ATC180829: Report of the Portfolio Committee on Labour on the THIRD Quarterly Report regarding the Performance of the Department of Labour and its entities in meeting Strategic Objectives for 2017/18, dated 29 August 2018
Employment and Labour
Report of the Portfolio Committee on Labour on the THIRD Quarterly Report regarding the Performance of the Department of Labour and its entities in meeting Strategic Objectives for 2017/18, dated 29 August 2018
The Portfolio Committee on Labour, having considered the Third Quarterly Report on the performance of the Department of Labour (DoL) and its entities in meeting strategic objectives for 2017/18, reports as follows:
- Introduction
The Portfolio Committee on Labour considered the Third Quarterly Report on the performance of the Department of Labour and its entities in meeting strategic objectives for 2017/18 as presented in the meeting held on 23 May 2018.
This report gives an overview of the presentations made by the Department of Labour (Department) and its entities, focusing mainly on its achievements, output in respect of the performance indicators and targets set for 2017/18 and the financial performance. The report also provides the Committee’s key deliberations and recommendations relating to the Department’s and entities’ performance.
- Performance per Strategic Objective
The Department reported on its performance per strategic objective as follows:
Table 1: DoL Performance per Strategic Objective
|
Strategic Objectives |
Annual Planned Indicators |
Indicators with targets reporting in Q3 |
Achieved |
Overall Achievement % |
|
Strengthen occupational safety and protection |
This strategic objective is covered in terms of indicators that are applicable in strengthening occupational safety protection. |
|||
|
Promote equity in the labour market |
1 |
** |
- |
- |
|
Protecting vulnerable workers |
5 |
5 |
3 |
60% |
|
Strengthen multilateral and bilateral relations |
1 |
**- |
- |
- |
|
Contribute to employment creation |
4 |
4 |
4 |
100% |
|
Promote sound labour relations |
3 |
3 |
2 |
67% |
|
Monitoring the impact of legislation |
2 |
**1 |
0 |
0% |
|
Strengthening the institutional capacity of the Department |
4 |
4 |
3 |
75% |
|
Total number of indicators |
20 |
17 |
12 |
71% |
|
Overall Performance |
|
|
||
Source: Presentation to the Portfolio Committee on Labour dated 23 May 2018
⃰ Labour Policy and Industrial Relations had no targets for three indicators:
- Promoting Equity in the Labour Market
- Strengthening multilateral and bilateral relations
- Monitoring the impact of legislation
In terms of performance per strategic objective, the Department had 20 planned targets for the 2017/18 financial, 17 of which reported to quarter 3. Of the 17 targets reporting in quarter 3, 12 were achieved, translating to an overall achievement of 71%. Contribute to employment creation strategic objective recorded an achievement of 100%. Monitoring the impact of legislation objective had one target reporting in quarter 3, which was not achieved resulting in 0% achievement on this strategic objective.
- Performance per Programme
The overall performance per programme was reported as follows:
Table 2: DoL Performance per Programme
|
Branch |
Annual Planned Indicators |
Indicators with targets reporting in Q3 |
Achieved |
Achievement % |
|
Administration |
4 |
4 |
3 |
75% |
|
Inspection and Enforcement Service |
4 |
4 |
3 |
75% |
|
Public Employment Services |
4 |
4 |
4 |
100% |
|
Labour Policy and Industrial Relations |
8 |
5 |
2 |
40% |
|
Total |
20 |
17 |
12 |
71% |
Source: Adapted from the presentation to the Portfolio Committee on Labour dated 23 May 2018
In terms of performance per programme, Public Employment Services had 4 indicators reporting in quarter 3, which were all achieved. Labour Policy and Industrial Relations programme achieved 2 out of 5 planned indicators reporting in quarter 3, translating to 40% achievement. Administration and Inspection and Enforcement Services programmes achieved 75% of planned targets.
Under Administration programme, the Department reported that:
- All interim financial statements comply with guidelines issued by National Treasury.
- R83 125.60 fruitless and wasteful expenditure, and zero unauthorised expenditure was detected and reported during reporting period.
- R116 639.56 irregular expenditure was detected and reported.
- Departmental Audit and Risk Committees were fully functional.
- Inspection and Enforcement Services’ Performance per Province in Quarter 3
Table 3: IES Performance per Province
|
Province |
Planned Indicators |
Achieved |
Overall Performance |
|
Eastern Cape |
4 |
3 |
75% |
|
Free State |
4 |
|
100% |
|
Gauteng |
4 |
1 |
25% |
|
KwaZulu-Natal |
4 |
3 |
75% |
|
Limpopo |
4 |
3 |
75% |
|
Mpumalanga |
4 |
3 |
75% |
|
Northern Cape |
3 |
2 |
67% |
|
North West |
4 |
3 |
75% |
|
Western Cape |
4 |
3 |
75% |
Source: Adapted from the presentation to the Portfolio Committee on Labour dated 23 May 2018
Table 3 reflects that the Free State Province achieved 100% of its planned indicators under the IES programme. This is an improvement from the 75% achieved in the second quarter. Gauteng province deteriorated from 75 % achieved in the second quarter to 25% in the third quarter. Most of the provinces recorded 75% achievement under the IES programme. Northern Cape recorded 67% achievement, which is a deterioration from the 75% achieved in quarter 2. Mpumalanga province improved from 25% achievement in quarter 2 to 75% in quarter 3.
IES conducted 48 191 inspections in quarter 3 against a target of 43 402 inspections. Of the 48 191 companies inspected, 38 934 complied and 9 257 did not comply.
- Public Employment Services’ Performance per Province in Quarter 3
Table 4: PES Performance per Province
|
Province |
Planned Indicators |
Achieved |
Overall Performance |
|
Eastern Cape |
4 |
4 |
100% |
|
Free State |
4 |
4 |
100% |
|
Gauteng |
4 |
4 |
100% |
|
KwaZulu-Natal |
4 |
4 |
100% |
|
Limpopo |
4 |
4 |
100% |
|
Mpumalanga |
4 |
4 |
100% |
|
Northern Cape |
4 |
4 |
100% |
|
North West |
4 |
4 |
100% |
|
Western Cape |
4 |
4 |
100% |
Source: Adapted from the presentation to the Portfolio Committee on Labour dated 23 May 2018
Table 4 reflects PES performance of 100% in all provinces. PES registered 206 904 work-seekers on ESSA during the third quarter against a target of 116 700. PES filled 16 555 work and learning opportunities with registered work-seekers against a target of 5 450 in the third quarter of 2017/18.
Labour Policy and Industrial Relations programme extended 33.3% of collective agreements within 90 calendar days of receipt against a target of 100%. The reason provided for variance was that the collective agreements were received in mid-December and only published for comments on 5 January 2018.
6. Financial Report
First quarter expenditure for 2017/18 is reflected in the following table:
Table 5: DoL Q3 Expenditure Information
|
Branch |
Final Appropriation 2017/18 R’000 |
Actual Expenditure 2017/18 R’000 |
Available Over/Under 2017/18 R’000 |
% |
|
Administration |
887 791 |
539 230 |
348 561 |
60.7 |
|
Inspection and Enforcement Services |
531 248 |
355 165 |
176 083 |
66.9 |
|
Public Employment Services |
557 384 |
310 038 |
247 346 |
55.6 |
|
Labour Policy and Industrial Relations |
1 079 398 |
803 600 |
275 798 |
74.4 |
|
Total |
3 055 821 |
2 008 033 |
1 047 788 |
65.7 |
Source: Presentation to the Department of Labour dated 23 May 2018
The final appropriation of the Department amounted to R3.0 billion in 2017/18 financial year. The actual expenditure at the end of quarter 3 was R2.0 billion. This is less than the R2.3 billion (75% of the final appropriation) that the Department is required to have spent at the end of the third quarter. In percentage terms, the Department spent 65.7% of its allocated budget by the end of the third quarter. The Labour Policy and Industrial Relations programme received the larger share of the Department’s budget at 35.3 %. The programme spent 74.4% of its allocated budget at the end of the third quarter. However, it must be noted that the larger portion of this programme budget goes to Transfers and Subsidies. Commission for Conciliation Mediation and Arbitration received the larger portion of this programme’s budget. Administration programme received the second largest share of the Department’s budget at R887.8 million in 2017/18 financial year. It spent R539.2 million or 60.7% at the end of the third quarter. Inspection and Enforcement Services received the least allocation of the Department’s budget, at R531.2 million. It spent R355.2 million or 66.9% of its budget allocation by the end of the third quarter. Public Employment Services received R557.4 million and spent R310.0 million, translating to 55.6% expenditure by the end of the third quarter.
Table 6: Expenditure Information by Economic Classification
|
Economic Classification |
Budget R’000 |
Expenditure R’000 |
Variance R’000 |
Variance % |
|
Compensation of Employees |
1 212 767 |
795 647 |
417 120 |
65.6 |
|
Goods and Services |
574 488 |
343 427 |
231 061 |
59.8 |
|
Transfers and Subsidies |
1 162 445 |
849 325 |
313 120 |
73.1 |
|
Payments for Capital Assets |
106 121 |
19 598 |
86 523 |
18.5 |
|
Payment for Financial Assets |
- |
36 |
-36 |
00 |
|
Total |
3 055 821 |
2 008 033 |
1 047 788 |
65.7 |
Source: Presentation to the Portfolio Committee on Labour dated 23 May 2018
In terms of Economic Classification, the larger portion of the budget went to Compensation of Employees, at R1.21 billion or 39% of the Departmental allocation. The Department spent R795.6 million on this item by the end of the third quarter. The second largest allocation went to transfers and subsidies at R1.16 billion or 38% of the budget allocation. A total of R849.3 million was transferred at the end of the third quarter. Goods and Services budget, which reflects the actual budget for delivering the services of the Department amounted to R574.5 or 19% of the total departmental budget.
Table 7: Expenditure Information by Economic Classification Less Transfers
|
Economic Classification |
Final Appropriation 2017/18 R’000 |
% of Vote |
Actual Expenditure 2017/18 R’000 |
% Expenditure |
|
Compensation of Employees |
1 212 767 |
64.1 |
795 647 |
65.6 |
|
Goods and Services |
574 488 |
30.3 |
343 427 |
59.8 |
|
Payment for Capital Assets |
106 121 |
5.6 |
19 598 |
18.5 |
|
Payment for Financial Assets |
- |
0.0 |
36 |
0.0 |
|
Total |
1 893 376 |
100 |
1 158 708 |
65.6 |
Source: Presentation to the Portfolio Committee on Labour dated 23 May 2018
Table 7 reflects the total budget of the Department less transfers, which amounts to R1.9 billion. This is the total budget for running the Department. The Department spent R1.1 billion or 65.6 % of this budget at the end of the third quarter.
- Supported Employment Enterprises
Supported Employment Enterprises reported on the permanent employment creation for people with disabilities as follows:
Table 8: Permanent Employment Creation for PWDs
|
Province |
Factory Name |
31 March 2017 |
Employment created (Q1-Q3) |
Headcount at 31 Dec 2017 |
|
Free State |
Bloemfontein |
45 |
21 |
66 |
|
KwaZulu-Natal |
Durban |
94 |
10 |
104 |
|
Eastern Cape |
East London |
47 |
0 |
10647 |
|
Gauteng |
Springfield |
94 |
4 |
98 |
|
Northern Cape |
Kimberley |
47 |
13 |
60 |
|
KwaZulu-Natal |
Pietermaritzburg |
34 |
25 |
59 |
|
Eastern Cape |
Port Elizabeth |
63 |
0 |
63 |
|
North West |
Potchefstroom |
33 |
3 |
36 |
|
Gauteng |
Pretoria |
96 |
12 |
108 |
|
Gauteng |
Rand |
81 |
6 |
87 |
|
Western Cape |
Epping |
93 |
14 |
107 |
|
Western Cape |
Ndabeni |
164 |
5 |
169 |
|
Grand Total |
891 |
77 |
968 |
|
|
Percentage increase in employment creation |
|
8.64% |
|
|
Source: Presentation to the Portfolio Committee on Labour dated 23 May 2018
Table 8 reflects that 77 jobs were created between quarter 1 and 3 leading to a total number of 968 jobs by 31 December 2017.
- THIRD QUARTER PERFORMANCE OF ENTITIES OF THE DEPARTMENT OF LABOUR
The entities that report to the Department of Labour are:
- Compensation Fund;
- Productivity South Africa;
- Commission for Conciliation, Mediation and Arbitration;
- National Economic Development and Labour Council; and
- Unemployment Insurance Fund.
- Compensation Fund (CF)
The strategic objectives of the CF are:
- To provide an effective and efficient client oriented support services.
- To provide faster, reliable and accessible COID services by 2020.
CF reported third quarter performance per strategic objectives of 2017/18 financial year as follows:
Table 9: CF Performance per Strategic Objective
|
Strategic Objectives |
Planned Indicators |
Achieved |
Not Achieved |
Overall Performance |
|
Provide an effective and efficient client oriented support services |
2 |
1 |
1 |
50% |
|
Provide faster, reliable and accessible COID services by 2020 |
5 |
3 |
2 |
60% |
|
Overall Performance |
7 |
4 |
3 |
57% |
Source: Presentation to the Portfolio Committee on Labour dated 23 May 2018
CF achieved 4 of its planned indicators per strategic objectives against a target of 7, translating to an overall achievement of 57%.
The activities of the CF are structured into three programmes, namely: Administration, Compensation for Occupational Injuries and Diseases Act (1993) operations and Provincial operations: Compensation for Occupational Injuries and Diseases Act (1993).
CF reported third quarter performance per programme as follows:
Table 10: CF Performance per Programme
|
Programmes |
Planned Indicators |
Achieved |
Not Achieved |
Overall Achievement |
|
Administration |
2 |
1 |
1 |
50% |
|
Compensation for Occupational Injuries and Diseases Act (1939) operations |
3 |
1 |
2 |
33% |
|
Provincial operations: Compensation for Occupational Injuries and Diseases Act (1993) |
2 |
2 |
0 |
100% |
|
Overall performance |
7 |
3 |
4 |
57% |
Source: Presentation to the Portfolio Committee on Labour dated 23 May 2018
CF registered an improvement in performance from 43% in quarter 2 to 57% in quarter 3 of 2017/18 financial year.
Overall performance in quarter 3 include
- An amount of R1 011 217 463.84 for approved benefits sent to the financial system.
- 97% (142 666 of 147 529) of claims received were adjudicated within 60 working days of receipt.
- 94% (536 899 of 568 311) of medical invoices received were finalized within 60 working days of receipt.
- 66% (614 of 931) of the requests received for prosthetic and assistive devices were adjudicated within 15 working days.
- 75% (964 of 1294) of received pre-authorisation requests were responded to within 10 working days.
8.1.1. Performance Challenges and Remedial Actions
Administration
The entity planned to assess 85% of active registered employers by 31 December 2017. It managed to assess only 45% of registered employers. The reason provided was non-submission of Return of Earnings (ROE) by employers. The planned corrective action is to estimate ROEs not submitted during quarter 4, refer employers not eligible for estimation to IES for follow up and to develop a circular on definition of active employer. All these corrective actions would be implemented during the fourth quarter.
COIDA operations
CF planned to adjudicate 85% of requests received for prosthetic and assistive devices within 15 working days by 31 December 2017. It managed to adjudicate 66% (614 of 931) within 15 working days. The reason proffered was that there is skills limitation in provinces in this area. The planned corrective action was to expedite the process of appointing critical skills in provinces and roll-out the requisite training by 31 March 2018.
The entity planned to respond to 85% of received pre-authorisation requests within 10 working days by 31 December 2017. It managed to respond to 74.5% (964 of 1 294) of received pre-authorisation requests within 10 working days. Reasons for deviation were reported to be the limitation in system capacity and the manual nature of the process as well as delays in verifying claims caused by navigation through various unlinked systems.
8.1.2. 2017/18 third quarter performance linked to budget
CF reported as follows:
Table 11: CF Third Quarter Performance linked to Budget
|
Programmes |
Planned Indicators |
Achieved |
Overall Performance |
Budget
R’000 |
Actual Spent
R’000 |
Variance
R’000 |
% Spent |
|
Administration |
2 |
1 |
50% |
1 454 846 |
845 373 |
609 473 |
58% |
|
Compensation for Occupational Injuries and Diseases Act (1939) operations |
3 |
1 |
33% |
7 781 646 |
2 088 651 |
5 692 995 |
27% |
|
Provincial operations: Compensation for Occupational Injuries and Diseases Act (1993) |
2 |
2 |
100% |
70 561 |
38 200 |
32 361 |
54% |
|
Overall performance |
7 |
4 |
57% |
9 307 053 |
2 972 224 |
6 334 829 |
32% |
Source: Adapted from the Presentation to the Portfolio Committee on Labour dated 23 May 2018
The overall spending for CF was at 32% during the third quarter of 2017/18. This is far less than the 25% expenditure recommended per quarter.
8.2 Productivity SA
Productivity SA was established in terms of section 31 of the Employment Services Act (Act 4 of 2014) as a juristic person and schedule 3A Public Entity in terms of the PFMA (Act 1 of 1999), as amended. It is governed by a tripartite board consisting of 7 members appointed in terms of section 33 of the Act. The vision of the PSA is to lead and inspire a productive and competitive South Africa.
8.2.1. Highlights of performance per strategic objectives
The entity reported as follows:
- 7 635 jobs were saved in companies facing economic distress since the beginning of the financial year. This translates to 2 873 jobs saved in the third quarter of 2017/18 since the entity reported that 4 762 jobs were saved in the presentation of their second quarter report.
- 76 Productivity Champions; Education, Training and Development (ETDs); Skills Development Facilitators (SDFs) were trained across the business, labour and government spectrum against the target of 60.
- 186 companies in industry sectors including SEZs and industrial parks were supported through Productivity and Competitiveness Enhancement programmes against the target of 178.
8.2.2. Under-performing non-financial targets in the third quarter of 2017/18
Productivity SA has identified under-performance on non-financial targets, reasons for non-achievement of targets and devised corrective measures.
The entity had a target of establishing and maintaining two stakeholders and strategic partners in the second quarter. This target was not achieved and the reason provided for non-achievement was that MOUs were signed by one party (SEFA and NAFCOC). PSA resolved to have both parties sign MOUs in quarter four.
Productivity SA planned to support 1600 small enterprises and cooperatives on ESD programmes through productivity and operational efficiency enhancement programmes. It supported 1414 companies resulting in a shortfall of 186. The shortfall was attributed to training that was not schedule due to festive season. The entity resolved to make up for the shortfall in quarter four.
PSA planned to conduct 9 capacity building workshops. However, seven workshops were conducted. The reason provided for non-achievement was that companies are grouped for training to save costs. The entity plans to have more capacity building sessions during the fourth quarter.
The entity planned to support 30 companies facing economic distress through turn-around strategies to retain jobs. It managed to support only 20 companies. The reason proffered for non-achievement was that funding for quarter three was not received, which adversely affected the achievement of targets. The funding issue has been escalated to the Board, Director General and the Minister.
8.2.3. Quarterly performance report per programme
Performance per programme in the third quarter of 2017/18 was reported as follows:
Table 12: PSA Performance per Programme
|
Programmes |
Annual Planned Indicators |
Q3 planned Indicators |
Achieved |
Aggregate Performance |
|
Corporate Services |
5 |
1 |
1 |
100% |
|
Human Resource Management |
5 |
3 |
3 |
100% |
|
Marketing and Communication |
5 |
4 |
3 |
75% |
|
Productivity Organisational Solutions |
3 |
3 |
2 |
67% |
|
Value Chain Competitiveness |
8 |
4 |
3 |
75% |
|
Turnaround solutions |
2 |
2 |
1 |
50% |
|
Overall Performance |
28 |
17 |
13 |
76% |
Source: Adapted from the Presentation to the Portfolio Committee on Labour dated 23 May 2018
The overall performance has seen a steady improvement from 66%, 68% and 76% in the first, second and third quarter, respectively.
One of the targets of the Human Resource Management programme was to fill vacancies within a period of four months after being advertised. The programme managed to achieve a turn-around time of 1.6 months for the filling of vacancies.
Value Chain Competitiveness programme achieved the target of supporting ten black industrialists through productivity and competitiveness enhancement programmes.
8.2.4. Finance Report for third quarter of 2017/18
Operational expenditure for the third quarter of 2017/18 was reported as follows:
Table 13: PSA Finance Report for Q3
|
|
Actual YTD R’000 |
Budget YTD R’000 |
Variance |
Comments |
|
Revenue |
92 161 |
140 525 |
(48 364) |
Major contributor is UIF delayed funding. |
|
Operational Expenditure |
|
|
|
|
|
Compensation of Employees |
50 587 |
58 893 |
8 306 |
Open vacancies |
|
Goods and Services |
41 297 |
76 774 |
35 477 |
Delayed expenditure on TAS |
|
Total Expenditure |
91 884 |
135 667 |
43 783 |
|
|
(Deficit)/ Surplus |
277 |
4 858 |
(4 581) |
|
Source: Adapted from the presentation made to the Portfolio Committee on Labour dated 23 May 2018
The entity had spent a cumulative R91.9 million at the end of the third quarter against the revenue of R92.2 million, resulting in a surplus of R277 000.
- National Economic Development and Labour Council (Nedlac)
- Nedlac’s Performance per Strategic Objectives During Quarter 3
Nedlac reported performance per strategic objectives are as follows:
Table14: Nedlac Performance per Strategic Objective
|
Strategic Objectives |
Annual Planned Indicators |
Indicators reporting in Q3 |
Achieved |
Overall Achievement % |
|
Effective governance and strategic leadership |
3 |
1 |
1 |
100 |
|
Provision of efficient and reliable back office support services |
2 |
2 |
2 |
100 |
|
Improved risk management and financial oversight |
3 |
2 |
1 |
50 |
|
Improved facilities management |
2 |
2 |
1 |
50 |
|
Office administration systems enhanced and monitored |
2 |
2 |
2 |
100 |
|
Strengthen organizational culture and performance |
2 |
1 |
0 |
0 |
|
Effective engagement on draft policy and legislation within the framework of the Nedlac Act, Constitution and Protocols |
24 |
12 |
11 |
92 |
|
Conclude matters under consideration within the framework of Section 77 of the Protocol |
1 |
1 |
1 |
100 |
|
Promote social dialogue through communication, information and capacity building |
3 |
3 |
3 |
100 |
|
Compliance with the Nedlac Policy on Constituency Capacity Building and Expense |
3 |
3 |
3 |
100 |
|
Total number of indicators |
47 |
30 |
26 |
87 |
Source: Adapted from the Presentation to the Portfolio Committee on Labour dated 23 May 2018
Of the 30 planned indicators reporting in quarter 3, 26 were achieved translating to 87% achievement.
- Nedlac programmes
Nedlac reported its performance per programme reported as follows:
Table 15: Nedlac Performance per Programme
|
Programmes |
Annual Planned Indicators |
Indicators with targets reporting in Q3 |
No. of targets achieved |
Overall Performance % |
|
Administration |
14 |
9 |
6 |
67 |
|
Core Operations |
30 |
18 |
17 |
94 |
|
Constituency Capacity Building Funds |
3 |
3 |
3 |
100 |
|
Overall Performance |
47 |
30 |
26 |
87 |
Source: Adapted from the Presentation to the Portfolio Committee on Labour dated 23 May 2018
The Nedlac activities are structured into three programmes, namely Administration, Core-Operations and Constituency Capacity Building Funds. The Constituency Capacity Building Funds programme achieved all its planned targets that report in quarter 3. Core Operations programme achieved 17 of the 18 targets reporting in quarter 3, translating to an achievement of 94%. Administration had 9 targets reporting in quarter 3 and managed to achieve 6, translating to an overall performance of 67%.
- Nedlac Financial Performance for Quarter 3
- Administration: R21 854 182
- Co-operations: R6 434 400
- Constituency Capacity Building: R4 113 018
Total Budget: R32 401 600
Budget allocation and expenditure by economic classification at the end of quarter three was reported as follows:
Table 16: Nedlac Financial Performance by Economic Classification
|
Economic Classification |
Budget 2017/18 |
Actual Exp as at 31 Dec 2017/18 |
Variance Over/Under Exp 2017/18 |
|
Compensation of Employees |
R13 905 000 |
R12 139 680 |
R1 765 320 |
|
Goods and Services |
R18 296 600 |
R12 193 043 |
R6 103 557 |
|
Payment for Capital Assets |
R200 000 |
R0 |
R200 000 |
|
Payment for Financial Assets |
R0 |
R0 |
R0 |
|
Total |
R32 401 600 |
R24 332 723 |
R8 068 877 |
Source: Presentation to the Portfolio Committee on Labour dated 23 May 2018
Nedlac spent R24 332 723 of the R32 401 600 budget allocation in the third quarter of 2017/18 financial year. A total of R12 139 680 was spent on compensation of employees against the budget of R13 905 000. Nedlac spent R12 193 043 on Goods and Services, against a target of R18 296 600 by the end of quarter 3.
Financial performance per programme was reported as follows:
Table 17: Nedlac Financial Performance per Programme
|
Programme |
Annual Budget |
Actual Exp to date |
Expenditure to date % |
|
Administration |
R21 854 182 |
R16 581 677 |
76 |
|
Co-Operations |
R6 434 400 |
R6 069 668 |
94 |
|
Constituency Capacity Building |
R4 113 018 |
R1 681 378 |
41 |
|
Total |
R32 401 600 |
R24 332 723 |
75 |
Source: Adapted from the Presentation to the Portfolio Committee on Labour dated 23 May 2018
Table 17 reflects that by the end of the third quarter, 75% of the allocated budget had been spent. This is in line with the expected average expenditure of 25% per quarter. The larger portion of the Nedlac budget went to Administration programme. It spent R16 581 677 at the end of the third quarter against the budget of R21 854 182, translating to 76% expenditure. Co-Operations programme spent R6 069 668 at the end of quarter 3, against the budget of R6 434 400, translating to a 94% expenditure.
- Unemployment Insurance Fund
- UIF performance per strategic objective
The UIF reported its performance per strategic objective as follows:
Table 18: UIF Performance per Strategic Objective
|
Strategic Objectives |
Actual Output Validated |
Overall Achievement % |
|
|
Planned Indicators |
Achieved |
||
|
Improve financial management |
3 |
3 |
100% |
|
Improve service delivery |
5 |
2 |
40% |
|
Improve compliance to the Unemployment Insurance Act |
2 |
1 |
50% |
|
Fund poverty alleviation schemes |
2 |
1 |
50% |
|
Overall Performance |
12 |
7 |
58% |
Source: Adapted from the Presentation to the Portfolio Committee on Labour dated 23 May 2018
Table 18 reflects an overall achievement of 58%, which is the same as in the second quarter of 2017/18. The best performing strategic objective was Improve financial management at 100%. It was followed by Improve compliance to the UI Act and Fund poverty alleviation schemes, both at 50%. Both objectives achieved 50% in quarter 2 as well. Improve service delivery objective has been consistent in poor performance at 40% in quarter 1, 2 and 3.
- Performance per programme
The UIF execute its activities towards the achievement of the above-mentioned strategic objectives through the following programmes:
- Administration
- Business Operations
- Labour Activation Programmes.
Table19: UIF Performance per Programme
|
Programmes |
Actual Output Validated |
Overall Achievement % |
|
|
Planned Indicators |
Achieved |
||
|
Administration |
1 |
1 |
100 |
|
Business Operations |
7 |
3 |
43 |
|
Labour Activation Programmes |
2 |
1 |
50 |
|
OVERALL PERFORMANCE |
12 |
7 |
58 |
Source: Adapted from the presentation to the PC: Labour dated 23 May 2018
The Administration programme committed 60% of total mandated social responsibility
investments against a target of 80% by the end of the third quarter. The reason provided for the variance was that the SRI commitment value increased by 11% in the year under review.
- UIF Financial Expenditure linked to organizational performance
In this regard, UIF reported as follows:
Table 20: UIF Financial Performance for Q3
|
Programme |
Budget |
Actual Expenditure |
Actual Expenditure % |
|
Improve Financial Management |
1 057 884 |
543 078 |
51 |
|
Improve Service Delivey |
11 751 572 |
7 610 227 |
64 |
|
Improve Compliance |
245 209 |
206 120 |
84 |
|
Fund Poverty Schemes |
652 383 |
24 508 |
4 |
|
Total |
13 707 048 |
8 383 933 |
61 |
Source: Adapted from the Presentation to the Portfolio Committee on Labour dated 23 May 2018
Table 20 reflects that the UIF spent 61% of its budget by the end of the third quarter of 2017/18. This is less than the recommended 25% expenditure per quarter.
- Commission for Conciliation, Mediation and Arbitration
- Performance per Strategic Objective
CCMA performance per strategic objective was reported as follows:
Table 21: CCMA Performance per Strategic Objective
|
Strategic Objective |
Actual Output |
Overall Achievement % |
|
|
Planned Indicators |
Achieved |
||
|
Enhancing the labour market to advance stability and growth |
1 |
1 |
100 |
|
Advancing good practices at work and transforming workplace relations |
3 |
3 |
100 |
|
Building knowledge and skills |
1 |
1 |
100 |
|
Optimising the organization |
4 |
2 |
50 |
|
Overall Performance |
9 |
7 |
78 |
Source: Adapted from the presentation to the PC: Labour dated 23 May 2018
The overall non-financial performance per strategic objective was at 78% in the third quarter of 2017/18. The under-performance in Optimising the organization objective was attributed to systems outages and administration errors by staff members.
- Under-performing non-financial targets for the 2017/18 third quarter
- CCMA heared 99.99% (34 866 out of 34 870) of registered cases’ first event within thirty days, excluding agreed extensions. Under-performance on this target was attributed to system outages and administration errors by staff members.
- The entity sent 99.80% (4 528 out of 4 537) of arbitration awards to parties by the fourteenth day after completion of arbitration process. Under-performance on this target was attributed to similar reason as above.
- 2017/18 Quarter 3 Dashboard
- 45 517 cases were referred to the CCMA during the period under review compared to 47 311 in the second quarter. On average the CCMA took 23 days to deal with conciliation cases as compared to the legislated target of 30 days.
- On average the CCMA took 58 days to deal with arbitration cases against a target of 60 days.
- The CCMA settled 91 of 107 public interest matters (section 150).
- The CCMA settled 7.4 out of 10 cases heard, which constitutes 74%.
- The CCMA conducted 562 outreach activities (inclusive of awareness raising activities, capacity building activities and social justice blockages activities).
- 11 489 people were capacitated to better understand the law and their rights through the outreach activities conducted.
- 34% of jobs (17 986 out of 52 392) at stake were saved compared to employees facing retrenchment (cases referred to the CCMA).
- The inaugural Director’s User Forum in Agriculture was held on 07 November in Limpopo.
- The CCMA received 99 complaints and all complaints were investigated and responded to.
- CCMA Quarter 3 Financial Performance per programme
CCMA reported financial performance per programme as follows:
Table 22: Financial Performance per Programme
|
Programme |
Budget |
Actual |
Variance |
Variance |
|
R’000 |
R’000 |
R’000 |
% |
|
|
Administration |
344 879 |
327 202 |
17 677 |
5 |
|
Institution Development |
18 098 |
15 779 |
2 319 |
13 |
|
Corporate Governance |
3 802 |
2 651 |
1 151 |
30 |
|
Social Services |
310 014 |
295 102 |
14 912 |
5 |
|
Total |
676 793 |
640 734 |
36 059 |
5 |
Source: Adapted from the Presentation to the Portfolio Committee on labour dated 23 May 2018
The actual expenditure per programme amounted to R640.7 million against the budget of R676.8 million at the end of quarter 3. The largest portion of expenditure was on Administration programme, at R327.2 million against the budget of R344.9 million. This was followed by Social Services, which spent R295.1 million against the budget of R310.0 million. Corporate Governance programme had the least expenditure of R2.6 million against the budget of R3.8 million.
The entity reported financial performance per strategic objective as follows:
Table 23: Financial Performance per Strategic Objective
|
Strategic Objectives |
Budget |
Actuals |
Variance |
Variance |
|
R’000 |
R’000 |
R’000 |
% |
|
|
Enhancing the labour maket to advance stability and growth |
21 710 |
21 464 |
246 |
1 |
|
Advancing good practices at work and transforming workplace relations |
7 715 |
5 657 |
2 058 |
27 |
|
Building knowledge and skills |
13 146 |
11 714 |
1 432 |
11 |
|
Optimising the Organisation |
634 223 |
604 876 |
32 323 |
5 |
|
Total |
676 793 |
640 734 |
36 059 |
5 |
Source: Adapted from the presentation to the Portfolio Committee on Labour dated 23 May 2018
Table 23 reflects that the larger portion of expenditure went to Optimising the Organisation, at R604.9 million against the budget of R634.2 million. It was followed by Enhancing the labour market to advance stability and growth objective, which spent R21.5 million against the budget of R21.7 million. Building knowledge and skills objective spent R11.7 million against the budget of R13.1 million.
The CCMA reported financial performance by economic classification as follows:
Table 24: CCMA Financial Performance by Economic Classification
|
Economic Classification |
Budget |
Actuals |
Variance |
Variance |
|
R’000 |
R’000 |
R’000 |
% |
|
|
Compensation of Employees |
345 101 |
350 985 |
-5 884 |
-2 |
|
Transfer Payment |
5 457 |
5 178 |
279 |
5 |
|
Admin & Operating Expenses |
314 321 |
281 594 |
32 727 |
10 |
|
TOTAL OPEX |
664 764 |
637 757 |
27 007 |
4 |
|
CAPEX |
12 029 |
2 977 |
9 052 |
75 |
|
Total Expenditure |
676 793 |
640 734 |
36 059 |
5 |
Source: Adapted from the presentation to the Portfolio Committee on Labour dated 23 May 2018
The larger portion of expenditure by economic classification went to Compensation of Employees at R350.9 million against the budget of R345.1 million, resulting in the over-expenditure of R5.9 million. The over-expenditure mainly relates to provision for Leave Pay. The second largest expenditure was on Admin and Operating Expenses at R281.6 million against the budget of R314.3 million, resulting in under-expenditure of R32.7 million. The under-expenditure relates to budgeted goods and services that are on demand basis.
- Committee Observations
- Standing Committee on Appropriations reported that Inspection and Enforcement Services programme is struggling to retain labour inspectors as a result of competition in terms of salaries with the private sector and other departments such as the Mineral Resources.
- In its presentation to the Committee, the Compensation Fund did not provide information on expenditure by economic classification and expenditure per strategic objective.
- In its finance report presentation to the Committee, the Productivity SA did not provide information on expenditure per programme and expenditure per strategic objective.
- Productivity SA was inconsistent in its report on strategic objectives highlights in that it provided a cumulative figure for jobs saved and quarter specific figure for the other two highlights.
- Productivity SA has foot-prints in only three provinces, which are Gauteng, KwaZulu-Natal and Western Cape.
- Productivity SA reported that it was unable to curb job losses through its Turnaround Solutions programme because the funds were not received in full and on time.
- In its presentation on third quarter expenditure, Nedlac did not provide information on expenditure per strategic objective.
- Nedlac had spent 94% of its budget by the end of the third quarter as a result of minimum wage related spending.
- In its third quarter expenditure report presentation to the Committee, the UIF did not provide information on expenditure per strategic objective and expenditure by economic classification. It also did not provide a consolidated table on performance per programme.
- In its presentation on financial performance, the CCMA did not provide the percentage of the amount spent at the end of the third quarter.
10. Committee Recommendations
The Committee recommends that the Minister ensures that the Department do the following:
- The Department should consider reviewing the remuneration of labour inspectors as part of a retention strategy. An occupational specific dispensation is an option that can be explored.
- In view of the lack of uniformity in the manner of reporting as reflected in the above Committee Observations, the Department should ensure that a standard format of reporting is used.
- The Department should explore the feasibility of establishing Productivity SA branches in other provinces.
- The Department should ensure that Productivity SA receives its budget allocation on time in order for it to execute its mandate.
Report to be considered.
Documents
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