Employment and Labour 2022/23 Budget: Committee Report

Meeting report

The Chairperson announced that the Committee has received the first draft of their Committee Report on the Labour Budget Vote 31. She thanked Mr Nontsele for standing in for her during her sick leave and appreciated his good leadership skills. She also appreciated the Committee for working well with him.

She said that they are holding the meeting at a very difficult time as the country is going through a lot with the Kwa-Zulu Natal (KZN) floods. The DEL offices were not affected in KZN but the Department will be affected one way or the other due to the volume of claims that will be sent to the UIF and Compensation Fund. At the appropriate time they will receive reports from Portfolio Committees that are directly affected and will be informed of their role and responsibility.

Committee Report on Department of Employment and Labour 2022/23 Budget
The Chairperson presented the draft report on the Annual Performance Plan and budget for the Department and its entities.

The Committee discussed the Observations and Recommendations sections:

Observations
Mr N Hinana (DA) pointed to the five-year targets for the Medium Term Strategic Framework (MTSF) in paragraph 2.3.2 which needed to include achievements for the summit held on job creation especially for youth.

Ms K Mkhonto (EFF) read out paragraph 2.4.2 on the Inspection and Enforcement Services programme and asked if the Department waited employees to report ill mannered activities or was DEL proactive. If this was the case, why is it that on May Day in Mafikeng employees had to take their complaints to President Ramaphosa? On the same note, the Department of Labour seemed not to have a clue of what transpired in Mafikeng. She also claimed that DEL should have been aware because this issue has been in all the newspapers and circulated on social media platforms. She was really embarrassed as a Member of this Committee when this issue was raised.

The Chairperson agreed that this was an important point. She asked Ms Mkhonto to draft a recommendation to this effect to be included at the end of this section.

Recommendations
The Chairperson asked Members to formulate their statements into precise recommendations

Mr M Bagraim (DA) said not much has been done on Employment and Job Creation within DEL.

Mr M Nontsele (ANC) commented on Employment and Job Creation that one needed to consider the circumstances that prevailed during Covid-19. The main reason there is a high unemployment rate is due to the direct impact of Covid-19 and the heavy lockdown for over one and half years. He gave a statistic of over 2.2 million jobs lost during that time. He recommended that the section be amended to include these facts.

Mr J Cardo (DA) asked the Committee what the Department has done to integrate the employment creation portfolio into Labour portfolio. The Committee needed to make an observation on what the Department has achieved and done to integrate the two functions. He made the recommendation that the Department must brief the Committee more regularly on its efforts to integrate the job creation aspect into its programmes and structure.

Mr Nontsele seconded Mr Cardo's point about the integration of job creation into the portfolio. We must also factor in the conditions that prevailed during the Covid-19 pandemic and the intense lockdown that led to the loss of jobs.

The Chairperson proposed that Mr Cardo and Mr Nontsele write down their observations and their recommendations must be in line with their observations. This would assist in saving time.

Mr Bagraim said that lots of money has been spent on Productivity SA, however South Africa has been at the bottom (62nd out of 64 countries) in the World Competitiveness Yearbook for almost 10 years. There has been no improvement in all these years even though so much money has been spent by Productivity SA. He is not against the efforts made towards productivity however his concern is Productivity SA's inability to improve matters. His observation was that surely there must be something that can be done to change this; otherwise this money could be used in support of the Commission for Conciliation, Mediation and Arbitration (CCMA) or by DEL for job creation.

Ms Mkhonto pointed out that previously the Committee had suggested that Productivity SA visit the top 10 countries that are doing well in productivity. They need to learn the productivity methods that benefit the top 10 countries. This point has been left out and she recommended that it be added to the report.

Mr Cardo noted that NEDLAC is re-evaluating its foundational statutes and its mission and mandate. A recommendation should be that NEDLAC brief the Committee regularly on the progress made to remedy the defects diagnosed by NEDLAC over the years. He suggested the existing bullet point be deleted

Mr Nontsele suggested that they do not delete anything but rather incorporate all the necessary points to be raised. The social partners at NEDLAC were in agreement with the interventions made in response to Covid-19 and with other measures by government.

Mr Bagraim said after agreements were reached by NEDLAC and its social partners they are hardly followed by legislation thereafter. He previously asked the Minister if NEDLAC will be debating the changes to legislation as a result of Covid-19 when people started working from home. Labour law needs to be updated to encompass and encourage working from home as opposed to working in the office. The Minister’s response was that it must be debated at NEDLAC and his understanding was that NEDLAC has started those discussions. He suggested that this may be added as an observation. It is good that the Minister has started looking into basic conditions of working from home especially health and safety regulations.

The Chairperson noted that Members of Parliament complain they are still getting hundreds of queries about non-payment of UIF for long-standing claims. They have received tedious responses from the Department. There seems to be problems with their offices, long queues, staff not answering phones and many other issues. It cannot be right that it is only told to improve service whereas this has been going on for longer than two years. It has been very disappointing. They must be made aware that people are very angry. There must be accountability on their side.

Mr Nontsele commented on the steps taken about the challenges with the Covid-19 TERS payments. The questionable management of the UIF investment portfolio needs to be factored in as well. He spoke of the collapse of a big investment where the UIF lost billions of Rands. The Committee cannot keep quiet about such things. This needs to be raised and a recommendation must that this matter needs to be addressed and bring those responsible to account.

Mr Bagraim strongly supported Mr Nontsele and suggested that those involved be brought to justice and prosecuted. They must try and get back some of the money for the UIF.

The Chairperson strongly suggested that those companies that messed up and ran away with money must be exposed. This issue falls under this Department over which the Committee has oversight. The Committee will be judged if it does not report such things. The Minister as a political head must give time frames for all these recommendations.

Mr Hinana commented on paragraph 5.1 that he accepts and agrees that the Department must improve the employment rate at the SEE because employees in this enterprise are disabled yet have the capacity to be productive. Seeing that the money allocated to the Department increased from R3.81 to R3.95 billion, he recommended that the Department provide these employees with transport and improve the quality of their workplace. The Committee needs implementation time frames so the Department should provide the Committee with a quarterly report on how far it is with the recommendations.

Mr Bagraim made a recommendation on job creation and the DEL mandate to improve the unemployment rate. A task team has been set up by government looking at laws that are creating a stumbling block to jobs creation. DEL needs to have a re-look at its legislation and see what is standing in the way of small businesses to employ more people. They must encourage small businesses. He recommended that DEL look at specific laws and regulations and establish what exactly is standing in the way of growth in small businesses and job creation. This is the Minister’s prerogative and he should be asked to re-look at them. This is considering that in the previous meeting there was a positive response from the Director-General and he confirmed that they will be looking into it. DEL needs to provide time frames on when are they executing this and what are they doing to remedy the situation.

Secondly, he believes strongly that the SEE should be working together with representatives in the disability sector. The disability sector itself has workshops, and they are working closely with Epilepsy SA and they know how to create jobs. They also know how to make these workshops profitable. Government should have 6% of the general working population from the disabled sector which is not the case; it is rather less than 1%. He noted societies such as Blind SA and Deaf SA that get left out of the economy completely.

Finally, they should encourage the Department to spend more money on the inspectorate as it is key. If there is no inspection of the implementation of the laws then no one adheres to them.

Mr S Mdabe (ANC) said SEE is part of the employment mandate of DEL. He recommended that the Public Employment Services (PES) branch be restructured, repurposed, and set firmly on the task of coordinating and facilitating job creation interventions across government and the private sector

Mr Nontsele seconded the motion. He also supported Mr Hinana's proposal on the SEE. He suggested a comprehensive package of benefits to improve the working conditions taking into account that the people with disabilities are a designated group. He noted their inability to progress up to management positions. There should not be a hindrance for them to progress to higher positions. They should be exposed to appropriate institutions that could help them to acquire the necessary qualifications.

Mr M Wolmarans (ANC) said some of the points Members have raised must be flagged because the Department is not in their midst. The meeting is internal and they are only focusing on recommendations and observations. He was concerned about how DEL will find expression for their recommendations if it is not present.

He commented on Labour Compliance and the DEL target of "serving notices to 95% of non-compliant employer within 14 days". In his opinion this is impractical if you are not sure of the number of cases you are referring to. He added that the Department should respond to the Committee about petitioning National Treasury about Supported Employment Enterprises (SEE) having lost its preferential treatment status for procurement by government departments.

The Chairperson called Members to order. As much as they are recently from an SEE oversight visit, they must not be tempted to discuss their SEE oversight report by default. The Committee has not yet engaged on the oversight visit. The focus should be on what has been reported by the Department in the APP. The Committee Report on the SEE oversight visit has not yet been tabled.

Ms Mkhonto noted that the Chairperson reminded them of time frames for the recommendations. The recommendation about DEL and National Treasury should have a solid time frame for when the Committee will receive the report to avoid having an open-ended activity.

The Chairperson said there has been discussion with the Department about working with Treasury since 2019. She would like to make a proposal about time frames. The Department must tell the Committee of its progress in working with National Treasury. She expressed her dissatisfaction with the matter. It cannot be that Committee must wait this long. She would summon them to appear before the Committee in 30 days to give feedback. This has been going on for two years and nothing productive has been presented. Otherwise the Committee can go to the extent of having a bilateral with the Standing Committee on Finance on this and invite the Minister to outline the challenges experienced by SEE not to be given preferential treatment. She asked Members to vote between the 30 day notice or having a bilateral with the Standing Committee on Finance.

Ms Mkhonto supported the bilateral with the Standing Committee on Finance.

There was no objection therefore the Chairperson concluded that due to the urgency of the matter a date should be decided within a week.

Mr Bagraim said they have made a conclusion that Productivity SA cannot be ordinary and something different must be done. It is wrong for Productivity SA to draw up its own turnaround plan because they are going to get the same results as seen in the last decade. They should be stepping outside to approach universities, NEDLAC and discuss how productivity can improve in the country. South Africa has good people with hard working ethics and eager to work but still our productivity is the lowest in the world. Productivity SA should consider looking at what is wrong in their planning. They set their own test, mark it themselves and pass – which is not the correct way of doing things. They do well every year but remain the worst in the world. He recommended that bullet 3 on Paragraph 4.2-Productivity SA should be worded correctly.

Ms Mkhonto reiterated that Productivity SA should go to top performing countries and draw on their lessons and methods. She previously requested that this recommendation be added.

The Chairperson made an amendment to the recommendation that Ms Mkhondo made and said that before they go outside they should rather have a sitting in a form of a meeting with all stakeholders i.e. businesses, government, community chambers and Labour; for them to outline these things particularly, DEL so that they don’t hear it from one side but both the government and the Department itself. She said they have to know first how these stakeholders understand Productivity SA before they could approach outsiders with this issue. In the next 30 days they must secure a meeting with all the stakeholders, NEDLAC and invite Productivity SA. Only then, they could look into going outside after this encounter with different stakeholders.

Mr Bagraim suggested strongly that the Minister look at the latest Compensation Fund regulations that worked to outlaw third parties as the regulations made it almost impossible for third parties to continue. The functionality of the Compensation Fund is still incredibly poor hence the need for these third parties to continue to exist.

Mr Nontsele proposed that there be ongoing monitoring and reporting on the implementation of the regulations and challenges faced, so DEL is able to continually keep them abreast of challenges they encounter.

Mr Bagraim emphasised that the public is still complaining about not being assisted. The first bullet point under UIF says it must improve efficiency. The system is not working at all and it cannot be blamed on the DG or the Minister because it is the staff on the ground who are not answering telephones or helping people and also losing their important documents. He had received numerous complaints from people claiming that they have sent their documents more than 10 times without any response.

The Chairperson strongly advised members to mention provinces and their districts by name so that this kind of behaviour can be dealt with and corrected. There is no point in chasing shadows when the real problem is not addressed. In this way, the Head of the Department (HOD) and the Minister should account for this kind of behaviour at centres in provinces.

Ms H Denner (FF+) seconded the Chairperson and said they must make a list of the centres that have problems. She also supported Mr Bagraim as she had a list of similar complaints she received from the public. The complaints were from Free State, Gauteng, Northern Cape, KZN and the Eastern Cape. She suggested a recommendation that the quality of administration at the ground level of Labour Centres should be looked at to stop this duplication process and frustration for people who need their UIF money.

Mr Nontsele made a recommendation that the Committee must be comprehensively updated on the UIF investigation by investigating agencies. He referenced the UIF investments.

The Chairperson instructed the Committee researcher to circulate the amended draft report by Friday 6 May which was adopted in principle.

The previous committee meeting minutes were adopted.

The meeting was adjourned.