House Chairperson, hon Members of Parliament, distinguished guests, ladies and gentlemen and fellow South Africans, this is my first Budget Vote speech since my appointment as Minister in the Labour portfolio. In this regard, I would like to take this opportunity to thank the hon President Jacob Gedleyihlekisa Zuma for entrusting me with this important function, as well as showing confidence in me.
Our Constitution places an injunction on us as government and the democratic state to ensure equality between men and women, between black and white, between urban and rural, between rich and poor. It is this constitutional ethos that drives the work of the Department of Labour.
In other words, it is not possible for South Africa to speak of a well- developed society based on equality and justice in isolation of the following: improved economic efficiency and productivity; employment creation; sound labour relations; the elimination of inequality and discrimination in the workplace, alleviating poverty and unemployment; enhanced occupational health and safety awareness and compliance in the workplace; as well as nurturing the culture of acceptance that workers' rights are human rights.
Essentially, this is what the mandate of the Department of Labour is all about. These policies and programmes that regulate the labour market are developed in consultation with our social partners. In its assumption of administration, government, through the President, placed a priority on job creation through meaningful economic transformation and inclusive roles.
This is a task that has to be undertaken with dedication, commitment and a higher level of vigour. It will require the Department of Labour together with its social partners - organised labour, organised business and community constituencies - to be focused and to remain committed to achieving common goals.
South Africa, at the end of 2010, was characterised by over 4,2 million of unemployed people. Of the above number, 2,8 million are the long-term unemployed. Of the unemployed, the most are young persons within the range of 25 and 34 years of age, with low levels of skills and work experience.
These are not just numbers, but individual persons whose lives are severely affected by a lack of income, lack of security and lack of dignity. These are the people who require assistance to find work or to re-enter the labour market.
South Africa experienced a significant increase in industrial action through strikes, resulting in a lot of workdays being lost due to industrial action in 74 cases. These industrial actions, which were about improved wages and working conditions, took place when the world was hit by the economic meltdown. It would be important to study and derive lessons from these industrial actions with the view to confronting and improving the labour relations systems.
It must also be remembered that labour relations require an ongoing engagement and refinement from time to time. Once an analysis has been conducted, one could hope that 2011 will see much improved labour relations in the respective workplaces with a focus on bringing about stability and industrial peace.
The South African economy in 2010 began to show signs of recovery from the recession we experienced in 2009. In the fourth quarter of the same year, we also saw a small gain in employment, with growth projected to be positive during the year 2011.
As part of our commitment and effort in bringing about a society based on justice and equality for all, the department identified policy gaps in the following pieces of legislation: the Labour Relations Amendment Bill of 2010; the Basic Conditions of Employment Amendment Bill of 2010; the Employment Equity Amendment Bill of 2010; and the new Employment Services Bill of 2010. Further, we are also addressing policy gaps in sheltered Employment Factories, with specific emphasis on accommodating the needs of people with disabilities and gender equality.
In recent times, labour broking has attracted a huge policy debate in our country, mainly due to abuses that have commonly been associated with the practice. It is for this reason, ladies and gentlemen, that one of our key aims in amending labour legislation is to address the phenomenon of labour broking and its associated abusive tendencies.
We do this, well aware that amending this legislation will have important consequences for the operation of the labour market system. The debates on these Bills have attracted a variety of responses, which illustrate clearly the articulation of different interests that could be affected by the proposed amendments.
As government, through the Department of Labour, we will continue to work constructively with our social partners and will further endeavour to find the appropriate labour framework that gives sufficient protection to workers who have been rendered vulnerable through certain abuses. We will do so, mindful of the fact that our policies should not have negative consequences for employment.
At the turn of the fourth quarter, our inspectors visited more than 192 000 workplaces across the country. Of the workplaces visited, 77% were found to be compliant with our labour laws. During the year under review, we have continued to conduct blitz inspection programmes with a view to targeting high-risk and problematic sectors. Activities conducted were focused on the wholesale and retail, construction, agriculture and forestry, hospitality and private security sectors and a number of shopping malls. We are intensifying our efforts on inspection and enforcement as part of our commitment to ensure the creation of decent working conditions for workers, at the same time ensuring a competitive environment in which business can operate.
We have begun to focus our energies on the need to ensure that the inspectorate is professional. Creating a professional inspectorate requires of us to consider issues of upgrading the level of training of inspectors, and we have already started to engage the service of the International Labour Organisation, ILO, to provide training.
The department remains focused on ensuring the highest level of compliance by companies. In this regard, notices have been issued to noncomplying employers, and we have referred 295 cases to the Labour Court and 415 employers to magistrates' courts. We hope that those who flout the law will be successfully prosecuted.
The previous financial year saw significant changes in the department with the transfer of the skills development functions to the Department of Higher Education and Training. The transfer has been concluded and the department has begun repositioning the public employment services during the year.
The new Employment Services Bill sets out the proposed legal framework for the operation of our employment services. This Bill also sets out the role of Productivity SA under the mandate of the department and provides a legal basis for the operation of the Sheltered Employment Factories.
During the 2010-11 financial year, our employment services managed to register 472 179 job seekers. The service managed to link 70% of these registered job seekers to career counselling, skills development interventions, work placement opportunities, as well as Unemployment Insurance Fund, UIF, and Compensation Fund benefits.
Our career guidance services were undertaken by the nursing colleges in Gauteng, saving them up to R21 million in recruitment costs. We will continue to step up our commitment to improving our employment service to contribute to job creation in South Africa.
For the period up to March 2011, the UIF paid benefits to 693 000 beneficiaries, with a total value of R5,3 billion, compared to 779 604 beneficiaries, with a total value R5,7 billion, the previous year. The fund experienced a very slight decrease in unemployment benefit payments compared to the same period in the year 2009-10.
The decrease is mainly due to the effects of the recession wearing off. This once again highlights the importance of the UIF as a safety net during times of unemployment and economic crisis. The UIF has invested 68% of its investment portfolio in central government, municipal and parastatal bonds and money market instruments supporting infrastructure projects that will create and sustain jobs.
The fund has identified a number of projects in pursuit of the creation of decent work in South Africa. The contribution made by the fund comprises both commercial and socially responsible investment. This is an investment of R35 billion of the R52 billion portfolio.
The UIF has also invested in the Industrial Development Corporation, IDC, through the purchase of a R2 billion bond during 2010 with the aim of creating and sustaining jobs. These funds are available to initiate businesses, to provide a debt portion of expansionary acquisitions for existing businesses and to facilitate working capital-funded expansions.
The UIF has also taken further steps by setting aside R1 billion over the 2009-10 to 2013-14 medium-term period for schemes aimed at reintegrating unemployed UIF beneficiaries back into employment. The scheme involves participation by various Sector Education and Training Authorities, Setas, in reskilling the unemployed in critical scarce and soft skills.
The fund is also providing assistance to Productivity SA through allocation of funding to the social plan. For the 2010-11 financial year, R48 million has been committed towards the social plan. In the financial year 2011-12, we aim to save 20 000 jobs through the social plan interventions.
The Compensation Fund, which caters for the injured on duty, processed claims and paid compensation benefits in 2010-11 amounting to R2,1 billion. In terms of medical claims, the fund paid 186 563 medical accounts in 2010- 11 at an amount of R1,9 billion, compared to 135 829 accounts at R1,5 billion during the same period in 2009-10.
Revenue of R4,5 billion was raised in 2010-11. The increased capacity in debt collection yielded positive results as R431 million in debt has been recovered. The Compensation Fund's total investments increased by R3,2 billion; from R23,3 billion to R26,5 billion in the year under review.
The Compensation Fund is aiming to increase the number of registered employers in the current financial year in order to improve revenue collection through employer assessments.
To promote a return to work, develop skills and improve the functionality of injured and diseased employees, the fund has begun developing an integrated comprehensive policy framework for the rehabilitation, reintegration and return to work of its beneficiaries. This will require amending the Compensation for Occupational Injuries and Diseases Act, and the amendments are projected to be promulgated in 2014-15.
The implementation of the Compensation Fund turnaround strategy is at an advanced stage. This is aimed at improving claim turnaround time and bringing Compensation Fund services closer to the people through decentralisation and job creation.
In September 2010 the department launched the South African Decent Work Country Programme at the National Economic Development and Labour Council, Nedlac. Through this programme the ILO will work together with government, organised business, organised labour and the community constituencies to give support to initiatives aimed at promoting the Decent Work Agenda.
The speeding up of economic growth and transforming the economy to create decent work and sustainable livelihoods is the first priority of government for 2011 and also through to 2014. Decent work will feature strongly in all economic policies during the coming period. Despite the significant progress in changing our economy to benefit our people, unemployment, poverty and inequality remain serious challenges. Decent work is the foundation of the fight against poverty and inequality, and its promotion should be the cornerstone of all our efforts.
The last ANC national conference, held in 2007, resolved that the ANC-led government will make the creation of decent work opportunities and sustainable livelihoods the primary focus of our economy. Discussion of decent work, in fact, goes back quite a few years in the international community, and it is worth noting that at the 2005 World Summit of the UN General Assembly, heads of state and governments of more than 150 countries made a commitment to implement a far-reaching international agenda. They declared that -
... we strongly support fair globalisation and resolve to make the goals of full and productive employment and decent work for all, including women and young people, a central objective of our relevant national and international policies as well as our national development strategies, including poverty reduction strategies, as part of our efforts to achieve the Millennium Development Goals.
This commitment has led to the whole UN system recognising the Decent Work Agenda and to placing it at the centre of the relevant national and international policies and development strategies. So, the direction that we are now taking in South Africa is not new; in fact, it is overdue.
Decent work has been defined by the ILO as being productive work for women and men in conditions of freedom, equality, security and human dignity. Decent work involves opportunities for work that is productive and delivers a fair income; provides security in the workplace and social protection for workers and their families; offers better chances for personal and skills development; gives people freedom to express their concerns, to organise and to participate in decisions that affect their lives; and guarantees equal opportunities and equal treatment for all.
The Decent Work Agenda of the ILO is made up of four pillars. These are employment creation and enterprise development, social protection, standards and rights at work and governance and social dialogue. These four pillars are intended to work together in an integrated manner and to apply to different areas of policy, to policies directed at the workplace and the way in which people carry out their livelihoods.
What is important to realise about decent work is that it does not prescribe a one-size-fits-all approach. Decent work for Italy and Ethiopia may look very different to that for South Africa. Our employment creation strategies must speak to the realities of the South African economy and labour market.
Our priorities in the areas of social protection must address the gaps that we find here. The South African Constitution, the Labour Relations Act and the Basic Conditions of Employment Act provide a strong floor of rights and standards.
Equally, we have a very good framework in our legislation for governance and social dialogue, although we may need to find ways of strengthening our practise of social dialogue. In pursuing decent work in our context, it is our national priorities that must shape our response going forward. The framework agreement between the social partners on how to respond to the international economic crisis simply says, "By decent work we mean the need to increase the level of employment as well as to improve the quality of jobs."
Decent work is, therefore, a package deal, an integrated way of looking at work in our society in conditions of freedom, equity, security and human dignity. We already have some targets, the most important of which is the target of halving unemployment by 2014.
Let me now turn to the priorities of the Department of Labour over the next year. The department will, in the 2011-12 financial year, focus on the following strategic areas: reviewing and submitting to Parliament amendments to labour legislation, which includes the Basic Conditions of Employment Act, Employment Equity Act, Labour Relations Act and a new Employment Services Bill.
Our aim is to create a policy framework to promote decent work and a policy framework for the provision of public employment services, which will enable government to maintain a database of job seekers and job opportunities, as well as matching and placement of job seekers. The department will, during the 2011-12 financial year, also consult with stakeholders and, on conclusion, present the Bills to Parliament, the proposed amendments of which are before our social partners as we speak.
The Occupational Health and Safety Act, Act 85 of 1993, predates the Constitution of the Republic and requires updating in certain areas. The department intends to repeal this legislation and replace it with new occupational health and safety legislation to ensure a safe and healthy working environment and to protect workers against hazards associated with their work or use of machinery.
The Labour inspectorate will be strengthened to monitor and enforce compliance with legislation to ensure that decent work principles are adhered to and address vulnerability in the labour market. The department was allocated R60 million in the two outer years of the Medium-Term Expenditure Framework by National Treasury for the creation of additional inspectors' posts at specialist levels.
The department also aims to reduce inequality and discrimination in the labour market through effective compliance monitoring and enforcement of the Employment Equity Act, which is currently under review, and to improve access to social security services provided in terms of the Compensation Fund and Unemployment Insurance Fund, including reintegration of workers into the labour market.
These areas of activity will be our priority. On the one hand, they link directly to improving the policy framework that governs and regulates the labour market. To improve the regulatory framework is a key to laying the basis for greater equity and for reducing inequalities, on the one hand. On the other hand, the department's focus areas for 2011-12 will aim to reduce the decent work deficit through improved enforcement and efforts to ensure compliance with our labour laws.
Various branches and public entities within the department have outlined plans to contribute to creating jobs, saving jobs in identified distressed companies and sectors, and placing in excess of two million work seekers in jobs over the period 2011-12 through to 2013-14.
Interventions planned by the department involve training and reskilling of workers in order to give them the capacity to compete in the open economy. Funding to be provided through the Compensation Fund and Unemployment Insurance Fund will include a continued investment of R9 billion of the R26 billion portfolio in commercial and socially responsible investments by the Compensation Fund, and continued investment of R44 billion of the R52 billion portfolio in commercial and socially responsible investment by the Unemployment Insurance Fund.
The Unemployment Insurance Fund has set aside R1 billion over the 2009-10 to 2013-14 medium-term period for the schemes that are aimed at integrating unemployed UIF beneficiaries back into employment. The scheme is funded by the fund and involves participation by various Setas in reskilling the unemployed in critical scarce and soft skills.
In order to further assist in preventing retrenchments, the UIF has committed R1,2 billion towards the Training Layoff Scheme. This scheme is designed to provide support to companies in distress that intend to retrench employees. Productivity SA's social plan will be given R290 million in funding over the period 2011-12 to 2015-16. This is funding that will go towards providing assistance to companies in distress.
The public employment service branch of the department has identified a number of interventions aimed at creating and sustaining jobs. The highlights are as follows: The department aims to refer 450 000 workseekers for placement in jobs and other opportunities in 2011-2012, and in excess of two million workseekers will be referred for placement in opportunities over the period 2011-12 to 2015-16.
This will be accomplished through the job matching exercise in the Employment Services System of South Africa, Essa. Through the employer services functions, the department aims to provide assistance to 51 500 workers in distressed sectors over the period 2011-12 to 2015-16.
There are 151 000 people from designated groups who will be placed in training and income-generating opportunities over the period 2011-12 to 2015-16. The total targeted group comprises 10 000 youth, 15 000 women and 4 000 persons with disabilities.
The Sheltered Employment Factories, which fall under the public employment services branch, aim to increase orders for goods leading to the creation of jobs for 3 500 people with disabilities over the period 2011-12 to 2015- 16.
In addition, the Sheltered Employment Factories aim to accommodate more people with disabilities from disadvantaged communities, as they previously accommodated only a certain category of ex-combatants. About 3 200 learners will be recruited over the period 2011-12 to 2015-16 to participate in the Sheltered Employment Factories' centre of excellence with the view of training them as mentors and placing them in both the Sheltered Employment Factories and the open economy.
In addition to contributing to job creation during the 2011-12 financial year, the strategic plan of the department outlines a number of ways in which the department intends improving its efficiency and service delivery.
I will not list all of these, but examples include improvements in the time taken to finalise compensation claims, improvements in the processing of claims for unemployment insurance benefits, increased sale of products from the Sheltered Employment Factories, a campaign aimed at reducing exposure of workers to silica dust and eliminating the department's vacancy rate.
The department has employed a new director-general, whom I want to introduce formally - Mr Nkosinathi Nhleko - who has undertaken to eliminate the vacancy rate within this financial year.
We are also looking forward to hosting the 12th African regional meeting of the ILO during October 2011. This meeting will be attended by a number of heads of state from African countries as well as the Director-General of the ILO.
Chairperson, the department has been allocated R1,98 billion for the 2011- 12 financial year. This represents an 11% increase to the 2010 baseline. The bulk of the increase goes to the conditions of service improvements and to the budget of the Commission for Conciliation, Mediation and Arbitration, CCMA.
In closing, let us recall the words of former President Nelson Mandela, who called on all of us, in his first state of the nation address as President of South Africa, to regard labour as a resource and not a cost. As the economy begins to recover, and as we strive to make 2011 the year of job creation, we would be well advised to bear in mind that, in creating the many new jobs that government is committed to do, we cannot treat labour only as a cost factor.
We need to always remember that labour is a very special commodity. Workers, like all of us, are entitled to rights, to dignity in the workplace and to conditions of decent work.
Chairperson, allow me to congratulate all political parties and their supporters that participated in the recent local government elections for the wonderful manner in which they conducted themselves during the election campaign period and on election day.
I believe that, since it is now after the election, it is not going to be a campaign platform when you are debating this important Budget Vote. I also want to thank the department's officials for the support that they have given me, as well as the portfolio committee, under the leadership of Mr Nchabeleng, and for supporting us as the department.
Hon members of this House, I hereby put before you the budget of the Department of Labour, which I highly commend. I thank you. [Applause.]