ATC200618: Report of the Portfolio Committee on Employment and Labour on the First Quarterly Report Regarding the Performance of the Department of Employment and Labour and its Entities in Meeting Strategic Objectives for 2019/20, Dated 10 June 2020

Employment and Labour

Report of the Portfolio Committee on EMPLOYMENT AND Labour on the FIRST Quarterly Report regarding the Performance of the Department of EMPLOYMENT AND Labour and its entities in meeting Strategic Objectives for 2019/20, dateD 10 june 2020

 

The Portfolio Committee on Employment and Labour, having considered the First Quarterly Report on the performance of the Department of Employment and Labour (DEL) and its entities in meeting strategic objectives for 2019/20, reports as follows:

 

  1. INTRODUCTION

 

The Portfolio Committee on Employment and Labour considered the First Quarterly Report on the performance of the Department of Employment and Labour and its entities in meeting strategic objectives for 2019/20 as presented in the meeting held on 13 and 20 November 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 2019/20 financial year and the financial performance. The report also provides the Committee’s observations and recommendations relating to the Department’s and entities’ performance.

 

  1. PERFORMANCE PER STRATEGIC OBJECTIVES

 

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

Table 1: DEL Performance per Strategic Objective in Q1 of 2019/20

STRATEGIC OBJECTIVES

Planned Indicators

Indicators with Q1 Targets

Achieved

Overall Achievement

1.

Strengthen occupational safety protection

This strategic objective is covered under indicators that are applicable to protecting vulnerable workers

2.

Promote equity in the labour market

1

1

1

100%

3.

Protecting vulnerable workers

5

4

2

50%

4.

Strengthening multilateral and bilateral relations

1

1

1

100%

5.

Contribute to employment creation

4

4

4

100%

6.

Promoting sound labour relations

3

3

2

66%

7.

Monitoring the impact of legislation

2

2

2

100%

8.

Strengthening the institutional capacity of the Department

3

3

3

100%

OVERALL PERFORMANCE

19

18

15

83%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 13 November 2019

 

The overall performance of the Department increased from 72% in Q4 of 2018/19 to 83% in Q1 of 2019/20 financial year. The Department’s performance on Strategic Objective 6 increased from 33% in Q4 of 2018/19 to 66% in Q1 of 2019/20 financial year. On Strategic Objective 8 it increased from 75% in Q4 of 2018/19 to 100% in Q1 of 2019/20 financial year. The improvement in performance of these two strategic objectives resulted to an increase in overall performance from 72% in Q4 of 2018/19 to 83% in Q1 of 2019/20 financial year.

 

  1. PERFORMANCE PER PROGRAMME

 

The overall performance per programme was reported as follows:

 

Table 2 DEL Performance per Programme in Q1 of 2019/20

BRANCH

Annual Planned Indicators

Indicators with Q1 Targets

Achieved

Overall Achievement %

1.

Administration

3

3

3

100%

2.

Inspections and Enforcement Services

4

4

2

50%

3.

Public Employment Services

4

4

4

100%

4.

Labour Policy and Industrial Relations

8

7

6

86%

OVERALL PERFORMANCE

19

18

15

83%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 13 November 2019

 

The Administration programme’s performance improved from 75% in Q4 of 2018/19 to 100% in Q1 of 2019/20 financial year. The Labour Policy and Industrial Relations programme improved its performance from 66% in 2018/19 to 86% in Q1 of 2019/20 financial year. Improvement in performance on these two programmes led to an increase in overall achievement from 72% in Q4 of 2018/19 to 83% in Q1 of 2019/20 financial year.

 

  1. PROGRAMME PERFORMANCE IN Q1 of 2019/20

 

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 targets reporting in Q1 under Administration programme were:

  • Communication annual work plan approved by 30 April 2019.
  • 100% implementation of the activities mapped for Q1.
  • One Annual Financial Statement compiled by 31 May 2019, which comply with guidelines issued by National Treasury.
  • All cases of irregular; fruitless and wasteful and/or unauthorized expenditure detected and reported monthly to the Accounting Officer.

All the above targets were achieved leading to an overall achievement of 100% on this programme.

 

The Department incurred irregular expenditure amounting to R22,008.45 and fruitless and wasteful expenditure amounting to R360,547.06 in Q1 of 2019/20 financial year. There was no unauthorized expenditure detected and reported during the reporting period.

 

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 targets reporting in Q1 under the Inspection and Enforcement Services were:

  • Inspecting 55 173 employers to determine compliance with employment law.
  • To serve 85% of non-compliant employers of those inspected with notice in terms of relevant labour legislation within 14 calendar days of the inspection.
  • To refer 60% of non-compliant employers who failed to comply with the served notice to Statutory Services for prosecution within 30 calendar days.
  • To finalise 70% of reported incidents within prescribed time frames.

The programme inspected 52 184 employers to determine compliance with employment law against a target of 55 173. Of the 52 184 employers inspected, 9 770 were found to be non-compliant and 9 729 were served with notices within 14 calendar days of inspection. Of the 9 729 employers served with notices, 2 024 failed to comply with        those notices and 72% (863 of 1 195) of them were referred for prosecution against a target of 60%. Of the 185 incidents reported, 115 or 62% were finalized against a target of 70%.

 

The Free State and North West provinces achieved an overall performance of 100% each in IES programme in Q1 of 2019/20. Of the 52 184 employers inspected to determine compliance with employment law, 10 734 were from KZN and 10 426 were from Gauteng. Of the 9 729 non-compliant employers served with notice within 14 calendar days, 2 230 were from KZN and 1 352 were from Gauteng province. Of the 863 employers who failed to comply with served notices and were referred for prosecution, 395 were from KZN and 181 were from Limpopo. KZN province finalized all its reported incidents (100%) within the prescribed time frame. Gauteng had the least number of reported incidents (37%) finalized within the prescribed time frame. The amounts recovered for non-compliance to Basic Conditions of Employment Act (BCEA) and the National Minimum Wage Act (NMWA) were R442 798 and R5 486 223 respectively. The largest amount recovered for non-compliance to the BCEA was from the Agriculture sector at R248 232. The highest amount recovered for non-compliance to the NMWA was from the Wholesale and Retail sector at R1.6 million followed by Community sector at R1.1 million. The amounts recovered after prosecution for non-compliance to BCEA and NMWA were R392 872 and R6.2 million respectively. A total of 84 employers from the Community sector were referred for prosecution for non-compliance to BCEA, which is the highest number per sector. A total of 99 employers from Wholesale and Retail were referred for prosecution for non-compliance to NMWA. The highest number of prosecutions for non-compliance to BCEA were from KZN at 369 and those for non-compliance to Occupational Health and Safety Act (OHSA) were from Limpopo at 33. The highest number of reported incidents took place in Manufacturing, Construction and Agriculture at 42(22%), 35(18%) and 23(12%) respectively.

 

  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.

 

This programme 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

 

PES reported performance per strategic objective as follows:

 

Table 3: PES Performance per Strategic Objective in Q1 of 2019/20

STRATEGIC OBJECTIVES

Planned Indicators

Indicators with targets reporting in Q1

Achieved

Overall Achievement

Contribute to decent employment creation

4

4

4

100%

Overall Performance

4

4

4

100%

Source: Information obtained from the Presentation to the PC: Employment and Labour dated 13-11-2019

 

The PES programme achieved all four planned indicators, translating to an overall achievement of 100%. The programme planned to register 161 000 work-seekers on Employment Services of South Africa (ESSA) database. It registered 220 851 work-seekers on ESSA, thus over-achieving by 59 851. Table 4 below reflects the number of registered work-seekers per province.

 

Table 4: Number of work-seekers registered on ESSA per Province in Q1 of 2019/20

PROVINCE

Target to be registered

Actual registered

Variance

EC

19 320

26 416

7 096

FS

11 270

14 691

3 421

GP

41 860

50 793

8 933

KZN

28 980

32 350

3 370

LP

11 270

17 661

6 391

MP

12 880

16 396

3 516

NC

4 830

7 154

2 324

NW

9 660

12 572

2 912

WC

20 930

28 125

7 195

*Online

0

14 693

14 693

TOTAL

161 000

220 851

59 851

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 4 above reflects that the majority of work-seekers registered on ESSA were in Gauteng and KZN at 50 793 and 32 350 respectively. Northern Cape registered 7 154 work-seekers on ESSA in Q1, which is the least number registered by a province.

 

The programme planned to register 21 600 employment opportunities on ESSA. It registered 52 894 employment opportunities on ESSA, with a positive variance of 31 294 in Q1 of 2019.20 financial year. Table 5 below shows the number of employment opportunities registered on ESSA per province.

 

Table 5: Number of employment opportunities registered on ESSA per Province in Q1 of 2019/20

PROVINCE

Target to be registered

Actual registered

Variance

EC

3 024

6 329

3 305

FS

1 728

5 633

3 905

GP

4 320

8 354

4 034

KZN

3 456

7 800

4 344

LP

2 160

7 326

5 166

MP

1 728

2 814

1 086

NC

1 080

5 786

4 706

NW

1 512

4 685

3 173

WC

2 592

4 093

1 501

*Online

0

74

74

TOTAL

21 600

52 894

31 294

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 5 above shows that Gauteng registered 8 354 employment opportunities, which is the highest number of employment opportunities registered by a province. It was followed by KZN, which registered 7 800 employment opportunities on ESSA in Q1. Mpumalanga province registered 2 814 employment opportunities, which is the least number of employment opportunities registered by a province.

 

PES planned to provide 50 400 work-seekers with employment counselling. It provided 70 086 work-seekers with employment counselling, resulting to an over-achievement by 19 686 in Q1 of 2019/20 financial year. Table 6 below reflects the number of work-seekers provided with employment counselling per province.

 

Table 6: Number of work-seekers provided with employment counselling per Province in Q1 of 2019/20

PROVINCE

Target to be provided with counselling

Actual provided with counselling

Variance

EC

6 401

9 701

3 300

FS

4 399

5 644

1 245

GP

10 399

13 232

2 833

KZN

6 401

9 362

2 961

LP

5 198

7 051

1 853

MP

6 000

9 038

3 038

NC

2 801

3 431

630

NW

4 001

5 164

1 163

WC

4 800

5 074

274

*Online

0

2 389

2 389

TOTAL

50 400

70 086

19 686

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 6 above reflects that Gauteng province provided 13 232 work-seekers with counselling, which is the highest number of work-seekers provided with counselling by a province. It is followed by the Eastern Cape which provided 9 701 work-seekers with employment counselling. Northern Cape province provided 3 431 work-seekers with employment counselling, which is the least number of work-seekers provided with counselling.

 

This programme planned to fill 10 800 employment opportunities with registered work-seekers but managed to fill 18 126 translating to an over-achievement of 7 326 in Q1 of 2019/20 financial year. Table 7 below reflects the number of registered employment opportunities filled by registered work-seekers per province.

 

Table 7: Number of registered employment opportunities filled by registered work seekers per province in Q1 of 2019/20

PROVINCE

Target to be filled

Actual filled

Variance

EC

1 512

2 906

1 394

FS

864

1 544

680

GP

2 160

3 320

1 160

KZN

1 728

2 258

530

LP

1 080

3 940

2 860

MP

864

876

12

NC

540

713

173

NW

756

882

126

WC

1 296

1 687

391

*Online

0

0

0

TOTAL

10 800

18 126

7 326

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 7 above reflects that Limpopo filled 3 940 registered employment opportunities with registered work-seekers, which is the highest number of registered employment opportunities filled with registered work-seekers by a province. It is followed by Gauteng, which filled 3 320 employment opportunities with registered work-seekers.

 

The Department reported that of the 18 126 opportunities filled by registered work-seekers, only 3 308 or 18% were classified by economic sector. The majority of the placements classified by economic sector were from Manufacturing at 958 followed by Education at 542 and Safety and Security at 453. Challenges of placement included skills mismatch and lack of required experience by a number of work-seekers. A total of 12 631 or 70% of work-seekers placed were aged between 15 and 35 years. A total of 5 495 or 30% of work-seekers placed were 36 years and above. Of the registered employment opportunities filled with registered work-seekers 9 422 or 52% were formal jobs; 4 421 or 24% were projects; 2 680 or 15% were Labour Activation Programmes of the UIF; and 1 225 or 7% were Learnerships.

 

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).

 

4.4.1.    Performance per Strategic Objectives

 

The programme reported its performance per strategic objectives in Q1 as follows:

 

Table 8: Performance per Strategic Objectives in Q1 of 2019/20

STRATEGIC OBJECTIVES

Planned Indicators

Indicators with Q1 targets

Achieved

Overall Achievement

1.

Promote equity in the labour market

1

1

1

100%

2.

Strengthen multilateral and bilateral relations

1

1

1

100%

3.

Promote sound labour relations

3

3

2

67%

4.

Monitor impact of legislation

2

2

2

100%

OVERALL PERFORMANCE

7

7

6

86%

Source: Information obtained from the presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 8 reflects that this programme had seven indicators reporting in Q1 and achieved six of them, translating to an overall achievement of 86%. On Strategic Objective 1 objective, the programme published the 2018/19 Annual Employment Equity report and Public Register by 30 June 2019 as per target.

 

On Strategic Objective 2, the programme had the annual implementation report signed off by the Minister on 29 April 2019.

 

On Strategic Objective 3, the programme failed to extend 100% of collective agreements within 90 calendar days of receipt. It achieved the target of approving or rejecting 100% of labour organizations’ applications for registration within 90 calendar days of receipt. The programme also achieved the target of moderating workplace conflict by measuring the impact of the labour relations amendments. It reported that there were four incidents of industrial action from 1 April 2019 to 30 June 2019 compared to 66 for the corresponding period in 2018/19 financial year prior to the new LRA amendments.

 

On Strategic Objective 4, the programme achieved both targets of producing two annual labour market trends reports by June 2019 and identifying research services providers to deliver on the RME agenda by 31 March 2020.

 

5.         FINANCIAL REPORT

 

5.1.       Expenditure information per programme in Q1 of 2019/20

 

The Department reported its expenditure per programme as follows:

 

Table 9: DEL Expenditure Information per programme in Q1 of 2019/20

BRANCH

FINAL APPROPRIATION

 2019/20

ACTUAL EXPENDITURE

AVAILABLE BUDGET

EXP AS T 30/06/2019

 

R’000

R’000

R’000

%

Administration

961 959

182 532

779 427

19.0%

Inspection and Enforcement Services

631 133

126 187

504 946

20.0%

Public Employment Services

611 198

145 635

465 563

23.8%

Labour Policy and Industrial Relations

1 230 843

304 288

926 555

24.7%

Total

3 435 133

758 642

2 676 491

22.1%

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 9 above reflects that the Department spent R758.6 million or 22.1% of the original appropriation of R3.4 billion by the end of Q1 of 2019/20 financial year, resulting to a variance of R2.7 billion.

 

Labour Policy and Industrial Relations programme was appropriated R1.2 billion, which was the highest programme allocation. This programme spent R305.3 million or 24.7% of the allocation by the end of Q1, resulting to a variance of R926.6 million. However, the appropriation of this programme less transfers was R120.3 million and it spent R23.1 million or 19.2% by the end of Q1 of 2019/20 financial year, resulting to a variance of R97.2 million. This programme received the least budget allocation when transfers are subtracted.

 

The Administration programme was appropriated R961.9 million, which was the second highest programme allocation. It spent R182.5 million or 19.0% by the end of Q1 of 2019/20 financial year, resulting to a variance of R779.4 million. The Administration programme was appropriated R422.6 million less transfers and had spent R95.7 million or 22.6% by the end of Q1 of 2019/20, resulting to a variance of R326.9 million.

 

The Inspection and Enforcement Services programme spent R126.2 million or 20.0% of the R631.1 appropriated budget by the end of Q1 of 2019/20, resulting to a variance of R504.9 million. This programme received a budget allocation of R522.6 million when transfers are excluded and it spent R113.3 million or 21.7% of the allocated amount by the end of Q1 of 2019/20, resulting to a variance of R409.2 million.

 

Public Employment Services programme spent R145.6 million or 23.8% of the R611.2 million appropriated budget by the end of Q1 of 2019/20, resulting to a variance of R465.6 million. The budget allocation of this programme amounted to R327.7 million when transfers are excluded and it had spent R68.6 million or 20.9% by the end of Q1 of 2019/20, resulting to a variance of R259.1 million.

 

Table 10 below reflects the expenditure information by economic classification.

 

Table 10: Expenditure Information by Economic Classification in Q1 of 2019/20

ECONOMIC CLASSIFICATION

FINAL APPROPRIATION

EXPENDITURE AS AT 30/06/2019

AVAILABLE BUDGET

% EXPENDITURE AS AT 30/06/2019

 

R’000

R’000

R’000

%

Current Payments

2 065 593

407 969

1 657 624

19.8%

Compensation of Employees

1 393 207

300 751

1 092 456

21.6%

Goods and Services

672 386

107 218

565 168

15.9%

Transfers and Subsidies

1 309 356

346 645

962 711

26.5%

Payments for Capital Assets

60 184

3 853

56 331

6.4%

Payment for Financial Assets

-

175

(175)

100.0%

Total

3 435 133

758 642

2 676 491

22.1%

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Of the total original appropriation of R3.4 billion, R2.1 billion was allocated to Current Payments. A total of R407.9 million or 19.8% of Current Payments budget was spent by the end of Q1 of 2019/20, resulting to a variance of R1.7 billion. The larger share of the Current Payments budget (R1.4 billion) went to Compensation of Employees. Of this amount, R300.8 million or 21.6% was spent by the end of Q1 of 2019/20 resulting to a variance of R1.1 billion. Goods and Services received R672.4 million and spent R107.2 million or 15.9% of the appropriation by the end of Q1 of 2019/20, resulting to R565 million variance.

 

A total of R1.3 billion was appropriated for Transfers and Subsidies and R346.6 or 26.5% was spent by the end of Q1 of 2019/20 financial year, resulting to a variance of R962.7 million.

 

Payments for Capital Assets was appropriated R60.2 million and spent R3.9 million or 6.4% of the appropriation by the end of Q1 of 2019/20 financial year, resulting to a variance of R56.3 million.

 

6.         SUPPORTED EMPLOYMENT ENTERPRISES (SEE)

 

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. 4 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.

 

The SEE provides employment to 1 064 persons with disabilities.

 

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. SEE is allowed to invest proceeds from its sales in the following:

  • Employing additional people.
  • Expansion of manufacturing capacity of the entity. Large scale investment was made in the new Limpopo, Seshego factory and replacement of some of the old machinery in existing factories across the country.
  • The sales proceeds generated during 2019/20 financial year will fund the establishment of a new factory in Mpumalanga and employment of additional people.

 

6.1.       Performance per Strategic Objective

 

SEE reported on its performance as follows:

 

Table 11: Performance per Strategic Objective of SEE in Q4 of 2018/19

STRATEGIC OBJECTIVE

Annual Planned Indicators

Indicators with targets reporting in Q1

Achieved

Overall Achievement %

Provide work opportunities for PWD

2

1

1

100%

Overall Performance

2

1

1

100%

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

The performance of SEE remained at 100% from Q4 of 2018/19 to Q1 of2019/20 financial year. SEE exceeded its target of employing 25 people with disabilities by end of Q1 of 2019/20 financial year by employing 10 more people above target.

 

  1. Q1 PERFORMANCE OF ENTITIES OF THE DEPARTMENT OF LABOUR (2019/20)

 

The entities that report to the Department of Employment and Labour are:

 

  • Productivity South Africa
  • Commission for Conciliation Mediation and Arbitration
  • Compensation Fund
  • Unemployment Insurance Fund
  • National Economic Development and Labour Council.

 

  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.

 

7.1.1.    Productivity SA Performance per Strategic Objective in Q1 of 2019/20

 

Productivity SA reported its performance per strategic objective as follows:

 

Table 12: Productivity SA Performance per Strategic Objectives in Q1 of 2019/20

STRATEGIC OBJECTIVES

Annual Planned Indicators

Q1 Planned Indicators

Achieved

Overall Achievement %

1.

Strengthen the institutional capacity of Productivity SA to deliver on its mandate and be financially sustainable

2

1

1

100%

2.

To support programmes aimed at sustainable employment and income growth

1

1

1

100%

3.

To support enterprises facing economic distress and initiatives aimed at preventing job losses.

-

-

-

-

4.

Generation and dissemination of productivity related research and statistics

2

1

1

100%

5.

To promote a culture of productivity and competitiveness in the workplace and community life

2

2

0

0%

Overall Performance

7

5

3

60%

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Productivity SA achieved three of the five Q1 planned targets, translating to an overall performance of 60%. The entity did not receive funding for Strategic Objective 3 by the end of Q1 of 2019/20. Strategic Objective 5 had two planned indicators reporting in Q1 and did not achieve both of them, translating to an overall achievement of 0%. The entity had an overall achievement of 100% in Strategic Objectives 1, 2 and 4.

 

  1. Productivity SA Performance per Programme in Q1 of 2019/20

 

Productivity SA reported on its performance per programme as follows:

 

Table 13: Productivity SA Performance per Programme in Q1 of 2019/20

PROGRAMME

Annual Planned Indicators

Q1 Planned Indicators

Achieved

Overall Achievement %

1.

Corporate Services

1

1

1

100%

2.

Human Resource Management

1

0

0

-

3.

Marketing and Communication

1

1

0

0%

4.

Productivity Organisational Solutions

2

2

1

50%

5.

Value Chain Competitiveness

2

1

1

100%

6.

Turnaround Solutions

-

-

-

-

Overall Performance

7

5

3

60%

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 13 reflects that Programme 2 (Human Resource Management) had no planned indicators reporting in Q1. As reflected in table 12 under Strategic Objective 3, Productivity SA did not receive funding for Programme 6 (Turnaround solutions) by the end of Q1 of 2019/20 financial year. Programme 3 (Marketing and Communication) had one planned indicator reporting in Q1, which was not achieved translating to an overall achievement of 0%. This indicator was to host three productivity awards and regional milestones workshops. The programme managed to host only one workshop reportedly due to budgetary constraints. Programme 4 (Productivity Organisational Solutions) achieved one of the two Q1 planned indicators, translating to an overall achievement of 50%. The programme planned to train 60 Education, Training and Development (ETD) practitioners and Skills Development Facilitators but managed to train only six reportedly due to lack of operational budget. However, it capacitated 977 enterprises to improve productivity and business efficiency against a target of 813. Programme 1 (Corporate Services) and Programme 5 (Value Chain Competitiveness) achieved all Q1 planned indicators, translating to overall achievement of 100%. Programme 1 paid all SMEs within 30 days of receipt of statements, translating to an overall achievement of 100%. Programme 5 published one statistical report on productivity and competitiveness as planned.

 

  1. Productivity SA Financial Performance in Q1 of 2019/20

 

Productivity SA reported its financial performance as follows:

 

Table 14: Productivity SA Revenue and Expenditure per Programme in Q1 of 2019/20

FINANCIAL PERFORMANCE

Quarter 1

Actual

R’000

Budget

R’000

Variance

R’000

Revenue

16 276

30 111

(13 835)

Non-exchange revenue

13 653

21 090

(7 437)

Administration

13 653

13 653

-

Turnaround Solutions

-

5 000

(5 000)

Workplace Challenge

-

2 437

(2 437)

Exchange Revenue

2 623

9 021

(6 398)

 

 

 

 

Expenditure/ Programme

22 825

30 111

7 286

Administration

14 185

14 023

(162)

Productivity Organisational Solutions

3 101

3 292

191

Value Chain Competitiveness

2 298

2 817

519

Workplace Challenge

3 241

4 979

1 738

Turnaround Solutions

-

5 000

5 000

Surplus/ (Deficit)

(6 549)

-

(6 549)

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

The Q1 revenue of Productivity SA amounted to R16.3 million, which is R13.8 million less than the budgeted R30.1 million. It comprised R13.7 million non-exchange revenue and R2.6 exchange revenue. The non-exchange revenue was R7.4 million less than the budgeted R21.1 million. Funding from the UIF for Turnaround Solutions and from DTI for Workplace Challenges programmes were not received by the end of Q1. The budgeted amount for Turnaround Solutions was R5 million and R2.4 for Workplace Challenges.

 

The Q1 expenditure of Productivity SA amounted to R22.8 million, resulting to a deficit or over-expenditure of R6.5 million. The Administration programme spent R14.2 million in Q1, which is the highest amount of expenditure and is R162 000 more than the budgeted R14.0 million. Productivity Organisational Solutions programme spent R3.1 million, which is R191 000 less that the budgeted expenditure of R3.3 million. Value Chain Competitiveness programme spent R2.3 million, which is R519 000 less than the budgeted R2.8 million. Workplace Challenges programme spent R3.2 million, which is R1.7 million less than the budgeted expenditure of R4.9 million.

 

Table 15: Productivity SA Revenue and Expenditure by Economic Classification in Q1

FINANCIAL PERFORMANCE

Quarter 1

Actual

R’000

Budget

R’000

Variance

R’000

Revenue

16 276

30 111

(13 835)

Non-exchange revenue

13 653

21 090

(7 437)

Department of Labour

13 653

13 653

-

Unemployment Insurance Fund

-

5 000

(2 437)

Department of Trade and Industry

-

2 437

50

Exchange Revenue

2 623

9 021

(6 398)

 

 

 

 

Expenditure

22 825

30 111

7 286

Compensation of Employees

17 434

20 096

2 662

Goods and Services

5 391

10 015

4 624

Surplus/ (Deficit)

(6 549)

-

(6 549)

Source: Presentation to the PC: Employment and Labour dated 13 November 2019

 

Q1 expenditure of Productivity SA amounted to R22.8 million, comprising R17.4 million spent on Compensation of Employees and R5.4 million on Goods and Services. Expenditure on Compensation of Employees was R2.7 million less than the budgeted expenditure of R20.1 million. Expenditure on Goods and services was R4.6 million less than the budgeted R10.0 million.

 

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

 

Constitutional Mandate

The CCMA aims to promote social justice and economic development in the world of work, and to be the best dispute management and dispute resolution organization. The entity derives its mandate from section 23 of the Constitution that deals with labour relations.

 

Legislative Mandate

The CCMA’s legislative mandate is drawn from the purpose of the Labour Relations Act (LRA), which is to advance economic development, social justice, labour peace and the democratization of the workplace. Section 115(1) of the LRA identifies the mandatory functions of the CCMA as follows:

  • Conciliate workplace disputes.
  • Arbitrate certain categories of disputes that remain unresolved after conciliation.
  • Establish picketing rules in respect of protected strikes and lock-outs.
  • Facilitate the establishment of workplace forums and statutory councils.
  • Compile and publish information and statistics.
  • Consider accreditation and subsidy of Bargaining Councils and Private Agencies.
  • Administer the Essential Services Committee (ESC), including the Director of the CCMA functioning as the Accounting Officer for the ESC.

 

7.2.1.    CCMA Performance per Strategic Objective in Q1 of 2019/20

 

CCMA reported its performance per strategic objectives as follows:

 

Table 16: CCMA Performance per Strategic Objective in Q1 of 2019/20

STRATEGIC OBJECTIVE

Annual Planned Targets

Planned Targets reporting in Q1

Achieved

Overall Achievement

1.

Enhancing the Labour Market to advance stability and growth

2

2

2

100%

2.

Advancing good practices at work and transforming workplace relations

0

0

0

-

3.

Building knowledge and skills

1

1

1

100%

4.

Optimising the organisation

4

4

2

50%

Overall Performance

7

7

5

71%

Source: Presentation to the PC: Employment and Labour dated 27 August 2019

 

Table 16 reflects that CCMA achieved five of its seven planned targets translating to an overall performance of 71%, which is a decrease in performance from the 95% achieved in Q4 of 2018/19 and from 75% achieved in Q1 of 2018/19.

 

The decrease in performance was a result of under-achievement in strategic objective 4 (Optimising the organization). The entity conciliated 97% (32 522/33 632) of cases at first event within 30 days of the date of receipt of the referral against a target of 100%. This under-achievement was reported to be due to operational and administrative errors. The entity reported that measures to improve internal controls have been implemented at regional level in order to mitigate the risk of reoccurrence.

CCMA sent 99.29% (5 492/5 531) arbitration awards rendered to parties within 14 days of the conclusion of the arbitration proceedings against a target of 100%. Under-achievement on this target was also reported to be due to operational and administrative errors. The entity reported that measures to improve internal controls have been implemented at regional level in order to mitigate the risk of reoccurrence.

 

7.2.2.    CCMA Dashboard inQ4 of 2018/19

 

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

  • A total of 51 771 cases were referred to the CCMA in Q1 of 2019/20 financial year, compared to 48 704 cases in Q1 of the 2018/19 financial year.
  • On average it took CCMA 24 days to conciliate disputes compared to the legislated target of 30 days.
  • On average it took the entity 48 days to arbitrate disputes against a target of 60 days.
  • The entity settled 33 or 85% of the 39 public interest matters (section 150) during the period under review.
  • The CCMA settlement rate was 79% in the period under review.
  • The entity conducted 485 outreach services during the period under review.
    • A total of 10 661 people were capacitated to better understand the law and their rights through the outreach activities conducted.
  • Of the 11 998 jobs at stake, 5 409 or 45% were saved compared to employees facing retrenchments (cases referred to the CCMA).
  • The CCMA held 2019 Collective Bargaining Season Briefing on 09 May 2019 at the Birchwood Hotel, Boksburg, Gauteng Province.
  • The entity received 116 complaints in Q1 of 2019/20, compared to 80 complaints received in Q1 of 2018/19 financial year.

 

7.2.3.    CCMA Financial Performance in Q1 of 2019/20

 

Table 17: CCMA Expenditure per Programme in Q1 of 2019/20

PROGRAMME

Budget

Actual Spending

Variance

Expenditure as at end of Q1 of 2019/20

R’000

R’000

R’000

%

Administration

146 506

129 903

16 603

87%

Institution Development

10 911

5 504

5 307

50%

Corporate Governance

2 503

1 442

1 061

58%

Social Services

109 206

119 968

(10 762)

110%%

Total

269 127

256 917

12 209

95%

Source: Adapted from the Presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 17 above reflects that CCMA spent R256.9 million or 95% of the R269.1 million budget allocated for Q1 of 2019/20 financial year. The Administration programme received R146.5 million, which is the largest share of the entity’s budget and spent R129.9 or 87% by the end of Q1 resulting to a variance of R16.6 million. Social Services programme received the second largest allocation of R109.2 million and spent R119.9 million or 10% in excess of the budget allocation. Institution Development programme spent R5.5 million or 50% of the allocated R10.9 million resulting to a variance of R5.3 million in Q1 of 2019/20. Corporate Governance spent R1.4 million or 58% of the allocated R2.5 million in Q1 resulting to a variance of R1.0 million.

 

Table 18: CCMA Expenditure by Economic Classification in Q1 of 2019/20

ECONOMIC CLASSIFICATION

Budget

Actual Spending

Variance

Expenditure as.at end of Q1

R’000

R’000

R’000

%

Compensation of Employees

142 818

135 199

7 619

95%

Goods and Services

119 929

120 011

(82)

100%

Transfer Payments

1 380

1 031

349

75%

Total Operational Expenditure

264 127

256 241

7 886

97%

Capital Expenditure

5 000

676

4 324

14%

Total Expenditure

269 127

256 917

12 209

95%

Source: Adapted from the Presentation to the PC: Employment and Labour dated 13 November 2019

 

Table 18 above reflects that CCMA spent R256.2 million or 97% of the R264.1 million Total Operational Expenditure in Q1 of 2019/20 resulting to a variance of R7.9 million. Of this amount, R135.2 million or 95% of the R142.8 million allocated for Compensation of Employees was spent in Q1 resulting to a variance of R7.6 million. A total of R120.0 million was spent on Goods and Services resulting to over-expenditure of R82 000. A total of R1.0 million or 75% was spent on Transfer Payments against an allocation of R1.4 million, resulting to a variance of R349 000. A total of R676 000 or 14% of the R5 million allocated for capital Expenditure was spent in Q1 of 2019/20 financial year.

 

7.3.       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; and 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.

 

7.3.1.    CF Performance per Strategic Objective in Q1 of 2019/20

 

CF reported on its strategic objectives as follows:

 

Table 19: CF Performance per Strategic Objectives in Q1 of 2019/20

STRATEGIC OBJECTIVE

Annual Planned Indicators

Indicators with targets reporting in Q1

Achieved

Overall achievement %

1.

Provide an effective and efficient client oriented support services

3

1

0

0%

2.

Provide faster, reliable and accessible COID services by 2020

6

5

2

40%

Overall Performance

9

6

2

33%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Table 19 above reflects that CF achieved two of the six indicators with targets reporting in Q1, translating to an overall performance of 33%. This reflects a decrease in performance from the 67% achieved in Q4 of 2018/19. Strategic objective 1 had one indicator with target reporting in Q1, which was not achieved translating to an overall achievement of 0%. The flagship projects under this strategic objective are: Improved capacity through Human Resource Development; increase in the asset base of the Fund through investments; and contribute to employment creation through investments and training programmes.

 

Strategic objective 2 achieved two of the five indicators with targets reporting in Q1, translating to an overall achievement of 40%. Flagship projects under this strategic objective are:

  • Integrated Online Platform for Employer Registration and compliance management
  • Online Claims Management System
  • Hospital Care Management Program
  • Disability Care Management
  • Integration of data from e-claims. ICM and uMehluko systems or better
  • Review of medical services function in the Fund
  • Chronic Medication Dispensing

 

7.3.2.    CF Performance per Programme in Q1 of 2019/20

 

CF reported its performance per programme as follows:

 

Table 20: CF Performance per Programme in Q1 of 2019/20

PROGRAMME

Annual Planned Indicators

Indicators with targets reporting in Q1

Achieved

Overall Achievement %

1.

Administration

3

1

0

0%

2.

Compensation for Occupational Injuries and Diseases Services Operations

3

2

1

50%

3.

Medical Services

2

2

1

50%

4.

Orthotic and Rehabilitation

1

1

0

0%

Overall Performance

9

6

2

33%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Table 20 above reflects that the entity achieved two of the six indicators with targets reporting in Q1, translating to an overall achievement of 33%. This is a decrease in performance from the 76 % achieved in Q4 of 2018/19. Programme 1 and programme 4 had one indicator each with targets reporting in Q1, which were not achieved translating to an overall achievement of 0% for both programmes. Programme 1 (Administration) implemented 18% of the approved annual risk-based audit plan against the Q1 target of 20%. Programme 4 responded to 83% of compliant requests for assistive devices within 15 working days of receipt against a target of 85%.

 

Programme 2 and programme 3 achieved one of the two indicators with targets reporting in Q1 each, translating to an overall achievement of 50% for both programmes. Programme 2 paid 87% of approved benefits within five working days against a target of 100%. It adjudicated 93% of claims within 30 working days of receipt, thus exceeding the Q1 target of 90%. Programme 3 finalised 60% of medical invoices within 40 working days of receipt against a target of 85%. It responded to 95% of pre-authorisation requests within 10 working days, thus exceeding the Q1 target of 85%.

 

7.3.3.    Performance per Province in Q1 of 2019/20

 

Table 21: Compensation claims adjudicated within 30 working days of receipt in Q1 of 2019/20

Province

Total claims registered

Total claims adjudicated

% of total claims adjudicated

Claims adjudicated within 30 working days

% of total claims adjudicated within 30 working days

EC

3396

3219

95%

3092

91%

FS

560

522

93%

512

91%

GP

11240

10464

93%

10270

91%

KZN

6425

6242

97%

5986

93%

LP

4897

4636

95%

4621

94%

MP

2660

2608

98%

2583

97%

NW

2448

2281

93%

2261

92%

NC

590

560

95%

554

94%

WC

11180

10798

97%

10598

95%

Total

43396

41330

95%

40477

93%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Of the 43 396 claims received by CF in Q1 of 2019/20, 41 330 or 95% were adjudicated. A total of 40 477 or 93% of those received claims were adjudicated within 30 working days against a target of 90%. Gauteng province registered 11 240 claims, which is the highest number of claims registered in Q1. The province managed to adjudicate 10 464 or 93% of those registered claims. Of the registered claims, 10 270 or 91% were adjudicated within 30 working days. Western Cape province registered 11 180 claims in Q1 of 2019/20, which is the second highest number of claims registered. The province adjudicated 10 798 or 97% of the registered claims. Of the registered claims, 10 598 or 95% were adjudicated within 30 working days. Free State province registered 560 claims, which is the least number of claims registered in Q1 of 2019/20. This province adjudicated 522 or 93% of the registered claims. It adjudicated 512 or 91% of the registered claims within 30 working days.

 

Table 22: Medical invoices finalized within 40 working days of receipt in Q1 of 2019/20

Province

Total received

Total finalised

Finalised within 40 working days

% of total finalized within 40 working days

EC

9040

3324

3212

36%

FS

18030

8710

8591

48%

GP

131632

82572

81215

62%

KZN

26312

14585

13112

50%

LP

18904

15437

15283

81%

MP

16012

9182

8719

54%

NW

16854

13942

13843

82%

NC

2915

1135

1082

37%

WC

19609

10359

10011

51%

Autopay

844

657

654

77%

Total

260152

159903

155722

60%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Of the 260 152 medical invoices received, 159 903 were finalized and 155 722 or 60% were finalized within 40 working days against a target of 85%. A total of 844 medical invoices were received through Autopay and 657 were finalized. Of those medical invoices received through Auto-Pay, 654 or 77% were finalized within 40 working days. Of the 131 632 medical invoices received by the GP, 82 572 were finalized and 81 215 or 62% were finalized within 40 working days. Western Cape province finalized 10 359 of the 19 609 medical claims received in Q1 of 2019/20. Of the claims receive by the WC 10 011 or 51% were finalized within 40 working days. Northern Cape province received 2 915 medical invoices, which was the least number of invoices received by the province. Of those invoices 1 135 were finalized and 1 082 or 37% were finalized within 40 working days.

 

Table 23: Pre-authorisation responded to within 10 working days on previously finalized cases in Q1 of 2019/20

Province

Received

Achieved

Percentage

EC

92

89

97%

FS

43

43

100%

GP

186

163

88%

KZN

182

181

99%

LP

51

51

100%

MP

40

39

98%

NC

13

13

100%

NW

23

20

87%

WC

74

72

97%

Total

704

671

95%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Of the 704 pre-authorisations received, 671 or 95% were responded to within 10 working days on previously finalized cases against a target of 85%. GP responded to 163 or 88% of the 186 received pre-authorisations within 10 working days on previously finalized cases. GP received the highest number of pre-authorisations, followed by KZN. KZN responded to 181 or 99% of the 182 received pre-authorisations within 10 working days on previously finalized cases. North West province received the least number of pre-authorisations and responded to 20 or 87% of the 23 received pre-authorisations within 10 working days.

 

Table 24: Compliant requests for assistive devices responded to within 15 working days of receipt in Q1 of 2019/20

Province

Received

Actual Performance

% Achievement

EC

14

5

36%

FS

27

27

100%

GP

111

63

57%

KZN

86

83

97%

LP

33

32

97%

MP

35

32

91%

NC

16

16

100%

NW

16

16

100%

WC

41

41

100%

Total

379

315

83%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Of the 379 compliant assistive devices requests received, 315 or 83% were responded to within 15 working days of receipt against a target of 85%. The Free State, Northern Cape, North West and Western Cape responded to all compliant assistive devices requests within 15 working days of receipt, which translate to overall achievement of 100% for the four provinces. Gauteng province responded to 63 or 57% of the 111 compliant assistive devices requests within 15 working days. Eastern Cape received the least number of request and responded to 5 or 36% of the 14 received compliant assistive devices requests within 15 working days. Poor performance in the Eastern Cape and Gauteng was attributed to capacity constraints.

 

7.4. 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’s mandate is derived from the following: NEDLAC Act; Labour Relations Act, NEDLAC Constitution; and NEDLAC protocols.

 

NEDLAC’s 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.

 

7.4.1.    Nedlac Performance per programme in Q1 of 2019/20

 

Nedlac reported its performance per programme as follows:

 

Table 25: Nedlac Performance per programme in Q1 of 2019/20

PROGRAMME

Total No. of Quarterly Planned Indicators

Achieved

Not Achieved

Overall Achievement %

1.

Administration

5

5

0

100%

2.

Core-Operations

5

5

0

100%

3.

Constituency Capacity Building

3

3

0

100%

Overall Performance

13

13

0

100%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Table 25 above reflects that Nedlac had 13 planned indicators reporting in Q1 and all the targets for those indicators were achieved, translating to an overall performance of 100%. Nedlac reported that the work achieved in Q1 was primarily administrative with achievements in human resource where staff performance was given more priority, an improvement from previous years. The entity also reported that the performance of Core-operations programme was primarily as a result of the successful engagements on legislation and the achieving of set out performance based strategic and organizational goals. Furthermore, the entity reported that the 100% achieved in programme 3 in Q1 was an improvement in receiving financial report from the three constituencies on a quarterly basis, which was previously the area of low performance. This was achieved reportedly by the implementation of more efficient monitoring tools for each of the constituency funds.

 

  1. Nedlac Financial Overview as at Q1 of 2019/20

 

Nedlac reported on its finances as follows:

 

Table 26: Financial Overview as at 30 June 2019

Revenue

Amount R’000

Transfers

10 185

Interest Received

205

Sundry income

67

SETA

19

Total income

10 476

 

 

Expenditure

Amount R’000

Administration

6 159

Core Operations

997

Capacity Building

461

Total spending

7 617

 

 

Surplus/(Deficit)

2 858

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

The total income of Nedlac in Q1 of 2019/20 amounted to R10.4 million. The larger portion of the revenue was a transfer from Labour Policy and Industrial Relations programme of the Department, which was R10.1 million. The total expenditure at Q1 amounted to R7.6 million, resulting to a surplus of R2.8 million. The larger portion of expenditure was on Administration programme, which spent R6.1 million in Q1 of 2019/20 financial year.

 

  1. The Unemployment Insurance Fund

 

Constitutional Mandate

The mandate of the UIF is derived from section 27(1)(c) of the Constitution. The UIF provides social security to its contributors in line with section 27(1)(c) which states that “everyone has the right to social security”.

 

Legislative Mandate

The mandate of UIF is stated in the Unemployment Insurance Act (Act 63 of 2001) as amended. The UIF was established in terms of section 4(1) of the UIA. The Act empowers the UIF to register all employers and employees in South Africa and pay those who qualify for unemployment insurance benefits.

 

The Unemployment Contributions Act (Act 4 of 2002) empowers the SARS Commissioner and the UI Commissioner to collect monthly contributions from both employers and employees. Section 9 of the UCA empowers the UI Commissioner to collect contributions from all those employers who are not required to register as employers in terms of the fourth schedule of the Income Tax Act (Act 58 of 1962) and who are not liable for the payment of the skills development levy in terms of the Skills Development Act (Act 9 of 1999). These contributions are used to pay benefits and other expenditure reasonably incurred relating to the application of the Act.

 

Policy Mandate

The UIF is expected to make a contribution to the following service delivery outcomes:

  • Creation of decent employment through inclusive economic growth;
  • An efficient, effective and development-oriented public service and an empowered and inclusive citizenship; and
  • An inclusive and responsive social security system.

 

  1. UIF Performance per Strategic Objective in Q1 of 2019/20

 

UIF reported on its performance per strategic objective as follows:

 

Table 27: UIF Performance per Strategic Objective in Q1 of 2019/20

STRATEGIC OBJECTIVE

Planned Indicators

Achieved

Overall Achievement %

1.

Ensure financial sustainability

3

2

67%

2.

Strengthen institutional capacity of the Fund

1

0

0%

3.

Provide easy to use services through multiple access points

1

0

0%

4.

Improve service delivery

6

5

83%

5.

Collaborate with stakeholders to improve compliance with UIF acts

2

2

100%

6.

Enhance employability of UIF beneficiaries, enable entrepreneurship and preserve jobs

2

2

100%

OVERALL PERFORMANCE

15

11

73%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Table 27 reflects that UIF achieved 11 of the 15 planned indicators reporting in Q1, translating to an overall performance of 73%. The entity did not achieve on all indicators under strategic objectives 2 and 3, translating to an overall achievement of 0% in both strategic objectives. Programme 2 missed the target of maintaining the vacancy rate at 10%. Instead it went up to 11.79% (71/602). Under strategic objective 3, the entity failed to implement the Integrated Claims Management System (ICMS) because the user requirement of SAP Release 1 was not developed. It received an overall achievement of 100% in strategic objectives 5 and 6. The entity received overall achievement of 67% and 83% in strategic objectives 1 and 4 respectively. Under strategic objective 1, the entity paid 99.8% of valid invoices against a target of 100%, resulting to an overall achievement of 67% (2/3). Under strategic objective 4, 93% of new companies were created with a registration document (UI54) within one working day, against a target of 95%. This resulted to an overall achievement of 83% (5/6) in strategic objective 4.

 

  1. UIF Performance per Programme in Q1 of 2019/20

 

UIF reported on its performance per programme as follows:

 

Table 28: UIF Performance per programme in Q1 of 2019/20

PROGRAMME

Planned Targets

Achieved

Overall Achievement %

1.

Administration

5

2

40%

2.

Business Operations

8

7

88%

3.

Labour Activation Programmes

2

2

100%

Overall Performance

15

11

73%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

Table 28 reflects that the Administration programme achieved two of the five planned indicators with targets reporting in Q1, translating to an overall achievement of 40%. Business operations programme achieved seven of the eight planned indicators with targets reporting to Q1, translating to an overall achievement of 88%. Programme 3 achieved all planned targets with indicators reporting in Q1 of 2019/20 financial year.

 

  1. Business Operations: Performance per Province in Q1 of 2019/20

 

Table 29: % of valid claims (Unemployment Benefit) approved/ rejected within specified time frames

Province

Q1 2019/20

Q1 2018/19

EC

97%

87%

FS

98%

91%

GP

98%

95%

HO

88%

90%

KZN

96%

93%

LP

74%

84%

MP

93%

76%

NW

93%

94%

NC

94%

92%

WC

90%

94%

Total

93%

91%

Source: Presentation to the PC: Employment and Labour  dated 20 November 2019

 

The UIF processed 93% of valid claims for unemployment benefits with complete information within 15 working days, thus exceeding the 90% target. This is an improvement from the 91% achieved in Q1 of 2018/19 financial year. Head Office processed 88% claims against a target of 90%, which was a decrease in performance from 90% achieved in Q1 of 2018/19 financial year. Limpopo province processed 74% claims against a target of 90%, which was a decrease in performance from 84% achieved in Q1 of 2018/19 financial year. Free State and Gauteng provinces processed 98% of claims, which is the highest percentage of claims processed by a province. Good performance in processing of unemployment benefits was attributed to establishment of rapid response task teams.

 

Table 30: % of valid claims (in-service benefits; maternity, illness  and adoption benefits) processed within specified time frames

Province

Q1 2019/20

Q1 2018/2019

EC

97%

83%

FC

99%

94%

GP

99%

94%

HO

76%

77%

KZN

94%

88%

LP

82%

81%

MP

92%

79%

NW

95%

94%

NC

97%

90%

WC

87%

94%

Total

93%

89%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

The UIF processed 93% of valid in-service; maternity, illness and adoption benefits with complete information within 10 working days against a target of 90%. This was an improvement in performance from the 89% achieved in 2018/19 financial year. Head Office processed 76% claims in Q1 of 2019/20 financial year against a target of 90%, which was a decrease in performance from the 77% processed in Q1 of 2018/19 financial year. Limpopo province processed 82% of valid claims within 10 working days against a target of 90%, which was an increase in performance from the 81 % processed in Q1 of 2018/19 financial year. The Western Cape province processed 87% of the valid claims, which was a decrease in performance from the 94% processed in Q1 of 2018/19 financial year.

 

Table 31: % of valid claims (Deceased benefit) processed within specified time frames

Province

Q1 2019/20

Q1 2018/19

EC

97%

88%

FS

99%

93%

GP

97%

75%

KZN

97%

89%

LP

81%

89%

MP

92%

88%

NW

97%

88%

NC

91%

96%

WC

97%

93%

Total

95%

87%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

The UIF processed 95% of deceased benefit claims with complete information within 20 working days in Q1 of 2019/20 against a target of 90%, which was an improvement in performance from the 87% processed in 2018/19 financial year. Limpopo was the only province that missed the target of 90% by processing 81% death benefit claims in Q1 of 2019/20 financial year. Its performance decreased from 89% processed in Q1 of 2018/19.

 

Table 32: % of benefit payment documents created after receipt within specified time frame

Province

Q1 2019/20

Q1 2018/19

EC

100%

96%

FS

100%

100%

GP

100%

99%

HO

92%

100%

KZN

99%

98%

LP

100%

100%

MP

100%

77%

NW

100%

97%

NC

98%

93%

WC

100%

99%

Total

100%

97%

Source: Presentation to the PC: Employment and Labour dated

20 November 2019

 

Table 32 above reflects that only Head Office missed the targets of creating 95% benefit payment documents after receipt within 6 working days. Head Office achieved an overall performance of 92% in Q1 of 2019/20, which was a decrease in performance from 100% achieved in Q1 of 2018/19 financial year.

 

Table: 33: % of new companies created with a registration document (UI54) within 1 working day

Province

Q1 2019/20

2018/19

EC

99%

98%

FS

100%

95%

GP

98%

98%

HO

89%

99%

KZN

99%

96%

LP

100%

100%

MP

100%

89%

NW

99%

97%

NC

99%

97%

WC

99%

98%

uFiling

100%

 

Total

93%

98%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

The entity created 93% of new companies with a registration document (UI54) within one working day in Q1 of 2019/20 against a target of creating 95% new companies. Only Head Office missed the 95% target by creating 89% new companies with a registration document within one working day in Q1 of 2019/20 financial year.

 

  1. UIF Expenditure per Programme in Q1 of 2019/20

 

The Fund reported on its expenditure per programme as follows:

 

Table 34: UIF expenditure per programme in Q1 of 2019/20

PROGRAMME

Budget

Actual as at 30/06/2019

Variance

Exp. as at 30/06/2019

R’000

R’000

R’000

%

1.

Administration

738 139

195 331

542 808

26%

2.

Business Operation

2 974 204

4 084 867

-1 110 663

137%

3.

LAP

416 435

16 218

400 217

4%%

 

TOTAL

4 128 778

4 296 416

-167 638

104%%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

The UIF spent R4.2 billion or 104% of the R4.1 budget in Q1 of 2019/20, resulting to over-expenditure of R167.6 million. Over-expenditure of the total budget was a result of over-expenditure in programme 2 (Business Operations). This programme spent R4.0 billion or 137% against a budget of R2.9 billion by the end of Q1 of 2019/20, resulting to an over-expenditure of R1.1 billion. Overspending in benefits payments was reported to be due to implementation of the Amendment Act. However, it was reported that the benefit payments budget will be revised as per the latest actuarial valuations to cover the Amendments.

 

Programme 1 (Administration) spent R195.3 million or 26% of the R738.1 million budget, resulting to under expenditure of R542.8 million. The contributing factors to 74% under-expenditure of the budget were reported to be:

  • The 12% underspending in compensation of employees due to the vacant post not yet filled.
  • The Fund being in the process of creating the LAP structures in the provincial offices.
  • Number of ICT projects both hardware and software on contracting stages.
  • Management and investment fees low spending due to the new mandate that was estimated higher due to the fact that initial commitment capital fees of new instruments are substantially higher than subsequent management fee. Trading activity in the portfolio also decreased due to unfavourable market conditions.

 

Programme 3 spent R16.2 million or 4% of the R416.4 million budget, resulting to under expenditure of R400.2 million. The 96% underspending was reported to be due to delays on the finalization of the evaluation process and inadequate supporting documents submitted by service providers for payment.

 

  1. UIF Expenditure per Economic Classification in Q1 of 2019/20

 

UIF reported on its expenditure by Economic Classification as follows:

 

Table 35: UIF expenditure by economic Classification in Q1 of 2019/20

ECONOMIC CLASSIFICATION

Budget

Actual as at 30/06/2019

Variance

Expenditure as at 30/06/2019

 

R’000

R’000

R’000

%

Compensation of Employees

374 913

328 062

46 851

88%

Goods and Services

506 309

187 298

319 011

37%

CAPEX

264 485

20 551

243 934

8%

Transfers

2 983 071

3 760 505

-777 434

126%

TOTAL

4 128 778

4 296 416

-167 638

104%

Source: Presentation to the PC: Employment and Labour dated 20 November 2019

 

The largest component of the budget was Transfers at R2.9 billion or 72% of the total budget of the UIF. A total of R3.7 billion or 126% was spent against a budget of R2.9 billion, resulting to overspending by R777.4 billion. The second largest component of the budget was Goods and Services at R506.3 million or 12% of the total budget of the entity. A total of R187.2 or 37% was spent by the end of Q1 of 2019/20 resulting to a variance of R319.0 million. A total of R328.0 or 88% of the R374.9 budget for compensation of employees was spent by the end of Q1 of 2019/20 resulting to a variance of R46.8 million. The Capital Expenditure amounted to R20.5 million or 8% of the R264.4 budget, resulting to a variance of R243.9 million.

 

  1. Committee Observations

 

After receiving the presentations from the Department and its entities, the Committee made the following observations:

 

8.1.       The Department of Employment and Labour

8.1.1.    The Wholesale and Retail sector had high level of non-compliance to the National Minimum Wage Act.

8.1.2.    The highest number of Occupational Health and Safety incidents were reported in the Manufacturing sector.

8.1.3.    A total of 18 126 registered employment opportunities were filled by registered work-seekers against a target of 10 800.

 

8.2.       Productivity South Africa

8.2.1.    Productivity SA will receive its budget from the Public Employment Services programme of the Department as from the next financial year.

 

8.3.       The Compensation Fund

8.3.1.    Performance of the Compensation Fund deteriorated from 67% in Q4 of 2018/19 to 33% in Q1 of 2019/20.

8.3.2.    Compensation Fund did not report on Q1 budget and expenditure. The Fund subsequently submitted its financial report after it was alerted of the omission by the Committee members. The report reflected that it achieved two of the six planned indicators, translating to an overall performance of 33% in Q1. The Fund spent 13% (R910.8 million of R7.1 billion) of its budget at the end of Q1, resulting to a variance of R6.2 billion.

 

8.4. Nedlac

8.4.1.    Nedlac did not report on its performance per strategic objective.

8.4.2.    Nedlac’s budget and expenditure was not reported in accordance with the standard format of financial reporting.

 

8.5.       Unemployment Insurance Fund

8.5.1.    Unemployment Insurance Fund did not provide actual numbers of processed claims in its report on performance by provinces.

 

9.         Committee Recommendations

 

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

 

9.1.       The Department of Employment and Labour

9.1.1.    The Department deploys its scares resources to focus on sectors that reported high levels on non-compliance to legislation.

9.1.2.    In addition to the reporting on work opportunities filled by work-seekers registered on ESSA, the Department also report on employment creation by other departments.

 

9.2.       Productivity South Africa

9.2.1.    The Department keeps the Committee updated regarding the new funding model of Productivity SA.

 

9.3.       Compensation Fund

9.3.1.    The Fund continues to report quarterly to the Committee on progress regarding the implementation of its Action Plan.

 

9.4.       All entities reporting to the Department

9.4.1.    All entities of the Department use a standard format of reporting similar to that used by the Department.

 

Report to be considered.

Documents

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