ATC200618: Report of the Portfolio Committee on Employment and Labour on the Third Quarterly Reports Regarding the Performance of the Department of Employment and Labour and its Entities in Meeting Strategic Objectives for 2018/19, Dated 10 June 2020

Employment and Labour

Report of the Portfolio Committee on EMPLOYMENT AND Labour on the THIRD Quarterly ReportS regarding the Performance of the Department of EMPLOYMENT AND Labour and its entities in meeting Strategic Objectives for 2018/19, dateD 10 JUNE 2020

 

The Portfolio Committee on Employment and Labour, having considered the Third Quarterly Report on the performance of the Department of Employment and Labour (DEL) and its entities in meeting strategic objectives for 2018/19, reports as follows:

 

1. Introduction

 

The Portfolio Committee on Employment and Labour considered the Third Quarterly Reports on the performance of the Department of Employment and Labour and its entities in meeting strategic objectives for 2018/19 as presented in the meeting held on 21 August 2019.

 

This report gives an overview of the presentations made by the Department of Employment and Labour (Department) and its entities, focusing mainly on its achievements, output in respect of the performance indicators and targets set for 2018/19 and the financial performance. The report also provides the Committee’s key deliberations and recommendations relating to the Department’s and entities’ performance.

 

1. Performance per Strategic Objective

 

The Department reported on its performance per strategic objectives as follows:

Table 1: DEL Performance per Strategic Objective in Q3

STRATEGIC OBJECTIVES	Planned Indicators	Indicators with Q3 Targets	Achieved	Overall Achievement
Strengthen occupational safety	This strategic objective is covered under indicators that are applicable to protecting vulnerable workers
Promote equity in the labour market	1	0	0	-
Protecting vulnerable workers	5	4	4	100%
Strengthening  multilateral and bilateral relations	1	1	1	100%
Contribute to employment creation	4	4	4	100%
Promoting sound labour relations	3	3	1	33%
Monitoring the impact of legislation	2	1	0	0%
Strengthening the institutional capacity of the Department	4	4	4	100%
OVERALL PERFORMANCE	20	17	14	82%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 21 August 2019

 

The overall performance per strategic objectives improved from 80% in the Q2 of 2018/19 to 82% in the Q3 of 2018/19. The major contributors to improvement in overall performance were Protecting vulnerable workers and Strengthening multilateral and bilateral relations strategic objective at 75% to 100% and 0% to 100% respectively. Monitoring the impact of legislation strategic objective subdued the increase in overall performance by regressing from 100% in Q2 to 0% in Q3 of 2018/19.

 

1. Performance per Programme

 

The overall performance per programme was reported as follows:

 

Table 2 DEL Performance per Programme in Q3

BRANCH	Annual Planned Indicators	Indicators with Q3 Targets	Achieved	Overall Achievement %
Administration	4	4	4	100%
Inspections and Enforcement Services	4	4	4	100%
Public Employment Services	4	4	4	100%
Labour Policy and Industrial Relations	8	5	2	40%
OVERALL PERFORMANCE	20	17	14	82%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 21 August 2019

 

Labour Policy and Industrial Relations is the only programme that achieved less than 100% performance. This programme achieved a performance of 40%, which is a decrease in performance from the 50% achieved in the Q2 of 2018/19. Inspection and Enforcement Services programme improved from 75% in Q2 of 2018/19 to 100% in Q3 of 2018/19.

 

1. Programme performance in Q3 of 2018/19

 

4.1.       Administration

The purpose of the Administration programme is to provide strategic leadership, management and support services to the Department.

 

The Administration programme comprise the following sub-programmes: Ministry; Office of the Director-General; Office of the Chief Operations Officer; Corporate Services; and Office of the Chief Financial Officer. Corporate Services includes: Human Resource Management, Internal Audit, Risk Management, Security Services, Communication, Legal Services and Office of the Chief Information Officer.

 

The Department incurred fruitless and wasteful expenditure of R425 812.57 in Q3 of 2018/19. This is an increase of R48 969.73 from R376 842.84 recorded in the Q2 of the year under review.

 

There was no unauthorized expenditure detected and reported during the reporting period.

 

A total of R670 380.73 of irregular expenditure was detected and reported during the reporting period. This is an increase of R414 640.61 from R255 740.12 recorded in the Q2 of 2018/19.

 

4.2.       Inspection and Enforcement Services (IES)

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

 

The programme consists of the following sub-programmes: Management and Support Services; Occupational Health and Safety; Registration: IES; Compliance, Monitoring and Enforcement Services; Training of Staff: IES; and Statutory and Advocacy Services.

 

The programme conducted 46 508 inspections in the third quarter of 2018/19 against a target of 43 746, translating to an overall performance of 106%. Of those inspected 37 453 were found to be compliant and 9 055 were non-compliant and as a result were issued with enforcement notices.

 

A total of 414 Director-General Reviews were conducted against a target of 466, which constitutes 88.6% achievement. Only 118 complied at the initial review and 256 did not comply and were issued with Director-General recommendations with which to comply within 60 days. The following sectors were reviewed: Agriculture; Mining and Quarrying; Manufacturing; Electricity, Gas and Water; Construction; Retail, Motor Trade; Wholesale Trade, Commercial Trade; Catering, Accommodation; Transport, Storage and Communications; Finance and Business; and Community, Special and Personal Services.

 

In order to address identified areas of non-compliance, the programme is to conduct advocacy sessions on: employer organisations; Employment Equity Consultative Forums; and trade union federations. Furthermore, the programme will serve confirmatory letters to employers who fail to comply within timeframe and employers who fail to comply with sections invoking direct referral for prosecution.

 

The programme conducted 420 employment equity inspections against a target of 259, which constitutes 162% performance. Of those inspected, 258 were compliant and 162 were non-compliant and those found to be non-compliant were issued with notices to comply within 14 days. To address areas of non-compliance, the programme will serve confirmatory letters to employers who fail to comply within timeframe and employers who fail to comply with sections invoking direct referral for prosecution. Moreover, structured advocacy sessions are to be reintroduced and strengthened under EE to deepen the employers and workers understanding of EEA.

 

IES inspected 36 083 workplaces for BCEA compliance against a target of 35 093, translating into 87.3% achievement. Of those inspected 12.7% were found to be non-compliant and issued with enforcement notices to comply within 14 days. Major BCEA non-compliance was found in the following sectors: Wholesale and Retail; Hospitality; Farm Worker sector; Community Services sector; and Private Security. Areas of non-compliance included: underpayment of wages; non-issuing of pay slips; illegal deductions; non-issuing of particulars of employment; and non-signing of attendance to prove working hours including overtime. IES is to reintroduce and strengthen structured advocacy sessions under BCEA and to deepen the employers and workers understanding of the BCEA including the Sectoral Determinations.

 

A total of 5 162 OHS inspections were conducted against a target of 4 702, resulting in a positive variance of 559. Of the total number of inspections done, 3 201 were compliant, translating to 62% compliance level. Sectors inspected were construction, which constituted more than half of the inspections conducted in KZN, Gauteng and Western Cape. This was followed by Iron and Steel and the Wholesale and Retail sector with most inspections conducted in KZN and Gauteng. The bulk of the inspections conducted in Wholesale and Retail sector were in the Free State province.

 

Of the 256 incidents that were reported, 182 or 71% were investigated and finalized within 90 days. A total of 859 applications for registration of entities were received and 854 or 99.4% were processed and finalized within 60 days.

 

A total of 4 044 procedural (UIF) audits were conducted against a target of 3 095, equating to 130.7% performance. Of those employers audited, 54.3% were compliant and 46.7% were non-compliant and those found to be non-compliant were issued with enforcement notices to comply within 14 days. Areas of non-compliance were: declarations in terms of section 56 of the UIA; failure to register with the Fund; and non-payment of contributions. The most non-compliant sectors were: Private Security; domestic; Construction; Wholesale and Retail; and Manufacturing. To address non-compliance, IES will reintroduce and strengthen structured advocacy sessions under UI legislation and deepen the employers and workers understanding of UI legislation. Furthermore, IES will strengthen relationship with SARS to achieve improved compliance.

 

A total of 233 or 101.7% payroll audits were conducted against a target of 229. A total of 104 audited employers were compliant and 129 were non-compliant and issued with notices. The areas of non-compliance were: declarations as per section 56(3) non-compliance in terms of section 56 of the UIA; failure to register with the Fund; and non-payment of contributions. The most non-complying sectors were: Private Security; Domestic; Construction; Wholesale and Retail; Manufacturing; and Iron and Steel. IES is to launch a series of advocacy campaigns to sensitise non-compliant employers about the legislation and the consequences of non-compliance as per section 56(3).

 

The Employment Audit Services (EAS) recovered a total of R515 882.95 through penalties imposed to non-compliant employers. The major share of monies recovered was in the Eastern Cape (R336 520.49); North West (R90 413.37); and Western Cape (R81 913.44).

 

The total number of employers referred for prosecution were as follows:

• DG Reviews: 3
• Employment Equity (EE): 15
• Basic Conditions of Employment Act (BCEA): 608
• Occupational Health and Safety Act (OHS):16
• Employment Audit Services (EAS): 71

 

1. Public Employment Services (PES)

 

The purpose of this programme is to provide assistance to companies and workers to adjust to changing labour market conditions and to regulate private employment agencies. It consists of the following sub-programmes: Management and Support Services; Employer Services; Work-Seeker Services; and Designated Groups Special Services. The programme has oversight over the following entities: Supported Employment Enterprises; Productivity South Africa; Unemployment Insurance Fund; and Compensation Fund.

 

1. PES performance per strategic objective

The PES programme contributes to outcome 4 of the Medium Term Strategic Framework 2014-2019, which is decent employment through inclusive economic growth. The DEL strategic objective 1 is contribution to decent employment creation.

 

Table 3: PES performance per Strategic Objective in Q3

KEY PERFORMANCE INDICATORS	Q3 TARGET	ACTUAL
No. of work seekers registered on ESSA	151 000	203 293
No. of registered work-seekers provided with employment counselling	142 001	174 985

Source: Information obtained from the presentation to PC: Employment and Labour dated 21 August 2019

 

Table 3 reflects that the PES programme registered 203 293 work-seekers on ESSA against a target of 151 000, translating to 135% achievement. Gauteng province registered the highest number of work-seekers at 52 341, followed by KZN at 29 765 and Western Cape at 28 529. Of the work-seekers registered, 122 922 or 60% are young people aged 16 – 35 years and 80 369 or 40% are adults aged 36 years and above. Of the work-seekers registered, 1 437 or 0.7% are people with different forms of disabilities, including 678 with blindness, 299 with physical disabilities and 168 with chronic conditions. In terms of Employment Equity, 171 894 or 85% of work-seekers registered are Africans; 21 652 or 11% Coloureds; 5 653 or 3% Whites and only 2 464 or 1% are Indians. The remaining 1 630 were not specified by equity group.

 

Only 32 039 or 29% of registered work and learning opportunities were classified by economic sectors, while 78 726 or 71% were not. Agriculture; Construction; and Safety and Security registered 10 321; 6 974; and 3 821 respectively. Of the 110 765 opportunities registered, 65 140 or 59% are formal jobs.

 

PES programme provided 174 985 out of 203 293 or 86% work-seekers with employment counselling against a target of 142 001, translating to 123% achievement. Gauteng; Eastern Cape; and KZN provided 43 144; 26 456; and 23 762 employment counselling respectively.

 

A total of 31 741 work and learning opportunities were filled by registered work-seekers, of which 18 408 or 58% were formal jobs, 9 320 or 29% were projects, 2 511 or 8% were learnerships and 463 or 2% were internships. A total of 22 504 work-seekers placed are young people between the ages 16 – 35 years. The remaining 9 237 are work-seekers aged 36 years and above.

 

Only 9 332 or 29% opportunities filled were classified by economic sector and 22 409 or 71% were not. Most of the placements came from Agriculture (3 146) followed by Construction (2 021) and Security (1 390). Challenges with placement include skills mismatch and that number of work-seekers registered lack required experience.  Proposed interventions include: profiling of work-seekers on ESSA database, establishment of employment schemes for the low skills work-seekers and provisioning of funding from UIF and CF for the implementation of employment schemes.

 

4.4.       Labour Policy and Industrial Relations (LP & IR)

 

The purpose of this programme is to facilitate the establishment of an equitable and sound labour relations environment and the promotion of South Africa’s interests in international labour matters through research, analysis and evaluating labour policy, and providing statistical data on the labour market, including providing support to institutions that promote social dialogue. The programme consists of the following sub-programmes and entities: Management and Support Services; Strengthen Civil Society; Collective Bargaining; Employment Equity; Employment Standards; Commission for Conciliation, Mediation and Arbitration (CCMA); Research, Policy and Planning; Labour market Information and Statistics; International Labour Matters; and National Economic Development and Labour Council (NEDLAC).

 

LP & IR programme received 38 applications for registration from labour organisations in Q3. This was an increase by 11 applications from the 27 received in Q2. Of those applications received 32 were refused within 90 days of receipt. The number of applications refused increased by 10 from 22 refused in Q2. Only 6 applications were approved within 90 days in Q3, which is an increase by 1 from the 5 applications approved within 90 days in Q2.

 

The number of trade union applications increased from 9 054 in Q2 to 10 016 in Q3 of 2018/19. The Public Service reflected the highest number of members at 5 219 or 52%. Trade union members impacted by refusal increased from 8 246 in Q2 to 9 401 in Q3 of 2018/19. The highest number of members impacted by refusal were from the public service at 5 096 or 54%.

 

5.         Financial Report

 

5.1.       Expenditure information per programme in Q3

 

Table 4: DEL Expenditure Information per programme in Q3

BRANCH	ADJUSTED BUDGET   R’000	EXPENDITURE AS AT 31/12/2018 R’000	AVAILABLE BUDGET   R’000	EXP AS T 31 12/2018   %
Administration	906 631	541 079	365 552	60%
Inspection and Enforcement Services	592 223	384 884	207 339	65%
Public Employment Services	580 574	404 061	176 513	70%
Labour Policy and Industrial Relations	1 203 442	904 869	298 573	75%
Total	3 282 870	2 234 893	1 047 977	68%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

The adjusted budget of the DEL amounted to R3.3 billion in 2018/19 financial year. By the end of the third quarter, R2.2 billion or 68% was spent. The available budget as at 31 December 2018 was R1 million. The Administration programme spent R541 million or 60% of the allocated R906.6 million by the end of Q3 of 2018/19.This programme had an available budget of R365.5 million by the end of Q3.

 

The IES programme spent R384.8 million or 65% of the allocated R592.2 million by the end of Q3 of 2018/19. The available budget as at 31 December 2018 was R207.3 million. The PES programme spent R404 million or 70% of the allocated R580.6 million by the end of Q3 of 2018/19. The available budget as at 31 December 2018 was R176.5 million. LP & IR spent R904.9 million or 75% of the allocated R1.2 billion by the end of Q3 of 2018/19. The available budget as at the end of the Q3 was R298.6 million. The portion of the budget spent by this programme is in line with the expenditure pattern recommended by the National Treasury.

 

Table 5: Expenditure Information by Economic Classification in Q3

ECONOMIC CLASSIFICATION	ADJUSTED BUDGET	EXPENDITURE AS AT 31/12 2018	AVAILABLE BUDGET	% EXPENDITURE AS AT 31/12 2018
Current Payments	1 885 315	1 218 967	666 348	65%
Compensation of Employees	1 293 058	861 375	431 683	67%
Goods and Services	592 257	357 592	234 665	60%
Transfers and Subsidies	1 287 983	996 199	291 784	77%
Payments for Capital Assets	109 572	18 478	91 094	17%
Payment for Financial Assets	-	1 249	-1 249	*
Total	3 282 870	2 234 893	1 047 977	68%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

In terms of Economic Classification, the larger portion of the budget went to Current Payments and followed by Transfers and Subsidies. Compensation of Employees constitute the larger share of Current Payments at R1. 2 billion or 69% of the Current of Payments budget. At the end of Q3 Current Payments spent R1.2 billion or 65% of the allocated R1.8 billion. The available budget for current payments as at 31 December 2018 was R666.3 million. Compensation of Employees spent R861 million or 67% of the allocated R1.3 billion for the year 2018/19. The available budget for Compensation of Employees as at 31 December 2018 was R431.6 million.

 

Goods and Services spent R357.6 million or 60% of the allocated R592.3 million by the end of Q3 of 2018/19. The available budget for Goods and Services was R234.7 million as at 31 December 2018.

 

A total of R996.2 million or 77% of the R1.3 billion allocated for Transfers and Subsidies was spent by the end of Q3. The available budget for Transfers and Subsidies was R291.8 as at 31 December 2018. The largest amount, which is R963 million was transferred to the CCMA. CCMA spent R722 million or 75 % of the allocation by the end of Q3. The available budget for the CCMA was R240.8 million as at 31 December 2018. Productivity South Africa received a transfer of R53.3 million and had spent all its budget transfer by the end of Q3.

 

6.         Supported Employment Enterprises

 

The entity was established in 1943 through a Cabinet Memorandum as Service Product for the sole purpose of creating employment for ex-service man and women who could not secure employment in the labour market due to barriers that prevented their participation. The factories moved from various departments and eventually to the then Department of Manpower as the Sheltered Employment Factories.

 

The entity was formally established under the Employment Services Act, No. 04 of 2014 and continue to be audited as a trading entity.

 

There are currently 13 factories located in 8 of the 9 provinces in South Africa, with Mpumalanga currently being the only province without a factory. A process is underway to launch the Mpumalanga factory before the end of the current financial year.

 

The SEE provides employment to a total of 159 DEL staff seconded to support operations and a total of 1100 persons with disabilities employed under the Basic Conditions of Employment Act.

 

SEE is managed under the Department of Employment and Labour and report through the Branch: Public Employment Services.

 

Until 1999 the entity enjoyed “Preferential Procurement Status” that meant all government departments procured their office and school furniture as well as hospital linen and uniforms from SEE. The entity continues to receive grant funding to subsidize operations and is allowed to charge 50% upfront payment.

 

6.1.       Performance per Strategic Objective

 

Table 6: Performance per Strategic Objective of SEE in Q3 of 2018/19

STRATEGIC OBJECTIVE	Annual Planned Indicators	Indicators with targets reporting in Q3	Achieved	Overall Achievement %
Provide work opportunities for PWD	2	2	1	50%
Overall Performance	2	2	1	50%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

The performance of SEE increased from 0% in Q2 to 50% in Q3 of 2018/19. SEE employed 94 people with disabilities by end of Q3 against a target of 75. This was because SEE required additional capacity to deliver on the outstanding orders for National Department of Basic Education; Western Cape Department of Health; and Eastern Cape Department of Education.

 

The revenue from the sale of goods and services increased by 8.36% in Q3 of 2018/19 against a target of 10% increase. To remedy the situation, the entity plans to secure more contracts through implementation of the approved sales plan during Q4; process outstanding orders and collect revenue; resolve outstanding dispute on orders; and accelerate manufacturing process on new orders.

 

1. Q3 PERFORMANCE OF ENTITIES OF THE DEPARTMENT OF LABOUR (2018/19)

 

The entities that report to the Department of Labour are:

 

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

 

7.1.       The Compensation Fund (CF)

 

Constitutional Mandate

The mandate of the CF is derived from section 27(1)(c) of the Constitution. In terms of this section, “Everyone has the right to have access to social security, including, if they are unable to support themselves and their dependents, appropriate social assistance.” The CF is mandated to provide social security to all injured and diseased employees.

 

Legislative Mandate

The CF is a Schedule 3A Public Entity of DEL. The CF administers the Occupational Injuries and Diseases Act (COIDA). The main objective of the Act is to provide compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees, or for death resulting from injuries or diseases.

 

7.1.1.    CF Performance per Strategic Objective in Q3 of 2018/19

 

CF reported its performance per strategic objectives as follows:

 

Table 7: Q3 Performance per Strategic Objective

STRATEGIC OBJECTIVE	Annual Planned Indicators	Indicators with targets reporting in Q3	Achieved	Overall achievement %
Provide an effective and efficient client oriented support services	3	1	1	100%
Provide faster, reliable and accessible COID services by 2020	6	6	5	83%
Overall Performance	9	7	6	86%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

Table 7 above reflects that CF achieved an overall performance of 86% in Q3 of 2018/19. On the strategic objective “Provide an effective and efficient client oriented support services”, the entity had one target reporting in Q3 which was achieved equating to 100% achievement. On the objective “Provide faster, reliable and accessible COID services by 2020” CF had six targets reporting in Q3 and achieved 5 translating to an achievement of 83%.

 

7.1.2.    CF Performance per Programme in Q3 of 2018/19

 

Table 8: Q3 Performance per Programme

PROGRAMME	Annual Planned Indicators	Indicators with targets reporting in Q3	Achieved	Overall Achievement %
Administration	3	1	1	100%
Compensation for Occupational Injuries and Diseases Services Operations	3	3	2	67%
Medical Services	2	2	2	100%
Orthotic Rehabilitation	1	1	1	100%
Overall Performance	9	7	6	86%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

Table 8 above reflects performance per programme in Q3 of 2018/19. The overall achievement was 86%, with all but “Compensation for Occupational Injuries and Diseases Services Operations” programme achieving a performance of 100%. “Compensation for Occupational injuries and Diseases Services Operations” programme had three targets reporting in Q3 and achieved two translating to 67% achievement. This programme registered a total of 113 420 claims and adjudicated 109 307 or 96% in Q3 of 2018/19. Of the 113 420 registered claims, 106 657 or 94% were adjudicated within 40 working days against a target of 90% finalized within 40 working days.

 

Medical Services programme received 695 054 medical invoices and finalized 692 993 or 99.7% in Q3 of 2018/19. Of the 695 054 invoices received, 662 865 or 95% were finalized within 60 working days against a target of 85% of medical invoices finalized within 60 working days. This programme received 1073 pre-authorisations and responded to 999 or 93% within 10 working days against a target of 85% pre-authorisations responded to within 10 working days on previously finalized cases.

 

The Orthotic Rehabilitation programme received 893 requests for assistive devices and responded to 882 or 92% within 15 working days against a target of 85% of compliant requests for assistive devices responded to within 15 working days. The provinces that achieved less than 85% were Eastern Cape (71%), North West (75%) and Western Cape (82%). Under-achievement was attributed to non-compliance to letters and a process to load POE on the Y-Drive. The following actions are proposed to remedy non-compliance:

• The POE requirement to be discussed at workshops with provinces emphasizing the audit outcome.
• Constant communication and training with the provinces.
• Conduct provincial visit to provide support on performance information and reporting.
• Compiled and sent non-compliance notices to CDPOS of provinces where POE is not being submitted.

 

7.1.3.    CF Financial Performance in Q3 of 2018/19

 

CF reported financial performance as follows:

 

Table 9: CF Expenditure per Programme in Q3 of 2018/19

BRANCH	ADJUSTED BUDGET	EXPENDITURE AS AT 31/12/2018	AVAILABLE BUDGET	EXP AS AT 31/12/2018
	R’000	R’000	R’000	%
Administration	2 340 425	655 799	1 684 626	28%
COID Services	1 022 669	1 143 821	-121 152	112%
Medical Services	3 106 081	2 020 779	1 085 302	65%
Orthotic and Medical Rehabilitation	68 750	26 428	42 322	38%
Total	6 537 925	3 846 827	2 691 097	59%

Source: Presentation to the PC: Employment and Labour dated 21 August 2018/19

 

The adjusted budget for CF amounted to R6.5 billion and R3.8 billion or 59% was spent by the end of Q3 of 2018/19. This is less than the expenditure benchmark set by National Treasury, which recommends 25% expenditure per quarter. However, COID Services programme expenditure stood at 112% by the end of Q3. It was allocated R1 billion and had spent R1.1 billion by the end of Q3. Over-expenditure amounted to R121 million. Medical Services spent R2 billion or 65% of the allocated R3 billion. The available budget for this programme was R1 billion at the end of Q3. Orthotic and Medical Rehabilitation spent R26,4 million or 38% of the allocated R68.7 million by the end of Q3. The available budget was R42.3 million at the end of Q3 of 2018/19.

 

Table 10: CF Expenditure by Economic Classification in Q3 of 2018/19

ECONOMIC CLASSIFICATION	ADJUSTED BUDGET	EXPENDITURE AS AT 31/12 2018	AVAILABLE BUDGET	% EXPENDITURE AS AT 31/12 2018
Current Payments	2 210 609	806 507	1 404 102	36%
Compensation of Employees	973 497	399 181	574 316	41%
Goods and Services	1 237 112	407 326	829 786	33%
Payments for Capital Assets	82 251	6 094	76 157	7%
Total Administrative Expenditure	2 292 861	812 602	1 480 259	35%
Compensation Claims	1 185 670	1 031 557	154 114	87%
Medical Claims	3 099 440	2 002 760	1 096 770	65%
Total Benefits	4 285 110	3 034 226	1 250 884	71%
Total Budget	6 577 971	3 846 828	2 731 143	58%

Source: Presentation to the PC: Employment and dated 21 August 2019

 

Table 10 reflect that total administrative amounted to R812.6 million or 35% of the allocated R2.2 billion. The available budget was R1.4 billion as at 31 December 2018. The largest allocation went to Goods and Services at R1.2 billion and R407.3 million or 33% of that amount was spent as at 31 December 2018. The available budget for this programme was R829.7 million by the end of Q3 of 2018.

 

The entity spent R3 billion or 71% of the R4 billion allocated for total benefits by the end of Q3. There was R1 billion available budget by the end of Q3. A larger portion of benefits budget was allocated to Medical Claims at R3 billion and R2 billions or 65% of this amount was spent by the end of Q3 of 2018/19. Compensation Claims received R1.1 billion and R1.0 or 87% was spent as at 31 December 2018.

 

In terms of Economic Classification, a total of R3.8 billion or 58% of the allocated R6.5 billion was spent by the end of Q3. The available budget was R2.7 billion as at 31 December 2018.

 

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

 

CCMA reported its performance per strategic objective as follows:

 

7.2.1.    CCMA Performance per Strategic Objective in Q3 of 2018/19

 

Table 11: CCMA Performance per Strategic Objective in Q3

STRATEGIC OBJECTIVE	Annual Planned Targets	Planned Targets reporting in Q3	Achieved	Overall Achievement
Enhancing the Labour Market to advance stability and growth	5	2	1	50%
Advance good practices at work and transforming workplace relations	5	1	1	100%
Building knowledge and skills	1	1	1	100%
Optimising the organisation	8	4	2	50%
Overall Performance	19	8	5	63%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

Table 11 reflects the overall achievement of the CCMA was at 63% by the end of Q3 of 2018/19, which is a decrease in performance from the 78% achieved in Q3 of 2017/18. The entity under-performed in two strategic objectives, which are Enhancing the Labour Market to advance stability and growth (50%); and Optimising the organization (50%).

 

The entity delivered five capacity building interventions on effective negotiation skills covering the COGP and the Accord against a target of six strategically identified users. Non-achievement of this target was attributed to down time experienced due to early closure during December 2018. However, CCMA promised that the annual target will still be achieved as a result of delivery of five interventions to mitigate for the early December closure of Q3.

 

Of the 112 377 registered cases, 99 621 or 88.65% were heard first event within 30 days against a target of 98% of all registered cases’ first event heard. The reason for non-achievement was reported to be the description of the target not being prescriptive enough for CMS to produce accurate statistics. It was reported that this target has been amended in the 2019/20 APP and will now be achieved as planned.

 

CCMA delivered 12 training interventions to capacitate the workforce for efficient and effective delivery of the CCMA mandate against a target of 13 training interventions. The entity reported that it was planning to over achieve on this target in Q4 of 2018/19 to compensate for non-achievement in the Q3. It therefore promised that the annual target will be met.

 

7.2.2.    CCMA Dashboard inQ3 od 2018/19

 

The entity reported on its progress during the period under review as follows:

• A total of 45 180 cases were referred to the CCMA in Q3 of 2018/19, compared to 46 517 cases in Q3 of 2017/18.
• On average it took CCMA 23 days to conciliate disputes compared to the legislated target of 30 days.
• On average it took the entity 60 days to arbitrate disputes against a target of 60 days.
• The entity settled 133 or 88% of the 152 public interest matters (section 150) during the period under review.
• The CCMA settlement rate for the period under review was 74%.
• The entity conducted 379 outreach services during the period under review. A total of 16 564 people were capacitated to better understand the law and their rights through the outreach activities conducted.
• Of the 31 426 jobs at stake, 12 943 or 41% were saved compared to employees facing retrenchments (cases referred to the CCMA)
• The CCMA Indaba was held on 6-8 December 2018 in Cape Town, Western Cape.
• The entity received 88 complaints in Q3 of 2018/19 compared to 99 complaints received in Q3 of 2017/18 financial year, which were investigated and reported to.

 

7.2.3.    CCMA Financial Performance in Q3 of 2018/19

 

Table 12: CCMA Expenditure per Programme in Q3 of 2018/19

PROGRAMME	BUDGET	ACTUAL SPENDING	VARIANCE	EXPENDITURE AS AT 31 DECEMBER 2018
	R’000	R’000	R’000	%
Administration	394 407	353 411	40 996	89.6%
Institution Development	19 934	18 203	1 731	91.3%
Corporate Governance	4 891	3 900	991	79.7%
Social Services	333 865	322 341	11 524	96.5%
Total	753 098	697 856	55 242	92.7%

Source: Adapted from the Presentation to the PC: Employment and Labour dated 21 August 2019

 

The CCMA spent R697.9 million or 92.7% of the allocated R753.1 million as at 31 December 2018. The available budget for the remainder of the financial year was R55.2 million. The Administration programme received the highest allocation of R394.4 million and spent R353.4 million or 89.6% of the programme budget by the end of Q3. The available budget for the programme was R40.9 million at the end of Q3 of 2018/19. The entity reported that the variance resulted from unfilled vacancies and variable administrative expenses that are on demand basis as well as the procurement of once off ICT projects.

 

Social Services programme received the second highest allocation of R333.9 million and spent R697.9 million or 96.5% of the allocation by the end of Q3. The available budget for the remainder of the financial year was R11.5 million. CCMA reported that expenditure is in line with the projected spending.

 

Institutional Development programme spent R18.2 million or 91.3% of the allocated R19.9 million by the end of Q3 of 2018/19. The available budget was R1.7 million as at 31 December 2018. CCMA reported that the variance resulted from bursaries’ costs as well as training course fees and material costs which will be utilized as and when the interventions happen.

 

Corporate Governance programme spent R3.9 million or 79.7% of the allocated R4.9 million by the end of Q3 of 2018/19. The variance was reported to have resulted from unfilled vacancies as well as training course fees, travel costs and fees which were planned for GB members.

 

Table 13: CCMA Expenditure by Economic Classification in Q3 of 2018/19

ECONOMIC CLASSIFICATION	BUDGET	ACTUAL SPENDING	VARIANCE	EXPENDITURE AS AT Q3
	R’000	R’000	R’000	%
Compensation of Employees	380 351	374 103	6 247	98.4%
Goods and Services	337 248	310 645	26 603	92.1%
Transfer Payments	4 588	3 557	1 031	77.5%
Total Operational Expenditure	722 187	688 305	33 881	95.3%
Capital Expenditure	30 911	9 551	21 360	30.9%
Total Expenditure	753 098	697 856	55 241	92.7%

Source: Adapted from the Presentation to the PC: Employment and Labour dated 21 August 2019

 

The total operational expenditure of CCMA amounted to R688.3 million or 95.3% of the allocated R722.2 million. The available budget for operational expenditure was R33.9 million for the remainder of the financial year. The largest portion of the allocation of R380.4 million went to Compensation of employees, of which R374.1 million or 98.4% was spent as at 31 December 2018. The variance of R6.2 million was reported to be in line with the projected budget and was related to unfilled vacancies.

 

Goods and Services received the second largest allocation of R337.2 million and R310.6 or 92.1% was spent by the end of Q3 of 2018/19. The variance of R26.6 million was reported to have resulted from training, software, consulting fees and legal fees that are on demand basis as well as the communication expenses due to the implementation of cost containment measures.

 

CCMA spent R3.6 million or 22% of the allocated R4.6 million on Transfer Payments by the end of Q3 of 2018/19. The variance of R1 million was reported to have resulted from lower inflow of claims on settled and awarded cases from bargaining councils.

 

The entity spent R9.6 million or 30.9% of the R30.9 million allocated for Capital Expenditure. The variance of R21.4 million was reported to have resulted from once off procurement of JAVS case recording system, video conferencing and IP based call center solution system that are currently under the procurement processes.

 

7.3. National Economic Development and Labour Council (NEDLAC)

 

NEDLAC was established through the NEDLAC Act no 35 of 1994. It operates under the terms of the NEDLAC Constitution. NEDLAC mandate is derived from the following: NEDLAC Act; Labour Relations Act, NEDLAC Constitution; and NEDLAC protocols.

 

NEDLAC objectives in terms of the NEDLAC Act are as follows:

• Strive to promote the goals of economic growth, participation in economic decision-making and social equity;
• Seek to reach consensus and conclude agreements on matters pertaining to social and economic policy;
• Consider all proposed labour legislation relating to labour market policy before they are introduced in Parliament;
• Consider all significant changes to social and economic policy before it is implemented or introduced in Parliament; and
• Encourage and promote the formulation of coordinated policy on social and economic matters.

 

7.3.1.    NEDLAC Performance per programme

 

NEDLAC reported its performance per programme as follows:

 

Table 14: NEDLAC Performance per programme in Q3

PROGRAMME	Total No. of Quarterly Planned Indicators	Achieved	Not Achieved	Overall Achievement %
Administration	7	6	1	86%
Core-Operations	15	15	0	100%
Constituency Capacity Building	6	3	3	50%
Overall Performance	28	24	4	86%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

Table 14 reflects an overall achievement of 86% by NEDLAC as at 31 December 2018. Constituency Capacity Building programme achieved three of the six indicators reporting in Q3, translating to an achievement of 50%. Core-Operations programme achieved all the targets reporting in Q3 of 2018/19. The Administration programme achieved six of the seven targets reporting in Q3, translating to an achievement of 86%.

 

1. Challenges experienced and remedial action

 

Some of the targets in the Annual Performance Plan were not achieved and the reasons provided were as follows:

• The performance appraisals were not conducted as some employees had gone on emergency leave (maternity/ ill health) prior to conclusion of appraisals. Remedial action includes realignment of governance standards with the national norms and improved internal processes.
• No performance improvement plans were developed due to employees that had undergone performance appraisals had performed in line with the set standards.
• NEDLAC obtained a qualified audit opinion as a result of undisclosed irregular expenditure amounting to R391 809.00 on the financial statements. As a remedial action, NEDLAC is in the process of improving compliance with the relevant statutory requirements, NEDLAC policies and protocols. Furthermore, audit action plans are going to be implemented timeously and effectively.
• Progress reports were not submitted to the Financial Committee because information was not received timeously from constituencies. As a remedial action, constituencies were reminded to submit information timeously. This target has since been removed from the APP of 2019/20 because of heavy reliance on external parties for achievement.
• Insufficient budget allocation resulting in cost pressures. To remedy the situation, funding requests were submitted to the DEL and National Treasury with MTEF submissions. Moreover, cost containment measures were put in place to manage spending.
• Receiving of additional projects/ mandates after budget allocation. Additional funding requests were submitted to the DEL and National Treasury.
• Shortage of human resources and inadequate requisite structure. To remedy the situation, proposals were submitted to governance structures for creation of new positions and funding proposals for the positions were submitted to DEL and National Treasury. Furthermore, NEDLAC will undertake an organizational workflow assessment process to review its structure and necessary resources and to recommend change where necessary to advance the organisation’s mandate.
• Lack of employee benefits e.g. Medical Aid, Pension Fund etc. Funding proposals were submitted and subsequently approved by the DEL and National Treasury. Benefits are to be implemented in the 2019/20 financial year.

 

1. NEDLAC Financial Performance in Q3 of 2018/19

 

1. NEDLAC revenue

 

Table 15: Budget Income for 2018/19 Financial Year

Description of Income	Amount
Grant from Department of Employment and Labour	R33 825 000
Interest Received	R452 000
Sundry Income	R95 000
Total Income	R34 372 000

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

The total income of NEDLAC in 2018/19 financial year amounted to R34.44 million, excluding the R12 million allocation for the Job Summit. The largest portion of revenue was the R33.8 million grant from the Department of Employment and Labour.

 

1. NEDLAC expenditure per economic classification in Q3

 

Table 16: NEDLAC expenditure per economic classification in Q3

ECONOMIC CLASSIFICATION	Budget 2018/19	Actual 2018/19 Q3	Variance (Over)/ Under Q3
	R’000	R’000	R’000
Compensation of Employees	11 119	12 228	(1 109)
Goods and Services	14 702	18 543	(3 841)
TOTAL	25 821	30 771	(4 950)

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

NEDLAC spent R12.2 million on Compensation of Employees by the end of Q3 of 2018/19 against a budget of R11.1 million, equating to an over-expenditure of R1.1 million. It was reported that this over-expenditure was incurred as a result of increased workload where staff resources are sourced to compensate for suspended staff or staff on maternity leave. It spent R18.5 million on Goods and Services against a budget of R14.7 million, translating to an over-expenditure of R3.8 million. A total of R30.8 million was spent on current payments against a budget of R25.8 million, translating to an over-expenditure of R4.9 million.

 

1. Productivity South Africa

 

Productivity SA is established in terms of section 31 of the Employment Services Act, No. 4 of 2014, with the mandate to fulfill an economic or social responsibility of government. Its mandate is to promote employment growth and productivity thereby contributing to South Africa’s socio-economic development and competitiveness.

 

Productivity SA has three regional offices in Johannesburg/ Midrand, which is the Head Office and also servicing Gauteng, North West and Limpopo; eThekwini/ Durban servicing KZN, Eastern Cape and Mpumalanga; and Cape Town servicing Western Cape, Northern Cape and Free State.

 

7.4.1.    Productivity SA Performance per Strategic Objective in Q3

 

Productivity SA reported its performance per strategic objective as follows:

 

Table 17: Productivity SA Performance per Strategic Objective in Q3

STRATEGIC OBJECTIVE	Annual Planned Indicators	Indicators with Targets Reporting in Q3	Achieved	Overall Achievement %
Strengthen the institutional capacity of Productivity SA to deliver on its mandate and be financially sustainable	4	1	1	100%
Provide support to programmes aimed at sustainable employment and income growth	2	2	1	50%
Provide support to companies facing economic distress to retain jobs	3	3	0	0%
Contribute to employment and income growth through research, information generation and dissemination	2	-	-	-
Promote social dialogue and a culture of productivity and competitiveness in the workplace and community life	2	2	2	100%
Overall Performance	13	8	4	50%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

The overall performance of Productivity SA in Q3 of 2018/19 was 50%. The entity achieved 100% on its indicators in the following strategic objectives: Strengthen the institutional capacity of Productivity SA to deliver on its mandate and be financially sustainable; and Promote social dialogue and a culture of productivity and competitiveness in the workplace and community life.

 

Some of the achievements of the entity was that 48 companies ranging from small to large corporates in industry sectors including in the Special Economic Zones (SEZ) and Industrial Parks were supported through the WPC Programme against a target of 25. A total of 117 productivity champions; Education, Training and Skills Development Facilitators (ETDs); and beneficiaries were trained against a target of 40. The entity generated income amounting to R3.5 million in Q3 of 2018/19.

 

The entity achieved 50% and 0% on the objectives to Provide support to programmes aimed at sustainable employment and income growth; and to Provide support to companies facing economic distress to retain jobs, respectively.

 

The source of the challenges resulting in non-achievement on indicators was the expansion of the mandate of Productivity SA consequent to the promulgation of the Employment Services Act in 2015. The mandate was expanded to include: (a) promoting employment growth; and (b) supporting initiatives aimed at preventing job losses. However, the expansion of the mandate was not accompanied by additional funding for execution of the expanded mandate.

 

1. Productivity SA Performance per Programme in Q3

 

Productivity SA reported on its performance per programme as follows:

 

Table 18: Productivity SA Performance per Programme

PROGRAMME	Annual Planned Indicators	Indicators with Targets Reporting in Q3	Achieved	Overall Achievement %
Corporate Services	2	1	1	100%
Human Resource Management	1	-	-	-
Marketing and Communication	1	1	1	100%
Productivity Organisational Solutions	2	2	1	50%
Value Chain Competitiveness	4	1	1	100%
Turnaround Solutions	3	3	0	0%
Overall Performance	13	8	4	50%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

Table 16 reflects that Productivity SA achieved all its planned indicators in the following programmes: Corporate Services; Marketing and Communication; and Value Chain Competitiveness. Marketing and Communication programme improved from 0% in Q2 to 100% in Q3 of 2018/19. The entity paid all SMEs within 30 days of receipt of invoices. Productivity SA hosted three productivity awards and regional milestones workshops against a target of one. The entity capacitated 48 companies to improve productivity and business efficiency against a target of 25.

 

Productivity Organisational Solutions consistently achieved 50% performance from Q1 to Q3 of 2018/19. The entity supported 1024 SMEs and co-operatives on ESD programmes through productivity and operational efficiency enhancement programmes against a target of 1600. Productivity SA trained 117 productivity champions, Education, Training and Skills Development Facilitators (ETDs) and beneficiaries against a target of 40.

 

Turnaround Solutions programme performance was 0% from Q1 to Q3 of 2018/19 as a result of unfunded mandate, as mentioned above.

 

1. Productivity SA Financial Performance in Q3 of 2018/19

 

Productivity SA reported its financial performance as follows:

 

Table 19: Productivity SA Financial Performance in Q3

FINANCIAL PERFORMANCE	Quarter 3
	Actual R’000	Budget R’000	Variance R’000
Revenue	60 633	104 240	(43 607)
Non-exchange revenue	52 980	94 451	(41 471)
Administration	39 975	39 975
Turnaround Solutions	3 774	45 245	(41 471)
Workplace Challenge	9 231	9 231
Other Revenue	7 653	9 789	(2 136)
Expenditure	66 167	109 535	43 368
Employment costs	48 608	48 312	(296)
General Expenses	17 559	61 223	43 664
Surplus/ (Deficit)	(5 534)	(5 295)	(239)

Source: Presentation to the PC: Employment and Labour dated 21August 2019

 

Productivity SA budgeted for R104 million but received a budget of R60.6 million, resulting in a deficit of R43.6 million. The larger portion of actual revenue was non-exchange revenue, which amounted to R52.9 million or 87% of actual revenue. However, the entity had budgeted for R94 million resulting to a deficit of R41 million. Non-exchange Revenue comprise Administration, Turnaround Solutions and Workplace Challenge programme. Administration constitute the larger percentage of Non-Exchange Revenue, which is R39.9 million or 75% of non-exchange revenue.

 

Productivity SA spent R66.2 million against the revenue of R60.6, resulting to a deficit of R5.5 million. The entity had budgeted for an expenditure of R109.5 million resulting to a variance of R43.3 million. The larger portion of expenditure went to Employment Costs, which amounted to R48.6 million or 73% of expenditure.

 

1. Unemployment Insurance Fund (UIF)

 

7.5.1.    UIF Performance per Strategic Objective in Q1, Q2 and Q3 of 2018/19

 

UIF reported its expenditure per strategic objective as follows:

 

Table 20: UIF Performance per Strategic Objective in Q1, Q2 and Q3

Strategic Objectives	2018/19 Q1			2018/19 Q2			2018/19 Q3
	Planned indicators	Achieved	Overall Achievement	Planned indicators	Achieved	Overall Achievement	Planned Indicators	Achieved	Overall Achievement
Ensure financial sustainability	3	3	100%	3	3	100%	3	3	100%
Strengthen institutional capacity of the Fund	1	1	100%	1	0	0%	1	0	0%
Provide easy to use services through multiple access points	2	1	50%	2	0	0%	2	0	0%
Improve service delivery	6	3	50%	6	5	83%	6	5	83%%
Collaborate with stakeholders to improve compliance with UIF Act	2	1	50%	2	1	50%	2	2	100%
Enhance employability of UIF beneficiaries, enable entrepreneurship and preserve jobs	2	1	50%	2	1	50%	2	1	50%
Overall Performance	16	10	63%	16	10	63%	16	11	69%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

UIF performance improved from 63% in Q2 to 69% in Q3 of 2018/19. The entity achieved a performance of 100% in strategic objective: Ensure financial sustainability and Collaborate with stakeholders to improve compliance with UIF Acts. The performance of UIF on the Strategic Objective, “Collaborate with stakeholders to improve compliance with UIF Acts”, improved from 50% in Q2 to 100% in Q3 of 2018/19. The entity’s performance was consistent at 83% on “Improve Service Delivery” strategic objective. Similarly, the entity was consistent at 50% from Q1 to Q3 on “Enhance employability of UIF beneficiaries, enable entrepreneurship and preserve jobs” strategic objective. UIF achievement was 0% on strategic objectives “Strengthen institutional capacity of the Fund”; and “Provide easy to use services through multiple access points”, which lowered the overall performance to 69%. UIF failed to reduce vacancy rate to less than equal to 11%, hence 0% achievement on strengthen institutional capacity of the Fund. The entity failed to upgrade 20 provincial sites with free Wi-Fi. This resulted in 0%performance on “Provide easy to use services through multiple access points. UIF issued 76% of applications with complete information with compliance certificates or tender letter within 10 working days, against a target of 90% issued within 10 working days. This resulted in 83% achievement on “Improve service delivery objective”. The entity failed to provide 100 000 UIF beneficiaries with learning and/ or work place experience opportunities. This resulted in 50% achievement on “Enhance employability of UIF beneficiaries, enable entrepreneurship and preserve jobs” strategic objective.

 

1. Claims Comparison

 

UIF processed 96% unemployment benefits within 15 working days against a target of 90% in Q3 of 2018/19. This is an improvement from the 94% and 91% processed in Q2 and Q1 respectively. The highest performing provinces were Eastern Cape, Free State and Gauteng and they all processed 98% unemployment benefits within 15 working days in Q3.

 

UIF processed 94% of in-service benefits within 10 working days in Q3 of 2018/19 against a target of 90% within 10 working days. This was an improvement from the 92% and 89% of in-service benefits processed within 10 working days in Q2 and Q1 respectively. Eastern Cape, Free State, Gauteng and Northern Cape were the highest performing provinces in Q3 at 98%.

 

The entity processed 93% of death benefits within 20 working days in Q3 of 2018/19 against a target of 90% within 20 working days. The Free State province processed all death benefits within 20 working days.

 

The entity paid 100% of benefits within six working days in Q3 of 2018/19 against a target of 95% benefits paid within 6 working days. This is an improvement from the 99% and 97% achievement in Q2 and Q1 respectively.

 

1. UIF Financial Performance in Q3 of 2018/19

 

1. UIF       7.5.3.1. UIF Expenditure per Programme in Q3

 

The Fund reported on its expenditure per programme as follows:

 

 

Table 21: UIF Expenditure per Programme in Q3 of 2018/19

PROGRAMMES	Budget R’000	Actual R’000	Variance R’000	Spent %
Administration	1 325 373	676 642	648 731	51%
Business Operations	9 256 265	9 092 492	193 773	98%
Labour Activation Programmes	729 838	48 265	681 573	7%
Total	11 341 476	9 817 399	1 524 077	87%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

UIF spent R9.8 billion or 87% of the allocated R11.3 billion by the end of Q3 of 2018/19. Business Operations programme, which received the highest budget allocation spent R9.0 billion or 98% of the allocated R9.2 billion by the end of Q3 of 2018/19. The contributing factors to underspending of 2% was Compensation of Employees on overtime in line with the limitation of overtime to 30% of official’s salary.

 

 Administration programme spent R676.6 million or 51% of the allocated R1.3 billion by the end of Q3 of 2018/19. Contributing factors to 49% underspending were:

• The Fund continued to limit spending in accordance with the cost containment measures.
• Management fees were less than the budgeted amount due to new mandate that was estimated higher due to the fact that Initial Commitment Capital fees of new instruments were substantially higher than subsequent management fees. Trading activity in the Portfolio also decreased due to unfavourable market conditions.
• The Fund was in the process of filling the vacant positions.

 

Labour Activation Programmes, which received the least allocation spent R48.2 million or 7% of the allocated R729.8 million by the end of Q3 of 2018/19. The 93% underspending was due to the delays on the finalization of the evaluation process and inadequate supporting documents submitted by service providers for payment.

 

7.5.3.2  UIF Expenditure per Economic Classification in Q3

 

The Fund reported on expenditure per Economic Classification as follows:

 

 

Table 22: UIF Expenditure by Economic Classification in Q3 of 2018/19

ECONOMIC CLASSIFICATION	Budget R’000	Actual R’000	Variance R’000	Spent %
Compensation of Employees	1 129 554	949 472	180 082	84%
Goods and Services	1 405 369	804 404	600 965	57%
CAPEX	414 227	55 598	358 628	13%
Transfers	8 806 553	8 063 523	743 030	92%
Total	11 755 703	9 872 997	1 882 705	84%

Source: Presentation to the PC: Employment and Labour dated 21 August 2019

 

The Fund spent R9.8 or 84% of the allocated R11.7 billion in the Q3, resulting in a variance of R1.9 billion. The largest budget allocation went to Transfers, whose budget amounted to R8.8 billion or 75% of the total budget allocation of the Fund. Of this amount R8.1 billion or 92% was spent by the end of Q3 of 2018/19. The second largest allocation went to Goods and Services, whose budget amounted R1.4 billion. Of this amount R804.4 or 57% was spent by the end of Q3, resulting to a variance of R66.9 million. A total of R949.5 million or 84% of R1.1 billion was spent on Compensation of Employees by the end of Q3 of 2018/19. Capital Expenditure received the least allocation of R414.2 million, of R55.6 million or 13% was spent by the end of Q3 of 2018/19.

 

1. Committee Observations

 

The Committee made the following observations:

8.1.       The overall performance of the CCMA went down from 78% in Q3 of 2017/18 to 63% in Q3 of 2018/19.

8.2.       The CCMA had spent 93% of its budget by the end of Q3, which is far above the recommended 75%.

8.3.       NEDLAC did not report on performance per strategic objective.

8.4.       NEDLAC identified shortage of human resources and inadequate requisite structure as one of the challenges that resulted in some of its performance targets not being achieved.

8.5.       The funding for core-programmes of Productivity SA (Workplace Challenges and Turnaround Solutions) is not guaranteed. The TAS funding has over the past three years never been transferred in full and/or on time by the DEL/UIF; and funding for the WPC from Department of Trade and Industry covers only 45% of the total operational costs of the programme with 55% of expenses unfunded.

8.6.       The UIF did not report on non-financial performance per programme in its presentation to the Committee.

8.7.       Health and safety in mines is regulated by the Mine Health and Safety Act while all other sectors are regulated by the Occupational Health and Safety Act.

8.8.       Some employers still employ foreign nationals for jobs that do not require critical/scarce skills.

 

9.         Committee Recommendations

 

The Committee recommends that the Minister ensures that:

 

9.1.       The CCMA is appropriately resourced to deal with its extended mandate arising from amendments to labour legislation.

9.2.       All entities reporting to the Department of Employment and Labour use a uniform format of reporting financial and non-financial performance as the Department.

9.3.       NEDLAC is restructured and resourced to effectively and efficiently execute its mandate.

9.4.       The funding challenges of Productivity South Africa are timeously resolved.

9.5.       Integration of Mine Health and Safety into Occupational Health Safety is explored.

9.6.       The Department cooperates with the Department of Home Affairs in addressing the issue of employment of foreign nationals for jobs that can be done by South Africans.

 

Report to be considered.