ATC200319: Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on Oversight Visit Tosupported Employment Enterprises (See), Ndabeni, Western Cape, dated 11 March 2020

NCOP Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour

REPORT OFTHE SELECT COMMITTEE ON TRADE AND INDUSTRY, ECONOMIC DEVELOPMENT, SMALL BUSINESS DEVELOPMENT, TOURISM, EMPLOYMENT AND LABOUR ON OVERSIGHT VISIT TOSUPPORTED EMPLOYMENT ENTERPRISES (SEE), NDABENI, WESTERN CAPE,DATED 11 MARCH 2020
 

The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour, having conducted an oversight visit to Supported Employment Enterprises at Ndabeni, Western Cape, on the 10 September 2019, reports as follows:

 

1. Background and Introduction

In terms of section 42(4) of the Constitution, the National Council of Provinces (NCOP) ismandated to ensure effective cooperative governance and intergovernmental relations between the three spheres of government. This unique mandate of the NCOP further seeks to ensure that the provincial interests are taken into account in the national sphere of government. It is within this context that the Select Committees on Trade and Industry, Economic Development, Tourism, Small Business Development and Employment and Labour visited the Supported Employment Enterprises factory(SEE) in Ndabeni, Western Cape.

 

2. Purpose of the visit

2.1 Briefing by the SEE on Annual Performance Plan and Budget for the 2019/20 financial year;

2.2 Presentation by Department of Employment and Labour on measures undertaken to deal with challenges in the Road Freight and Logistic Sector;

2.3 Walk about in the factory.

 

 

3. Multiparty delegation

The delegation comprised of the following members:

Hon MI Rayi, Mr (ANC) Chairperson

Hon, MK Mmoiemang, Mr (ANC)

Hon ML Moshodi, Ms (ANC)

Hon HS Boshoff, Ms (DA)

Hon TJ Brauteseth, Mr (DA)

Hon B Mathevula, Ms (EFF).

 

The delegation was accompanied by the following parliamentary officials: Ms NG Dinizulu (Committee Secretary), Mr L Sishuba (Content Advisor), Mr Z Ngxishe (Committee Researcher), Mr S Mokoena (Communication Officer), Mr E Bazier (Committee Assistant) and Ms P Kakaza (Executive Secretary).

3.1 In attendance

The meeting was attended by the officials from the Department of Employment and Labour, and Supported Employment Enterprises (SEE).

Ministry, departmental, public entity representatives and other stakeholders

 

Name of delegate

 

 

Organisation

 

Designation

Mr T Lamati

Department of Employment and Labour

Director-General

Mr S Morotoba

Department of Employment and Labour

Deputy Director-General

Mr M Buthelezi

Department of Employment and Labour

Acting Chief Communication Officer

Adv M Ntleki

Depart Department of Employment and Labour

Director: Office of the Director-General

Mr K Moletsane

Department of Employment and Labour

Administrator

Mr T Wababa

Department of Employment and Labour

Parliamentary Liaison Officer

Mr CC Fourie

Department of Employment and Labour

Deputy Director:  SEE factory

Mr A Booysen

Supported Employment Enterprises

Acting Director: factory production

Ms N Ogle

Supported Employment Enterprises

Human Resources Generalist

Ms P Rustin

Supported Employment Enterprises

Human Resource Generalist

Ms C Van Reenen

Supported Employment Enterprises

Acting Director Communications

 

4. Outline of the Supported Employment Enterprises (SEE)

 

Ms Rustin, the Human Resources Generalist Officer, welcomed the entire delegation. She further tendered an apology for the factory manager, Mr D Sass. Ms Rustin informed Members that SEE in N’dabeni is the largest factory in the development scheme and consists of 161 employees. Nine officials have been seconded from the Department of Employment and Labour to form part of the management team.

 

She indicated that the presence of Members of Parliament gave them hope for continuous reciprocal, good financial and prosperous relationship with all government departments. The factory is divided into two main sections: Textile, Wood and Metal, recently it opened the Powder Coating Plant which is a subsidiary plant to the metal department. Ms Rustin emphasised the need of the SEE in the South African economy. The SEE is one of the paramount institutions that have created job opportunities for people with disabilities. As a result employees working in the SEE no longer received social grants administered by the South African Social Security Agency (SASSA).

 

4.1 SEE Annual Performance Plans for 2019/20

 

The Director-General, Mr Lamati, presented the budget and expenditure plan, and focused on the following areas:

  • Mandate for the Supported Employment Enterprises
  • 2018/19 Overall performance
  • 2018/19 Audit Outcomes, and implementation plan.

 

4.1.1 Mandate for Supported Employment Enterprises

 

The Department submitted that the mandate of SEEs is to create employment for people with disabilities who are unable to find employment in the open labour market due to the nature of their afflictions. The Supported Employment Enterprises develops and implement programmes that promote the employability of persons with disabilities, including persons with permanent disablement as defined in the compensation for occupational injuries and diseases act, no 130 of 1993), in the light of their evolving needs in a changing economy. There are about 4.7 million people with disabilities in South Africa of which, 10 per cent to 15 per cent probably require a working environment offered by the Supported Employment Enterprises.

 

Further it was reported that the Supported Employment Enterprisesworks closely with Productivity SAin conducting work study reviews of SEE manufacturing processes in line with South African Bureau of Standards (SABS)certified norms and standards. The Department further informed the Delegation that the implementation of approved SEE norms and standards are maintained throughout thefactories countrywide. Also, the focus is on upskilling key personnel involved in production,planning and execution.

 

4.1.2 Overall performance for 2018/19

 

The Department submitted that the SEE has achieved all the performance targets for the 2018/19 financial year. TheSEE has simply set two major performance targets that receive contribution from several functional policy programmes. The Department further indicated that it has put in place monitoring measures to ensure that performance targets are achieved, and the quarterly reviews have assisted in ensuring that the Department meet the annually targets.

 

For the period under review, the SEE has employed 150 additional persons with disabilities. Further, the SEE intends to increase the sales revenue from goods and services by 10 per cent by end of March 2020. The SEE has ambitions to expand and penetrate new markets. To reach the new markets it has realised it would need both non-financial and financial support. 

 

4.1.3 Audit Outcomesfor 2018/19

 

For the 2018/19 financial year, the SEE received a qualified audit outcome for both non-financial information and annual financial statements. In the main the audit outcomes highlighted that the SEE should adhere to the acceptable general standards of accounting. To this end, the SEE is in the process of establishing and strengthening the finance structure with management accounting and financial reporting capacity and capability including financial risk capacity.  In the main is to boost capacity in the finance department, and thus to appoint personnel with requisite skills to execute financial management and governance requirements in line with legislation and policy.

 

The Committee recognised that discrimination against people with disabilities persists in various social and economic spheres. Further, capacity and capability of the SEE should be prioritised. Partnership with development agencies, and private sector should be established. The Committee resolved within the six months after the adoption of this report to convene a meeting with relevant state departments to explore possible policy options to reposition the SEE to fulfil the legislative obligations, and to further meet government policy outcomes.

 

5. Report on the challenges facing Road Freight and Logistics Sector

 

The Director-General, Mr Lamati, briefed the Committee on the measures undertaken to deal with the challenges in the Road Freight and Logistic Sector, with specific focus on recent violence on trucks. The presentation covered the challenges raised by the Truck Drivers Association, work of the established Joint Inspection Task Team, Jurisdictional issues over Labour issues in the RFL Sector, and overview of the joint inspections conducted.

 

5.1 Brief Background

 

In the recent past South Africa witnessed a series road blockage, and burning of trucks on the N3 National Route, in KwaZulu-Natal. Complaints were lodged by the South African Truck Drivers Association who believed that employers in trucking industry preferred in hiring foreign nationals as truck drivers, as a result many South African truck drivers lost they jobs. The complaint which was submitted listed 47 South African companies that were alleged to have breached legislation.

 

The Truck Drivers Association listed raised the following challenges as matters that need to be investigated:

 

  • High rate and level of foreign nationals employed in the sector;
  • Employers giving unfair preference to foreign drivers displacing South African drivers; 
  • Ill-treatment of local drivers by employers;
  • Driver taking responsibility of overloaded cargos instead of employers;
  • Lack of compliance with labour laws including collective agreement;
  • Long hours worked without overtime;
  • Illicit driver’s licenses by foreign national drivers;
  • License disks/permits for one truck being shared by many trucks which are not roadworthy;
  • Fake or lapsed work permits.

 

The complaint caused government to launch a joint inspection task team to investigate the matter. The Department of Employment and Labour became the lead department on matter that affected labour laws. The joint inspection team was comprised of the following government departments and agencies:

 

  • Department of Home Affairs;
  • National Bargaining Council for Road Freight Industry;
  • Department of Employment and Labour;
  • Department of Transport;
  • South African Police Service, including the Road Traffic Infringement Agency (RTIA).

 

5.2 Overview of the Joint Inspection Activities

 

Inspection team compiled an inspection plan covering a period of six months up to the end of October 2019. The Department submitted that the following activities were undertaken by the Joint Inspections Team:

 

  • Joint inspections were conducted by visiting various workplaces targeting the companies that were on the list of the initial complaint;
  • The Inspectors also participated in the joint roadblocks at Mkhondeni Weighbridge, including Mooi River and Midway Estcourt.
  • The total number of companies inspected were 56.
  • The total number of employees from inspected companies was 2745 categorized as follows:1947 employeesfrom the Republic of South
    Africa and 798 foreign nationals.
  • Seven companies could not be inspected as their offices fell outside of KZN, four were based in the Western Cape, two in Gauteng and one in the Free State. Two companies could not be traced.
  • The companies that are based in KZN were selected and included in the list of those that had to be visited to complete the inspection process on the premises of the employer;
  • The employers who were found non-compliant with the labour laws were issued with the appropriate enforcement notices ordering them to comply within the prescribed period. Upon follow up, the majority had since complied whilst those that failed to comply at the expiry of the notice, were referred for prosecution;
  • Further, the inspectors identified that some of the employers were not complying with UIF registration requirements, including failure to pay the overtime, Sunday work; public holiday rate; and implementation of incentive scheme.

 

The common findings confirmed the prevalence of foreign nationals employed as truck drivers as reflected in the report indicating specific findings per employer. Issues relating to documentation of foreign nationals were referred to the Department of Home Affairs for validation.

 

5.3Jurisdictional issues over labour issues in relation to the sector

 

The Department submitted that the basic conditions of employment in the sector are regulated by a collective agreement administered by the Bargaining Council for Road Freight and Logistics Sector(NBCRFI). Further the Bargaining Council does not enforce Sections 29 and 33of the Basic Conditions of Employment Act [Act 75 of 1997]. The Bargaining Council has Agents who monitor and enforce compliance with the clauses of the Collective Agreement. The disputes of unfair dismissals also fall under the Bargaining Council which may conciliate or arbitrate over such cases.

 

The Employment Services Act, 2014 prescribes that an employer may not employ a foreign national prior to such a foreign national producing an applicable and valid work permit in terms of the Immigration Act. Section 50(4) of the Employment Services Act provides that any employer who contravenes Section 8(1) shall be guilty of an offence and liable on conviction to a fine or imprisonment contemplated in Section 49(3) of the Immigration Act. The Department further noted that although the Employment Services Act,which is administered by the Department of Employment and Labour makes reference to the regulation of the employment of the foreign nationals, where there are contraventions of such provisions such contraventions are referred to the Department of Home Affairs for enforcement under the Immigration Act and Regulations.

 

In terms of the law, Immigration Officers from the Department of Home Affairs are responsible for the enforcement of the Immigration Act and Regulations(work permits for employment of foreign nationals). Including enforcing compliance in relations to the ratio of 60 per cent of South Africans vs 40 per cent of foreign nationals in companies owned by foreign investors.

 

6.Key observations

  • The road freight and logistics labour conflict between local and foreign national truck drivers is a very complex problem, which require a multidisciplinary approach;
  • The Department of Employment and Labour has an establishment of 1400 labour inspectors at a national level and this far below the required capacity for effectively enforcing compliance as required by the South African labour legislation regime;
  • The National Road Freight Bargaining Council makes use of its own private agencies to enforce compliance of affiliated companies that it regulations;
  • Further, the Department is in the process of developing a labour migration policy to boost legislation and policy regime to effectively administer issues in the labour market;
  • South African Development Community (SADC) and African Union (AU) have migration protocols in place that regulate labour migration and movement of goods and services which also find expression under the newly adopted Africa Free Trade Agreement;
  • Key among the challenges in road freight and logistics industry is the preference of foreign national drivers over local truck drivers. Companies not affiliated to National Road Freight Bargaining Councilprefer to employ foreign nationals, and in the process avoid compliance with the existing labour laws.

 

The Committee recognised the complexity of the matter, and thus it needs a cross-sector approach to have a sustainable solution. It has resolved within six months after adoption of this report to convene a meeting in partnership with other relevant Parliamentary Committees to address labour immigration policy and legislation considerations.   

 

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