Unemployment Insurance Fund, Nedlac & Productivity SA 2020/21 Quarter 1 Performance; with Ministry

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Employment and Labour

09 February 2022
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

Video

In a virtual meeting, the Committee was briefed by the Department of Employment and Labour on the first quarter performance of the Unemployment Insurance Fund (the UIF), the National Economic Development and Labour Council (the NEDLAC), and Productivity South Africa for the 2021/22 financial year. The briefings focused on the entities’ financial reports, performance against their key performance indicators (KPIs), and reports on challenges faced.

In the UIF briefing on its first quarter performance of the 2021/22 financial year, the Committee heard that the UIF achieved 11 out of its 25 performance indicators which resulted in a 44% achievement rate. The Committee was disappointed in the mere 8% increase from the fourth quarter of the 2020/21 financial year, and the inadequate quality review of the UIF’s Annual Performance Plan (the APP) before approval and implementation. The UIF expressed a commitment to rectify the issues to strengthen the layers of assurance on the quality and adequacy of a plan to be implemented by 31 March 2022. In terms of expenditure, it was reported that the UIF has spent 59% of its budget for the first quarter of the 2021/22 financial year, with R8.61 billion spent out of the allocated R14.6 billion.

Members asked why no action was taken to account for the complete failure of the Department of Employment and Labour with regard to the accusations of fraud and corruption across the board for almost two years in the Department; What is the UIF going to do to pursue companies to ensure that they are compliant and to ensure that there is back pay of all the monies that were owed; whether the UIF is classified as an essential service during the COVID-19 pandemic and for clarity on how the UIF intends to improve its performance. Members stated that it was difficult to accept the excuse that the UIF could not perform because of the COVID-19 pandemic when there were mitigating measures in place to improve performance. The Committee asked for full information on the disciplinary matters so that they could get a sense of what was going on to intervene where needed.

In the NEDLAC briefing, the Committee heard that the NEDLAC achieved three out of its eight planned targets for the first quarter resulting in a 38% achievement rate. The vacancy rate was reported to be at 12.82% with no recruitment having taken place. The revenue for the first quarter was reported at R15.1 million, and the total expenditure amounted to R9.2 million, resulting in a surplus of R5.9 million. The risks highlighted included the lack of capacity of staff, delays in timeously fulfilling its mandate, the disruption of the infrastructure and systems, the lack of enabling a safe working environment, and the maintaining an efficient and effective financial management system.

The Committee sought clarity on the status of the Governance Task Team set up in 2017 that was looking into NEDLAC’s statutes and protocols; how its recommendations were being implemented or put into effect; whether the social partners have been engaging on the possibility of the phasing in of a basic income grant;  whether NEDLAC has been approached by the Ministry of Employment and Labour regarding the quota for South African workers as opposed to foreign workers that had recently been announced. Members asked if NEDLAC had tabled a re-look at the domestic labour laws. The Chairperson highlighted that all Members had received correspondence regarding the organisation called ‘the forgotten people of the country’. This information had been circulated to NEDLAC for the entity to respond and advise the lawmakers and policymakers on how to approach the situation. This was a sizable portion of the citizens which was concerning to the Committee. She asked NEDLAC to share its view on the matter and to advise the Committee on what to do to process the matter.

The Committee was briefed by Productivity South Africa for the 2021/22 financial year and heard that out of eight planned indicators for the first quarter Productivity South Africa achieved 100% of its targets. This showed a 60% improvement from the first quarter of the 2020/21 financial year. It was reported that Productivity South Africa had revenue of R26.06 million, and spent R25.55 million, resulting in a surplus of R511 000 for the period from April to June 2021. The Productivity South Africa outlined the following extreme risks: inadequate revenue, cybersecurity, the inability to respond to an increased demand for services, fraud and corruption, the inadequate digitisation of the environment, and poor performance under the hybrid work environment.

The Deputy Minister of the Department of Employment and Labour expressed the commitment of the Department to recovering the outstanding money, especially regarding the employers who received monies and did not disperse it to the employees. The Department of Employment and Labour will also take legal action against such employers.

Meeting report

The Chairperson convened the virtual meeting and welcomed Members and the delegations in attendance. She noted the apology received from Ms H Denner (FF+).

The purpose of the meeting was for the Committee to be briefed by the Department of Employment and Labour on the first quarter performance of the Unemployment Insurance Fund (the UIF), the National Economic Development and Labour Council (NEDLAC), and Productivity South Africa for the 2021/22 financial year. The briefings focused on the entities’ financial reports, performance against its key performance indicators (KPIs), and report on challenges faced.

The delegation from the Ministry of Employment and Labour consisted of Mr Thulas Nxesi (Minister of Employment and Labour), Ms Boitumelo Moloi (Deputy Minister of Employment and Labour), and Mr Khangala Mudumela (Chief of Staff). In addition, Mr Thobile Lamati (Director-General of the Department of Employment and Labour) was in attendance.

The delegation from the UIF consisted of Mr Teboho Maruping (Commissioner of the UIF), and Ms Fezeka Puzi (Chief Financial Officer). The delegation from NEDLAC consisted of Ms Lisa Seftel (Appointed Executive Director), Ms Vuyisa Tafa (Acting Senior Manager: Economics Unit), and Mr Farhaan Shamsoodeen (Chief Financial Officer). The delegation from Productivity South Africa consisted of Mr Mothunye Mothiba (Chief Executive Officer), Dr Sibusiso Acma (Chief Financial Officer), and Mr Justice Tshifularo (Executive Manager).

Minister of Employment and Labour remarks

Mr Thulas Nxesi, Minister of Employment and Labour, stated that he and his team welcomed the oversight and scrutiny over the Department of Employment and Labour and its entities.

Concerning the low-performance rate of 44% of the UIF, he stated that this is mitigated by the decline of in-person contact during the COVID-19 pandemic. On a positive note, the UIF is at least collecting sufficient evidence to measure its performance. He pointed out that the internal audits, monitoring, and evaluation are important regarding the recording of the performance, and this shows the intention of the UIF to tackle the problems and challenges that the entity has faced. He noted that Members would want to question the UIF’s delegation on the targets that were not achieved and to seek assurance that these matters are being addressed.

Relating to NEDLAC, he commended the entity for the critical role it continued to play in promoting social cohesion, and in facilitating an all-society response to the pandemic and the economic challenges resulting therefrom. The average performance rate of 35% is somewhat misleading, as the core business functions performed at 100% about NEDLAC.

Relating to Productivity South Africa, he stated that the entity reminds everyone that South Africa is facing a crisis of falling or stagnant productivity, which has negative long-term consequences for economic growth and competitiveness. With its limited budget, Productivity South Africa managed 100% performance against its targets, with many of its targets overachieving. This tells the story of a well-managed entity that achieved an unqualified opinion and report.

Director-General of the Department of Employment and Labour remarks

Mr Thobile Lamati, Director-General, Department of Employment and Labour, stated that he has written to the Committee to indicate that after the disciplinary processes involving the Commissioner of the UIF, Mr Teboho Maruping, has been concluded it was decided to bring him back in line with the sanctions that were been applied based on the allegations that were put to him. In the letter to the Committee he indicated that Mr Maruping subsequently received a final written warning along with a one-month suspension. On 01 February 2022, Mr Maruping resumed his duties as the Commissioner of the UIF after the sanctions were applied. He stated that as Minister Nxesi indicated, there are still two more cases that need to be finalised involving the relevant officials that were suspended and the disciplinary processes are continuing in that regard. Once it has been finalised the Committee will be duly informed as to its outcome.

First quarter performance of the UIF for the 2021/22 financial year

The first item on the agenda was for the Committee to be briefed by the Department of Employment and Labour on the first quarter performance of the UIF for the 2021/22 financial year. Mr Teboho Maruping, Commissioner of the UIF, presented the briefing to the Committee.

Summary of the briefing by the UIF

The briefing to the Committee focused on the UIF’s value chain, its internal audit review report, quarterly performance trends, and the first-quarter performance for the 2021/22 financial year.

It was reported that the UIF achieved only 11 out of its 25 performance indicators, resulting in a 44% achievement rate. This shows an 8% increase from the fourth quarter of the 2020/21 financial year. The internal audit findings included that there was an inadequate quality review of the UIF’s Annual Performance Plan (the APP) before approval and implementation. The UIF’s management picked up the gaps during the performance review and reporting, and these gaps were raised even before the internal audit commenced. It was reported that the weaknesses of the APP had an impact on the entity’s quality of reporting. The action plan to rectify the issues is to strengthen the layers of assurance on the quality and adequacy of the plan, and this is to be implemented by 31 March 2022.

In terms of the UIF’s expenditure, it was reported that the entity has spent 59% of its budget for the first quarter of the 2021/22 financial year, with R 8.61 billion spent out of the allocated R 14.6 billion. For each programme, it was reported that there was a 30% overspending in Programme 1 (Administration), a 41% underspending for Programme 2 (Business Operations), and a 97% underspending for Programme 3 (Labour Activation Programme).

See presentation for further details

Discussion

The Chairperson noted the briefing received from the delegation of the UIF. She opened the discussion for questions and inputs to be made by Members of the Committee.

Dr M Cardo (DA) referred to the disciplinary matters at the UIF and asked for the reasons why it is taking so long to finalise the matters particularly since it relates to serious allegations involving fraud and corruption. He noted that a year ago the Committee was informed that charges were brought against seven officials following an investigation by the Special Investigations Unit (the SIU). It was also reported that those disciplinary hearings would be conducted between 19 and 26 February 2021. It is now almost a year later and the Committee has not been informed of the identities and roles of the officials involved, nor have Members heard anything about the nature of the charges brought or the outcome of the disciplinary hearings for each instance. He asked whether the SIU’s investigation is still ongoing and whether a deadline has been put in place. He also asked for clarity on the outcome of the meeting that took place on 3 December 2021 of which Minister Nxesi informed him about by way of replying to a question raised in Parliament. The Committee is continuously being told that Members cannot be given any concrete information on the charges and the findings of the disciplinary hearings. This excuse is starting to wear thin because it has been a year since those disciplinary hearings against the seven officials involved were held. There needs to be an indicated end date for these matters, otherwise, it would mean that the Committee is simply being strung along.

Mr M Bagraim (DA) noted that there was a 12-month waiting period for the outcome of the disciplinary inquiries into the officials involved, and in particular for that of the Commissioner of the UIF. He noted that the Commissioner of the UIF had a one-month suspension without a salary, but that he did receive his salary for the other 11 months that were spent on the disciplinary inquiries. He asked whether the disciplinary inquiries were conducted internally. He also asked for clarity on the nature of the charges brought and requested that the Committee be provided with the charge sheet. Why was no action taken to account for the complete failure of the Department of Employment and Labour with regard to the accusations of fraud and corruption across the board for almost two years within the Department of Employment and Labour? Why is the Commissioner of the UIF taking no blame whatsoever in this regard? He suggested that a complete restructure of the UIF is needed. Regarding the issues related to the Temporary Employee / Employer Relief Scheme (the TERS), he stated that there have been numerous complaints from trade unions, employers, and employees across the board, and no one wants to talk about the failings of this project. He noted that there must be a list of non-compliant employers whose employees applied for the TERS. What is the UIF going to do to pursue those companies to ensure that they are compliant and to ensure that there is backpay of all the monies that are owed? Many complaints have been received about people’s struggles to contact the UIF, and everyone says that the phone lines are never answered.

Ms C Mkhonto (EFF) stated that there is a need to furnish the Committee with a report on the progress of the disciplinary processes involving the seven officials mentioned. It will be embarrassing for the Committee if this matter is taken action on by other Parliamentary Committees or any of the Chapter Nine Institutions in the Constitution, instead of action taken by the Committee. For this reason, the Committee must be given full information on the disciplinary matters for Members to get a sense of what is going on and so that the Committee can intervene where needed. Regarding the UIF’s performance for the first quarter of the 2021/22 financial year, she noted that the UIF had a very low performance achievement rate, and she also noted that the performance indicator for the entity’s vacancy rate has been reported as achieved. She stated that when the Committee visited the UIF’s offices, Members found that there was a high vacancy rate in the entity’s call centre. This is frustrating to the people of South Africa who are unable to contact the UIF and this means that they cannot have their requests attended to promptly and effectively. She asked whether the UIF is classified as an essential service during the COVID-19 pandemic. She noted that the Department of Employment and Labour has spent a lot of money on electronic devices to allow officials to work from home. The Committee is always receiving reports that entities and governmental departments are struggling to perform because of the COVID-19 pandemic. Were these mitigating measures not meant to allow the UIF to improve its performance? This is why it is difficult for the Committee to accept the excuse that the UIF could not perform because of the COVID-19 pandemic. She asked for clarity on how the UIF intends to improve upon its performance, and for input on what else can be done to help the entity.

Ms A Zuma (ANC) asked for clarity on the measures that have been put in place by the Department of Employment and Labour to closely monitor its entities’ performance to improve its service delivery. She also asked for more details on the plans that the Department of Employment and Labour has to ensure that invoices are paid on time and within the required 30 days.

Mr M Wolmarans (ANC) thanked the delegation from the UIF for the briefing made to the Committee. He noted that the presentation gave a lot of insights on the status of the UIF’s performance as it is currently. While some improvement has been seen in the first quarter of the 2021/22 financial year compared to the fourth quarter of the 2020/21 financial year, this improvement is not satisfactory, and the information presented raises concerning issues and red flags. He referred to the presentation noting that the performance targets are ‘satisfactory’ and asked whether this meant that the internal auditors were satisfied with the documentation at hand. He stated that the briefing should have been clearer on what is ‘satisfactory’ in this regard. He also noted an instance on the presentation where the UIF indicated a target as not achieved, despite this target being planned for the second quarter which is yet to come. He indicated that the UIF is short-changing itself in this regard. What does the sentence ‘there is no evidence to be validated’ that was indicated under some of the targets mean?

Responses from the UIF

Mr Lamati, Director-General of the Department of Employment and Labour, responded to the questions relating to the disciplinary matters. He stated that Members would remember that when the suspensions were first announced, it was indicated that the Department of Employment and Labour would not conduct an internal process, but that the process of looking at the cases would be outsourced. This method was followed and most of the delays were a result of the availability of the people involved. The other thing to remember is that the disciplinary hearings were called at the height of the COVID-19 pandemic, which affected people’s ability to attend because of safety reasons, and because many people had contracted COVID-19 themselves. This made it difficult for the processes to be completed. He stated that it has not taken 12 months for the Commissioner of the UIF to be placed under suspension. Mr Maruping has been working at the Department of Employment and Labour while the officials were awaiting the outcome of the disciplinary process. He noted that the Committee was informed of the number of officials that were implicated and commented that none of the officials were charged with fraud but rather with transgressions related to the Supply-Chain Management process. These charges were formulated based on the report and its findings from the SIO. The Department of Employment and Labour briefed the Committee when some of the officials were brought back. For example, Ms Judith Kumbi is the Chief Financial Officer of the UIF, and at the time, the Department of Employment and Labour briefed the Committee that she was brought back when the investigation was concluded. The Department of Employment and Labour also indicated the outcome of the investigations into the other officials, and a few of them pleaded guilty and the appropriate sanctions were applied. He confirmed that the Department of Employment and Labour will provide the Committee with a report on the progress and status of all these cases. He stated that no money was spent on these processes because it was chaired by someone from the Public Service Commission. He stated that the Department of Employment and Labour has been very consistent in providing information to the Committee on these matters.

Regarding the COVID-19 benefits and the TERS, he stated that the Department of Employment and Labour previously indicated that it would have a process to follow the money to ascertain whether the funds that were given to the employers made their way into the pockets of the employees. The Department of Employment and Labour has followed up in this regard. Any fraud reports were shared with the SIU and the Hawks. In this regard, some arrests have been made involving members of the public that had defrauded the UIF. It is not correct to say that nothing has been done, and there is no situation at this stage where employees of the UIF have been implicated. The Department of Employment and Labour is yet to receive a report from the SIU and the Hawks that indicates that officials of the UIF were involved in fraud. He noted the opinion from Mr Bagraim that the TERS is a complete failure and stated that the TERS has had a positive impact on the lives of the workers who had received the benefit. It has also had a good impact on employers who would have had to close their businesses as a result of the impact of the COVID-19 pandemic. The Department of Employment and Labour does accept that there were some failures on the part of the UIF and also on the part of the employers since the UIF is unable to process several claims. However, it is not fair to label the TERS as a complete failure. If the employer is not registered, then a consultant is appointed to deal with the issue of following the money and to follow the proper legal processes. However, some employers have been cooperating well. This exercise is not over, and the Department of Employment and Labour will continue to follow up. The first contract given to the service providers came to an end last year, and the UIF took over the functions in this regard to follow the money. There is a tender that has been decided on to find a new service provider to assist the UIF in this regard. The commitment made by the Minister of Employment and Labour in terms of ensuring that those employers who are not registered are pursued is indeed being fulfilled by the Department of Employment and Labour.

Relating to the operational work of the UIF and the phones not being answered, he stated that the UIF has a fully functional call centre. He indicated that the Department of Employment and Labour will be sharing the details of the disciplinary cases with the Committee. Regarding the question of what measures have been put into place to monitor the performance of the Department of Employment and Labour and its entities, he noted that each entity has a process put in place to monitor its performance every quarter. In the Department of Employment and Labour, there are also measures in place to monitor its performance every quarter. In the instances where performance has not been satisfactory, the Department of Employment and Labour demands that a process be put in place to ensure that the issues are corrected. Catch-up programmes are also used to ensure that targets are met by the end of the financial year to ensure that the entities’ service delivery is improved upon. The Department of Employment and Labour also rigorously monitors that the payments of invoices are done within 30 days because it is important to pay service programmes within 30 days. There is a report that the Department of Employment and Labour has to submit to National Treasury every month to indicate the number of service providers that were paid, and the reasons for non-payment. This is included in the performance agreement of the Director-General of the Department of Employment and Labour. It is also up to the Senior Managers to ensure that these invoices are paid on time. This is an important matter, and it is crucial that small businesses are paid on time and that they do not collapse because the government did not pay them timeously.

Mr Maruping, Commissioner of the UIF, commented that two middle-management employees have been disciplined and issued with warmings, and there are also cases with other employees whose disciplinary processes have been finalised and they were issued with final written warnings. The UIF is currently waiting for the Presiding Officers’ final report before the next steps can be taken. Regarding the meaning of the sentence ‘there is no evidence to be validated’, he stated that it means that there was no evidence that could be validated because in those targets there was nothing to confirm. On the service delivery issues, he stated that all operations have been decentralised down to the provincial level so that the provinces have their clients down to the labour centre. He stated that the Minister of Employment and Labour and the Director-General approved the introduction of UIF Directors in the provinces to ensure that those individuals can focus solely on the UIF’s operations. It is still early days to enjoy the benefits of the decentralisation and the appointment of the UIF Directors, but in the next two quarters, the benefits will become clear. He confirmed that the UIF has a fully functional call centre, and it is still growing in its capacity. The benefits of the call centre will also be seen as time passes.

The UIF is on the brink of concluding the appointment of service providers that will help the entity to re-engineer the structures of the UIF and the Compensation Fund. The UIF is not able to procure its ICT infrastructure and has to route this through the State Information Technology Agency (SITA). This reliance on the SITA affects the functionality of both the UIF and the Compensation Fund, and this issue is being addressed. He confirmed that over 2 000 companies have been followed and pursued, and about R900 million was recovered from these companies. The UIF will continue to pursue these companies to make sure that the money goes to the right people. However, because of the sensitivity of the matters, some of the details cannot be divulged, but the UIF is on the brink of appointing 11 Service Providers to help follow the funds that have been spent. Regarding the question on the vacancy rate, he stated that the UIF has prepared the services of its call centre and over time the benefits will become apparent. He stated that some staff members are working from home, but that staff members will start to migrate back to the UIF’s offices.

First quarter performance of NEDLAC for the 2021/22 financial year

The second item on the agenda was for the Committee to be briefed by the Department of Employment and Labour on the first-quarter performance of NEDLAC for the 2021/22 financial year. Ms Lisa Seftel, Appointed Executive Director, presented the briefing to the Committee.

Summary of the briefing by the NEDLAC

The briefing from NEDLAC centred on the entity’s highlights, challenges and performance against its KPIs, its financial report, and the risks it has encountered in the 2021/22 financial year. It was reported that NEDLAC achieved three out of its eight planned targets for the first quarter, resulting in a 38% achievement rate. NEDLAC appointed a COVID-19 Rapid Response Task Team with engagements on the vaccine rollout programme, and an agreement was reached on a revised Health and Safety Direction incorporating employer and employee obligations regarding vaccinations. The vacancy rate at NEDLAC was reported to be at 12.82% with no recruitment having taken place. NEDLAC has approved a new organogram which has been implemented.

The NEDLAC’s revenue for the first quarter was reported at R15.1 million, and the total expenditure amounted to R9.2 million, resulting in a surplus of R5.9 million. The key reason for the underspending was 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 NEDLAC’s consulting fees. The risks highlighted by NEDLAC included the lack of capacity of staff, delays in timeously fulfilling its mandate, the disruption of IT infrastructure and systems, the lack of enabling a safe working environment, and the maintaining an efficient and effective financial management system.

See presentation for further details

Discussion

Dr Cardo asked for an update on the status of the Governance Task Team set up in 2017 that was looking into NEDLAC’s statutes and protocols. He asked for clarity on how the recommendations of the Governance Task Team are being implemented or put into effect at NEDLAC. He asked whether the social partners have been engaging at NEDLAC on the possibility of the phasing in of a basic income grant and whether NEDLAC can provide more information on that issue.

Mr Bagraim asked if NEDLAC has tabled a re-look of the domestic labour laws, especially given the shift to and employees’ preference for working remotely or working from home. How are the Health and Safety Regulations implemented with regards to this? He asked whether NEDLAC has been approached by the Ministry of Employment and Labour regarding the quota for South African workers as opposed to foreign workers that have recently been announced.

Ms Mkhonto welcomed the briefing received from the NEDLAC. Regarding the Constituency Capacity Building Plans she noted that the presentation stated that no constituency submitted their plan as per the indicator. She asked for more details on the type of relationship between NEDLAC and those constituencies. At what frequency are those submissions expected between the two parties?

The Chairperson appreciated the report from NEDLAC. She stated that all Members received correspondence from the organisation called ‘the forgotten people of the country’ who are above 35 in terms of employment. She stated that she circulated the correspondence to NEDLAC for the entity to respond and advise the lawmakers and policymakers on how to approach the situation. This is a sizable portion of the citizens which is concerning to the Committee. She asked NEDLAC to share its view on the matter and what it advised the Committee to do to process the matter.

Ms Zuma sought clarity on how far the recruitment processes are to fill the positions of those who have passed away or have been dismissed from their roles. She also asked for reasons why NEDLAC’s performance is regressing compared to the previous quarterly report.

Responses from NEDLAC

Ms Lisa Seftel, Appointed Executive Director, responded to the questions on the progress of the Task Team and stated that in the second quarter the Executive Committee of NEDLAC approved several key areas that needed to be reviewed. It was agreed that there is a need to revisit the issues at play. She stated that the way to give effect to these changes was to revisit the NEDLAC Act 35 of 1994, NEDLAC’s Constitution, and the entity’s founding documents.  NEDLAC is now in the process of finalising a service provider to work closely with the Task Team to suggest amendments to be made to the appropriate documents. This process will be started by the end of the current quarter, and NEDLAC envisages that, in the next financial year, it will systematically work through the different documents to make these amendments and submit them to the Executive Committee for approval. Regarding the question on the basic income grant, she stated that there has been a comprehensive Social Security and Retirement Reforms Task Team to extensively deliberate on this issue.  NEDLAC also conducted its research for the social partners on the feasibility of the basic income grant, and the report on this issue is available on NEDLAC’s website. The social partners did indicate a preference for an instrument like the basic income grant on the Green Paper of Comprehensive Social Security that was issued by the Department of Social Development. The report in this regard is also available on NEDLAC’s website. She noted that the Department of Social Development has since retracted its Green Paper of Comprehensive Social Security, but that if any proposals come back the social partners are ready to further engage on this matter.

She stated that government has a responsibility to table labour law reforms, but that it has been raised by most constituencies in NEDLAC that any reform of labour laws has to look at the implications of remote work. On the issue of the quotas, she stated that the Minister of Employment and Labour together with the Department of Employment and Labour approached NEDLAC last year to present its work in progress around the issue of employment policies and migration, and NEDLAC’s social partners did give its inputs in this regard. Any firm proposals approved by the Cabinet will be coming to NEDLAC for deliberations. NEDLAC has just completed its deliberations on the Critical Skills List from the Department of Home Affairs, and that report is available on NEDLAC’s website. Regarding the Constituency Capacity Building Plans, she responded that NEDLAC has requested these plans from the social plans and also proposed a template in this regard. Subsequently, NEDLAC has engaged with the social partners interactively, and yet no plans have been submitted. However, there is still room for improvement on these plans, but its focus is on building a different kind of culture and approach at NEDLAC. Regarding the frequency of submissions, she stated that it is yearly. She stated that the Economic Recovery and Reconstruction Application monitor the commitments of government, businesses, the community, and the labour forces. In terms of ‘the forgotten people’, she stated that NEDLAC received the correspondence and entered into discussions with the Department of Employment and Labour because any response given needs to be coordinated. There is a strong need for the extension of the social relief of distress grants with the understanding that it also allows unemployed people to seek work or set up small income-generating activities.

In terms of the recruitment processes, she responded that NEDLAC has tried to recruit but did not find a suitable person to replace the dismissed employee. The recruitment process will be restarted this year. Regarding NEDLAC’s performance regressing, she stated that the first quarter of the 2021/22 financial year was an anomaly because there was a shift to some new performance indicators, and the entity’s performance will improve in the next two quarters. The poor performance is attributed to the shift to new indicators and some technical problems. However, Programme 2 (Core Operations) achieved a 100% achievement rate.

Mr Lamati, Director-General of the Department of Employment and Labour, responded to the issue of the National Labour Migration Policy. He informed the Committee that the Department of Employment and Labour has presented the policy to the Cabinet and has been given the go-ahead to take the policy to NEDLAC, so the consultation process is underway. He stated that the question of labour law reforms to take into account remote working conditions is important concerning occupational health and safety issues. With employers, the Department of Employment and Labour will have to work with the relevant stakeholders to develop working from home policies. This will involve taking on a host of amendments to be able to deal with the issue. The Department of Employment and Labour will brief the Committee at the time to share the relevant information.

Performance of Productivity South Africa for quarter one of the 2021/22 financial year

The third item on the agenda was for the Committee to be briefed by the Department of Employment and Labour on the first quarter performance of Productivity South Africa for the 2021/22 financial year. Mr Mothunye Mothiba, the Chief Executive Officer, presented the briefing to the Committee.

Summary of the briefing by the Productivity South Africa

The briefing focused on the quarter performance of Productivity South Africa for the 2021/22 financial year and its financial report, including recommendations on areas to improve upon. It was reported that South Africa’s overall productivity growth (which is a key driver of long-term competitiveness and economic performance) is low. Out of eight planned indicators for the first quarter, it was reported that Productivity South Africa achieved 100% of its targets. This showed a 60% improvement from the first quarter of the 2020/21 financial year. It was reported that Productivity South Africa had revenue of R26.06 million, and spent R25.55 million, resulting in a surplus of R511 000 for the period from April to June 2021. The Productivity South Africa outlined the following extreme risks: inadequate revenue, cybersecurity, the inability to respond to an increased demand for services, fraud and corruption, the inadequate digitisation of the environment, and poor performance under the hybrid work environment.

See presentation for further details

Ms Boitumelo Moloi, Deputy Minister of Employment and Labour, thanked the entities for the briefings made to the Committee. She stated that the Department of Employment and Labour needs to commit to improvement in the entities. The Department of Employment and Labour is satisfied with the continued improvement at the UIF, but there is a need for continuous monitoring of the situation, and there will be continuous reporting back to the Committee on matters relating to the improvement of the performance of its entities. In terms of the UIF, the Department of Employment and Labour is committed to recovering the outstanding money, especially regarding the employers who received monies and did not disperse it to the employees. The Department of Employment and Labour will also take legal action against such employers. The Department of Employment and Labour will report back to the Committee on these matters. She expressed the commitment of the Department of Employment and Labour to review the protocols of the NEDLAC for a positive change to the economy. She congratulated the NEDLAC and Productivity South Africa on its improvement in performance. She expressed the Department of Employment and Labour’s commitment to continue to work on these matters and to receive the guidance of the Committee.

The Chairperson thanked the delegations for engaging with the Committee. She expressed the Committee’s commitment to continue monitoring the performance of the Department of Employment and Labour and its entities in the upcoming quarters. She expressed the importance of the Department of Employment and Labour and its entities to furnish the Committee with progress updates as well as the information requested by Members.

The meeting was adjourned.

 

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