ATC220303: 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 2021/22, Dated 2 March 2022

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 2021/22, Dated 2 March 2022

 

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 2021/22, 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 2021/22 as presented in the meetings held on 2, 9 and 17 February 2022.

 

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 2021/22 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 PROGRAMME

 

The Department reported on its performance per programme as follows:

 

Table 1: DEL Performance per Programme in Q1 of 2021/22

BRANCH		Planned Indicators	Indicators with Q1 Targets	Achieved	Overall Achievement
1.	Administration	8	7	5	71%
2.	Inspections and Enforcement Services	7	4	1	25%
3.	Public Employment Services	6	5	5	100%
4.	Labour Policy and Industrial Relations	10	6	5	83%
OVERALL PERFORMANCE		31	22	16	73%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 February 2022

 

Table 1 above reflects that the Department has 31 annual planned indicators in the 2021/22 financial year. Of those indicators, 22 indicators have targets reporting in Q1. The Department achieved 16 of the 22 targets reporting in Q1. This translates to an overall performance of 73%. This is an improvement from the overall performance of the previous quarter (Q4: 2020/21), which was 67%.

 

Programme 1 (Administration) has eight annual planned indicators and seven indicators that have targets for Q1. The programme achieved five out of seven targets for Q1. This translates to an overall achievement of 71% in Q1. This is a substantial improvement from the 38% achieved in the previous quarter.

This programme did not achieve the target of maintaining vacant funded posts at 3% or less for every quarter. Instead the vacant funded posts were at 11% by the end of Q1.

The reason for non-achievement was reported to be that posts on salary level 8 and below are advertised internal of Exchange Postmaster and ESSA, which means that they are mostly filled through internal promotions. Management has to decide on the utilization of ESSA for posts from salary level 8 and below.

The programme did not achieve the target of resolving 93% of reported incidents of corruption in the Department. The programme resolved 134 of the 263 reported incidents, translating to an achievement of 51%. Six cases were referred to Employment Relations (ER) and 18 referred to the SAPS.

The reason for non-achievement of this target was reported to be that anti-fraud and corruption time frame in completing the investigation in 90 days and not integrated to the time frame with ER in terms of reaching the 90 days’ deadline.

To remedy the situation, the proposal is to have a consensus with all relevant stakeholders in relation to reasonable time frames between Anti-fraud and ER for resolution of reported incidents by disciplinary and criminal interventions.

 

Programme 2 (Inspection and Enforcement Services) has seven annual planned indicators and four indicators with targets for Q1. Of the four targets reporting in Q1, the programme achieved one. This translates to an overall achievement of 25%. This is a decline in performance from the 50% achieved in Q4: 2020/21.

A total of 49 278 employers were inspected to determine compliance with employment law against a target of 74 226. The total number of compliant employers was 36 589.The reasons for non-achievement were reported to be that a number of inspectors tested Covid-19 positive and were unable to do their work. Some inspectors were on mandatory leave and/or study leave during this period. Some workplaces were inaccessible due to the number of Covid-19 positive cases. The proposal is that inspectors have to be prioritized for vaccination to remedy the situation.

A total of 485 out of 1 489 or 32.5% of non-compliant employers/workplaces/users received by Statutory Services were referred for prosecution within 30 calendar days against the target of 65%.

The reason for the variance was reported to be that there was a reduced number of enforcement structures such as courts that remained open during the lockdown. The Department also have no printers and unable to print court papers as courts traditionally expect hard copies for filing. There is also a backlog coming from last financial year that was dealt with but cannot be reported as it falls outside the reporting period of Q1 of 2021/22 financial year.

To remedy the situation, the Department has put in place measures to strengthen the relations with the courts. In addition, the Department is exploring the use of technology to submit documents. It also reported that improvements are underway to reduce the backlog.

The branch could not conduct an advocacy session that was scheduled to be held physically on 30 June due to safety regulations in response to the pandemic and was postponed to 21 July 2021. As a remedy, the Branch will bring in virtual seminars in instances wherein physical ones aren’t possible.

 

Programme 3 (Public Employment Services) has six annual planned indicators and five indicators with targets reporting in Q1. All the five targets reporting in Q1 were achieved by the end of the quarter. This translates to an overall achievement of 100%, which is an improvement from the 83% achieved in the previous quarter.

A total of 236 127 work-seekers were registered on ESSA system against the target of 184 000 resulting to a variance of 52 127. The reason for the variance is high level of unemployment in the country and companies closing down due to Covid-19. Gauteng province registered the highest number of work seekers at 45 656, followed by KZN at 32 395 and Eastern Cape at 28 043. A total of 29 942 work seekers were registered online. A total of 143 184 or 61% of registered work seekers are young people aged 15-35 years. The gender split of work seekers registered is 54% females and 46% males. A total of 678 or 0.3% of work seekers registered have different forms of disabilities. A total of 183 610 or 78% of work seekers are Africans, 23 778 or 10% are Coloureds, 4 732 or 2% are Whites, 1948 or 1% are Indians and 22 059 or 9% are unspecified.

 

A total of 36 951 work and learning opportunities were registered on ESSA against a target of 25 000 resulting to a variance of 11 951. The reason for over achievement was reported to be an increase in registered employment opportunities. Only 8 111 or 22% of registered work and learning opportunities are classified by economic sector. The majority of work and learning opportunities were registered in the Safety and Security sector at 3 148, Local Government at 1 774, Education at 982 and Agriculture at 860 work and learning opportunities. A total of 18 913 or 51% of opportunities registered are formal jobs, 11 044 are projects, 3 969 or 11% are learnerships and 1 060 or 3% are Will-Programme. Gauteng province registered the highest number of opportunities at 6 689, followed by Eastern Cape at 6 036 and Limpopo at 5 624. Of the opportunities registered, 29 521 or 80% are of contract type, 4 798 or 13% are temporary opportunities, 1 719 are permanent opportunities and 913 or 2% are classified as other.

 

A total of 73 317 registered work-seekers were provided with employment counselling against a target of 55 000 resulting to a variance of 18 117. The reason for deviation was that high levels of unemployment necessitated that more people be provided with employment counselling. Gauteng province provided 17 238 work seekers with counselling, followed by KZN at 11 006, Eastern Cape at 8 894 and Mpumalanga at 8 166. The gender split of those that received counselling is 58% female and 42% male. A total of 481 (1%) registered work seekers who received employment counselling have different forms of disabilities.

 

A total of 14 852 work seekers were placed in registered work and learning opportunities against the target of 12 500 resulting to a variance of 2 352. The reason for deviation was reported to be improved employer confirmation of placement.

Of the 14 852 work and learning opportunities filled, 8 417 (57%) were formal jobs, 4 904 (33%) were projects and 1 014 (7%) were learnerships.

Of the total placements, 11 670 (79%) are contract type, 2 326 (16%) temporary opportunities, 456 (3%) permanent opportunities and 398 (2%) is classified as other.

Safety and security has most of the placements (817), followed by Local government (732) and Education (300).

Challenges experienced in placements include:

• Skills mismatch
• Number of work seekers lack required experience
• Covid-19 pandemic lockdown impacted the economy negatively and led to closure of some businesses.

Of the work seekers placed, 9 927(67%) are young people aged 15-35 years and 8 093 (54%) are females.

 

The Branch concluded five partnership agreements with various stakeholders as planned.

The five agreements concluded with various stakeholders were as follows;

 

Table 2: Areas of collaboration and provincial footprint

	Collaborative Partner	Area of collaboration	Province
1.	Ekurhuleni Artisans and Skills Training College	Registration of work opportunities and placement of registered work seekers	Gauteng
2.	NSG	Placement of work seekers	National
3.	Western Cape Department of Economic Development and Tourism	Registration of opportunities, counselling and placement of registered work seekers	Western Cape
4.	Mustard Seed Foundation	Registration of opportunities and placement of registered work seekers	Gauteng
5.	OR Tambo District Municipality	Registration of opportunities and placement of registered work seekers	Eastern Cape

Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 February 2022

 

Programme 4 (Labour Policy and Industrial Relations) have 10 annual planned indicators and six indicators with targets reporting in Q1. This branch achieved five of the six targets reporting in Q1. This translates to an overall achievement of 83%, which is a decline in performance from the 98% achieved in Q4: 2020/21.

The branch did not achieve the target of producing and submitting two annual labour market trend reports to the Deputy Director General of this programme. The annual Job Opportunity and Unemployment in the SA Labour Market was produced and submitted on 15 July 2021, which was about two weeks later after the agreed deadline of 30 June 2021. The report was delayed by the late release of source documents and the disputed numbers of the UIF claims by the acting UIF commissioner. The remedial action includes accessing external date such as the Quarterly Labour Force Survey that is produced by Statistic SA and discussing Unemployment Insurance data quality with the UIF managers.

The targets that were achieved were:

• 2020/21 Annual Employment Equity Report was published and launched on 25 June 2021; and the Public Register was published in the Government Gazette No. 44636 dated 28 May 2021.
• Five collective agreements were received and assessed and verified within 180 working days of receipt.
• Forty-three applications were received and forty-two were refused within 90 calendar days of receipt and one was approved within 90 calendar days of receipt.
• One annual implementation report was submitted to the Minister for sign off by 30 April 2021.
• Data collection instruments for research reports were piloted by 30 June 2021.

 

3.         FINANCIAL REPORT

 

3.1.      Expenditure information per Programme in Q1 of 2021/22

The Department reported its expenditure per Programme as follows:

 

Table 3: DEL Expenditure Information per Programme in Q1 of 2021/22

BRANCH	Q1 Budget	Q1 Expenditure	Available Budget	Expenditure
	R’000	R’000	R’000	%
Administration	251 039	170 836	80 203	68%
Inspection and Enforcement Services	151 723	133 035	18 688	88%
Public Employment Services	152 467	144 069	8 398	94%
Labour Policy and Industrial Relations	328 330	311 775	16 555	95%
Total	883 559	759 715	123 844	86%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 February 2021

 

Table 3 above reflects that the Department spent R759.7 million or 86% of the R883.6 million budget allocated for Q1, resulting to a variance of R123.8 million.

The Administration programme received R251.0 million budget for Q1 and spent R170.8 or 68% of the allocation by the end of the quarter. This resulted to a variance of R80.2 million by the end Q1 of 2021/22 financial year.

The Inspection and Enforcement Services programme received R151.7 million budget for Q1 of 2021/22, which is the least programme allocation. It spent R133.0 or 88% of the allocation by the end of the quarter, resulting to a variance of R18.7 million.

The Public Employment Services programme spent R144.1 or 94% of the R152.5 million allocated for Q1, resulting to a variance of R8.4 million by the end of the quarter.

Programme 4 (Labour Policy and Industrial Relations) received a budget of R328.6 million in Q1, which is the largest programme allocation. It spent R311.8 million or 95% of the allocation by the end of the quarter resulting to a variance of R16.6 million. The larger share of this programme budget goes to Transfers and Subsidies since it houses the CCMA, which is the entity that receives the largest allocation from the Department. This can be seen in expenditure by economic classification as reflected in table 4 below.

 

3.2.      Expenditure information by economic classification in Q1 of 2021/22

Table 4 below reflects the expenditure information by economic classification.

 

Table 4: Expenditure Information by Economic Classification in Q1 of 2021/22

ECONOMIC CLASSIFICATION	Q1 Budget	Q1 Expenditure	Available Budget	Expenditure
	R’000	R’000	R’000	%
Current Payments	512 476	406 068	106 408	79%
Compensation of Employees	342 968	308 223	34 754	90%
Goods and Services	169 508	97 845	71 663	58%
Transfers and Subsidies	356 974	347 766	9 208	97%
Payments for Capital Assets	14 109	5 881	8 228	42%
Payment for Financial Assets	0	-	0
Total	883 559	759 715	123 844	86%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 February 2021

 

Table 4 above reflects that a total of R512.5 million was allocated for current payments in Q1 of 2021/22. Of this amount, R342.9 was allocated to Compensation of Employees and R169.5 to Goods and Services.

 

Of R512.5 million allocated for Current Payments, R406.1 million or 79% was spent by the end of Q1 resulting to a variance of R106.4 million.

A total of R308.2 million or 90% of R342.9 allocated for Compensation of Employees was spent by the Q1 resulting to a variance of R34.7 million.

A total of R97.8 million or 58% was spent on Goods and Services resulting to a variance of R71.7 million by the end of Q1 of 2021/22.

 

Transfers and Subsidies received R356.9 million and R347.8 million or 97% was spent by the end of Q1 resulting to a variance of R9.2 million.

 

Payment for Capital Assets received a budget allocation of R14.1 million and R5.9 or 42% was spent by the end of Q1 resulting to a variance of R8.2 million.

 

4.         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 men and women who could not secure employment in the open 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.

 

The SEE provides employment to 1030 persons with disabilities.

 

Table 5: Impact Analysis: Factory Employees

Province	Factory	PWD as at 31/03/2021	PWD as at 30/06/2021	Terminations As at 20/06/21	Total
Free State	Bloemfontein	59	0	O	59
KwaZulu-Natal	Durban	82	0	1 death	81
	Pietermaritzburg	61	0	1 resigned	60
Eastern Cape	East London	68	1(transfer from Pretoria)	0	69
	Port Elizabeth	71	9	1 termination	70
Northern Cape	Kimberley	68	0	0	68
Western Cape	Ndabeni	153		2 death & retire	151
	Epping	110	3 replacements	1 transfer	112
North West	Potchefstroom	42	0	0	42
	Seshigo	35	0	0	35
Gauteng	Pretoria	104	0	2	102
	Rand	105	1	1 resigned	104
	Springfield	78	0	1 resigned	77
TOTAL		1036			1030

Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 February 2022

 

Table 5 above reflects the number of people with disabilities employed by Supported Employment Enterprises per province. Gauteng has a total of 283 people with disabilities in its SEE factories. It is followed by the Western Cape at 263, KwaZulu-Natal at 141 and Eastern Cape at 139.

 

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.

 

4.1.      Performance per Strategic Objective

 

SEE reported on its performance as follows:

 

Table 6: Performance per Strategic Objective of SEE in Q1 of 2021/22

STRATEGIC OBJECTIVE	Annual Planned Indicators	Indicators with targets reporting in Q1	Achieved	Overall Achievement %
Provide work opportunities for PWD	3	2	0	0%
Overall Performance	3	2	0	0%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 February 2022

 

The performance per strategic objective of SEE was 0% in the first quarter of 2021/22 financial year.

 

4.2.      Revenue vs Expenditure

 

Table seven below reflects the financial performance of the SEE.

 

Table 7: Revenue vs Expenditure

	Yearly Budget	Q1 Budget	Q1 Actual	Variances
REVENUE	R	R	R	R
Grant Allocation	149 062 000	37 265 500	35 297 251	1 968 249
Sales	41 754 096	10 438 524	1 049561	9 388 963
Other Income	350 000	87 000	411 546	-324 046
TOTAL REVENUE	191 166 096	47 791 524	36 758 358
EXPENDITURE	R	R	R	R
Admin support salaries	58 805 399	14 701 450	12 657 898	2 043 552
Factory salaries	108 714 100	27 178 525	22 430 640	4 747 885
Manufacturing expenses	5 000 000	1 250 000	4 662 000	-3 412 000
Mandatory/Statutory expenses	15 000 000	3 750 000	2 247 516	1 502 484
Administrative expenses	3 646 597	911 649	1 127 618	-215 969
TOTAL EXPENDITURE	191 166 096	47 791 624	43 125 672
DEFICIT			-6 367 314

Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 February 2022

 

Table 6 above reflects that SEE has an annual budget of R191.2 million in 2021/22 and budgeted for R47.8 million for Q1. However, the actual budget received in Q1 was R36.8 million. Of this amount R35.3 or 96% is the grant allocation. The remainder is sales at R1million and other income at R411 546.

 

The actual expenditure amounted to R43.1 million resulting to a variance or over expenditure of R6.4 million. A total of R22.4 million or 52% was spent on factory salaries. The entity spent R12.7 million or 29% of the Q1 budget on Administration Support Salaries. A total of R4.7 million or 11% was spent on Manufacturing expenses. Mandatory/Statutory Expenses and Administrative expenses has expenditure of R2 million and R1 million respectively.

 

1. Q1 PERFORMANCE OF ENTITIES OF THE DEPARTMENT OF LABOUR (2021/22)

 

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

 

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

 

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 legislative 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 Unemployment Contributions Act (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.

 

Quarter 1 Internal Audit Review (Audited Performance Information)

UIF reported that the objective of this audit was to evaluate the adequacy and effectiveness of Monitoring and Evaluation reports, and the process followed.

The audit scope covered the period 1 April 2021 to 30 June 2021 and evaluated the adequacy and effectiveness of control environment.

UIF has 25 performance indicators and targets.

Internal audit reported that of the 25 performance targets reviewed, 11 targets were achieved and 14 were not achieved. This translated to total performance of 44%. UIF management confirmed this assurance by Internal Audit.

 

Summary of Internal Audit Findings

 

Table 8: Summary if Internal Audit Findings

Findings	Management Comments	Action Plan	Implementation Date
Inadequate quality review on the Annual Performance Plan There were inadequate quality review of the annual performance plan prior to approval and implementation. M&E action plans are noted and will be followed up during review of the draft APP for the next financial year.	Management picked up the gaps during performance review and reporting and these gaps were raised with IA even be audit commenced.   Management agrees with the finding that the 2021/22Annual Performance has weaknesses impacting on quality reporting.	To ensure that the 2022/23 APP is SMART Management is to: Strengthen layers of assurance on the quality and adequacy of the plan and the Technical Indicator Descriptions by obtaining assurances at Directorate, EXCO, IA and Risk Management levels.	31 March 2022

Source: Presentation to the Portfolio Committee on Employment and Labour dated 9 February 2022

 

Conclusions by the Internal Audit

• M&E has conducted a thorough review in providing assurance on the Q1 performance reported.
• Evidence adequately validated.
• There was inadequate quality review of the APP prior to approval and implementation.
• M&E comments are adequate to address the gaps identified.
• However, APP review and recommendations by Internal Audit should be implemented.

 

1. UIF Performance per Programme in Q1 of 2021/22

 

UIF reported on its performance per Programme as follows:

 

Table 9: UIF Performance per Programme in Q1 of 2021/22

PROGRAMME		Planned Targets	Achieved	Overall Achievement %
1.	Administration	12	5	42%
2.	Business Operations	8	6	75%
3.	Labour Activation Programmes	5	0	0%
Overall Performance		25	11	44%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 9 February 2022

 

Table 9 above reflects that the Administration programme achieved 5 of the 12 planned indicators, which translates to an overall achievement of 42%. Some of the Q1 targets of programme 1 that were achieved were that the vacancy rate was reduced to 6.8% against a target of 9%; 2.7% of persons with disabilities were employed against a target of 2%, 88% representation of Africans in Senior and Middle Management level against a target of 75%; and a Claims Management Business process blue print was developed and approved.

 

Business Operations programme had 8 planned indicators reporting in Q1. Of those indicators, 6 were achieved translating to an overall achievement of 75%. This programme recorded the highest achievement in Q1. Some of the targets that were achieved was that 209 557 new employees were registered against a target of 175 000; 100% new companies with complete, accurate and verified information were registered within one working day against a target of 95%; 99% of complete, accurate and verified benefit payment documents created after receipt within 5 working days against a target of 95%; 93% of valid claims (Unemployment Benefit) approved or rejected within 15 working day against a target of 90%; 93% of valid claims (Unemployment Benefit) approved or rejected within 15 working days; 93% valid claims (In-service benefits, maternity, illness and adoption benefits) approved or rejected within 10 working days; and 92%of valid claims (Deceased benefits) approved or rejected within 20 working days.

 

The Labour Activation Programme have 5 planned indicators. All planned indicators were not achieved. This translates to an overall achievement of 0%.

 

The entity achieved 11 of its 25 planned indicators, translating to an overall performance of 44%.

 

1. UIF Expenditure per Programme in Q1 of 2021/22

 

The Fund reported on its expenditure per Programme as follows:

 

Table 10: UIF Expenditure per Programme in 2021/22

PROGRAMME		Budget	Actual as at Q1 2021/22	Variance	Expenditure Q1 2021/22
		R’000	R’000	R’000	%
1.	Administration	764 378	990 405	-226 027	130%
2.	Business Operation	12 987 189	7 600 954	5 386 235	59%
3.	LAP	851 853	23 469	828 384	3%
	TOTAL	14 603 420	8 614 828	5 988 592	59%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 9 February 2022

 

Table 10 above reflects that the entity had a budget of R14.6 billion in Q1 of 2021/22. Of this amount, R8.6 billion or 59% was spent in Q1 of 2021/22. This resulted to a variance of R5.9 billion.

 

Programme 2 received R12.9 billion, which is the largest share of the budget. It spent R7.6 billion or 59% of the budget by the end of Q1. This resulted to a variance of R5.4 billion. The Fund reported that the

contributing factors to underspending were operating lease-transport-buses, compensation of employees and benefit payments. Due to the Covid-19 regulations and lockdowns, the production companies had to close down and could not deliver the required number of buses. On compensation of employees, the DPSA has approved the Departments fit-for-purpose structure to be implemented. The process is underway and the service provider has been appointed. Benefit payments refers to amounts that were budgeted for re-assessments (UI Amendment Act Top-ups) but yet to be paid out. Processing and payment priority was given to Covid-19 TERS benefits.

 

Programme 3 received R851 million, which is the second largest programme allocation. It spent R23.5 million or 3% of the allocation resulting to a variance R828.4 million. Contributing factors to 97% underspending were reported as follows:

• Unemployment Alleviation Schemes:
  • The implementation of projects was delayed because the UIF took a decision to align with the employment mandate of the Department.
  • The new focus is on projects that will result in employment or establishment of enterprises.
  • All recommended projects had to provide written employment commitments from employers. This in turn meant approval of the projects had to wait until such commitments were provided.
  • Some of the recommended partners required funding for cost items, like infrastructure, not funded by the UIF.
  • This required further engagements with partners with an intention to collaboratively source partnerships to cover the infrastructure component.

 

Programme 1 received R764.4 million and spent R990.4 or 130%. This is an over-expenditure of R226 million. It was reported that the factors that contributed to 30% overspending were social benefits (capped leave). The Fund made a provision for a capped leave at the beginning of the financial year. This item is then reversed at the end of the financial year. The provision is made for the anticipated retirements during the financial year.

 

1. UIF Expenditure per Economic Classification in Q1 of 2021/22

 

UIF reported on its expenditure by Economic Classification as follows:

 

Table 11: UIF Expenditure per Economic Classification in Q1 of 2021/22

ECONOMIC CLASSIFICATION	Budget	Actual as at Q1 2021/22	Variance	Expenditure as at Q1 2021/22
	R’000	R’000	R’000	%
Compensation of Employees	473 464	456 870	16 594	96%
Goods and Services	1 000 875	904 351	96 524	90%
CAPEX	252 829	20 55136 861	243 934215 968	15%
Transfers	12 876 252	7 216 746	5 659 506	56%
TOTAL	14 603 420	8 614 828	5 988 592	59%

Source: Presentation to the Portfolio Committee on Employment on Employment and Labour dated 9 February 2022

 

The above table reflects that a total of R1 billion was allocated to Goods and Services. Of this amount, R904 million or 90% was spent in Q1 of 2021/22. This resulted to a variance of R96.5 million.

A total of R12.9 billion was allocated to Transfers and R7.2 billion or 56% was spent in Q1: 201/22 resulting to a variance of R5.6 billion. Compensation of employees received a total budget of R473.5 million and spent R456.9 million or 96% of its budget in Q1: 2021/22. This resulted to a variance of R16.6 million. A total of R252.8 million was allocated to Capital expenditure and R36.9 million or 15% was spent in Q1: 2021/22 resulting to a variance of R215.9 million.

 

1. Productivity South Africa

 

Productivity SA is established in terms of section 31 of the Employment Services Act, No. 4 of 2014, as a schedule 3A Public Entity of the Department of Employment and Labour with the responsibility to fulfill an economic or social mandate of government, which 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.

 

Vision

The vision of Productivity SA is to lead and inspire a productive and competitive South Africa.

 

Mission

The mission is to improve productivity by diagnosing, advising, implementing, monitoring and evaluating solutions aimed at improving South Africa’s sustainable growth, development and employment through increased competitiveness.

 

Legislative Mandate

Productivity SA contributes to the following mandate of the Department:

• Improved economic efficiency and productivity.
• Creation of decent employment.
• Give value to social dialogue in the formulation of sound and responsive legislation and policies to attain labour market flexibility for competitiveness of enterprises which is balanced with the promotion of decent employment.

 

Functions of Productivity SA

In terms of section 32 of the Employment Services Act, the functions of Productivity SA are to:

• Promote a culture of productivity in the workplace;
• Facilitate and evaluate productivity improvement and competencies in the workplace;
• Support initiatives aimed at preventing job losses;
• Measure and evaluate productivity and competitiveness in the workplace and overall economy; and
• Maintain a database of productivity and competitiveness systems and publicise same; and to undertake productivity-related research

 

1. Productivity SA Performance per Strategic Objective in Q1 of 2021/22

 

Productivity SA reported its performance per Strategic Objective as follows:

 

Table 12: Productivity SA Performance per Strategic Objectives in Q1 of 2021/22

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	3	1	1	100%
2.	To support government programmes aimed at sustainable employment and income growth	2	2	1	100%
3.	To support enterprises facing economic distress and initiatives aimed at preventing job losses.	3	3	3	100%
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	1	1	100%
Overall Performance		12	8	8	100%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 9 February 2022

 

Table 12 above reflects that Productivity SA has 12 planned indicators for 2021/22 financial year. Of these indicators, 8 report in Q1. All indicators reporting in Q1 were achieved, translating to an overall achievement of 100%.

 

1. Productivity SA Performance per Programme in Q1 of 2021/22

 

Productivity SA reported on its performance per programme as follows:

 

Table 13: Productivity SA Performance per Programme in Q1 of 2021/22

PROGRAMME		Annual Planned Indicators	Q1 Planned Indicators	Achieved	Overall Achievement %
1.	Corporate Services (CS)	2	1	1	100%
2.	Human Resource Management (HRM)	1	-	-	-
3.	Corporate Relations (CR)	1	-	-	-
4.	Competitiveness Improvement Services (CIS)	3	3	3	100%
5.	Business Turnaround and Recovery (BT&R)	3	3	3	100%
6.	Research, Innovation and Statistics (RIS)	2	1	1	100%
Overall Performance		12	8	8	100%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 9 February 2022

 

Table 13 above reflects that there were 12 annual planned indicators. Of these, 8 indicators have targets reporting in Q1. All the indicators were achieved, translating to an overall performance of 100%. Human Resource Administration (HRM) and Corporate Relations (CR) did not have indicators reporting in Q1.

 

Table 14: BT&R and CIS performance for Q1 2021/22 Financial Year

PROGRAMME	Output Indicator	Annual Target	Q1 Target
Business Turnaround and Recovery (BT&R)	Number of jobs saved in companies facing economic distress every year	9550	Target: 1050 Actual: 4362
	Number of companies facing economic distress supported through turn-around strategies to retain jobs (nurturing) per annum.	191	Target: 21 Actual: 35
	Number of workplace/ future forums members trained and capacitated on productivity improvement solutions per annum	573	Target: 63 Actual: 110
Competitiveness Improvement Programme (CIS)	Number of SMMEs and other enterprises supported through Competitiveness Improvement Services each year	1252	Target: 250 Actual: 328
	Number of entrepreneurs, workers and managers capacitated to promote the culture of productivity each year	2000	Target: 400 Actual: 816
	Number of Productivity Champions capacitated to build awareness and promote a stronger culture of productivity in South Africa each year	323	Target: 65 Actual: 135

Source: Presentation to the Portfolio Committee on Employment and Labour dated 9 February 2022

 

1. Productivity SA Financial Performance in Q1 of 2021/22

 

Productivity SA reported its financial performance as follows:

 

Table 15: Productivity SA Expenditure per Programme in 2021/22 Financial Year

PROGRAMMES	Budget	Actual	Variance	Expenditure Q1 2021/22
	R’000	R’000	R’000	%
Administration	16 848	13 822	3 026	82%
Competitiveness Improvement Services	3 203	5 748	-2 545	179%
Business Turnaround and Recovery	27 390	4 089	23 301	15%
Research, Innovation and Statistics	2 440	1 891	549	78%
TOTAL EXPENDITURE	49 881	25 550	24 331	51%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 9 February 2022

 

Table 15 above reflects that Productivity SA had a total budget of R49.9 million in Q1 of 2021/22. It spent R25.6 million or 51% by the end of Q1. This resulted to a variance of R24.3 million.

The Business Turnaround and Recovery programme received the largest budget allocation of R27.4 million. However, it spent only R4.0 million or 15% of the programme allocation. This resulted to a variance of R23.3 million.

Administration programme received the second largest programme allocation of R18.8 million. It spent R13.8 million or 82% of the allocation resulting to a variance of R3.0 million.

Competitiveness Improvement Services programme received R3.3 million and spent R5.7 million or 179% of the allocation resulting to over-expenditure of R2.5 million.

Research, Innovation and Statistics programme received R2.4 million programme allocation and spent R1.9 million or 78% of the allocation. This resulted to a variance of R549 000.

 

1. National Economic Development and Labour Council (Nedlac)

 

The 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.

 

1. Nedlac Performance per programme in Q1 of 2021/22

 

Nedlac reported its performance per programme as follows:

 

Table 16: Nedlac Performance per Programme in Q1 of 2021/22

PROGRAMME		Planned Indicators	Achieved	Not Achieved	Overall Achievement %
1.	Administration	3	1	2	33%
2.	Core-Operations	2	2	0	100%
3.	Constituency Capacity Building	3	0	3	0%
Overall Performance		8	3	5	38%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 9 February 2022

 

Table 16 above reflects that Nedlac has 8 planned indicators reporting in Q1 of 2021/22. Of these indicators, 3 were achieved translating to an overall performance of 38%.

Core-operations programme had 2 indicators reporting in Q1 and they were both achieved resulting in overall achievement of 100%.

The Administration programme had 3 indicators reporting in Q1 of 2021/22. Of these indicators 1 was achieved. This translates to an overall achievement of 33%.

Constituency capacity building programme had 3 planned indicators reporting in Q1 of 2021/22. Of these targets, none was achieved resulting to a total achievement of 0%.

 

1. Nedlac expenditure by economic classification as at Q1 of 2021/22

 

Nedlac reported on its finances as follows:

 

Table 17:  Nedlac Expenditure by Economic Classification

Economic Classification	Approved budget 2021/22	Q1 2021/22 Budget	Q1 2021/22 Expenditure	Variance	Q1 Expenditure Percentage
	R’000	R’000	R’000	R’000
Compensation of Employees	28 460	7 115	6 814	301	96%
Goods & Services	31 510	7 877	1 987	5 890	25%
Depreciation & amortisation	-	-	401	(401)
TOTAL EXPENSES	59 970	14 992	9 132	5 790	63%

Source: Adapted from the presentation to the PC on Employment & Labour date 9 February 2022

 

The table above reflects that the approved budget for Nedlac in 2021/22 financial year amounted to R59.9 million. The budget for Q1 of 2021/22 amounted to R14.9 million. Of this amount R9.1 million or 63% was spent by the end of Q1, resulting to a variance of R5.7 million. The key reason for underspending was reported to be the continued remote working arrangement whereby online meetings are held which has resulted in savings on travel and accommodation and related costs such as catering and refreshments. Further, an underspending was noted under consulting fees.

Goods and Services received an annual budget of R31.5 million. The Q1 budget for Goods and Services amounted to R7.8 million. Of this amount R1.9 million or 25% was spent by the end of Q1. This resulted to a variance od R5.8 million.

Compensation of Employees received an annual budget of R28.4 million. The budget for Q1 amounted to R7.1 million. Of this amount R6.8million or 96% was spent by the end of Q1 resulting to a variance of R301 000.

 

5.4.      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, all South Africans have a right to social security. The CF is mandated to provide social security to all injured and diseased employees.

 

Legislative Mandate

The CF is established in terms of section 15 of the Compensation for Occupational Injuries and Diseases Act as amended. 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 such injuries or diseases and provide for matters connected therewith.

 

Strategic Focus

The CF shall focus on the following strategies which will further inform institutional policies over the five-year cycle:

            Financial Management

1. Improve the system of internal control and maintain financial soundness.

Customer

1. Ensure appropriate benefits are delivered to intended beneficiaries, efficiently and at a reasonable cost.
2. Contribute to employment and economic growth through rehabilitation and re-integration.

Organisational Capacity

1. Develop the capacity of the Fund to deliver according to its mandate.

Internal Business Process

1. Improve operational efficiency through process reengineering and technological innovation.

 

5.4.1.    CF Performance per Programme in Q1 of 2021/22

 

CF reported on its programme as follows:

 

Table 18: CF Performance per Programme in Q1 of 2021/22

PROGRAMME		Annual Planned Indicators	Indicators with targets reporting in Q1	Achieved	Overall achievement %
1.	Administration	11	3	2	67%
2.	Compensation for Occupational Injuries and Diseases Services operations	3	2	1	50%
3.	Medical Services	2	2	2	100%
4.	Orthotic and Rehabilitation	3	1	1	100%
Overall Performance		19	8	6	75%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 17 February 2022

 

Table 18 above reflects that CF has 19 annual planned indicators and eight indicators with targets reporting in Q1. Of the eight targets reporting in Q1, six were achieved translating to an overall performance of 75%.

 

The Administration programme has 11 annual planned indicators and three indicators reporting in Q1. Of the three indicators reporting in Q1, two were achieved translating to an overall achievement of 67%. The CF did not achieve the target of reducing the vacancy rate to 15%. Instead, the vacancy rate stood at 16.52% by the end of Q1.

 

Programme 2 has three annual planned indicators and two indicators with targets reporting in Q1. Of the two indicators reporting in Q1, one was achieved translating to an overall achievement of 50%. The Fund did not achieve the target of adjudicating 85% of claims within 30 working days of receipt. It adjudicated 25078 of 31489 claims within 30 working days of receipt, translating to 80% achievement of the target.

 

Medical Services programme has two annual planned indicators and two indicators with targets reporting in Q1. The Fund had an overall achievement of 100% under this programme. This programme finalized 96% of requests for pre-authorisation of specialized medical interventions within 10 working days against a target of 85%. It finalized 84% of accepted medical invoices within 40 working days of receipt against a target of 80%.

 

Orthotic and Rehabilitation programme has three annual planned indicators and one indicator with target reporting in Q1. This target was achieved translating to an overall achievement of 100%. This programme finalized 98% of compliant requests for assistive devices within 15 working days of receipt against a target of 85%.

 

1. CF Financial Performance in Q1 of 2021/22

CF reported its financial performance as follows:

 

Table 19: Expenditure per Programme in Q1 of 2021/22

PROGRAMME		2021/22 Approved Budget	Expected Expenditure as at 30 June 2021	Actual Expenditure at 30 June 2021	Variance Under (Over)	Total Expenditure
		R’000	R’000	R’000	R’000	%
1.	Administration	7 273 598	1 818 399	708 903	1 109 496	39%
2.	COID Services	1 691 846	422 962	373 764	49 198	88%
3.	Medical Services	4 586 073	1 146 518	873 235	273 283	76%
4.	Orthotic and Medical Rehabilitation	229 901	57 475	52 992	4 483	92%
TOTAL BUDGET		13 781 417	3 445 354	2 008 894	1 436 460	58%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 17 February 2022

 

Table 19 above reflects that the approved budget for 2021/22 financial year amounted to R13.8 billion. The expected expenditure for Q1 of 2021/22 amounted to R3.4 billion. The actual expenditure was R2.0 billion or 58% of the expected expenditure. This resulted to a variance of R1.4 billion.

 

The Administration programme received R7.2 billion in 2021/22 financial year, which is the largest share of the budget. The budget for Q1 of 2021/22 financial year amounted to R1.8 billion. Of this amount, R708.9 million or 39% was spent by the end of Q1 resulting to a variance of R1.1 billion.

 

The approved budget for COID Services for 2021/22 financial year amounted to R1.7 billion. The expected expenses for Q1 amounted to R422.9 million. Of this amount, R373.8 or 88% was spent by the end of Q1 of 2021/22 financial year resulting to a variance of R49.2 million.

 

The approved budget for Medical Services programme amounted to R4.6 billion in 2021/22 financial year. The expected expenses for Q1 of 2021/22 financial year amounted to R1.1 billion. Of this amount, R873.2 million or 76% was spent by the end of Q1 resulting to a variance of R273.3 million.

 

The approved budget for Orthotic and Medical rehabilitation programme amounted to R229.9 million in 2021/22 financial year. The expected expenses for Q1 of 2021/22 amounted to R57.4 million. Of this amount, R52.9 million or 92% was spent by the end of Q1 resulting to a variance of R4.5 million.

 

5.5.      Commission for Conciliation Mediation and Arbitration (CCMA)

 

The CCMA is a statutory body established in terms of section 112 of the Labour Relations Act of 1995 (LRA), as amended.

In terms of section 113 of the LRA, the CCMA is independent of the State, any political party, trade union, employer, employers’ organization, federation of trade unions or federation of employers’ organisations.

 

Constitutional Mandate

The CCMA’s Constitutional mandate is drawn directly from section 23 of the Constitution of the Republic of South Africa that deals with labour relations.

 

Mandatory Functions

The mandatory functions of the CCMA are to:

• Conciliate and arbitrate workplace disputes.
• Assist with the establishment of workplace forums.
• Compile and publish statistics and information about its activities.
• Administer the Essential Services Committee (ESC).
• Consider applications for accreditation and subsidies of bargaining councils and private agencies.

 

Discretionary Functions

The discretionary functions of the CCMA are to:

• Supervise ballots for unions and employer organisations.
• Provide training and information relating to the primary objective of the LRA.
• Advise a party to a dispute about the procedures to follow.
• Offer to resolve a dispute that has not been referred to the CCMA.
• Publish guidelines on any aspect of the LRA and to make rules.
• Provide training and advice on the establishment of collective bargaining structures, workplace restructuring, consultation processes, termination of employment, employment equity programmes and dispute prevention.
• Conduct and publish research.
• Provide assistance of an administrative nature to an employee earning less than the BCEA threshold.
• Determine fees that the CCMA can charge and regulate practice and procedure for conciliation and arbitration hearings.

 

Goal, Mission and Vision

Goal: Towards labour peace and equity

Vision: A world-class institution that promotes labour market stability, social justice and job security.

Mission: To give effect to everyone’s constitutional right and freedom.

 

Strategic Pillars

The strategic pillars of the CCMA are to:

• Optimise the organization.
• Enhance labour market stability
• Support strategy implementation and good governance.

 

Programmes of the CCMA

Programmes of the CCMA are:

1. Administration
2. Proactive and relevant labour market intervention
3. Special interventions and support
4. Efficient and quality dispute resolution and enforcement services
5. Effective strategy management and governance

 

5.5.1.    CCMA 2021/22 Q1 Non-Financial Performance

 

CCMA reported its non-financial performance as follows:

 

Table 20: CCMA 2021/22 Q1 Non-Financial Performance

PROGRAMME 2: Proactive and relevant labour market interventions
OUTPUT INDICATOR	Annual Target	Quarterly Target	Q1 Actual Output	Reason for Deviation
Number of interventions conducted to promote effective dispute resolution in essential services	9	2	3	Over-achievement on this target is due to that in the past parties usually cancelled planned processes on short notice, which has had a detrimental effect on the ability of the ESC to achieve its targets.
Number of stakeholders engaged to make inputs on legislative changes.	3	1	2
Number of entities engaged to ensure that there are minimums to be maintained during industrial action in essential services.	84	21	22
Number of essential services designations, minimum services agreements, minimum services determinations and/or maintenance services determinations monitored for compliance and observance.	6	1	1	N/A
Number of awareness sessions on essential services designation conducted	10	2	2	N/A

Source: Presentation to the Portfolio Committee on Employment and Labour dated 17 February 2022

 

Table 20 reflects that CCMA has an annual target of conducting nine interventions to promote effective dispute resolution in essential services and two interventions per quarter. The entity conducted three interventions against the quarterly target of two.

CCMA has an annual target of engaging three entities to make inputs on legislative changes and one engagement per quarter. CCMA engaged two stakeholders against the target of one per quarter.

The Commission has an annual target of engaging 84 entities to ensure that there are minimums to be maintained during industrial action in essential services and 21 entities per quarter. The Commission engaged 22 entities against a target of 21 per quarter.

Over-achievement on the above three targets was reported to be due to that in the past, parties usually cancelled planned processes on short notice, which has had a detrimental effect on the ability of the ESC to achieve its targets.

The entity has an annual target of monitoring compliance and observance of six essential services designations, minimum services agreements, minimum services determinations and/or maintenance service determination and one per quarter. The entity achieved the set quarter target.

CCMA has an annual target of conducting 10 awareness sessions on essential services designations and two per quarter. The entity met the quarter target.

 

5.5.2.    CCMA Dashboard in Q4 of 2021/22

 

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

• A total of 39 830 referrals were received by the CCMA.
• This is an increase of 66% (15 821) referrals compared to 24 009 referrals in the first quarter of the previous financial year.
• The sectors with the highest referrals at the end of the reporting quarter were:
  • Business/professional services, 20%
  • Safety/security (private), 15%
  • Retail, 13%
  • Building/construction, 6%
  • Domestic, 6%
  • Agriculture/farming, 4%
  • Mining, 4%
  • Food/beverage (manufacture), 4%.
• 4 530 outreach services were conducted (inclusive of awareness raising activities, capacity building activities and social justice blockages activities).
• 2 579 800 people were capacitated to better understand the law and their rights through outreach activities (inclusive of Radio Talk Shows).
• 63 complaints were received, 48 were investigated and responded to while 15 were pending investigations.
• 97% (34 out of 35) of public interest matters (s150) were settled.
• 42% of jobs (4 237 out of 10 061 jobs at stake) were saved compared to employees facing retrenchments (cases referred to the CCMA).

 

5.5.3.    CCMA Financial Performance in Q1 of 2021/22

 

Table 21: CCMA Expenditure per Programme in Q1 of 2021/22

PROGRAMME	Budget	Actual Spending	Variance	Expenditure
	R’000	R’000	R’000	%
Administration	79 335	40 264	39 071	51%
Labour Market Intervention	5 298	3 615	1 683	68%
Special Interventions and Support	1 971	1 832	139	93%
Dispute Resolution and Enforcement Services	184 006	168 655	15 351	92%
Strategy Management and Governance	9 089	6 671	2 418	73%
TOTAL	279 699	221 037	58 662	79%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 17 February 2022

 

The CCMA budget for Q1 2021/22 amounted to R279.7 million. Of this amount, R221.0 million or 79% was spent by the end of Q1, resulting to a variance of R58.7 million.

 

The Dispute Resolution and Enforcement Services programme received R184.0 million, which is the largest share of the programme budget. Of this amount, it spent R168.7 million or 92% by the end of Q1 resulting to a variance of R15.4 million.

The variance was reported to be due to less utilization of part-time commissioners but not limited to the variable costs such as venue hire and travel costs incurred to conduct cases in the remote areas by the commissioners, which were not utilized as anticipated.

 

The Administration programme received R79.3 million, which is the second largest programme budget of the entity. It spent R40.3 million or 51% of the budget by the end of Q1, resulting to a variance of R39.1 million.

The variance was reported to result from computer equipment maintenance that was budgeted for but not consumed as anticipated as the service is consumed as and when required. The organisation also noted a saving from printing costs. The other factors noted were the timing difference in training interventions that is still expected during the financial year and court litigation costs, which will be incurred as and when a need arises. A timing difference in software expenditure maintenance was also noted, and projects in procurement processes, such as penetration tests and tripwire solutions. In addition, Covid-19 related expenditure also contributed to the favourable variance due to spending that will still take place in months to come.

 

Labour Market Intervention programme received a budget of R5.3 million and spent R3.6 million or 68% by the end of Q1. The resultant variance was R1.7 million or 32% of the allocation.

The variance was reported to be due to variable costs such as commissioner fees, venue hire costs, travel costs relating to the dispute management preventing activities that were budgeted for but not consumed as anticipated. The other contributing factor is fewer claims submitted by the bargaining councils on awards rendered and settlement agreements as well as savings resulting from travel costs related to ESC activities programme

 

Strategy Management and Governance programme received a budget of R9.1 million and spent R6.7 million or 73% of the allocation by the end of Q1. This resulted to a variance of R2.4 million.

The variance was reported to be due to timing differences in data renewal and qualitative analysis licenses. The other contributing factor was the provision for insurance, which is amortised monthly.

 

Special Interventions and Support was allocated a budget of R1.9 million in the Q1 and spent R1.8million or 93% by the end of Q1 resulting to a variance of R139 000.

The variance was reported to be due to less utilization of part time commissioners for the collective bargaining matters. This matters are triggered by the major negotiations which might have an impact on strikes.

 

1. Committee Observations

 

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

 

6.1.      The Department of Employment and Labour

6.1.1.    The Department spent 86% of its Q1 budget and achieved an overall performance of 73%, which is an improvement from the 67% achieved in the previous quarter.

6.1.2.    The IES branch did not achieve the target of referring 65% of non-compliant employers received by the Statutory Services for prosecution within 30 calendar days because it does not have printers therefor unable to print court papers as courts traditionally expect hard copies for filing.

6.1.3.    The Covid-19 pandemic still has a negative effect on the Department’s performance

 

6.2.      Unemployment Insurance Fund

6.2.1.    UIF achieved an overall performance of 44%, which is an improvement of 8% from Q1 2020/21.

6.2.2.    The Internal Audit found that there was inadequate quality review of the annual performance plan prior to approval and implementation.

 

6.3.      Productivity SA

6.3.1.    Productivity SA achieved the overall performance of 100% in Q1 of 2021/22. It over-achieved its set targets in Business Turnaround and Recovery and in Competitiveness Improvement Services programmes. In some instances, it overachieved by more than 100% e.g. It saved 4362 jobs in companies facing economic distress against a target of 1050.

 

6.4.      Nedlac

6.4.1.    Research by Mapungubwe Institute for Strategic Reflection (MISTRA) and International Labour Organisation (ILO) on how to restructure Nedlac so that it is “fit for purpose” was completed and presented to a workshop of stakeholders and constituencies.

 

6.5.      Compensation Fund

6.5.1.    Members raised concern about clients having to wait in long queues at labour centers to access the services of the Compensation Fund. This includes long waits for claims to be processed. Some labour centers have quotas of clients that they see per day.

 

6.6.      Commission for Conciliation, Mediation and Arbitration

6.6.1.    During the period under review, a total of 39 830 referrals were received by the CCMA. This is an increase of 66% (15 821) referrals compared to 24 009 referrals in Q1 of the previous financial year. However, the Committee is concerned about the low referrals from the vulnerable sectors such as Domestic and Agriculture/Farming. Low referrals were attributed to prohibition of walk-ins for the past two years.

 

7.         Committee Recommendations

 

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

 

7.1.      Department of Employment and Labour

7.1.1.    Printers are made available for the Inspections and Enforcement Services branch of the Department to enable it to perform its duties.

7.1.2.    Government departments must procure their office and school furniture as well as hospital linen and uniforms from SEE through granting of a preferential procurement status.

 

7.2.      Unemployment Insurance Fund

7.2.1.    The annual performance plan review and recommendations by Internal Audit should be implemented, while the Committee is waiting for the External Audit.

 

7.3.      Productivity SA

7.3.1.    The entity must consider reviewing its targets upwards in the next financial year if this trend of 100% achievement continues in the remaining period.

 

7.4.      Nedlac

7.4.1     Nedlac should present the “fit for purpose” report that was completed and adopted by its relevant constituencies to the Portfolio Committee.

 

7.5.      Compensation Fund

7.5.1.    The performance assessment of labour centre managers must include the services that the centres provide to the public and there must be consequences for poor services.

 

7.6.      Commission for Conciliation Mediation and Arbitration

7.6.1.    CCMA accelerates its outreach activities specifically targeting the vulnerable sectors to increase the usage of its services by this sector.

 

The Committee further recommends that the DEL provides regular updates on how its expanded mandate is being institutionalized in its structures and programmes. Secondly, the DEL must report back on the recommendations by the ILO insofar as the international comparison with similar government departments around the world are concerned.

 

Report to be considered.