ATC230309: 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 2022/23, Dated 8 March 2023

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 2022/23, Dated 8 March 2023

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 2022/23, reports as follows:

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 2022/23 as presented in meetings held on 1 and 15 February 2023.

This report provides 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 2022/23 financial year and financial performance. The report also provides the Committee’s observations and recommendations relating to the Department’s and entities’ performance.

PERFORMANCE PER PROGRAMME

The Department reported on its performance per programme as follows:

Table 1: DEL Performance per Programme in Q1 of 2022/23

BRANCH		Annual Planned Indicators	Indicators with Q1 Targets	Achieved	Overall Achievement
1.	Administration	9	7	5	71%
2.	Inspections and Enforcement Services	4	4	3	75%
3.	Public Employment Services	6	4	4	100%
4.	Labour Policy and Industrial Relations	10	6	3	50%
OVERALL PERFORMANCE		29	21	15	71%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 1 February 2023

Table 1 above reflects that the Department had 29 annual planned indicators in the 2022/23 financial year. Of those indicators, 21 have targets reporting in Q1. The Department achieved 15 of the 21 targets reporting in Q1. This translates to an overall performance of 71%, which is a regression from the 81% achieved in Q4 of 2021/22.

Programme 1 (Administration) had seven planned indicators that have targets reporting in Q1. The programme achieved five of the seven reporting in Q1. This translates to an overall achievement of 71% in Q1. This is a decline from the 75% achievement of Q4.

This programme did not achieve the target of maintaining vacant funded posts at 8% or less for every quarter. Instead, the vacant funded posts were at 9.27% in Q1 of 2022/23.

The reason for non-achievement was reported to be the delay caused by massive amounts of applications especially at lower levels against the current HRM capacity and unavailability of panel members.

As a remedial action, the Department has decided to discontinue email applications because the country is no longer under lockdown and develop a commitment form to be signed by panel members to confirm their availability during recruitment and selection processes.

The programme did not achieve the target of resolving 93% of reported incidents of corruption in the Department. The programme resolved 6% of cases in Q1 of 2022/23.

The reason for non-achievement of this target was reported to be that Employment Relations (ER) has 90 working days to finalise all misconduct cases. All cases received within the quarter are still within the required time frame. Disciplinary action for the remaining 16 cases is in progress.

To remedy the situation, ER will endeavor to finalise the remaining cases within the prescribed time frame.

Programme 2 (Inspection and Enforcement Services) had four indicators with targets reporting in Q1. Of the four targets, three were achieved in Q1. This translates to an overall achievement of 75%, which is consistent with Q4 performance. This programme conducted 71 213 inspections against the target of 74 526. The under-achievement was attributed to that some offices took longer to fill vacancies. As a corrective measure, the branch recruited a number of new inspectors; some are yet to be fully functional.

The branch has prioritized filling of vacancies, training and development of new inspectors to be complemented with coaching and monitoring.

The total number of compliant employers was 54 340. Eastern Cape (EC), Free State (FS) and Western Cape (WC) were the only provinces that exceeded their targets. The EC, FS and WC inspected 8 333, 7 486 and 8 331 against the targets of 7 971, 6 657 and 8 181 respectively.

The total number of non-compliant employers was 16 873 and 16 645 or 99% were served with notice within 14 calendar days. The Northern Cape (NC) province served 772 of 845 or 91% of non-compliant employers with notices against the 95% target, which is the least number of non-compliant employers served with notices.

The branch referred 86% workplaces for prosecution against a target of 65%. Only the Northern Cape Province did not meet the target. It referred 150 of the 237 workplaces received by statutory services, translating to an achievement of 63%.

Programme 3 (Public Employment Services) had four indicators with targets reporting in Q1 of 2022/23 and they were all achieved, translating to an overall achievement of 100%.

A total of 230 276 work-seekers were registered on Employment Services South Africa (ESSA) system against the target of 195 500 resulting to a positive variance of 34 776. The reason for the variance was reported to be high level of unemployment in the country and companies closing down due to Covid-19.

Of the work-seekers registered on ESSA, 137 113 or 60% are young people aged 15-35 and 93 106 or 40% are adults aged 36 years and above. Gender split of registered work-seekers is 55% females and 45% males. A total of 650 or 0.3% of registered work-seekers have disabilities. Classification of work-seekers in terms of equity groups is as follows: Africans: 189 772 or 82%, Coloureds: 20 360 or 9%, Whites: 6 357 or 3%, Indians: 1 969 or 1% and unspecified: 11 818 or 5%.

A total of 51 936 employment opportunities were registered on ESSA against a target of 26 250 resulting to a positive variance of 25 686. The reason for over achievement was reported to be an increase in registered employment opportunities.

Only 13 368 or 26% registered work and learning opportunities are classified by economic sector and 35 568 or 74% are not. The sectors that registered most opportunities are agriculture (5 164), Public (2 291), safety and security (1 320), and manufacturing (1 026). The challenge was negative impact of COVID-19 pandemic lockdown on the economy that led to closure of some businesses and reduced registration of opportunities.

Registration of opportunities by opportunity types is as follows:

Formal jobs-25 665 or 49%, projects-12 138 or 23%, learnerships-6 331 or 12%, internships-3 997 or 8%, UIF-LAP-2 831 or 5%, apprenticeships-595 or 1% and will-programme-180 or 0%.

Opportunities registered by employment type is as follows:

Contract-40 489 or 78%, temporary-5 851 or 11%, permanent-3 254 or 6% and other-2 342 or 5%.

A total of 83 649 registered work-seekers were provided with employment counselling against a target of 57 600 resulting to a positive variance of 26 049. The reason for deviation was that high levels of unemployment necessitated that more people be provided with employment counselling. The following provinces provided the majority of counselling:

Gauteng (18 397), KwaZulu-Natal (12 072), Limpopo (11 012) and Mpumalanga (10 219).

A total of 475 or 0.5% registered work-seekers who received counselling have disabilities.

Placements: A total of 23 663 registered work and learning opportunities were filled by registered work seekers against a target of 13 750. The reason for deviation was reported to be improved employer confirmation of placement.

Of the filled work and learning opportunities 13167or 56% are formal jobs, 5 495 or 23% are projects and 1 583 or 7% are learnerships.

Of all the placements, 18 843 or 80% are of contract type, 3 128 or 13% are temporary opportunities, 1 180 or 5% are permanent opportunities and 512 or 2% are classified as other.

Only 6 010 or 25% of filled opportunities are classified by economic sector and 17 653 or 75% are not.

The sectors with majority placements are agriculture (2 562), public (1 550), safety and security (784), education (400) and financial accounting (250).

A total of 16 535 or 70% of work seekers placed are young people aged 15 – 35 years and 7 127 or 30% are adults aged 36 years and above. The remaining one percent is not specified by age group.

Placement by gender reflects that 13 633 or 58% females and 10 030 or 42% males registered on ESSA were placed in registered work opportunities.

Placement rate against work seekers registered is 10% (23 663 of 230 276) and placement rate against registered opportunities is 46% (23 663 of 51 936).

Programme 4 (Labour Policy and Industrial Relations) had six indicators with targets reporting in Q1 of 2022/23. This branch achieved three of the six targets reporting in Q1. This translates to an overall achievement of 50%, which is a decline from the 88% achieved in Q4 of 2021/22.

The branch did not achieve the target of assessing and verifying 100% of collective agreements where parties are representative within 60 working days of receipt by 30 June 2022. The branch managed to assess and verify 33.3% collective agreements within 60 working days of receipt by 30 June 2022. The reason for variance was reported to be delays caused by both external and internal factors. As a remedial action, the branch reported that government printer system is now working and the order number is secured.

The branch did not achieve the target of submitting one annual implementation report to the Minister for sign-off by 30 April 2022. Instead, the report was submitted to the Minister for sign-off after 30 April 2022. The variance was attributed to delay of the report due to commitments in the Chief Directorate in respect of preparations for the V Global Conference on the elimination of Child Labour. Officials got caught up in the preparations and overlooked the submission date of the report. It was later submitted on the 6 June 2022.

The branch did not achieve the target of submitting draft report, completing workplace survey and completing data collection instruments (internally conducted research). Actual achievement was reported as follows: Gender stereotypes and sexism within DEL: Data cleaning, analysis completed. Developing draft report commenced; Silicosis benchmark: Preparation for fieldwork by engaging companies to participate in the study that is currently ongoing; Ethics in the Department: Proposal, literature review, draft data collection tool and project plan shared for inputs; and Youth employment creation interventions: Data collection finalized, data analysis completed and draft report development commenced.

Reasons for variance were reported as: Pressure from other work demand; delays due to lack of buy-in from companies to participate in the study, only three of the 27 companies confirmed participation; and delays in submission and consolidation of inputs to finalise the data collection.

The branch undertook to implement the following as remedial action: Complete drafting report; Silicosis benchmark: Inspection and Enforcement Services intervening by doing physical visits to the sampled companies to get buy-in. This will be done up to end of July 2022; and workshops to present revised draft and adoption of the data collection tool.

3. FINANCIAL REPORT OF DEL

3.1. Expenditure information per Programme in Q1 of 2022/23

The Department reported its expenditure per Programme as follows:

Table 2: DEL Expenditure Information per Programme in Q1 of 2022/23

BRANCH	Original Appropriation	Q1 Expenditure	Available Budget	Expenditure as at 30/06/22
BRANCH	R’000	R’000	R’000	%
Administration	1 044 005	204 845	839 160	20%
Inspection and Enforcement Services	657 167	124 994	532 173	19%
Public Employment Services	935 396	310 416	624 980	33%
Labour Policy and Industrial Relations	1 319 451	376 095	943 356	29%
Total	3 956 019	1 016 350	2 939 669	26%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 1 February 2023

Table 2 above reflects that the Department’s original appropriation amounted to R3.9 billion. Of this amount, R1.0 billion or 26% was spent in Q1, resulting to a variance of R2.3 billion.

Labour Policy and Industrial Relations received the largest allocation of R1.3 billion and spent R376 million or 29% in Q1, resulting to a variance of R943 million.

The Administration programme received R1.0 billion, which is the second largest allocation. This programme spent R204 million or 20% by the end of Q1, resulting to a variance of R839 million

Public Employment Services programme received R935 million allocation, which was the third largest budget allocation and spent R310 million or 33% of the allocation resulting to a variance of R624 million.

Inspection and Enforcement Services received the least budget allocation of R657 million and spent R124 million or 19% of the allocation by the end of Q1 resulting to a variance of R532 million.

3.2. Expenditure information by economic classification in Q1 of 2022/23

Table 3 below reflects the expenditure information by economic classification.

Table 3: Expenditure Information by Economic Classification in Q1 of 2022/23

ECONOMIC CLASSIFICATION	Original Appropriation	Q1 Expenditure	Available Budget	Expenditure as at 30/6/2022
ECONOMIC CLASSIFICATION	R’000	R’000	R’000	%
Compensation of Employees	1 430 813	319 065	1 111 748	22%
Goods and Services	716 995	165 460	551 535	23%
Transfers and Subsidies	1 736 957	523 539	1 213 418	30%
Payments for Capital Assets	71 254	8 284	62 970	12%
Payment for Financial Assets	-	-	-	-
Total	3 956 019	1 016 350	2 939 669	26%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 1 February 2023

Table 3 above reflects budget allocation by Economic Expenditure. It shows that Transfers and Subsidies received the largest share of the budget at R1.7 billion and spent R523 million or 30% of the allocation by the end of Q1, resulting to a variance of R1.2 billion.

Compensation of Employees received the second largest allocation at R1.4 billion and spent R319 million or 22% resulting to a variance of R1.1 billion.

Goods and Services received. The appropriation of R716 million and spent R165 million or 23% by the end of Q1 resulting to a variance of R551 million. Payment for Capital Assets received appropriation of R71 million and spent R8 million or 12% by the end of Q1 resulting to a variance of R62 million.

3.3. Expenditure per Q1 Budget Allocation

Table 4: DEL Expenditure per Q1 Budget Allocation by Programmes

Programme	Q1 Budget	Q1 Expenditure	Available Budget	Expenditure as at 30/06/2022
	R’000	R’000	R’000	%
Administration	246 879	204 845	42 034	83%
Inspection & Enforcement Services	165 010	124 994	40 015	76%
Public Employment Services	152 796	310 416	-157 619	203%
Labour Policy and Industrial Relations	344 767	376 095	-31 328	109%
Total	909 452	1 016 350	-106 898	112%

Source: Presentation to the PC on Employment and Labour dated 1 February 2023

Table 4 above reflects that the Department was allocated R909 million in Q1 of 2022/23 and spent R1.0 billion or 112% of the allocation resulting in over spending of R106 million.

Public Employment Services had the highest level of over-spending. It was allocated R152 million and spent R310 million or 203% of the budget resulting over-spending of the budget by R157 million.

Labour Policy and Industrial Relations was allocated R344 million and spent R376 million or 109% resulting to over-spending of R31 million.

The Administration programme was allocated R246 million and spent R204 million or 83% of the allocation resulting to under-spending by R42 million.

Inspection and Enforcement Services received a budget allocation of R165 million and it spent R124 million or 76% by the end of Q1 resulting to a variance of R40 million.

Table 5 below reflects Q1 budget allocation and expenditure by Economic Classification.

Table 5: Expenditure per Q1 Budget Allocation by Economic Classification

Economic Classification	Q1 Budget	Q1 Expenditure	Available Budget	Expenditure as at 30/06/2022
	R’000	R’000	R’000	%
Compensation of Employees	355 118	319 066	36 052	90%
Goods & Services	163 057	165 460	-2 403	101%
Transfers & Subsidies	370 633	523 539	-152 905	141%
Payment for Capital Assets	20 644	8 284	12 360	40%
Payments for Financial Assets	0	2	-2	*
Total	909 452	1 016 350	-106 898	112%

Source: Presentation to the PC on Employment and Labour dated 1 February 2023

In terms of Economic Classification CoE was allocated R355 million and Spent R319 million or 90% of its allocation by end of Q1 resulting to a variance of R36 million.

Goods & Services received R163 million and spent R165 million or 101% of its budget resulting to a variance of R2 million.

Transfers & Subsidies received the largest budget allocation of R370 million and spent R523 million or 141% by the end of Q1 resulting to over-spending of R152 million.

Payment for Capital Assets received R20 million and spent only R8 million or 40% of its allocation by the end of Q1 resulting to a variance of R12 million.

Q1 PERFORMANCE OF ENTITIES OF THE DEPARTMENT OF EMPLOYMENT AND LABOUR (2022/23)

The entities that reported to the Portfolio Committee on Employment and Labour on their QPR 1 are the following:

Commission for Conciliation, Mediation and Arbitration
National Economic Development and Labour Council

Productivity South Africa

4.1. COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION (CCMA)

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, CCMA is independent of the State, any political party, trade union, employer, employers’ organisation, federation of trade unions or federation of employers’ organisations.

4.1.1. Constitutional Mandate

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

4.1.2. Mandatory Functions

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.

4.1.3 Discretionary Functions

The discretionary functions of CCMA are to:

Supervise ballots for unions and employer organisations.
Provide training and information relating to 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 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 CCMA can charge and regulate practice and procedure for conciliation and arbitration hearings.

4.1.4. Strategic Pillars

The strategic pillars of the CCMA are to:

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

4.1.5. Programmes of the CCMA

Programmes of the CCMA are:

Administration
Proactive and relevant labour market intervention
Special interventions and support
Efficient and quality dispute resolution and enforcement services
Effective strategy management and governance

4.1.6. CCMA 2022/23 Q1 Non-Financial Performance

CCMA reported that it had four planned indicators with targets reporting in Q1 and all were achieved translating to an overall achievement of 100%. The table below provides the details on non-financial performance in Q1.

Table 6: CCMA 2022/23 Q1 Non-Financial Performance Results

OUTPUT INDICATOR	Annual Target	Quarterly Target	Q1 Actual Output
Percentage of uptime ICT critical systems implemented.	95%	95%	98.33
Number of interventions conducted to promote effective dispute resolution in essential services per annum.	12	12	30
Number of stakeholders engaged to make inputs on legislative changes per annum.	4	1	1
Number of entities engaged to ensure that there are minimums to be maintained during industrial action in essential services per annum.	106	26	47
Number of essential services designations, minimum services agreements, minimum services determinations and/or maintenance services determination monitored for implementation and observance per annum.	8	2	2
Number of awareness sessions on essential services designations conducted per annum.	14	3	4
Percentage of conciliable cases heard within 30 days of first event (excludes agreed extensions, where certificates were issued, and out of jurisdiction cases/ withdrawn / settled by parties’ cases before the matter being scheduled, no process cases and cases which are not conciliable or where conciliation is not the first process)	98%	98%	99.57%
Percentage of arbitration awards rendered and sent to parties within 14 days of conclusion of the arbitration proceedings (exclude extensions granted and heads of arguments filed)	98%	98%	0
Quality of awards index achieved by 31 March 2023.	97%	97%	0

Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023

The last two targets that were reflected as not achieved when QPR 1 was finalized were converted to achieved after assurance by internal audit.

4.1.7 High Impact Labour Market Contributions in 2022/23, Q1

During the period under review, a total of 43 129 referrals were received by the CCMA. This is an increase of 8% (3 299) referrals compared to 39 830 referrals in the first quarter of previous financial year.

Referrals by sector were as follows:

Safety/ Security (private)-17%
Business/ Professional Services-15%
Retail-13%
Building/ Construction-7%
Domestic-5%
Agriculture/ Farming-4%
Transport (private)-4%
Mining-4%

Other CCMA achievements in Q1 of 2022/23

Conciliations heard-99.57% (29115/29242)
Conciliation turnaround time-22 days
Settlement rate-80%
Postponement rate-6%
Certificates issued-514
Arbitration awards rendered and sent to parties within 14 days-99.98% (4 123/4 124)
Arbitration turnaround time-45 days
TERS application received-5
- Considered by SAC-3
- Finalised-8
- Employees to benefit-67
- Total cost-R3 885 909
Complaints
- Received-84
- Investigated and finalised-55
- Pending-29
Online referrals-3 879
National Minimum Wage referrals-567
Public interest matters (s 150)-97% (38/39)
Jobs saved-40% (4100/10189)
Disputes of interest resolved-59% (572/964)
Return to work index (RTW)-9% (1 061/11 626)

4.1.8. CCMA Financial Performance in Q3 of 2021/22

CCMA reported on its financial performance as follows:

Table 7: CCMA Expenditure per Programme in Q1 of 2022/23

PROGRAMME	Budget	Actual Spending	Variance	Variance
PROGRAMME	R’000	R’000	R’000	%
Administration	58 551	34 994	23 557	40.2%
Labour Market Intervention	4 155	2 714	1 442	34.7%
Special Interventions and Support	4 470	2 745	1 726	38.6%
Dispute Resolution and Enforcement Services	192 070	188 718	3 353	1.7%
Strategy Management and Governance	9 819	7 010	2 809	28.6%
TOTAL	269 066	236 180	32 886	12.2%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023

The CCMA spent R236 million of the R269 million allocated for Q1 of 2022/23 resulting to a variance of R32 million or 12% of the allocated budget.

The Dispute Resolution and Enforcement Services programme spent R188 million of the R192 million allocated for Q1 resulting to a variance of R3 million or 1.7% of the budget. The programme receives the highest programme allocation. The variance resulted from the part time commissioners’ fees which were more than projected costs. The other factor was due to the increased expenditure on travelling costs to conduct cases in remote areas by the commissioners.

The Administration programme received the second largest budget allocation. It spent R34 million of the R58 million allocated for Q1 resulting to the variance of R23 million, which is 40% of the budget allocation. This variance was reported to have resulted from timing differences in staff recruitment. The other contributing factors include the outstanding invoices for VOIP, WAN, Vodacom 4G usage and once-off payment for Microsoft Teams migration. The printing costs, organisational design project and employee wellness programme also contributed to the saving. Furthermore, the savings related to operating costs variance results from amortization of Fenestrae (Fanixation) and Board pack (Support and Maintenance) which was renewed at a lower than the projected costs during the budget planning process. The factors that contributed to the saving include the delay of the removal of VMWARE project due to the non-responsive bid. The procurement process has been initiated. The other factors that contributed to the savings include the travel costs and training interventions, as well as legal fees which were budgeted for but not utilized as anticipated for the activities such as the panel of attorneys for litigation matters, opinions and investigations. Lastly, the saving is also seen in the expenditure resulting from recruitment services. It is expected that the saving will be absorbed in subsequent months as the expenditure is incurred.

Strategy Management and Governance programme received the third largest programme allocation. It spent R7 million of the R9 million of the budget allocated for Q1, resulting to a variance of R2 million or 28% of the Q1 budget. The variance reportedly resulted from timing differences in staff recruitment. The other contributing factor is due to the savings resulted from projects such as printing of CCMA coffee table book, corporate events services, editing, proof reading and translation services as well as appointment of service provider to conduct the Imvuselelo Mid-Term Impact Assessment which were budgeted for but not utilized as anticipated. Lastly, the other factors that contributed to the saving include the insurance premiums not paid as anticipated and saving from committee fees and travel related for special committee meetings.

Special Interventions and Support programme spent R2 million of the R4 million allocated for Q1 of 2022/23 resulting to a variance of R1 million or 38% of the budget. The variance reportedly resulted from timing difference in staff recruitment and less utilization of part-time commissioners for the ESU and Mediation interventions. The other contributing factor is saving related to travel costs for the ESC members to conduct its mandate.

The Labour Market Intervention programme spent R2 million of the R4 million budget allocation resulting to a variance of R1 million or 34% of the allocation. The variance is reported to result from dispute management outreach activities, including travelling costs, venue hire and promotional materials that were budgeted for but not utilized as anticipated as the service is also dependent on the user request.

NATIONAL ECONOMIC DEVELOPMENT AND LABOUR COUNCIL (NEDLAC)

The NEDLAC was established through 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.

NEDLAC Performance per programme in Q1 of 2022/23

NEDLAC reported its performance per programme as follows:

Table 8: NEDLAC Performance per Programme in Q1 of 2022/23

PROGRAMME		Planned Indicators	Indicators applicable to Q1	Targets achieved in Q1	Targets not achieved in Q1	Overall Achievement %
1.	Administration	8	3	2	1	66%
2.	Core-Operations	4	2	2	0	100%
3.	Constituency Capacity Building	1	0	N/A	N/A	N/A
Overall Performance		13	5	4	1	80%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023

The above table reflects that NEDLAC has 13 annual planned indicators in 2022/23 and five indicators applicable to Q1. Of those indicators four were achieved, translating to an overall achievement of 80%.

The Administration programme has eight annual planned indicators and three applicable to Q1. Of those applicable to Q1, two were achieved translating to an overall achievement of 66%.

NEDLAC resolved 94.23% of IT related complaints against a target of 100%. The reasons for non-achievement of the target were:

New engineers hired by the IT service provider did not understand the NEDLAC system and this led to problems with applications, which took long to resolve.
Users struggled to use applications.

As a remedial action, training was done to correct the second reason above.

Core Operations programme has four annual planned indicators and two applicable to Q1. Both targets applicable to Q1 were achieved translating to an overall achievement of 100%.

Constituency Capacity Building programme has no indicator applicable to Q1.

NEDLAC Financial Report as at Q1 of 2022/232

NEDLAC reported on its expenditure per programme as follows:

Table 11: Expenditure per programme in Q1

Programme	Q1 YTD budget R’000	Q1 YTD actual R’000	Variance R’000
Administration	11 448	11 433	15
Core-Operations	1 625	-	1 625
Capacity Building	1 875	467	1 408
Total	14 948	11 900	3 048

Source: Presentation to the PC: Employment and Labour dated 15 February 2023

The total budget of Nedlac for Q1 amounted to R14 million and it spent R11 million by the end of Q1 resulting to the variance of R3 million.

Administration programme Spent R11.43 million of the allocated R11.44 resulting to a variance of R15000.

Core-Operations programme did not spent its first quarter budget of R1.6 million.

Capacity building programme spent R467 000 of the allocated R1.8 million resulting to a variance of R1.5 million by the end of Q1.

PRODUCTIVITY SOUTH AFRICA (PSA)

Productivity SA was 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.
Promoting social dialogue and workplace democratization.

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 publicize same; and to undertake productivity-related research.

Productivity SA Performance per Strategic Objective in Q1 of 2022/23

Productivity SA reported its performance per Strategic Objective as follows:

Table 12: Productivity SA Performance per Strategic Objectives in Q1 of 2022/23

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	2	100%
3.	To support enterprises facing economic distress and initiatives aimed at preventing job losses.	3	3	2	67%
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	1	50%
Overall Performance		12	9	7	78%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023

Table 12 above reflects that Productivity SA had 12 annual planned indicators for 2022/23 financial year. Of these indicators, 9 have targets reporting in Q1. The entity achieved 7 of the 9 indicators with targets reporting in Q1, translating to an overall performance of 78%.

Strategic objective 3 achieved two of the three indicators with targets reporting in Q1, translating to an overall achievement of 67%.

Strategic objective 5 achieved one of the two objectives reporting in Q1, translating to an overall achievement of 50%.

The entity achieved 100% in other strategic objectives.

Productivity SA Performance per Programme in Q1 of 2022/23

Productivity SA reported on its performance per programme as follows:

Table 13: Productivity SA Performance per Programme in Q1 of 2022/23

PROGRAMME		Annual Planned Indicators	Q1 Planned Indicators	Achieved	Overall Achievement %
1.	Corporate Services (CS)	2	1	1	100%
2.	Human Resource Management (HRM)	1	n/a	n/a	n/a
3.	Corporate Relations (CR)	1	1	1	100%
4.	Competitiveness Improvement Services (CIS)	3	3	3	100%
5.	Business Turnaround and Recovery (BT&R)	3	3	2	67%
6.	Research, Innovation and Statistics (RIS)	2	1	1	100%
Overall Performance		12	9	7	78%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023

Table 13 above reflects that there were 12 annual planned indicators. Of these, 9 indicators have targets reporting in Q1. The entity achieved seven of the nine targets reporting in Q1, translating to an overall performance per programme of 78%.

Business Turnaround and Recovery (BT&R) programme had three indicators reporting in Q1 and two was achieved, translating to an overall achievement of 67%.

Corporate Relations programme had one planned indicator for Q1 and did not achieve it translating to an overall performance of 0%.

Productivity SA Financial Performance in Q1 of 2022/23

Productivity SA reported its financial performance as follows:

Table 14: Productivity SA Expenditure per Programme in Q1 of 2022/23 Financial Year

PROGRAMMES	Budget	Actual	Variance	Expenditure Q1 2022/23
PROGRAMMES	R’000	R’000	R’000	%
Administration	13 247	18 097	(4 850)	136.6%
Competitiveness Improvement Services	5 915	5 283	632	89.3%
Business Turnaround and Recovery	20 799	5 339	15 460	25.7%
Research, Innovation and Statistics	2 203	1 753	450	79.6%
TOTAL EXPENDITURE	42 164	30 472	11 692	72.3%

Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023

Table 14 above reflects that Productivity SA had a total budget of R42.1 million in Q1 of 2022/23 and it spent R30.5 million or 72.3% by the end of Q1 resulting to a variance of R11.7 million.

The Administration programme has a budget of R13.2 million and spent R18.1 million or 136.6% resulting to an over-expenditure of R4.9 million or 36.6% of the allocated budget.

Competitiveness Improvement Services had a budget of R5.9 million and spent R5.3 million or 89.3% of the budget by the end of Q1 resulting to a variance of R632 000.

Business Turnaround and Recovery programme had a budget of R20.8 million and spent R5.3 million or 25.7% resulting to a variance of R15.5 million.

Research, Innovation and Statistics had a budget of R2.2 million and spent R1.8 million or 79.6% by the end of Q1 resulting to a variance of R450 000.

COMMITTEE OBSERVATIONS

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

5.1. The Department of Employment and Labour

The Department spent 26% of Q1 budget and achieved 71% of the targets.
The Northern Cape Inspection and Enforcement Services branch under-achieved in the number of workplaces inspected, number of non-compliant workplaces served with notices and number of workplaces received by statutory services that were referred for prosecution.
The placement rate by Public Employment Services against work seekers registered was 10%.

5.2. Commission for Conciliation, Mediation and Arbitration

5.2.1. CCMA overspent its budget by 9.10% and recorded an overall achievement of 78% in Q1 of 2022/23.

5.2.2. The entity had 43 129 total case referrals during the period under review. Of these referrals, 567 were National Minimum Wage. Some of these NMW referrals are for repeat offenders.

NEDLAC
1. NEDLAC spent R11.9 million of its R14.9 million Q1 budget, translating to 80% of Q1 budget. It also recorded an overall achievement of 80% during the period under review.
2. NEDLAC founding documents are still in review process.

5.4. Productivity SA

Productivity SA achieved the overall performance of 78% in Q1 of 2022/23. The entity achieved 67% in Business Turnaround and Recovery (BT&R) programme and achieved 0% in Administration Corporate Relations programme.
Productivity SA is still receiving funding from multiple sources.

Unemployment Insurance Fund (UIF) and Compensation Fund (CF)
1. That UIF and CF did not meet the deadline for tabling of their annual reports for 2021/22 financial year.

6. COMMITTEE RECOMMENDATIONS

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

6.1. The Department of Employment and Labour

6.1.1. Recruitment and selection process for the vacant post of the Compensation Fund Commissioner is expedited without delay.

6.2. Commission for Conciliation Mediation and Arbitration

6.2.1. The statistics of National Minimum Wage Act referrals are disaggregated in terms of sectors they originate from.

6.3. NEDLAC

6.3.1. Reviewed founding documents of the entity are presented to the Committee as soon as they are finalized.

6.4 Productivity SA

6.4.1. The single source funding matter is expedited to ensure that the entity is appropriately resourced.

6.5. UIF and CF

6.5.1. Progress on UIF and CF tabling of annual reports for 2021/22 financial year and the plan to ensure that the deadline is not missed in future is provided to the Portfolio Committee.

Report to be considered.

Documents