Compensation Fund & CCMA Quarter 1 2021/22 Performance; with Deputy Minister

Meeting report

The Chairperson convened the virtual meeting, welcoming the Members and the delegations in attendance. She thanked Members for attending the meeting despite the change in the time and date of the meeting, which was necessitated by circumstances beyond the control of the Committee. She stated that the Committee will have a busy year and will soon be preparing for the Budget Speech and engaging with the issues raised by the President in the 2022 State of the Nation Address (SONA).

She noted that Mr F Jacobs (ANC) was in attendance as a visiting Member of Parliament, and welcomed him to the meeting. Mr Jacobs is welcome to raise any questions for the delegations. However, should the Committee need to vote on a matter, he will not be able to cast a vote, as he is not a Member of the Committee.

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 Compensation Fund (CF), and the Commission for Conciliation, Mediation, and Arbitration (the CCMA) for the 2021/22 financial year.

The delegation from the Department of Employment and Labour included Ms Boitumelo Moloi, Deputy Minister of Employment and Labour, Mr Khangala Mudumela, Chief of Staff, and Ms Boitumelo Gumbu, Head of Internal Audit. The Committee noted the apology tendered by Mr Thobile Lamati, Director-General of the Department of Employment and Labour.

The delegation from the CF consisted of Mr Vuyo Mafata, Commissioner, Mr Johnny Modiba, Chief Financial Officer, Mr Julian Soupen, Chief Director: COID Services, Mr Katlego Lebepe, Director: Anti-Corruption & Integrity Management, Ms Milly Ruiters, Director: Occupational Health & Hygiene, and Mr Keneiloe Nkabinde, Deputy Director: Risk Management.

The delegation from the CCMA consisted of Mr Cameron Morajane, Director, Ms Kedibone Mashaakgomo, Chief Financial Officer, Ms Zanele Hlophe, Chief Audit Executive, Ms Annah Mokgadinyane, Executive: Governance & Strategy, Mr Mthembeni Ncanana, Executive: Corporate Services, and Mr Marius Kotze, NSC: Dispute Resolution.

Opening Remarks by the Chairperson

The Chairperson notified Members that the Minister of Employment and Labour, Mr Thulas Nxesi, is attending a summit in Botswana and will not be able to join this meeting. She stated that it is important to note that the Department of Employment and Labour was called before the Standing Committee on Public Accounts to respond to questions on the issues related to the CF. Some Members of this Committee attended the meeting with the Standing Committee on Public Accounts (SCOPA). That meeting was necessitated by the report of the Auditor-General of South Africa (AGSA) that SCOPA received a preview of. The Committee will only meet with the AGSA in the following week.

She reminded Members that the AGSA was not able to conduct its audit of the CF and the Unemployment Insurance Fund (UIF), and the entity then wrote to the Office of the Speaker of the National Assembly; the audits have now been completed. She requested that the Members who attended the meeting with the SCOPA keep their questions relevant only to the briefings made by the WCF during the current meeting, and to direct other questions to the upcoming engagements with the AGSA.

Opening Remarks by the Deputy Minister of Employment and Labour

Ms Boitumelo Moloi, Deputy Minister of Employment and Labour, appreciated the opportunity granted to the Department to brief the Committee on the performance of the CF and the CCMA for the period between 01 April 2021 and 30 June 2021. She stated that the two entities will indicate to the Committee the number of targets that have been set for the period under review and will also indicate the respective targets that have been achieved. She stated that the Department’s engagement with the Committee is not a mere act of compliance but it is also a push for improvement in the performance of the entities through Members’ deliberations.

The Department of Employment and Labour takes Members’ inputs seriously, as it is a great help in providing compensation for workers and employees who are injured or disabled in the context of the CF. The delegations in attendance are here to work towards the common goal of ensuring that South Africans receive the services that they deserve from the state, including compensation for when they have been hurt, injured, disabled, or contracted a disease in the workplace. The CF is an institution that is providing pension benefits, medical benefits, disability care, and rehabilitation service offerings to those who qualify for compensation funds. The entity ought to contribute to the building of a capable, ethical, and developmental state, and any weaknesses in the institution need to be attended to.

The Department of Employment and Labour prides itself in its approach of openness and transparency, and the inputs and recommendations of the Committee are welcomed in this regard. There are problems within the CF that have to be addressed, and the Committee decided to monitor the implementation and progress of the entity's Audit Action Plan. The entity is on its way to address the historical problems and challenges to improve its service delivery. At some point, more time will be required to discuss the historical challenges within the WCF and to discuss potential remedies and recommendations to address the entity’s problems.

She stated that, in the first quarter of the 2021/22 financial year, the CCMA had 38 830 referred cases, with a 79% settlement rate. This shows a slight improvement in the settlement rate. The turnaround time concerning arbitration in the first quarter of the 2021/22 financial year was 44 days, showing an increase of a day.

Briefing on the CF's first-quarter performance for the 2021/22 financial year

The first item on the agenda was for the Committee to be briefed by the CF on its first-quarter performance for the 2021/22 financial year. Mr Vuyo Mafata, Commissioner of the CF, presented the briefing to the Committee after the CF delegation was introduced to the Committee.

Summary of the briefing made to the Committee

The CF has 127 labour centres across South Africa, with 33 labour centres that are equipped with COVID-processing functions. For the first quarter of the 2021/22 financial year, the CF achieved six out of the eight planned indicators, amounting to a 75% achievement rate, showing a 25% improvement from the first quarter of the 2020/21 financial year.

The entity underperformed in two areas, namely, to improve its vacancy rate and to decide claims within 30 working days of receipt. The CF finalised 96% of the requests for pre-authorisation of Specialised Medical Interventions within ten working days of receipt, with a total of 2 517 requests received in the first quarter. The CF finalised 84% of medical invoices within 40 working days of receipt, with 146 483 invoices received during the first quarter. However, only 80% of claims were decided within 30 working days of receipt, falling 5% short of the target. The WCF responded to 98% of Compliant-Assistive Devices requests within 15 days.

See presentation document for further details

Discussion

Ms C Mkhonto (EFF) stated that the Committee takes note of the fact that it will still engage with the AGSA's report on the CF's performance. She asked whether the CF has any outstanding claims that were approved and not paid from the previous system that are older than 12 months or even two years. The implications of the briefing are not what the people who need to be serviced by the CF are saying.

She stated that she was not surprised that Limpopo is one of the underperforming provinces, as people in Limpopo are complaining that they are made to sleep at the gates of the labour centres, and the Department of Employment and Labour previously committed to solving this issue and investigating the matter. However, it is clear that Limpopo is still underperforming when it comes to the CF, and it is possible that nothing has been done to rectify the issue of people having to sleep at the gates of the labour centres because of imposed quotas of people being helped per day. She stated that she even made a Member's statement regarding the farmworkers who were not assisted by the Polokwane Labour Centre regarding their UIF-claims from 2020. The Office of the Minister of Employment and Labour then took the matter on and had it resolved. However, this cannot be the way that things need to be done to see any real results. She expressed the need for the Committee to take a stand to determine the required actions that must be implemented to rectify these issues and the underperformance of the CF and the specific labour centres.

Mr F Jacobs (ANC) stated that the labour centre in Athlone experiences similar problems than expressed by Ms Mkhonto, and this creates the appearance of an uncaring Department. He asked for clarity on whether any consequence management is implemented for labour centres that are underperforming and dysfunctional. He also asked for clarity on the measures put in place to improve upon the current situation at labour centres.

Ms A Zuma (ANC) asked whether the Department of Employment and Labour has a plan in place to address the issue of underachievement in the target related to the number of employees that are inspected per year to determine compliance with labour laws, due to the high unemployment rates.

Responses by the CF

Mr Mafata responded that the CF has various categories of claims, including claims where an employer would have submitted the claim, the claim would have been registered, and the claim number allocated, but then the supporting documentation is lacking. The CF has migrated all claims from its old system to its new system to ensure that no claim has been left behind. He indicated that there are approximately 108 000 claims that are awaiting further information or supporting documentation. This could either mean that the person had a minor injury and went back to work, or that medical reports are outstanding, or it could be instances of non-compliance by employers. The CF has facilitated public calls and campaigns to reach out to organised labour to help employees to claim forward if they have a claim registered with the CF.

Regarding labour centres, he stated that the Department of Employment and Labour's Chief Operating Officer has an ongoing project in Limpopo to address the issues raised by Ms Mkhonto, and to monitor the performance of provinces in this regard. There is close monitoring of the provincial performances of labour centres, and support is provided by any of the branches of the Department of Employment and Labour to those labour centres where it shows that there is a need for improvement in this regard. He stated that the COVID-19 pandemic has also had an impact on the functioning of the provinces and the operations of the Department. Some labour centres had to close because of a need to decontaminate the buildings, and such health and safety protocols often take time and impact the service delivery of the labour centres.

Follow-up discussion

Ms Mkhonto stated that her questions were not fully answered by the delegation from the CF. She asked whether the CF has any outstanding, non-concluded claims that were approved and not paid from the previous system that are older than 12 months or even two years.

Responses by the CF

Mr Mafata responded to Ms Mkhonto’s question that there are claims that were approved and not paid from the CF's previous system that are older than 12 months.

Briefing on the CCMA’s First-Quarter Performance for the 2021/22 Financial Year

The second item on the agenda was for the Committee to be briefed by the CCMA on its first quarter performance for the 2021/22 financial year. Mr Cameron Morajane, Director of the CCMA, and Ms Kedibone Mashaakgomo, CA(SA), Chief Financial Officer, presented the briefing to the Committee.

Summary of the briefing made to the Committee

Regarding the CCMA’s non-financial performance for the first quarter of the 2021/22 financial year, it was reported that the entity achieved five out of its five planned targets, resulting in a 100% achievement rate. The CCMA’s high-impact labour market contributions showed a 66% increase in referrals, with 39 830 referred cases received in the 2021/22 financial year, compared to 24 009 referred cases received in the previous financial year. The settlement rate was 79% in the first quarter of the 2021/22 financial year, compared to 78% in the previous financial year. The average turnaround time for both arbitration and conciliation showed an increase in one day from the previous financial year. The CCMA conducted 4 530 outreach services, and 2.58 million people were capacitated to better understand the law and their rights during these outreach activities. A total of 63 complaints were received, of which 48 were investigated and responded to, while 15 are still pending investigation. Out of 35 public interest matters, 34 were settled (97% of the total matters), and 42% of jobs were saved for employees who faced retrenchments in cases referred to the CCMA.

The CCMA has continued to effectively manage the impact of the COVID-19 pandemic, with the health and safety regulations observed at all of the CCMA’s offices. Where required, offices have been closed to ensure disinfecting and to minimise the exposure to employees. The disinfecting of offices has been managed within the required Supply-Chain Management parameters to ensure strict budget control and avoidance of non-compliance risks. Parties are encouraged to refer disputes through email, facsimile, registered post or through the CCMA’s online referral platform, which allows for applications for conciliation and arbitration hearings as well as condonation applications.

Regarding the CCMA’s financial performance, it was reported that the entity spent R221.04 million of its budget of R279.7 million, with an underspending of 21% due to the budget of computer equipment maintenance not being consumed. For the quarter under review, no new cases of irregular, fruitless, and wasteful expenditure were identified and recorded in the register.

Discussion

Ms Mkhonto welcomed the presentation from the CCMA on its first quarter performance for the 2021/22 financial year. She noted that, on slide no. 14 of the CCMA's presentation, it was indicated that the sectors that were mostly assisted were that of business and safety services, with a small percentage of those assisted coming from the sectors of agriculture, farming, and food and beverages. She also noted that most of the CCMA’s outreach activities were conducted and facilitated online. She asked for the reasons why the sectors of agriculture, farming, and food and beverages are underrepresented in this regard. She expressed concern about these sectors’ ability to access the outreach activities of the CCMA without access to the technology required to participate.

Mr M Nontsele (ANC) thanked the delegation from the CCMA for the briefing made to the Committee. He agreed with the concerns of Ms Mkhonto, and asked for clarity so that the Committee can understand the limitations of the more vulnerable sectors with regards to accessing the CCMA’s outreach activities that were held online, as well as the CCMA’s online facilities.

Regarding the CCMA’s response to the COVID-19 pandemic, he indicated that the CCMA recently had a ground-breaking ruling stating that an employee’s refusal to be vaccinated is a dismissible offence. He asked for the CCMA to reflect on its exposure should this decision be reviewed by a higher judicial body.

Responses by the CCMA

Mr Morajane responded to the question from Ms Mkhonto regarding the request for reasons why the sectors of agriculture, farming, and food and beverages are underrepresented in assistance from the CCMA. He stated that the first reason had to do with the fact that the CCMA had to close its offices most of the time because of the COVID-19 pandemic, which meant that walk-in users and referrals could not access the offices of the CCMA. The second reason was that the CCMA’s migration to working with technology has not been the most inclusive method of ensuring that everyone has access to the services of the CCMA. While it was a progressive solution, the CCMA acknowledges that not all of the people requiring its services have access to the required technology for accessing the CCMA’s facilities online. Those who were most affected have been those people who work in vulnerable sectors, such as agriculture, farming, and food and beverages. The only way for the CCMA to measure the impact on these sectors is through a dashboard analysis by comparing the number of cases received before and during the COVID-19 pandemic. It is clear that the lack of access to technology during the COVID-19 pandemic did have an impact on the degree to which people could access the services of the CCMA, especially from vulnerable sectors. The other problem that the CCMA faced was the issue of access to the services of the Department of Employment and Labour, and a problem was faced in reaching and working together with labour inspectors during the COVID-19 pandemic. Another problem is that workers face intimidation from their employers when they access the services of the CCMA. He reminded the Committee of its oversight visit to a farm where farmworkers spoke freely about the challenges they faced while working on the farm. He recounted that, after the information was sent to the CCMA by the Committee, those farmworkers were dismissed for referring their cases to the CCMA. The CCMA is concerned about the intimidation faced by workers in these vulnerable sectors, including farmworkers, domestic workers, and employees in the construction sector. It is concerning when workplaces are privatised to such a degree that the CCMA cannot access places where there is a conflict between people's privacy and the need for labour inspectors to do their job and conduct the required inspections. Now that there is a celebration of the progressive increase of the minimum wage and the implementation of the parity principle, it is necessary that labour inspections in these vulnerable sectors are maximised to ensure that the minimum wage is given effect to, as prescribed by law. However, whether the minimum wage is adhered to by employers in these vulnerable sectors only becomes apparent when access is given for labour inspectors to conduct their inspections.

He stated that the CCMA is an entity that works on referrals, and the statistics presented to the Committee are dependent on people accessing the services of the CCMA. However, there are significant impediments in this process for people to access the services of the CCMA. The budgetary limitations of the CCMA have impacted the outreach activities of the entity, along with the lockdown restrictions imposed during the period under review.

He stated that the CCMA has received 125 referred cases regarding vaccination disputes, arising from the implementation of mandatory vaccination. The CCMA has prioritised all cases relating to the issue of vaccines. He stated that the cases on vaccines vary in terms of the nature of the case since some users claim that they have been discriminated against because of their status of not being vaccinated, others claim that they have been suspended because they refuse to be vaccinated, and others claim that they have been dismissed for refusal to be vaccinated. Claims of dismissals for refusal to vaccinate have been the biggest part of the cases related to mandatory vaccines. These cases have been red-lined as matters of public interest, meaning that they affect society at large and are likely to attract the attention of the media. These cases are then regulated at the national level instead of being dealt with at a provincial level. He informed Members of a trend arising where workers and employees end up settling their cases financially without necessarily wanting to have their case decided. A total of 19 cases in this regard has been settled, and 13 cases have been withdrawn. The CCMA has only rendered two awards in the vaccination cases, and one has been referred to the Labour Court, meaning that 89 cases are still in progress.

Regarding the two rewards made by the CCMA: in one case, an award was issued that stated that it is allowable to dismiss an employee if they refuse to be vaccinated. The CCMA planned to issue an award that would assist the Labour Court, the labour market, and the public on how to deal with the issue of mandatory vaccination. This specific award was not red-lined by the CCMA and was issued at the own accord of the CCMA commissioner in the case. While it is a binding award of the CCMA, he stated that its quality and content did not meet the standards or purpose of the red-lining exercise of the CCMA. He stated that the commissioner in the matter committed misconduct in this regard. The quality of the reward and the way it was reasoned was quite poor, especially if you look at the analysis in the award (which has not considered a variety of materials that should have been considered) including the Disaster Management Act 57 of 2002 and its Regulations, as well as the Occupational Health and Safety Act 85 of 1993 that requires significant consideration of reasonableness, risk assessments, the vulnerable situations of the employees or workers, medical objections, or objections related to the constitutional rights of employees and workers. There is a significant amount of consultation and worker counselling that must be facilitated before a mandatory vaccination policy can be implemented. There will be different findings in the vaccination cases, as there are a host of different factors that have to be considered in each unique case. However, the CCMA is still pursuing everything possible to get the best possible award that will guide the labour market on the issue of vaccinations and employment. He stated that, when dealing with mandatory vaccinations, workplaces are encouraged not to be trigger-happy in dismissing people for a refusal to get vaccinated. There is now a new trend that is arising where employers dismiss employees or workers for operational requirements, meaning that they are retrenched for a refusal to vaccinate. The CCMA wants to ensure that proper awards are issued in this regard. However, the CCMA does not have the final word on the issue as any matter can be taken on review to the Labour Court, but the problem is reviews can take two to five years to finalise, or five to seven years to be finalised in the Constitutional Court. These matters take time, while an answer is required immediately.

Concerning the CCMA’s outreach activities and the entity’s capacity, he stated that, with the number of cases at the CCMA, the entity planned to deploy all of its commissioners on these cases to promote workplace mediations and solutions. The rationale behind this is that the vaccine cases before the CCMA are about protecting life, on the one hand, and the fact that the employer must continue to operate without an employee infecting another, on the other hand.

A new question, which Mr Mafata could comment on, is whether employees will have claims in terms of the CF for COVID-19 being a work-based health issue related to vaccinations. The different outcomes of awards is not because the CCMA is confused about its stance on the issue, but rather because of the unique circumstances and processes for each of the cases. However, it is paramount that the law is interpreted correctly.

Follow-up discussion

Mr Nontsele thanked the Director of the CCMA for the comprehensive and revealing analysis that has been made relating to the outcomes of the vaccine cases. He asked whether there should be minimum standards for commissioners to deal with these matters. How should these kinds of weaknesses be dealt with at the CCMA, and how can the labour market be better assisted?

The Chairperson stated that the CCMA’s award in terms of mandatory vaccination and dismissal has become a matter of public interest, although it was not part of the CCMA’s briefing to the Committee.

Responses by the CCMA

Mr Morajane responded that Mr Nontsele’s question is quite important. He stated that the CCMA is arranging a special session with its commissioners to answer the questions related to the awards for mandatory vaccinations. The first thing that commissioners are expected to do is follow the law that is applicable to vaccinations, and the consideration of the rights of employers and employees is paramount. He stated that the Constitutional Court has held that, when disputes about employment law are held, the centre of it must have regard to the job security of those who are involved. Commissioners must be sensitive to the impact of the COVID-19 pandemic on employees and their job security. The entity’s labour laws does not condone reckless behaviour of employees when it comes to occupational health and safety, and commissioners must take into account all of the factors of each case while also resolving the dispute expeditiously. He stated that there is a need for Parliament to look into the length of time it takes for cases to be reviewed and resolved beyond the CCMA.

The Chairperson thanked the delegations from the CF and the CCMA for the briefings made to the Committee, and for the answers provided to Members' questions. She stated that there will perhaps be a need to receive a full report from the CCMA on the issue of vaccines and awards made, as it is a matter of public interest. She stated that she will circulate an email to the Committee’s Secretariat that she received from a citizen that outlines a challenge the person has been facing for 12 years. She requested a response on the email by Monday, 21 February 2022, on what has been done regarding the issue, as well as advice on how to proceed on the issues raised by the worker.

She thanked the Members, support staff and all the guests for attending the meeting.

The meeting was adjourned.