Department of Employment & Labour 2019/20 Annual Performance Plan, with Minister & Deputy

Meeting report

The Chairperson welcomed everyone present and acknowledged both the Minister and Deputy Minister for their presence. He asked Members to consider and adopt the outstanding committee minutes.

He led the Members through the minutes page by page. The minutes were adopted without any amendments. 

Meeting Report
The Chairperson welcomed the Minister and Deputy Minister and posed the question whether the mandate of the Department of Labour would be expanded.
Minister’s remarks

Mr Thulas Nxesi, Minister of Employment and Labour said that it was his belief that as the Executive they must always account. He said he takes the oversight role of Parliament very seriously because it keeps the Officials and the Executive accountable as this was at the heart of the democracy. Therefore, he was pleased to attend the meeting and account to Parliament. He informed Members that the Director-General would present the annual performance plan and budget for the 2019/20 financial year.

He shared with the Members the reconfiguration process of the Department. Firstly, the Department would liberate resources for the market labour instruments entities such as the UIF (Unemployment Insurance Fund) and UCF Compensation Funds to preserve jobs and create jobs. Secondly, the Department will provide coordination and collaborate its efforts with other departments in order to create jobs and assist people to obtain skills required. Almost every commentator talks about the nature of the structural unemployment due to skills mismatch in the country. Thirdly, the department will strengthen the labour market through tools available at its disposal and in line with the vision of the department. This will have something to do with doing away with red tape but this did not mean that government regulations would not be adhered to. Government would ensure that it acts on the serious retrenchment drives. Lastly, the department’s policy mandate would include providing value to social dialogue to formulate legislation and policies to attain labour market flexibility for enterprise competitiveness balanced with the promotion of decent employment.

He emphasized minimum conditions of employment and fair labour practices. DEL had to assume a new role, for which resources in government entities had to be liberated, and it also had to preserve jobs. DEL had to coordinate with other departments to create jobs and skills for the market. Structural unemployment was caused by lack of skills and skills mismatch. Government had to use labour market policies to address deep systemic unemployment. Government had to act on serious retrenchment drives. Red tape had to be done away with, where it created labour rigidity. The DEL policy mandate included giving value to social dialogue to formulate legislation and policies to attain labour market flexibility for enterprise competitiveness balanced with the promotion of decent employment.
 

Department of Employment and Labour (DEL) 2019/20 Annual Performance Plan

Director General Thobile Lamati briefed the Committee on DEL programmes and entities such as the Supported Employment Enterprises and their focus (see document for a tabulated).

The department policy mandate outline:

-Improved economic efficiency and productivity.

-Creation of decent employment.

-Promoting labour standards and fundamental rights at work.

-Providing adequate social safety nets to protect vulnerable workers

-Sound labour relations.

-Eliminating inequality and discrimination in the workplace.

-Enhancing occupational health and safety awareness and compliance in the workplace.

-Give value to social dialogue in the formulation of sound and responsive legislation and policies to attain labour market flexibility for competitiveness of enterprises which is balanced with the promotion of decent employment

 In the Medium-term, the Department of Employment and Labour will contribute mainly to the following Medium Term Strategic Framework (MTSF) Outcomes:

-Outcome 4: Decent employment through inclusive economic growth

-Outcome 5: A skilled and capable workforce to support an inclusive growth path

-Outcome 11: Create a better South Africa, a better Africa and a better World

-Outcome 12: An efficient, effective and development oriented public service; and

-Outcome 13: An inclusive and responsive social protection system

-Outcome 14: Transforming society and uniting the country

Discussion

The Minister commented about the Supported Employment Enterprises (SEE). When he was with the Department of Public Works, furniture from SEE was used as it was so cost efficient.

The Chairperson agreed.

Ms H Boshoff (DA, Mpumalanga) referred to the Minister’s statement that the labour market had to be conducive for investment. The practicalities of that had to be spelled out. On slide 41 (Public Employment Services) the figures doubled from quarter one to quarter two. Was that viable? Could the targets be reached? Non-compliance had to be quantified. The Minister and the DG had referred to a skills lack. Upskilling had to take place, both for the employed and unemployed. There should be a reaching out to the Department of Basic Education (DBE) which had adopted a three stream model. Disabled learners had to be able to enter the labour market. There was a mismatch between job seekers and employers. Were there any new recommendations around the national minimum wage? Informal entrepreneurs such as street vendors were treated unjustly. Many were mothers, with no access to ablution facilities.
Mr J Londt (DA, Western Cape) remarked that the notion of red tape removal was not new, but there was insufficient rollout. It was better in some pockets, but in other places it was not. It was not rolled out in all the provinces, provinces had to learn from each other. The labour environment was not lucrative for investment. It was not the job of the Minister to fix that unaided. SA was being allowed to become an unattractive investment destination. The Sixth Parliament had to get clear policy direction, not contradictory messages from government. Ms Boshoff had touched on schooling. The school system did not prepare people to compete in the job market. The teachers’ union had to be talked to about teaching learners to be competitive after completing matric. Only 40% of learners who enter the school system complete matric. Drastic steps had to be formulated by the relevant departments otherwise the current status would still be the same in five years time. 60% of the unemployed were young people.

Mr M Dangor (ANC, Gauteng) asked why provinces had international relations budgets. What was the principle that governed the deregistration process for unions?

Mr E Landsman (ANC, North West) asked what the vision of the Department was to create jobs. Employment by the State could reduce youth unemployment. However, the Department of Public Service and Administration (DPSA) had called for a decrease in the public service wage bill. How would the impact of that affect the DEL vision?

Mr M Mmoiemang (ANC, Northern Cape) noted that labour inspectors in the Northern Cape had to cover distances of up to 300 kilometers to do their work. He pointed to the tension between lowering the cost of doing business and government’s commitment to protect the vulnerable. There had been recommendations to amend the Labour Relations Act to deal with the difficult conditions that prevented SMMEs from growing the economy. He asked if there was a separate wage for the vulnerable.

Ms B Mathevula (EFF, Limpopo) referred to page 5 on providing adequate social safety nets to protect vulnerable workers. There had to be a policy mandate to provide work for farm workers, who were the most exploited of all. Working conditions and treatment were bad. Farmers were reducing the number of workers employed by buying machines. How could that be dealt with?

The Chairperson referred to Ms Boshoff’s remark about cooperation with the school system for training and skilling. The old DHET system had worked better than the current one. He referred to the targets for inspections in the presentation and said these were not broken down in terms of the relevant labour law that applied. There had to be different targets for the Basic Conditions of Employment Act and the Employment Equity Act. There had not been much transformation in the area of employment equity. All that was stated was the number of inspections, without it being properly broken down. How many cases of non-compliance had been taken to the labour court, and how long had they been waiting there? There were 200 unresolved cases. There was a case were cashiers had to stand all day long at a supermarket in PE. The company was non-compliant, and it was referred to the Grahamstown court, where one retired judge had to deal with all cases. He asked if the situation was the same in other provinces.

Minister Nxesi replied that the matter of compliance was raised with non-complying unions, of which AMCU was one. Some unions under Cosatu would be deregistered. He advocated a progressive and gradual approach. It was a fact that if AMCU were closed down, there would be violence. Yet the law could not be compromised. The union had to be sat down with and it had to be determined how there could be compliance. Punitive measures had to be a last resort. Some Cosatu unions also posed problems. But unions were at the heart of democracy.

The Minister replied that it was impossible to have enough inspectors for 1.7 million registered employers. The strong unions could help. There were two cases, one in which a worker was blinded by chemicals, and another in which a worker suffered third degree burns, where the employer had failed to assist the worker. Unions could help, and employers had to report. There were mechanisms for cooperation like NEDLAC and the labour relations system. The death of a union was not to be celebrated. All the tools necessary to create a conducive economic environment were not with the Department of Employment and Labour.

Minister Nxesi replied that skills development was originally part of the Labour mandate and then it was transferred to Higher Education. The SETAs had become agencies for bursaries, it had become like NSFAS. There was little training, and what there was, was of poor quality. The weakness was lack of coordination and the silo mentality. Mechanisation had led to retrenchment in agriculture worldwide. A machine could replace as many as 50 workers. The question was how to reskill workers, when big companies mechanised. Elsewhere in the world the big job creators were the SMMEs. How could people be trained to run their own businesses, and how could the township and rural economy be promoted?

On the vision of DEL and other departments to promote skilling, the answer lay in investment in infrastructure like roads, energy and railways. The Eskom crisis had to be resolved as it impacted on every sector. The energy crisis discouraged investment. The private sector had to play its part in creating jobs.

The Minister referred to the Presidential campaign in which envoys were assigned to attract investment in the country. All political parties had to agree on matters of national interest. Education had to effectively contribute to skills improvement. The teachers union had to be persuaded to focus on vocational education. When one called in the services of a plumber, the plumber was bound to a 58 year old white man, a Mozambican, or a Zimbabwean. There was a strike in KZN where trucks were burned because 100% of the drivers were foreigners. SA had a special dispensation for asylum seekers, according to which they qualified for everything in this country. Foreign nationals came into the country, benefitted from that, and went out. Foreigners were employed in agriculture, hospitality, hotels, security and in retail, especially by Spar. Foreigners were more likely to be used as cheap labour, as they were desperate. Internet cafes were run by Cameroonians, and hairdressers by Nigerians. Foreigners owned buildings. The protesters who burnt the trucks did not want to align themselves with registered unions, but were campaigning against the 100% employment of foreigners. The government position was that the ratio of local to foreign labour had to be 60/40. Legislation that prevented employers from labour exploitation had to be driven. The market had to be expanded.

The Minister replied that bad health led to low productivity, and employers had to safeguard the health of workers. Debt and interest rates hampered investment and individual savings. The private sector and government had to work together, and there had to be good governance in all state institutions. Poor governance undermined economic growth in Africa, and at the core of that was corruption. Priority had to be given to social inclusiveness and income disparity. The skills needs of workers who were to be retrenched, had to be attended to. One had to ask if people had the requisite skills, even university graduates.

Ms Boitumelo Moloi, Deputy Minister of Employment and Labour, said that skills training and devolution was required, but training systems were not being reviewed. China produced 10 million graduates per annum, but those were prepared for the market. Big corporations would say that it needed a certain number of artisans, for instance. SA had a large number of unemployed graduates. The question was how to reskill them, especially young people. The Department had to interact with the other relevant departments.

Mr Lamati responded that Inspection and Enforcement (IE) targets that were questioned were cumulative. The Department would indicate specific levels of compliance when it reported to the Committee. He noted that disabled learners were employed. Learners from special schools were placed in factories and the Supported Employment Enterprises.

The Chairperson advised that NEDLAC and the UIF be invited to the Committee.

Ms Boshoff asked if the national minimum wage had been re-tabled.

The Chairperson answered her that a commission was appointed to review whether there had to be an increase or not.

Mr Lamati answered Ms Boshoff about the informal sector, saying that the legislation covered those employed in the informal sector. Employers had to ensure that ablutions facilities were available for workers.

Ms Boshoff said that her concern was that people informally employed along the roadside were without access to ablutions. This could cause an epidemic.

Mr Lamati replied that this had to be dealt with at municipal level. Health implications would be considered. He answered Mr Dangor about the need to have an international relations budget in the provinces. Very few employees worked on labour market policy in the provinces, and budgets were low. Officials working on labour market policy in the provinces did not fall under the international relations branch. However, when DEL travelled overseas, it had to include a fair spread of experience. When the International Labour Organisation was visited, the delegation had to include people from head office, as well as from the provinces.

The Chairperson explained that Mr Dangor’s question referred to the fact that some of the visited countries had complained that they had uncoordinated visits from national, provincial and local levels of the South African government.

Mr Lamati answered about reducing red tape, saying that the Department of Trade and Industry had convened a one-stop service which represented all departments. It used to take long for companies to be registered but currently it took only one day, as the service was automated. It could also be accessed by overseas investors. A high panel report on the ease of doing business dealt with the extension of collective agreements, and a dispensation for SMMEs. There was a ministerial determination for SMMEs that removed some of the rights of workers but core rights such as safety and leave were retained. There had been appeals for the removal of the extension of collective agreements to non-parties. Bargaining councils were voluntary associations and could not be instructed by the Minister. Agreement was needed from different sectors to extend collective agreements. DEL only insisted that agreements comply with existing legislation. Parties could not come up with a wage structure that was less than the national minimum wage. The wage for vulnerable workers was the same as the national minimum wage. The Free Market Foundation did not want extension of collective agreements to non-parties. The DEL could not interfere, as it was a voluntary arrangement between employers and trade unions in the sector. The Department was in favour of it. Stakeholders in the sector could decide on employment conditions. Inspection targets would be broken down in terms of non-compliance per sector when the DEL reported to the Committee.

The Chairperson concluded that the Select Committee is tasked with overseeing five departments and their entities. The previous department had 31 entities, and all could not be dealt with. Annual performance plans and annual reports had to be dealt with, as well as oversight and international visits. DEL had to send its quarterly reports and these would be considered, even if the Department was not invited to present them. He noted that the budget debate on Employment and Labour would be on Thursday.

The Chairperson proposed the adoption of the Committee Report on the DEL 2019/20 APP.  He read out the requisite declaration, a motion for adoption was received and seconded, and the report was adopted. The Minister was asked to make concluding remarks.

Minister Nxesi noted requests from the Select Committee to be informed about the number of labour sectors. He advised that Members visit the various labour sectors to observe what was happening in them. The Ministry and the Department were tasked with the big issue of employment creation. Skills’ retraining was a big issue for government. It was not a matter of lack of resources, but rather of how resources were used. If money that was currently in pockets could be gathered together, it could make a difference. The Select Committee had to look out for quality training programmes when it did oversight. It was important that the national interest be borne in mind.

Minutes of the previous meeting were adopted.

The Chairperson adjourned the meeting.