ATC150505: Report of the Portfolio Committee on Labour on Budget Vote 28: Labour, and on the Strategic Plans of the Department of Labour (2014 – 2019) and its entities, dated 4 May 2016

Employment and Labour

Report of the Portfolio Committee on Labour on Budget Vote 28: Labour, and on the Strategic Plans of the Department of Labour (2014 – 2019) and its entities, dated 4 May 2016
 

The Portfolio Committee on Labour, having considered Budget Vote 28: Labour, and the Strategic Plans of the Department of Labour (2014 – 2019) and its entities, reports as follows:

 

1. Introduction

 

The President of the Republic of South Africa delivered his State-of-the-Nation Address on 11 February 2016. This was followed by the Minister of Finance delivering his budget speech and tabling the budget documents that include Estimates of National Expenditure, Budget Review, Division of Revenue Bill and the Appropriations Bill on the 24th February 2016. Subsequently the Department of Labour and its entities appeared before the Portfolio Committee on Labour to present their strategic and annual performance plans outlining how they intend spending the allocated budgets over the medium term and the current financial year respectively. This report is a result of the consideration by the portfolio committee of the afore-mentioned documents from the Department and its entities.

 

In performing its constitutional mandate, the Committee scrutinised the alignment of these plans to the following:

• State-of-the-Nation Address;
• Government priorities and key policies to develop programmes; and
• National Development Plan (NDP).

 

The Committee wanted to establish whether the funds allocated would help transform programmes to actual service delivery within the workplaces, especially to protect vulnerable workers and accelerate economic growth as envisaged in the NDP.

1.1 The National Development Plan and overview of the 2015/16 financial year

 

Job creation remains one of the most pressing concerns for the economy. During 2015, a large number of jobs were created in the Community, Trade and Manufacturing sectors.  A concerning trend has been the negative yearly growth of the manufacturing sector that has been earmarked as a sector with the most employment creation opportunities. Manufacturing stagnated in 2015, although performance was mixed across industries. Notwithstanding the drought, the agricultural sector remained the main source of employment in 2015.

 

According to Statistics South Africa, 19 000 jobs were created in the formal sector and 273 000 in the informal sector in the first three quarters of 2015. The unemployment rate stood at 25.5 per cent in the third quarter of 2015, with the number of South Africans categorised as long-term unemployed 5.7 per cent higher than in 2014. Growth in private-sector employment was concentrated in faster-growing sectors, such as financial and business services. Given the large number of jobless South Africans and the increasing skills intensity of production, policy interventions to support sectors that can create jobs for low-skilled workers are critical, as are efforts to raise the quality of public education.

 

The National Development Plan identifies the need to support sectors with high potential for job creation and benefits for the rest of the economy, alongside critical reforms to improve basic education and strengthen the capacity of the state. The plan guides government’s current efforts to support the economy, focused on alleviating infrastructure bottlenecks, improving labour relations, strengthening skills, diversifying exports, and facilitating an innovation-friendly business environment.

Rebuilding trust between business and labour is critical for finding collaborative solutions as the economy undergoes structural change. Hence the government is finalising a framework with business and labour, under the auspices of the National Economic Development and Labour Council (NEDLAC), to reduce economic disruption caused by large, protracted strikes.

 

2. Department of Labour (DoL)

2.1 Mandate of the DoL

 

The DoL derives its legislative mandate from the Constitution, and this is given effect through a number of Acts that regulate labour matters in South Africa. The most important of these are the Labour Relations Act (1995), the Basic Conditions of Employment Act (1997), the Employment Equity Act (1998), the Unemployment Insurance Act (1996), the Occupational Health and Safety Act (1993), the Compensation for Occupational Injuries and Diseases Act (1993), National Economic Development and Labour Council Act (1994) and Employment Services Act (2014).

 

The policy mandate of the DoL is to regulate the labour market through market policies and programmes developed in consultation with social partners, which are aimed at:

• Improving economic efficiency and productivity
• Facilitating decent employment creation
• Promoting labour standards and fundamental rights at work
• Providing adequate social safety nets to protect vulnerable workers
• Promoting and enforcing sound labour relations
• Eliminating inequality and discrimination in the workplace
• Enhancing occupational health and safety awareness and compliance in the workplace
• Giving value to social dialogue in the formulation of sound, and responsive legislation and policies to attain labour market flexibility for competitiveness of enterprises, balanced with the promotion of decent employment.

 

 

 

 

2.2 Strategic and Annual Performance Plans of the Department

 

During the 2016/17 financial year, the DoL received a total budget of R2 848 billion. This is a R165 million increase in nominal terms. However, in real terms, the budget has decreased by R11 million. In percentage terms, the budget saw a nominal increase of 6 per cent. However, in real percentage terms it decreased by 0.4 per cent when compared with the 2015/16 budget allocation of R2 683 billion.

 

Of the total allocation of R2 848 billion, The Department transferred R1.1 billion and R196.7 million to its entities and the Department of Public Works respectively. This left the Department with a budget of R1 587 billion. A total of R1 132 billion or 71.4 per cent was allocated to Compensation of Employees and R68.4 million or 4.3 per cent to Capital Payments. This left the Department with a budget of R385.9 million or 24.3 per cent for Goods and Services or its operations.

 

The DoL allocated R1, 132.2 million for compensation of employees in 2016/17 financial year, which is an increase of R79.3 million from the R1, 052.9 allocated in 2015/16. The compensation of employees’ budget is further increased by R89.3 million in 2017/18 financial year. The goods and services budget increased by R11.2 million from R571.4 million in 2015/16 to R582.6 in 2016/17. It increases further by R66.8 million in 2017/18.

 

Programme	Budget				Nominal Rand change	Real Rand change	Nominal % change	Real % change
R million	2015/16	2016/17	2017/18	2018/19	2015/16-2016/17		2015/16-2016/17
Administration	793.6	852.9	895.0	940.6	59.3	6.5	7.47	0.82
Inspection and Enforcement Services	471.8	519.5	529.8	581.8	47.7	15.5	10.11	3.29
Public Employment Services	497.3	510.3	571.9	594.3	13.0	-  18.6	2.61	-3.74
Labour Policy and Industrial Relations	920.0	965.2	1 035.3	1 107.5	45.2	-  14.6	4.91	-1.58
TOTAL	2 682.8	2 847.9	3 032.0	3 224.2	165.2	-  11.1	6.16	-0.41

Table1: Budget allocation per programme

 

Source: Adapted from the Estimates of National Expenditure 2016

 

The programme that received the largest share of the departmental budget is the Labour Policy and Industrial Relations programme. This programme received a total amount of R965.2 million, which constitutes 34 per cent of the total departmental budget. The largest budget allocation to the Labour Policy and Industrial Relations programme is due to the transfer to the CCMA of R770.5 million. The CCMA is the busiest labour dispute resolution centre in the world. The last available figures (CCMA 2015 Annual Report) indicates that a total of 171 854 new cases were referred to the CCMA during the 2014/15 financial year, where a total of 137 479 cases were deemed to be jurisdictional. Statistically, 76 per cent of cases are settled.[1] This leaves a significant number of cases that end up at arbitration, the Labour Court or in strikes or lock-outs. Therefore, any additional resources that could be allocated to the CCMA can only assist this organisation in further limiting (1) the burden on the arbitration and court processes, and (2) the risk of industrial action.

 

2.2.1 Programme 1: Administration

 

The Administration programme provides leadership, management and support services to the Department. It is composed of five sub-programmes, which are:

• Ministry;
• Management;
• Corporate Services;
• Office of the Chief Financial Officer; and
• Office Accommodation.

 

This programme was allocated R852.9 million in the 2016/17 financial year. This is the second largest programme allocation and it constitute 29.9 per cent of the overall departmental budget. The programme received a nominal increase of R37.8 million or 4.7 per cent in nominal percentage terms from R815.1 million allocation published in October 2015. Corporate Services sub-programme received the largest share of the programme budget at R249.5 million or 29.3 per cent of the programme budget. It is closely followed by the Management sub-programme at R248.8 million or 29.2 per cent of the programme budget. The sub-programme that received the least allocation is the Ministry, which received R26.2 million or 3.1 per cent of the programme allocation.

 

In terms of Economic Classification, Compensation of Employees received R378.8 million or 44.4 per cent of the programme allocation. Goods and Services were allocated R405.1 million or 47.7 per cent of the programme budget. After the transfers of R689 000 and R196.7 million to the Department of Public Works, the programme is left with the budget of R655.5 million. A total of R378.8 million is allocated to the Compensation of Employees. The programme is left with an operational budget of R276.7 million.

 

The programme intends to achieve the following goals with this available budget:

• Improve the Department’s management practice and strategic support.
• Reduce the vacancy rate to 9.9 per cent by 31 March 2017.
• Compile one Annual Financial Statement (AFS) by 31 May 2016 and 3 Interim Financial Statements 30 days after each quarter. The compiled statements should comply with National Treasury guidelines.
• Pay all compliant invoices within 30 days of receipt.
• Report all detected irregular, fruitless, wasteful and unauthorised expenditure.

 

2.2.2 Programme 2: Inspection and Enforcement Services (IES)

 

The Purpose of the Inspection and Enforcement Services is to realise decent work by regulating non-employment and employment conditions through inspection and enforcement, to achieve compliance with all labour market policies. The programme comprise the following sub-programmes:

• Management and Support Services: inspection and Enforcement Services;
• Occupational Health and Safety;
• Registration: Inspection and Enforcement Services;
• Compliance, Monitoring and Enforcement Services;
• Training of Staff: Inspection and Enforcement Services; and
• Statutory and Advocacy Services.

 

This programme was allocated R519.5 or 18.2 per cent of the departmental budget. This is a nominal increase of R47.7 million or 10.1 per cent from the R471.8 million allocated in 2015/16.

 

Compliance, Monitoring and Enforcement Services received the largest portion of the programme allocation at R401.6 million or 77.3 per cent. This sub-programme ensures that employers and employees comply with labour legislation through regular inspections and follow up on reported incidents. It is followed by Registration: Inspection and Enforcement Services at R68.1 million or 13.1 per cent of the programme allocation. This sub-programme registers incidents relating to labour relations and occupational health and safety, as reported by members of the public, and communicates these to the relevant structures within the Compliance, Monitoring and Enforcement Services sub-programme for investigation. Occupational Health and Safety received R29.9 million or 5.8 per cent of the programme budget. The sub-programme promotes health and safety in the workplace by regulating dangerous activities and the use of plant and machinery.

 

In terms of Economic Classification, R416.7 million or 80.2 per cent of the programme budget is allocated to Compensation of Employees. This leaves the programme with an operational budget of R102. 8 million or 19.8 per cent of the programme budget.

 

With this available budget, the programme aims, among other things, to:

• Review 808 designated employers per year to determine compliance with employment legislation;
• Inspect 4 729 designated employers to determine compliance with employment equity legislation;
• Inspect 134 958 workplaces per year to determine compliance with labour legislation;
• Conduct four seminars and train 400 shop stewards;
• Conduct 905 inspections on request for work permits within 25 calendar days;
• Conduct 21 967 workplaces per year to determine their compliance with the OHS legislation;
• Investigate 62 per cent of reported incidents within 90 calendar days;
• Process 80 per cent of applications for registration of entities within 30 calendar days;
• Submit OHS Amendment Bill to Cabinet by 31 March 2017; and
• Conduct 13 016 employer payroll audits per year to determine employers’ contribution to the Unemployment Insurance Fund.

 

 

 

 

2.2.3 Programme 3: Public Employment Services (PES)

 

The purpose of the Public Employment Services is to provide assistance to companies and workers to adjust to changing labour market conditions, and to regulate private employment agencies. This programme is composed of the following sub-programmes:

• Management and Support Services: Public Employment Services;
• Employer Services;
• Work Seeker Services;
• Designated Groups Special Services;
• Supported Employment Enterprises;
• Productivity South Africa;
• Compensation Fund; and
• Training of Staff: Public Employment Services.

 

The Public Employment Services was appropriated a total amount of R510.3 million in 2016/17 financial year, which is a nominal increase of 2.6 per cent from the R497.3 million allocated in 2015/16. The programme allocation constitutes 17.9 per cent of the departmental budget. The largest portion of the programme budget goes to Supported Employment Enterprises (formerly called Sheltered Employment Factories) at R144.5 million or 28.3 per cent of the programme budget. This represents a nominal increase of 7 per cent from the 2015/16 allocation of R135.1 million. The Supported Employment Enterprises transfers funds to subsidised workshops for the blind and subsidised work centres for people with disabilities, and aims to improve the administration, production and financial control of supported employment enterprises and workshops for the blind. The second largest allocation, which is R124.4 million or 24.4 per cent of the programme budget goes to Employer Services sub-programme. This sub-programme registers vacancies, facilitates the employment of foreign nationals where such skills do not exist in South Africa, oversees placements, responds to companies in distress, provides a social plan and regulates private employment agencies. Work Seeker Services received the third largest allocation of the programme budget at R120.5 million or 23.6 per cent. However, this is a nominal decrease of 4.4 per cent from the 2015/16 allocation of R126.0 million.

 

In terms of Economic Classification R223.6 million of the total programme budget or 43.8 per cent of the budget went to Transfers and Subsidies. This left the programme with the budget of R286.7 million. Of this amount R252.4 million or 88 per cent was allocated to Compensation of Employees. This left the programme with an operational budget of R34.2 million.

 

With the available budget, the programme aims, among other things, to:

• Conduct 261 provincial and local advocacy campaigns by March 2017;
• Register 500 000 work seekers on ESSA per year;
• Provide 150 000 registered work seekers with employment counselling per year;
• Fill 8 000 registered employment opportunities per year with registered work seekers;
• Register 60 000 employment opportunities on ESSA per year;
• Process all applications from private employment agencies and temporary employment services within 60 calendar days; and
• Process 70 per cent of applications for foreign nationals’ corporate and individual work visas within 30 working days.

 

2.2.4 Programme 4: Labour Policy and Industrial Relations (LP&IR)

 

The purpose of the Labour Policy and Industrial Relations programme (LP&IR) is to facilitate the establishment of an equitable and sound labour relations environment and the promotion of South Africa’s interests in international labour matters through research, analysing and evaluating labour policy, providing statistical data on the labour market, and supporting institutions that promote social dialogue.

 

The following sub-programmes reside under this programme:

• Management and Support Services: Labour Policy and Industrial Relations;
• Strengthen Civil Society;
• Collective Bargaining;
• Employment Equity;
• Employment Standards;
• Commission for Conciliation, Mediation and Arbitration (CCMA);
• Research, Policy and Planning;
• Labour Market Information and Statistics;
• International Labour Matters; and
• National Economic Development and Labour Council (NEDLAC).

 

This programme received R965.2 million or 33.9 per cent of the departmental budget, which is the largest portion. This is a nominal increase of R45.2 million or 4.9 per cent from the R920.0 million allocated in 2015/16 financial year. The CCMA received the largest share at R770.5 million or 79.8 per cent of the programme budget. NEDLAC received R31 million or 3.2 per cent of the programme allocation. The CCMA and NEDLAC are discussed in detail under the Public Entities section.

 

With regard to Economic Classification, Transfers and Subsidies received R840.3 million or 87 per cent of the total programme budget. This left the programme with an available budget of R124.9 million. Of this amount, Compensation of Employees received R84.3 million or 67.5 per cent.  The programme was left with an operational budget of R40.5 million.

 

With this amount the programme intends to:

• Develop and promote policy instruments to enhance the implementation of EEA by 31 March 2017 through -
  • Developing amended Code of Good Practice on preparation and implementation of EE Plans by 31 March 2017;
  • Conducting 13 workshops on amended Code of Good Practice on Employment of Persons with Disabilities by 30 September 2016;
  • Publishing 2015/16 Annual Employment Equity Report and Public Register by 30 June 2016;
  • Developing the 2016/17 Annual Employment Equity Report and Public Register by 31 March 2017;
• Review Hospitality and Taxi sectoral determinations by March 2017;
• Strengthen and monitor the implementation of bilateral agreements that are in line with National priorities within set time frames;
• Extend all collective agreements within 90 calendar days of receipt by end of March; and
• Produce four labour market trend reports annually.

 

2.3. Recommendations

 

After receiving the presentation of the Department of Labour, the Committee recommended that the Minister of Labour gives consideration to:

1. Capacitating the Labour Centres so as to improve service delivery to the clients of the DoL in line with the decentralisation of services;
2. Devising a plan to improve the processing of work VISA applications so as to facilitate the acquisition of scarce skills;
3. Facilitating the speedy transfer of funds to the organisations for people with disabilities such as the South African Society for the Blind; and
4. Increasing the capacity of the IES so as to strengthen the decent work agenda programme in South Africa.

 

3. Public Entities of the DoL

 

3.1 Compensation Fund (CF)

 

The Compensation Fund (CF) is a public entity of the DoL which administers the Compensation for Occupational Injuries and Diseases Act, No. 130 of 1993, as amended by the COIDA, No. 66 of 1997. The main objective of the Act is to provide compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees, or for death resulting from such injuries or diseases.

 

The CF’s main source of revenue is the levies payable by employers based on a determined percentage of the annual earnings of their employees and the risk category of the employer. The revenue collected in 2015/16 amounted to R11.3 billion and is estimated to increase to R18.4 billion in 2016/17. The larger portion of estimated revenue is from investment income at R10.1 billion. This is followed by assessment revenue at R8.2 billion. The Department transferred R19.0 million to the entity in the 2016/17 financial year.

 

The CF is structured into three programmes, which are:

• Administration;
• Operations Management; and
• Provincial Operations.

 

The strategic objectives of the Compensation Fund for the current financial year are to:

• Provide faster, reliable and accessible COID Services by 2020 and
• Provide an effective and efficient client oriented support services.

 

The CF completed the decentralisation of its claims processing services to all nine provinces in March 2015, with the aim of being accessible to all its stakeholders and improving the turnaround time for processing claims. In doing this, the CF improved employer access to its offices, which increased the number of claims registered in all the provinces by 15 per cent between 2012/13 and 2014/15.

 

Nevertheless, the CF has been receiving negative publicity from the media and other key stakeholders due to its poor service delivery record and negative audit opinions from the Auditor General South Africa (AGSA). In order to restore its reputation and improve the service delivery record, the CF has developed an Action Plan which will serve as a blue print for the service delivery improvement initiatives. The Action Plan was developed by management of the CF in June 2015 and implementation started on 01 July 2015.

 

3.1.1 Recommendation

 

The Committee recommended that the Minister of Labour gives consideration to briefing the PC on Labour on progress with regard to the implementation of the Action Plan by November 2016.

 

3.2. Unemployment Insurance Fund (UIF)

 

The Unemployment Insurance Fund (UIF) was established in terms of section 4(1) of the Unemployment Insurance Act (Act 63 of 2001) as amended. The mandate of the UIF is to contribute towards the alleviation of poverty by providing effective short-term unemployment insurance to all workers who qualify for unemployment and related benefits as legislated in the Act.

 

The UIF is structured into three programmes, which are:

• Administration, which provides management, strategic and administrative support services to the UIF.
• Business Operations, which collect contributions and pay benefits.
• Labour Activation Programmes, which provide active labour market programmes.

 

The UIF does not receive transfers from the Department of Labour because it generates its own funds. The UIF budgeted for an administration budget of R2.5 billion in 2016/17. The Business Operations programme received the largest portion of the budget at R1.4 billion. It is followed closely by Administration, which received R1.0 billion. Labour Activation programme received R5.3 million.

 

Over the medium term, the UIF expects to receive on average 61 per cent or R57.6 billion of its total revenue from unemployment contributions. The income from its own revenue is expected to amount to R38.2 billion, driven mainly by income from investments.

 

The strategic objectives of the UIF for 2016/17 to 2020/21 are to:

• Improve financial management;
• Improve service delivery; and
• Improve compliance to the Unemployment Insurance Act.

 

Moreover, the UIF’s mandate and job creation initiatives contribute to three core elements identified in the National Development Plan:

• Social protection through the provision of unemployment insurance to all workers in the country;
• Employment through investment in job creation projects; and
• Quality education and skills development through training initiatives that aim to provide unemployment beneficiaries with various artisan skills.

 

3.2.1 Recommendations

 

After receiving the presentation on the UIF, the Committee recommended that the Minister of Labour gives consideration to:

 

• Reporting back to the Committee on progress regarding appointment of special officers to attend to UIF claimants rather than using Client Services Officers (CSOs);
• Reporting back to the Committee on progress regarding the conclusion of the Memorandum of Understanding with the Department of Small Business on how UIF can assist in the training of small businesses; and
• Reporting back on progress regarding the stabilisation of the IT systems at labour centres.

 

3.3. Commission for Conciliation, Mediation and Arbitration (CCMA)

 

The CCMA is an independent statutory body established in terms of section 112 of the Labour Relations Act of 1995 as amended.

 

The CCMA’s legislative mandate is drawn from the purpose of the LRA, which is “to advance economic development, social justice, labour peace and the democratisation of the workplace”. The LRA identifies the mandatory functions of the CCMA as to:

• Conciliate workplace disputes;
• Arbitrate certain categories of disputes that remain unresolved after conciliation;
• Establish picketing rules in respect of protected strikes  and lock-outs;
• Facilitate the establishment of workplace forums and statutory councils;
• Compile and publish information and statistics;
• Consider accreditation and subsidy of bargaining councils and private agencies; and
• Administer the Essential Services Committee (ESC), including the Director of the CCMA functioning as the Accounting Officer of the ESC.

 

The CCMA is structured into four programmes, which are:

• Administration;
• Institutional Development;
• Corporate Governance; and
• Social Service.

 

As mentioned earlier, the DoL through the LP&IR programme, transferred R770.5 million to the CCMA for the 2016/17 financial year. The total budget for the CCMA, including self-generated non tax revenue of R26.8 million, amount to R797.3 million. Of this amount, R278.7 million or 35 per cent is budgeted for compensation of employees. In terms of programmes’ budget, Administration programme received the largest allocation of R454.5 million or 57 per cent. It was followed by Social Services, which received R279.6 million or 35 per cent of the total budget. The Institutional Development and Corporate Governance programmes received R59.2 million and R4.0 million respectively.

 

 

 

The Commission plans to spend its budget on the following strategic objectives:

 

• To enhance the market to advance stability and growth.
• To advance good practices at work and transform workplace relations.
• To build knowledge and skills.
• To optimise the organisation.

 

3.3.1 Recommendations

 

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 the developments on the establishment of forensic services within the CCMA internal audit; and
• Briefing the Committee regarding the outcome of the pilot study on Workplace Mediation Model conducted within the fruit sector in the Western Cape.

 

3.4 National Economic Development and Labour Council (NEDLAC)

 

NEDLAC is a statutory body which was established in terms of the National Economic Development and Labour Council Act, No. 35 of 1994.

 

In terms of the Act, NEDLAC shall:

• Strive to promote goals of economic growth, participation in economic decision-making and social security;
• Seek to reach consensus and conclude agreements pertaining to social and economic policy;
• Consider all proposed labour legislation relating to labour market policy before introduction in Parliament; and
• Encourage and promote the formulation of coordinated policy on social and economic matters.

 

NEDLAC is structured into three programmes, which are:

• Administration;
• Core Operations; and
• Capacity Building Funds.

 

As mentioned earlier, the DoL through the LP&IR transferred R30. 3 million to NEDLAC for the 2016/17 budget. The total budget of NEDLAC, inclusive of interest and other income, amount to R30.9 million in 2016/17 financial year. Interest is derived from the funds in the investment account and other income from SETA reimbursements. The larger portion of the NEDLAC budget, which amounts to R21.5 million or 69.8 per cent will be spent on the Administration programme. A total of R13.2 million or 63.5 per cent of the Administration budget will be spent on Human Resource Management. The Core-Operations programme received R5.2 million or 16.9 per cent of the NEDLA budget. This programme houses four chambers of NEDLAC, which are Development chamber, Public Finance chamber, Trade and Industry chamber and Labour Market chamber. The programme allocated funds to the chambers as follows:

• Development Chamber: R1 270 000;
• Public Finance Chamber: R846 000;
• Trade and Industry Chamber: R1 105 000; and
• Labour Market Chamber: R1 225 000.

 

The Capacity Building programme received R3.9 million or 12.7 per cent of the NEDLAC budget. This programme houses the NEDLAC constituencies, which are Business, Community and Labour Constituency. It allocated an equal amount of R1.3 million to the three constituencies.

 

NEDLAC plans to spend its budget on the following strategic objectives:

• Promoting economic growth, social equity and decent work;
• Promoting and embedding a culture of effective social dialogue and engagement;
• Promoting effective participation in socio-economic policy making and legislation; and
• Enhancing governance and organizational effectiveness and efficiency.

 

1. Recommendation

 

After listening to the NEDLAC presentation, the Committee recommended that the Minister of Labour gives consideration to insourcing auxiliary services that are of a permanent nature such as cleaning services.

 

3.5 Productivity South Africa

 

Productivity SA was established as a juristic person in terms of section 31(1) of the Employment Services Act (Act 4 of 2014) with a mandate to promote employment growth and productivity.

 

Productivity SA (PSA) is mandated by government, business and labour to improve productivity and thus contribute to South Africa’s socio-economic development and competitiveness. It aims to improve the productive capacity of the economy through interventions that encourages social dialogue and collaboration between partners.

 

The functions of the PSA are:

• To promote a culture of productivity in the workplace;
• To develop relevant productivity competencies;
• To facilitate and evaluate productivity improvement and competitiveness in workplaces;
• To measure and evaluate productivity in the workplace;
• To maintain a database of productivity and competitiveness systems and publicising these systems;
• To undertake productivity related research;
• To support initiatives aimed at preventing job losses; and
• To perform any other prescribed function.

 

PSA is structured into five programme, which are:

• Administration;
• Productivity Organisational Solutions;
• Value Chain Competitiveness;
• Workplace Challenge; and
• Transnet.

 

The DoL, through the Public Employment Services programme, transferred R47.9 million to PSA in the 2016/17 financial year. This constitutes 31 per cent of the total transfers to the PSA. The total transfers amount to R154.3 million. The UIF transferred R97.8 million or 63 per cent and the Department of Trade and Industry transferred R8.5 million or 6 per cent of the total transfers. Transfers constitute 84 per cent of total funding of the PSA. Income from sources other than grant funding amounts to R29.4 million or 16 per cent of PSA budget. The total revenue for 2016/17 is R183.7 million. The bulk of the PSA budget, which is R88.1 million or 48 per cent will be spent on Turnaround Solutions programme. PSA plans to spend its budget on its strategic objectives listed under the functions of the PSA.

 

1. Recommendation

 

After receiving the presentation of the Productivity SA, the Committee recommended that the Minister of Labour gives consideration to ensuring that Productivity SA is appropriately capitalized to be able to extend its services to areas where they are currently not operating and to ensure the entity is rendered more visible.

 

4. Conclusion

 

The Portfolio Committee on Labour considered the Strategic Plans and Annual Performance Plans of the Department of Labour and its entities. The Committee also received presentations and engaged with the Department and its entities. The Committee is generally satisfied with the plans of the Department and its entities and recommends that the House approves Budget Vote 28: Labour.

 

 

Report to be considered.

 

 

 

 

 

 

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[1] CCMA (2015)