performance on workplaces inspected to
determine compliance levels is also recognised.
there are still some concerns in areas like failure to reduce the vacancy rate.
It is not clear whether this is as a result of lack of suitably qualified
applicants. Another area of concern is the failure to finalise misconduct cases
in line with applicable prescripts.
Committee also noted the inability of the Productivity SA to establish itself
nationwide due to infrastructural shortcomings.
performance including funding proposals
Committee commends the Department for once again receiving an unqualified audit
opinion. However, the Committee would like to encourage the Department to address
the issues raised by the AGSA under matters of emphasis. The Committee also
acknowledge the Unemployment Insurance Fund for its excellent performance over
the past few years.
Summary of reporting
of the IT systems in the Department
During the fourth
quarter of the 2014/15 financial year.
and governance of the Compensation Fund
5 November 2014
Expenditure of Nedlac
report on irregularities within the Nedlac
performance including forward funding recommendations.
should consider the following:
Productivity SA and the UIF must speedily
resolve delays in funding transfers as this has impact on the entitys key
The CCMA has to establish appropriate supply
chain management policies and ensure that sufficient measures are in place to
detect and prevent supply chain management irregularities.
The Department and all its entities must
report quarterly to the Committee to ensure that the quarterly expenditure
The Department must monitor and ensure that
Inspection and Enforcement programmes expenditure increases to ensure that
more inspectors are hired and are provided with appropriate tools of trade such
as vehicles and laptops.
The Department must report to the Committee
on a quarterly basis on progress made with regard to filling of vacant funded
related recommendations with financial implications.
In view of the challenges faced by the Compensation
Fund, it is recommended that the Minister ensures that the entity comes back
within three weeks to brief the Committee on plans to remedy its problems. A
tentative date of 5 November 2014 was identified.
The Minister ensures that the CCMA services are
accessible to the most vulnerable people in rural and other outlying areas.
The CCMAs job saving functions, through the Training
Lay-off Scheme, must be extended to rural areas to curb growing rural
unemployment rates. The Department must simplify the procedure for accessing
the Training Lay-off funds.
The CCMA and the Department must ensure that Labour
Centre staff is suitably trained to render advice on services offered by the
The Minister should ensure that Nedlac provides a
thorough briefing on the special audit report on irregularities within the
NEDLAC must report back to the Committee on its
detailed financial performance for 2013/14 and also present on its 2013/14
The Department must engage Treasury to consider
increasing the Productivity South Africas budget in order to address
challenges of ageing IT infrastructure and the funding of its turnaround
solutions programme, given that this programme is key in employment creation as
it assists companies in distress.
The Committee is urging the Department to urgently
resolve the discrepancy with Treasury and organisations representing the
disabled so that people with disabilities receive benefits due to them.
Due to the challenges faced by vulnerable groups, we
propose that the number of inspectors in different categories should be
The Committee further recommends that the budget cut
for IES be reversed and the Committee will request the Department to table a
detailed plan with time frames as to how the money will be spent.
The Committee appreciates the cooperation it
received from the Minister, the Department and its entities. The Committee also
acknowledges the assistance of the Auditor-General and National Treasury in
providing information necessary for compiling this report.
These should include any follow-up recommendations from the 2013/14 BRRR
No related documents