ATC170308: Report of the Portfolio Committee on Labour on the Second Quarterly Report regarding the Performance of the Department of Labour in meeting its Strategic Objectives for 2016/17, dated 8 March 2017

Employment and Labour

Report of the Portfolio Committee on Labour on the Second Quarterly Report regarding the Performance of the Department of Labour in meeting its Strategic Objectives for 2016/17, dated 8 March 2017

 

The Portfolio Committee on Labour, having considered the Second Quarterly Report on the performance of the Department of Labour (DoL) in meeting its strategic objectives for 2016/17, reports as follows:

 

1. Introduction

 

The Portfolio Committee on Labour considered the Second Quarterly Report on the performance of the Department of Labour in meeting its strategic objectives for 2016/17 as presented in the meeting held on 7 December 2016.

 

This report gives an overview of the presentations made by the Department of Labour (Department), focusing mainly on its achievements, output in respect of the performance indicators and targets set for 2016/17 and the financial performance. The report also outlines the observations and recommendations of the Committee relating to the Department’s performance.

 

1. The Programmes of the Department

 

The activities of the DoL are structured into four programmes, which are:

 

• Programme 1: Administration
• Programme 2: Inspection and Enforcement Services
• Programme 3: Public Employment Services
• Programme 4: Labour Relations and Industrial Relations

 

The performance of each programme is discussed in the following paragraph.

 

1. Performance per Programme

 

The overall performance per programme was reported as follows:

Table 1

Branch	Annual Planned Indicators	Indicators with targets reporting in Q2	Achieved	Achievement %
Administration	5	5	3	60
Inspection and Enforcement Service	15	15	11	73
Public Employment Services	8	8	5	63
Labour Policy and Industrial Relations	7	4	3	75
Total	35	32	22	69

Source: Adapted from the presentation to the Portfolio Committee on Labour dated 7 December 2016

 

Figures in table one reflect the highest achievement by the Labour Policy and Industrial Relations programme (75%) and the lowest by the Administration programme (60%).

 

3.1. Programme 1: Administration

 

The Administration programme provides strategic leadership, management and support services to the Department.

 

3.1.1.    Programme Performance

 

Within this programme, the Department reported the following achievements:

• A total of 69 per cent of total Department’s Management Performance Assessment Tool standards were at level 3 and 4 by September 2016, against a target of 55 per cent. The Department exceeded its target by 14 per cent.
• The vacancy rate was 11.5 per cent against a target of 11 per cent. The Department slightly missed the target reportedly as a result of delays in filling of pots. There were 1001 vacant post, 7700 filled posts and 8701 funded posts.
• The Interim Financial Statements (IFS) were compiled and submitted to National Treasury and the Auditor General on 31st July 2016.
• Of all compliant invoices received, 99.9 per cent were paid within 30 days of receipt.
• All detected irregular expenditure (R169, 699.27) and unauthorised expenditure (R169, 699. 27) were reported.
• The overall achievement of the programme was at 60 per cent. This is a regression from the 80 per cent that was achieved in the previous quarter.

 

3.2.       Programme 2: Inspection and Enforcement Services

 

The purpose of this programme is to realise decent work by regulating non-employment and employment conditions through inspection and enforcement, to achieve compliance with all labour market policies.

 

3.2.1.    Programme Performance

 

The Inspection and Enforcement Services programme reported as follows:

• The programme reviewed 322 designated employers to determine compliance with employment equity legislation against the target of 242. This translates to a variance of 80 more designated employers reviewed. Of the reviewed employers, 318 were found to be non-compliant and were issued with recommendations within 90 days of the review.
• The programme inspected 1 403 designated employers to determine compliance with employment equity legislation against the target of 1 419. Of the 1 403 designated employers inspected, 263 were non-compliant and were dealt with in terms of the Employment Equity Act. Two hundred non-compliant employers were issued with notices, 27 with court referrals and 15 were subpoenaed.
• The programme inspected 44 004 workplaces to determine compliance with labour legislation against the target of 40 487. This translates to a variance of 3 517 more workplaces inspected. Of the 44 004 workplaces inspected, 6 284 were non-compliant and were dealt with in terms of the relevant labour legislation.
• The programme trained 116 shop-stewards against the target of 175. The under achievement was attributed to poor attendance by shop-stewards. As a result, the programme has decided to conduct training upon request by shop-stewards.
• Of the 119 requests for inspections for work permits, 117 inspections were conducted within 25 calendar days. This translates to 98 per cent achievement against a target of 90 per cent. Of the 117 workplaces that were inspected, 6 were non-compliant and were dealt with in terms of the relevant labour legislation. Notices were issued to the six non-compliant employers.
• The programme inspected 7 238 workplaces to determine their compliance with the OHS legislation against a target of 6 590. Of the 7 238 workplace inspected, 2400 were non-compliant and were dealt with in terms of OHS legislation.
• Of the 273 reported incidents, 213 were investigated within 90 calendar days. This translates to an achievement of 78 per cent against a target of 62 per cent.
• Of the 2 438 applications for registration of entities received, 2 400 were processed within 60 calendar days. This translates to an achievement of 98 per cent against a target of 80 per cent.
• The programme did not achieve the target of submitting the amendments to the Occupational Health and Safety Act to Cabinet by the scheduled date. The delay was reported to be as a result of further consultation requirements by National Treasury.
• A total of 3 684 employer payroll audits were conducted to determine employers’ contribution to the Unemployment Insurance Fund, against the target of 3 905. This reflects an under-achievement of 221, which was reported to be as a result of high staff turnover.
• The overall performance of the programme was at 73 per cent.

 

3.3. Programme 3: Public Employment Services

 

The programme provides assistance to companies and workers to adjust to changing labour market conditions and to regulate private employment agencies.

 

3.3.1.    Programme Performance

 

The Public Employment Services reported as follows:

• The Regulations on registration of work-seekers in accordance with section 52 of the Employment Services Act were not tabled as planned to the Employment Services Board. The Regulations were drafted but have not yet been tabled to the Employment Service Board. The reason for the delay was reported to be that the board was established at the end of the second quarter.
• A total of 186 advocacy campaigns were conducted against a target of 79, resulting in a variance of 107 more campaigns conducted. The over achievement was reported to be as a result of high demand for advocacy campaigns.
• The programme registered 156 326 work-seekers on ESSA system against the target of 135 000, resulting in a variance of 21 326.
• The programme provided 101 326 registered work-seekers with employment counselling against the target of 77 970, resulting to a variance of 23 392 more workers provided with employment counselling.
• A total of 4 919 registered employment opportunities were filled by registered work-seekers against the target of 3 990, resulting to a variance of 929.
• A total of 35 403 opportunities were registered on ESSA against the target of 30 080, resulting to a variance of 5 323 more opportunities registered.
• Of the 129 applications received from Private Employment Agencies and Temporary Employment Services, 84 were processed within 60 calendar days. This translates to an achievement of 65 per cent against a target of 100 per cent. The under achievement was reported to be as a result of the delay in the verification process of the applicants’ information.
• Of the 187 applications received for foreign nationals corporate and individual work visa, 82 were processed within 30 working days. This translates to an achievement of 44 per cent against a target of 70 per cent.
• The overall achievement of the programme was at 63 per cent.

 

3.4.       Programme 4: Labour Policy and Industrial Relations

 

This programme facilitates 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.

 

3.4.1.    Programme Performance

 

The Labour Policy and Industrial Relations programme reported as follows:

• The draft amended Code of Good Practice on preparation and implementation of Employment Equity Plans were published for public comments as planned under Government Gazette No 40316 on 30 September 2016.
• The 13 workshops on amended Code of Good Practice on Employment of Persons with Disabilities were conducted by 30 September 2016 as planned.
• The Hospitality and Taxi industry sectoral Determinations were promulgated as planned.
• The mid-term implementation report on strengthening and monitoring of implementation of bilateral agreements that are in line with national priorities was submitted on 15 September 2016 as planned.
• Of the 10 collective agreements received, only two were extended to non-parties within 90 calendar days. This translates to an achievement of 20 per cent against the target of 100 per cent. The failure to achieve the 100 per cent target was reported to be as a result of missing documentation.
• The overall performance of the programme was at 75 per cent.

 

4.         Financial Report

 

The DoL received an allocation of R2.8 billion in the 2016/17 financial year. A cumulative total of R1.4 billion, which translates to 49 per cent of the total allocation, was spent by the end of the second quarter. The available budget currently stands at R1.4 billion.

 

The allocation per programme was as follows:

• Administration: R852 921 or 29.9 per cent
• Inspection and Enforcement Services: R519 494 or 18.2 per cent
• Public Employment Services: R510 269 or 17. 9 per cent
• Labour Policy and Industrial Relations: R965 193 or 33.9 per cent.

 

At the end of the second quarter, the actual expenditure was as follows:

• Administration: R341 473 or 24.3 per cent
• Inspection and Enforcement Services: R227.089 or 16.2 per cent
• Public Employment Services: R226 172 or 16.1 per cent
• Labour Policy and Industrial Relations: R611 359 or 43.5 per cent.

 

In terms of economic classification, the budget was allocated as follows:

• Compensation of Employees: R1 132 239 or 39.8 per cent
• Goods and Services: R582 511 or 20.5 per cent
• Transfer Payments: R1 064 701 or 37.4 per cent
• Payments for Capital Assets: R68 426 or 2.4 per cent.

 

The actual expenditure by the end of quarter two was as follows:

• Compensation of Employees R502 286 or 35.7 per cent
• Goods and Services: R212 543 or 15.1 per cent
• Transfer Payments R665 387 or 47.3 per cent
• Payments and Capital Assets R25 876 or 1.8 per cent.

 

The allocation less transfer payments was R1.7 billion and R740.7 million was spent by the end of the second quarter or a cumulative 42 per cent. The allocation per programme less transfer payments was as follows:

• Administration: R852 232 or 47. 8 per cent
• Inspection and Enforcement Services: R519 429 or 29. 1 per cent
• Public Employment Services: R286 666 or 16.1 per cent
• Labour Policy and Industrial Relations: R124 849 or 7.0 per cent.

 

The actual expenditure less transfer payments was as follows:

• Administration: R340 206 or 45.9 per cent
• Inspection and Enforcement Services: R226 474 or 30.6 per cent
• Public Employment Services: R120 764 or 16.3 per cent
• Labour Policy and Industrial Relations R53 262 or 7.2 per cent.

 

In terms of economic classification, the allocation less transfer payments was as follows:

• Compensation of Employees: R1 132 239 or 63.5 per cent
• Goods and Services: R582 511 or 32.7 per cent
• Payment for Capital Assets: R68 426 or 3.8 per cent

 

 

The actual expenditure was as follows:

• Compensation of Employees: R02 286 or 67.8 per cent
• Goods and Services: R212 543 or 28.7 per cent
• Payments for Capital Assets: R25 876 or 3.5 per cent.

 

1. Performance per Strategic Objectives 2016/17

 

The overall performance of the Department per strategic objective was reported as follows:

Table 2

Strategic Objectives	Annual Planned Indicators	Indicators with targets reporting in Q2	Achieved	Achievement %
Contribution to employment creation	8	8	5	63
Promote equity in the labour market	5	5	4	80
Protecting vulnerable workers	6	5	4	80
Strengthening multilateral and bilateral relations	1	1	1	100
Strengthening occupational safety protection	6	6	4	67
Promoting sound labour relations	2	2	1	50
Monitoring the impact of legislation	2	-	-	-
Strengthening the institutional capacity of the Department	5	5	3	60
Total	35	32	22	69

Source: Adapted from the presentation to the Portfolio Committee on Labour dated 07 December 2016

 

As reflected in table 2 above, the overall performance of the Department against the strategic objectives for 2016/17 was 69 per cent in the second quarter.

 

1. Portfolio Committee Observations

 

The Committee made the following observations:

 

• The overall performance of the Department at the end of the second quarter was 69 per cent;
• The Administration programme regressed from the achievement of 80 per cent in the first quarter to 60 per cent in the second quarter.
• An irregular expenditure of R169, 699.27 was noted.
• There was improvement in the performance of the Inspection and Enforcement Services from 60 per cent in the first quarter to 73 per cent in the second quarter.
• The Labour Policy and Industrial Relations programme improved from 50 per cent in the first term to 75 per cent in the second term.
• The Department achieved the least (50%) in promoting sound labour relations strategic objective.
• There was poor attendance of training workshop by shop-stewards resulting to under-achievement in the relevant key performance indicator.
• There was under achievement in conduct of payroll audits to determine employers’ contribution to the Unemployment Insurance Fund.
• The Department did not achieve the set targets on processing within 60 calendar days of applications for registration from Private Employment Agencies and Temporary Employment Services.
• The Department managed to process within 30 working days only 44 per cent of the applications for foreign nationals corporate and individual work visa.
• The poor performance of the Inspections and Enforcement Services programme in the Northern Cape resulting in the programme being placed under administration by the relevant Deputy Director-General.

 

1. Portfolio Committee Recommendations

 

In view of the above, the Committee recommends that the Minister ensures that:

 

• The poor attendance of training by shop-stewards is investigated and addressed.

• The capacity challenges that led to failure to achieve the set target of processing, within 60 calendar days, pay roll audits to determine employers’ contribution to the Unemployment Insurance Fund are addressed.
• The applications for registration from Private Employment Agencies and Temporary Employment Services are timeously processed.
• The applications for foreign nationals’ corporate and work visas are timeously processed.
• The Department report back to the Committee on progress with regard to the intervention in the Northern Cape by the end of the fourth quarter.

 

Report to be considered.