ATC170906: Report of the Portfolio Committee on Labour on the Third and Fourth Quarterly Reports regarding the performance of the Department of Labour and its entities, dated 6 September 2017

Employment and Labour

Report of the Portfolio Committee on Labour on the Third and Fourth Quarterly Reports regarding the performance of the Department of Labour and its entities, dated 6 September 2017
 

The Portfolio Committee on Labour, having considered the Third and Fourth Quarterly Reports on the performance of the Department of Labour (DoL) and its entities in meeting their strategic objectives for 2016/17, reports as follows:

 

1. Introduction

 

The Portfolio Committee on Labour considered the Third and Fourth Quarterly Report on the performance of the DoL and its entities in accordance with their strategic objectives for 2016/17 as presented in meetings held on 27 and 28 June 2017.

 

This report gives an overview of the presentations made by DoL and the entities, focusing mainly on their 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 and entities’ 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 the Department and its entities was presented both in terms of per strategic objectives and per programme. For ease of comparison, this report is going to both quarters e.g. performance per strategic objective for third quarter followed by for the fourth quarter.

1. Performance of the Department

3.1.       Third and fourth term performance per strategic objective

The overall achievements of the Department were reported as follows:

Table 1

Strategic objective	Q3 overall achievement %	Q4 overall achievement %
Contribution to employment creation	63	75
Promote equity in the labour market	80	100
Protecting vulnerable workers	80	100
Strengthening multilateral and bilateral relations		100
Strengthening operational safety protection	100	83
Promoting sound labour relations	100	50
Monitoring the impact of legislation	0	50
Strengthening the institutional capacity of the Department	60	60
Overall performance	72	79

 

3.2.       Third and fourth term performance per programme

The overall performance was reported as follows:

Table 2

Programme	Q3 overall achievement %	Q4 overall achievement %
Administration	60	60
Inspection and Enforcement Services	86	93
Public Employment Services	63	75
Labour Policy and Industrial Relations	60	67
Overall Performance	72	79

 

Issues to be noted

·                     The performance of the Department improved from 72 per cent in the third quarter to 79 per cent in the fourth quarter.

·                     In terms of performance per strategic objectives there was improvement in most of the strategic objectives except Strengthening Operational Safety and Promoting Sound Labour Relations, which deteriorated from 100 per cent to 83 per cent and 100 to 50 per cent, respectively.

·                     In terms of performance per programme, no programme deteriorated in performance. The administration programme’s performance remained 60 per cent for both quarters.

 

1. Major performance challenges encountered by the Department in Q3 and Q4

 

The Department encountered major challenges with these Key Performance Indicators:

 

 

 

4.1.       Administration

 

• Improve the Department’s management practice and strategic support based on the Management Performance Assessment Tool (M-PAT) assessment criteria. This indicator was not achieved in both quarters. In Q3 it was reported that the plan was developed and would be signed off on 30 January 2017. In Q4 it was reported that 32 per cent was achieved for this indicator.
• The Department planned to reduce the vacancy rate to 9.9 per cent. However, it only managed to achieve 10.27 in Q3 and 9.27 per cent in Q4. The actual vacant posts were 894 in Q3 and 802 in Q4.
• The Department managed to pay 99.9 per cent of compliant invoices within 30 days in Q4 against the target of 100 per cent. It had achieved this target in Q3. Of the 5822 it managed to pay 5816 within 30 days in Q4.
• The amount of irregular expenditure detected increased from R30 340.00 in Q3 to R57 618.00 in Q4. Fruitless and wasteful expenditure increased from R38 021.94 in Q3 to R129 091.84 in Q4. There was no unauthorized expenditure detected in both quarters.

 

4.2.       Inspection and Enforcement Services (IES)

 

• The branch did not achieve the target of reviewing 162 designated employers to determine compliance with employment equity in Q3. It managed to review 160 designated employers. In Q4 it reviewed 231 designated employers against a target of 202.
• The branch did not achieve the target of conducting advocacy and educational sessions during Q3. Due to poor attendance by shop stewards, the branch trained 39, against the target of 175 shop stewards.  However, it achieved it target in Q4. One construction seminar was conducted in Q4. A total of 189 shop stewards were trained against a target of 175.
• Of the 128 requests received for inspections for work permits, 120 (94 %) inspections were conducted within 25 calendar days in Q3. The programme inspected 98 (97%) against 101 requests for inspections for work permit within 25 calendar days in Q4.
• Of the target of conducting 4393 inspections per year to determine employers’ compliance with OHS legislation, 4455 inspections were conducted in Q3. The branch inspected 6614 work places against a target of 5492 in Q4.
• Of the 189 reported incidents, 145 (77%) were investigated within 90 calendar days in Q3. Of the192 reported incidents, 141 (73%) were investigated within 90 calendar days.
• A total of 3150 employer payroll audits were conducted against a target of 2603.

 

 

4.3.       Public Employment Services (PES)

 

• PES did not achieve the target of tabling regulations on registration of work seekers before the Employment Services Board in Q3. However, all 4 regulations on provision of employment services by persons outside the public administration were presented to the Employment Services Board at a meeting held from 14 to 15 March 2017 during Q4.
• A total of 156 971 work seekers were registered on ESSA system against a target of 115 000 in Q3. Of this 34 049 were registered in Gauteng province. In Q4, a total of 212 367 work seekers were registered on ESSA system against a target of 135 000. Of this 46 895 were registered in Gauteng province.
• A total of 142 955 registered work seekers were provided with employment counselling against a target of 106 480 in Q3. The Gauteng province provided 28 9924 registered work seekers with Employment counselling. In Q4, a total of 197 247 registered work seekers were provided with employment counselling against a target of 150 000. The Gauteng province provided 39 511 work seekers with employment counselling.
• A total of 7625 work seekers were placed in registered employment opportunities against a target of 4 450 in Q3. KwaZulu-Natal placed 1 669work seekers in registered employment opportunities. In Q4, a total of 12 517 work seekers were placed in registered employment opportunities against a target of 8 000. KZN placed 2 497 work seekers in registered employment opportunities in Q4.
• A total of 52 550 work opportunities were registered on ESSA against a target of 60 000 in Q3. Gauteng province registered 10 554 work opportunities on ESSA in Q3. In Q4, a total of 74 510 work opportunities were registered on ESSA against a target of 60 000. Of this, Gauteng province registered 14 956 work opportunities in Q4.
• Sixty-six per cent of applications from Private Employment Agencies and Temporary Employment Agencies were processed within 60 calendar days against a target of 100 per cent in Q3. In Q4, 83 per cent of applications were registered within 60 calendar days.
• Sixty-seven per cent of applications for foreign nationals corporate and individual work visa were processed within 30 working days against a target of 70 per cent in Q3. In Q4, thirty-six per cent of applications were processed within 30 working days against a target of 70 per cent.

 

4.4.       Labour Policy and Industrial Relations

 

• LP & IR consolidated the public comments and developed and finalized the draft of the Code on Employment Equity Plans by 6 December 2016 in Q3. The target date was 31 December 2016. In Q4, LP & LR developed the Amended Code of Good Practice on preparation and implementation of EE plans by March 2017. The target date was 31 March 2017.
• A total of eight collective agreements were received and extended within 90 calendar days in Q3, translating to 100 per cent achievement. In Q4, LP&LR received 8 collective agreements and processed six within 90 calendar days, translating to 75 per cent achievement.
• Of the 38 applications by labour organisations for registration, 6 (16%) were approved and 32 (84%) were refused within 90 working days in Q3. In Q4, LP&IR received 32 applications for registration from labour organisations. It approved 2 (6%) and refused 30 (94%) within 90 calendar days.
• LP&IR produced and published two labour trends reports against a target of four in Q3. In Q4 two labour trends report were produced against a target of two.

 

1. The entities of the Department

 

There are five entities that report to the DoL, which are:

 

• Commission for Conciliation, Mediation and Arbitration (CCMA);
• National Economic Development and Labour Council (NEDLAC);
• Productivity South Africa (PSA);
• Compensation Fund (CF);
• Unemployment Insurance Fund (UIF); and
• Supported Employment Enterprises (SEE).

 

The CCMA and NEDLAC receive funds from Labour Policy and Industrial Relations programme of the DoL. The PSA, CF and UIF receive funds from the Public Employment Services of the DoL. SEE is a sub-programme of the Public Employment Services programme, which transfers funds to subsidized workshops for the blind and subsidized work centres for people with disabilities.

 

1. Performance per entity

 

6.1.       Commission for Conciliation Mediation and Arbitration

 

The statutory functions of the CCMA are classified into mandatory and discretionary statutory functions.

The mandatory statutory functions are to:

• Conciliate workplace disputes.
• Arbitrate disputes that remain unresolved after conciliation
• Facilitate the establishment of workplace forums and statutory councils.
• Compile and publish information about its activities.
• Consider applications for accreditation and subsidy from bargaining councils and private agencies.
• Supervise balloting for unions and employer organisations.
• Provide training and advise on collective bargaining, workplace restructuring, consultation process, termination of employment, employment equity programmes and dispute prevention.

 

The discretionary functions are to:

• Provide training and information relating to primary objectives of the LRA.
• Advise parties in disputes on procedures to follow.
• Offer to resolve disputes that have not been referred to the CCMA.
• Publish guidelines on any aspect of labour issues and to make rules.

 

6.1.1.    Performance per strategic objectives for quarter 3 and 4

 

Table 3

Strategic objectives	Quarter 3			Quarter 4
	Planned	Achieved	Overall Performance	Planned	Achieved	Overall Performance
SO1: Enhancing labour market to advance stability and growth	7	6	86%	13	12	92%
SO2: Advancing good practice at work and transforming workplace relations	4	4	100%	6	6	100%
SO3: Building knowledge and skills	1	1	100%	3	3	100%
SO4: Optimising the organisations	9	7	78%	11	9	82%
Overall Performance	21	18	86%	33	30	91%

 

As reflected in table 3 above, the overall performance improved from 86 per cent in quarter 3 to 91 per cent in quarter 4. Strategic objectives two and three achieved all planned targets in consecutive quarters.

 

6.2.       National Economic Development and Labour Council (Nedlac)

 

Nedlac strategic objectives are as follows:

• Effective governance and strategic leadership.
• Provision of efficient and reliable back office support services.
• Improved risk management and financial oversight.
• Improved facilities management.
• Office administration systems enhanced and monitored.
• Strengthening organisational culture and performance.
• Effective engagement on draft policies and legislation within the framework of the Nedlac Act, Constitution and Protocols.
• Conclude matters under consideration within the framework of the Section 77 Protocols.
• Promote social dialogue through communication, information and capacity building.
• Compliance with the Nedlac Policy on Constituency Capacity Building Budgeting and Expense.

 

The activities of NEDLAC, which are aimed at realising the above strategic objectives, are structured into the following programmes:

• Administration
• Core-Operations
• Constituency Capacity Building Funds.

 

The overall third and fourth quarter performance of NEDLAC per programme was reported as follows:

 

Table 4

Programmes	Quarter 3			Quarter 4
	Planned	Achieved	Overall Performance	Planned	Achieved	Overall Performance
Admin	9	6	66%	12	11	92%
Core Operations	14	14	100%	27	19	70%
Constituency building Capacity	3	3	100%	3	3	100%
Summary of performance	26	23	89%	42	33	79%

 

Table 4 reflects a decline in overall performance from 89 per cent in quarter 3 to 79 per cent in quarter 4. The increased performance in Administration programme from 66 per cent to 92 per cent was outweighed by a decline in performance of Core Operations programme from 100 per cent in quarter 3 to 70 per cent in quarter 4. There were two section 77 matters tabled that were ongoing and therefore not reporting in quarter 3. Two section 77 matters reporting in quarter 4 were achieved.

 

 

6.2.1.    Challenges and remedial actions

 

Nedlac undertook remedial actions to address the following challenges:

• An action plan to address the findings of the Auditor-General was developed and has been implemented.
• Positions for the TIC Senior Cooordinator and Head: Programme Operations have been filled.
• A process to finalise the filling of the Administrator position is being finalised.
• Deliberations to finalise the approval of staff benefits are underway.
• The engagements with Exco are still underway on the recommended restructuring of the Finance Department to ensure optimal output and efficiency.

 

7.         Productivity South Africa (PSA)

 

The key functions of Productivity SA are:

• To promote employment, income growth and workplace productivity.
• To improve the employment and re-employment prospects of employees facing retrenchments and retrenched workers.
• To provide productivity measures and evaluate productivity improvement and competitiveness in workplaces.
• To conduct research on productivity and competitiveness related matters, and collection and supply of information.
• To promote social dialogue and inculcate a culture of productivity and competitiveness mind-set in the workplace and all spheres of the nation’s economic and community life.

 

In order to ensure that the above-mentioned functions are performed, Productivity SA developed the following strategic objectives:

• To support initiatives aimed at preventing job losses.
• To develop relevant productivity competencies.
• To undertake productivity related research.
• To facilitate and evaluate productivity improvement and competitiveness in workplaces.
• Promote a culture of productivity in workplaces.
• To manage human resources.

 

 

 

7.1.       Performance per strategic objective

 

The overall performance for quarter 3 and quarter 4 was reported as follows:

 

Table 5

Strategic Objective	Quarter 3			Quarter 4
	Planned	Achieved	Overall Performance	Planned	Achieved	Overall Performance
Support initiatives aimed at preventing job losses	9	0	0%	9	0	0
Develop relevant productivity competencies	5	1	20%	5	2	40
Undertake productivity related research	5	4	80%	5	3	60
Facilitate and evaluate productivity improvement and competitiveness in workplaces	6	4	67%	8	4	50
Promote a culture of productivity in workplaces	6	3	50%	5	4	80
Manage Human Resources	2	2	100%	3	2	67
Overall Performance	33	14	53%	35	15	51

 

The key strategic objective achievements for quarter 3 and 4 were as follows:

• Total of 207 companies implemented the Workplace Challenges Programme. Of this 99 were new entrepreneurs.
• Turnaround solutions Programme:
  • 32 Future Forums were established to promote consultation and dialogue between management and workers on productivity improvement solutions.
  • 27 companies facing economic distress were supported to prevent retrenchment of workers.
  • 3080 jobs were saved due to implementation of Turnaround Solutions.
• Research Agenda, with a focus on measuring and evaluating productivity improvement, and competitiveness in workplaces and the economy has reports completed in the following sectors:
  • Report on Agro processing (in hide skin)
  • Report on Platinum Group Metals (Meta. Exchange)
  • Report on Fisheries: contribution to the blue economy
  • Report on Abalone.

 

In order to realise the above-mentioned objectives, the work of Productivity SA is structured into the following programmes:

• Marketing and Communications
• Productivity Organisational Solutions
• Turnaround solutions
• Value chain competitiveness - Research and Knowledge Management
• Human Resource Management.

 

Performance per programme for quarters 3 and 4 is reported below.

 

Table 6

Programmes	Quarter 3			Quarter 4
	Target	Progress	Overall Performance	Target	Progress	Variance
Marketing and Communications	159	126	79%	79	46	58%
Productivity Organisational Solutions	1810	1651	91%	1820	1620	89%
Turnaround Solutions	4030	1649	41%	4130	1591	39%
Value Chain Competitiveness-Research and knowledge Management	_	_	_	_	_	_
Human Resource Management	_	_	_	_	_	_

 

Most of the targets for Programme 4 (Value chain competitiveness-Research and knowledge management) and Programme 5 (Human Resources Management) are non-numerical and therefore could not be plotted on table 6.

 

8.         Compensation Fund

 

The strategic objectives of the Compensation Fund are:

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

 

 

 

8.1.       Performance per Strategic Objectives

 

Performance per strategic objective was reported as follows:

 

Table 7

Strategic Objectives	Quarter 3			Quarter 4
	Planned	Achieved	Overall Performance	Planned	Achieved	Overall Performance
Provide an effective and efficient client oriented support services	6	1	17%	8	2	25%
Provide faster, reliable and accessible COID services by 2020	10	7	70%	10	7	70%
Overall Performance	16	8	50%	18	9	50%

 

8.2.       Performance per programme

 

In order to accomplish the above-mentioned strategic objectives, the Compensation Fund’s activities are structured into the following programmes:

• Administration
• Compensation for Occupational Injuries and Diseases Act (1993)
• Provincial operations: Compensation for Occupational Injuries and Diseases Act (1993).

 

Performance per programme was as follows:

 

Table 8

Programmes	Quarter 3			Quarter 4
	Planned	Achieved	Overall Performance	Planned	Achieved	Overall Performance
Administration	6	1	17%	8	2	25%
Compensation for Occupational Injuries and Diseases Act (1993)	5	3	60%	5	2	60%
Provincial Operations: Compensation for Occupational Injuries and Diseases Act (1993)	5	4	80%	5	4	80%
Overall Performance	16	8	50%	18	9	50%

 

8.3.       Overall Performance in first quarter

 

The overall performance for quarter 4 was reported as follows:

• As at 31 March 2017 the vacancy rate was reported to be 10.3 per cent against the target of 10 per cent.
• A total amount of R4 214 436 147.07 was paid towards approved compensation benefits as at 31 March 2017.
• The distribution of chronic medication was fully implemented.
• Medical tariffs were published by end of March 2017.
• Of the 155 427 compensation claims registered 145 922 or 94 per cent were adjudicated. The majority of claims (34 998) were registered in the Western Cape. The Northern Cape registered the least claims at 2 795.
• Of the 145 922 adjudicated claims, 130 800 or 90 per cent were adjudicated within 60 working days. The Free State province adjudicated the highest percentage of claims (97 per cent) within 60 working days. The Eastern Cape and Mpumalanga adjudicated the least percentage of claims within 60 days, both 78 per cent.
• Of the 747 525 medical invoices received, 686 894 or 92 per cent were finalized. The Free State and the Western Cape finalized the highest percentages of medical invoices, both at 91 per cent.
• Of the 686 894 medical invoices finalized between April 2016 and March 2017, 613 430 or 89 per cent were finalized within 60 working days. The North West province finalized the highest percentage of invoices within 60 working days at 89 per cent.
• The Gauteng province received the highest number of compensation benefits claims and the Free State finalized the highest percentage at 14 729 and 98 per cent respectively.

 

 

 

 

8.4.       Injuries registered

 

• Gauteng province registered the highest number of injuries at 88 807. It was followed by KwaZulu-Natal at 11 600. The Northern Cape registered the lowest number of injuries at 1 174.
• In all the provinces the majority of those injured were male workers. Gauteng registered 63 345 injured male workers and 25 462 injured male workers.
• Most of the injured workers had multiple injuries at 1 471. This was followed by right hand and back injuries at 1 360 and1 358 respectively.
• Shoprite Checkers registered the highest number of injuries at 3 672.

 

9.         UNEMPLOYMENT INSURANCE FUND

 

The strategic objectives of the UIF are to:

• Improve financial management
• Improve service delivery
• Improve compliance to the unemployment insurance act
• Fund poverty alleviation schemes

 

9.1.       Performance per strategic objectives

 

Table 9

Strategic Objectives	Quarter 3			Quarter 4
	Planned indicators	Achieved	Overall Achievement	Planned indicators	Achieved	Overall Achievement
Improve financial management	3	2	67%	3	2	67%
Improve service delivery	2	1	50%	2	1	50%
Improve compliance to the Unemployment Insurance Act	4	3	75%	4	2	50%
Fund poverty alleviation skills	3	2	67%	3	1	33%
Overall performance	12	8	67%	12	6	50%

 

In order to fulfill the above-mentioned objectives, the activities of the Fund are structured into the following programmes:

 

• Administration
• Business operatioons
• Labour activation programmes

 

9.2        Performance per programme

 

Performance with regard to some indicators was as follows:

 

• The Fund had a target of achieving 8.6 per cent return on investment by March 2017. However, it only achieved 5.90 per cent return on investment. The reason provided for the variance was that the South African economy would continue to run a negative output gap and remain in a stagflation bind for the rest of 2016/17.
• The administrative expenditure was aimed to be less than equal to 15 per cent of the revenue by March 2017. By March 2017, the administrative expenditure was 11 per cent of revenue.
• The Fund aimed to commit 80 per cent of total mandated social responsible investment by March 2017. It managed to commit 80 per cent by March 20176.
• The Fund did not manage to approve 90 per cent of claims with complete information within five weeks of application by March 2017. The reasons for the variance were lack of capacity at service points, slow network performance and regular system downtime.
• The Fund aimed to have 20 000 of claims submitted through U-Filing claims portal by March 2017. It had 21 872 claims submitted through U-Filling portal.
• A total of 58 351 new employers were registered against a target of 55 000.
• The revenue of the Fund increased by 6.6 per cent against a target of 7.5 per cent.
• Five applications for training lay0off scheme were received and two were approved and three rejected within 30 days.

 

10.        Supported Employment Enterprises (SEE)

 

10.1.     Functions of the SEE as per the Employment Services act 4 of 2014

 

The functions of SEE are to:

• Facilitate supported employment;
• Provide work opportunities for persons with disabilities; and
• Develop and implement programmes that promote the employability of persons with disabilities, including persons with permanent disablement as defined in the COIDA, in the light of their evolving needs in a changing economy; and
• Perform any other functions as may be prescribed by the Minister.

 

10.2.     Third and Fourth Quarterly performance of the SEE

 

SEE achieved 75 and 5075 per cent on its performance targets for the third and fourth quarter of 2016/17 respectively.

 

SEE provided training on production norms and standards to factory staff during the third quarter.

 

It did not achieve a target of increasing gross profit to 41 per cent.

 

It conducted pone product exhibition.

 

It reduced audit findings by 55 per cent.

 

It managed to do all procurement in line with procurement plan.

 

Thirty-one officials were trained on Occupational Health and Safety on first and second of December 2016.

 

Three marketing campaigns were conducted in quarter four.

 

SEE resolved 31 per cent of audit findings in quarter four against a target of 50 per cent.

 

Ninety-nine per cent of procurement was done in line with procurement plan in quarter four.

 

Twelve officials attended First Aid training and 20 attended Sign Language training.

 

There is a need for improvement in the new financial year and the focus on the mandate will mean that there is direct impact on the lives of persons with disabilities.