Employment and Labour Budget: Committee Report

Meeting report

Adoption of minutes

 

The Minutes of the 2 and 3 of July 2019 were adopted without amendments.

Draft Report on Budget Vote 28: Employment and Labour

 

Mr Sibongiseni Ngcobo, Content Advisor, took Members through the Committee’s observations and recommendations in the Report.

Observations

 

Mr Ngcobo went through the Committee observations first. The Committee had made the following observations:

6.1 That the Department incurred irregular expenditure amounting to R257 657.79 and fruitless and wasteful expenditure amounting to R129 091.84. There was no unauthorised expenditure detected.

6.2 That a mismatch between available job opportunities and available skills was one of the drivers of unemployment.

6.3 That Thusong Services Centres closed too early, which made them inaccessible to some community members.

6.4. That the reconfiguration of the Department, to include Employment, might lead to the expansion of its mandate, which might strain its budget. This might put more strain on the entire budget of the Department especially the on the Inspection and Enforcement Services programme budget.

6.5 That the Occupational Health and Safety cases that require formal inquiries to be conducted got delayed because of court processes involved to the detriment of beneficiaries.

6.6 That attempts were made to register bogus trade unions so as to represent aggrieved employees at The Commission for Conciliation, Mediation and Arbitration (CCMA) proceedings at a fee.

6.7 That Productivity SA received R54.6 million for 2019/20 financial year while it was faced with a task of assisting struggling companies to turn-around so as avoid retrenchments.

Dr M Cardo (DA) on 6.4, referring to the reconfiguration of the Department, asked what the rationale was behind linking it to the Inspection and Enforcement Services. The expanded mandate of Employment would put more pressure on issues contained in paragraph 4, which dealt with labour policy and industrial relations. The focus on employment was related to how government could assist the private sector to create jobs and therefore it would have much more of a policy thrust and focus. Could the Content Advisor explain why the strained budget had been linked to the programme of Inspection and Enforcement services?

Mr L Ntshayisa (AIC) stated that since it was explicit that irregular expenditure was authorised, the Committee should put pressure on the Office of the Auditor Genera l(AG) and follow-up on the issue of authorisation of irregular expenditure.

The Chairperson asked that the Committee focus on the point Dr Cardo raised. The Committee was considering 6.4 and Mr Ntshayisa was told to hold on to his point.

Mr M Nontsele (ANC) advised that rather than seeking to displace what had been captured, that the Committee should add an additional explanation to observation 6.4. He also noted that what had been captured in the Report reflected the Committee’s discussion.

Mr M Bagraim (DA) expressed concern that all the observations left him underwhelmed. He suggested a change be made to the last sentence in observation 6.4 where ‘this might put a strain on the entire budget of the Department of Labour’ had to be added. The CCMA was completely underutilised, did not have enough money and was completely overburdened. The Inspection and Enforcement Services was a concern, but the entire Department would be put under pressure due to the expansion of its mandate.

Mr S Mdabe (ANC) agreed that the entire Department, not only the Inspection and Enforcement Services, would be overwhelmed by the inclusion of Employment. The issue of reskilling the existing workforce in relation to the Fourth Industrial Revolution also needed to be considered.

The Chairperson agreed that the entire Department would be put under pressure considering its new mandate and then addressed the point raised by Mr Ntshayisa.

Mr Ntshayisa remarked that pressure be put on the AG as those who authorised irregular expenditure should be charged. The AG should be encouraged to make use of its power. Irregular expenditure cannot be tolerated that Departments.

The Chairperson responded that Mr Ntshayisa park his point because it fell under recommendations and not observations.

Mr Bagraim remarked that what was observed in 6.1 had occurred in the Department before. He added that 6.2 which stated there was a mismatch between available job opportunities and available skills in the workforce, was a ‘real understatement of note’. Why does the Committee not indicate that the workforce is not qualified to take over the new jobs offered?

Categorising it as a mismatch made it seem like a small problem when South Africa was the worst in the world. The Committee needed to rewrite that particular sentence to state that there was a ‘radical mismatch between available job opportunities and available skills.’.

The Department of Education and Department of Labour needed to work together more carefully to ensure that the workforce would be ready for jobs in the Fourth Industrial Revolution.

Mr Ntshayisa stated that he wanted to clarify his understanding of the mismatch. There were jobs available but the people who searched for jobs had skills that were not relevant to the job.

Dr Cardo commented on the list of observations and said it was a mixed bag of observations. The observations should be a tiered list. For example, the list should start with the structural drivers of unemployment, which went far wider than those that were mentioned in 6.2 and then move on to general observations about the major challenges facing the Department of Labour. Lastly the major challenges facing the entities that the Department had oversight over had to be mentioned.

The Chairperson responded that the Committee had not received any entities that were able to present, because of time constraints.

Secondly, returning Members had an advantage as they had more insight than the newer Members. This meant that in this first meeting, the returning Members had to bear with the new Members as most of the Members were interacting with the Department of Labour and the report for the first time. The new Members would find their feet within the next quarter.

Mr N Hinana (DA) commented on observation 6.2. The Committee agreed that there were job opportunities available but that certain people did not have the necessary skills. That meant a mechanism needed to be designed to bridge the gap between job opportunities and the necessary skills for those jobs. The Committee had a responsibility to make a recommendation on to how to bridge the gap.

The Chairperson responded that observations were being dealt with and that when recommendations were being discussed the point raised by Mr Hinana would be discussed.

Mr Hinana responded that he had observed that jobs were available but that people were not working. He also observed the gap in between mentioned by Mr Hinana. When the Committee got to the recommendations section it needed to discuss the gap between job opportunities and the relevant skills.

Mr Nontsele raised concern with point 6.2 and said the mismatch was one of the drivers of unemployment, but to say it is the only major driver of unemployment was problematic. There were a number of other contributing factors to unemployment, including the contraction in the economy.

The reformulation of 6.2 should state that the mismatch was one of the major factors driving unemployment. The Committee needed to accept that there were other drivers including the collapse in various sectors, particularly the manufacturing and construction sectors, which faced severe decline over the past quarter.

The Chairperson noted that the Committee had two formulations. There needed to be a reconciliation between the issues raised by Mr Bagraim and Mr Nontsele.

Mr Hinana agreed with Mr Nontsele’s view that the paragraph did omit other major reasons that contributed to unemployment. It was not necessary to list the other major drivers of unemployment because the Committee was aware of them. The Report was just stating that the mismatch was one of many reasons driving unemployment.

The Chairperson confirmed with the Committee that the mismatch was one of the driving factors of unemployment.

Ms H Jordaan (FF+) commented that one of the observations was that the Skills Education Training Authorities(SETA) has failed. It should also be recommended that SETA was considered and that it received the necessary attention.

The Chairperson noted that SETA was not in the scope of Labour and Employment but rather under the scope of Higher Education and Training, which was never mentioned in the report. The Committee needed to discuss whether it was relevant for SETA to be under Higher Education and Training or Labour at a later time.

Mr Hinana on 6.5 raised the issue of the Occupational Health and Safety cases being delayed. The Committee needed to make a recommendation to introduce a mechanism to speed up the process. A person who was injured or sick takes a very long time to recover and has a family to look after. The cases took long in court, because of a huge back log, therefore a recommendation needed to be made by the Committee to speed up the process.

The Chairperson made it clear that the focus should be on observations only and that recommendations would only be dealt with later. She asked Mr Hinana to park his point until the Committee reached the recommendations section of the meeting.

Mr Hinana said the Chairperson needed to listen carefully to what the Members were saying.

The Chairperson responded by asking Mr Hinana to be fair as she was trying to assist everybody to the best of her ability. She said that Mr Hinana was mentioning recommendations and that the Committee had not moved on to that section yet.

Mr Hinana replied that he was not making any recommendations. He observed that a person who was sick or who was injured, had an adverse effect on the entire family. When the Committee got to the recommendations it had to look at the measures that needed to be put into place. He then reaffirmed that he had not yet made any specific recommendation but that a recommendation was needed to speed up the process.

Mr Nontsele commented that the Occupational Health and Safety Act did provide cover for the retention of salary for the person who was injured, for the duration that he or she remained incapacitated. When a person was permanently disabled and he or she had to wait for an investigation, which took far too long then the employer might, by that time, have been relieved from its obligation to pay for medical care. Compensation, in such cases, took much longer.

He asked how the Committee could mitigate the period of the compensation period which did not fall under observations as it fell under recommendations. Point 7.5 dealt with the issue of Occupational Health and Safety Cases whether it dealt with the issue sufficiently was a matter of debate, but it was to be dealt with under recommendations.

The Chairperson asked if there were any more comments or observations? There were none and Committee proceeded onto the recommendations section.

Recommendations

 

Mr Ngcobo took the Committee through the recommendations. In view of observations made, the Committee recommended that the Minister of Employment and Labour considered the following:

7.1 Putting measures in place to ensure that irregular, and fruitless and wasteful expenditure are not incurred, and ensuring that the recommendations of the Auditor-General are taken into consideration. recommended that measures were put into place to ensure that irregular, and fruitless and wasteful expenditure were not incurred.

7.2 Establishing partnerships between the Department of Employment and Labour and the Department of Higher Education, Science and Technology, as well as other government Departments to ensure that relevant skills are provided.

7.3 Ensuring that all the Department’s Centres such as Thusong are accessible to the majority of the communities.

7.4 Increasing the budget of the Department to accommodate the possible expansion of its mandate.

7.5 Ensuring that the Department work with the Department of Justice and Correctional Services to address delays in Occupational Health and Safety cases.

7.6 Strengthening the office of the Registrar of Labour Relations to ensure that it discharges its mandate effectively.

7.7 Funding Productivity SA appropriately so that it can perform its duties.

Mr Hinana on 7.1, commented that the Committee introduce and enforce consequence management. Somebody needed to take responsibility if there were irregular expenditures occurred in the Department and irregular spending needed to be prevented from happening in the future.

Mr Nontsele said that the AG had to be encouraged to use its power to deal with issues relating to irregular, fruitless and wasteful expenditure needed to be encouraged. The powers that the AG had needed to be fully expressed with regards to enforcing audit outcomes and dealing with the issues of irregular, fruitless and wasteful expenditure.

Dr Cardo suggested the recommendations place focus on the employment and job creation aspect of the now expanded portfolio. He recommended a trans-departmental approach to collaboration with other government departments. There was mention in 7.5 of the need of the Department to work with the Department of Justice and Correctional Services on occupational health and safety.

One of the things heard from the Minister when he addressed the Committee on Wednesday, was the need to collaborate with the likes of the Department of Small Business Development because job creation was to come from entrepreneurs and from small, medium and micro enterprises. It would be a good idea for the Committee to recommend that cooperation takes place between government departments to address issues of mutual concern. Small Business Development should be included so that the potential of entrepreneurs and small businesses, to create jobs, could be unlocked.

The Chairperson clarified this was an additional and separate recommendation as 7.5 dealt with the Departments of Justice and Correctional Services exclusively.

Dr Cardo stated that it was an additional recommendation.

Mr Bagraim on 7.3 commented that the entire Department needed to be accessible to communities and not just the Thusong Centres. It was observed across the board that these Centres were not accessible to communities. There are many complainants about Unemployment Insurance Fund (UIF), Worker’s Compensation Fund and the CCMA as people did not have access to these facilities. Recommendation 7.3 therefore had to include ensuring that all the Department Centres were accessible to the majority of communities.

On point 7.4, that the Inspection and Enforcement Services be increased he said it was not only that the Inspection and Enforcement Services budget that needed to be increased. The CCMA needed a bigger budget as well.

On 7.6, strengthening the office of the Registrar to ensure it discharged its mandate, he recommended going one step further so that it became independent from interference from the Ministry.

He then raised concern over 7.7, the funding of Productivity SA appropriately and said the Committee should be including that it the recommendations and in the Report. He had a problem with Productivity SA because it was being sent a lot of money and ‘not seeing much results at all’. He said that it was not worth the money it was being sent. Money would be better served by giving it to the CCMA or Inspection and Enforcement Services.

Mr Nontsele said that the principle established when dealing with 6.4 was that it should seek to be all-encompassing in dealing with all the programmes of the Department. He said that in line with the expanded mandate that the Department should come back and give a presentation to the Portfolio Committee as to how it intended to fulfil its obligations as stated through its additional mandate. When 7.4 was reformulated these two additional aspects had to be captured.

The Chairperson responded to Mr Bagraim by stating that there was no doubt that the Committee intended for the Registrar to be independent.

On point 7.7, she said that Mr Bagraim should give the Committee more time to understand Productivity SA. Adding Productivity SA to the recommendations enabled the Committee to ask the Department and Minister to explain Productivity SA. The Committee could not remove 7.7 from the recommendations on the basis of Mr Bagraim’s previous observations and past experience. It had to be on the basis of what the entire Committee had observed and been exposed to.

The Chairperson asked Mr Bagraim to allow the new Members to be exposed to all of those things so that if a certain matter was agreed upon, it was agreed upon the basis of all of the Members understanding and having experience with that particular entity in the Department of Employment and Labour.

Mr Bagraim replied that he would not argue with the Chairperson, but he would stand by his recommendation. Both the UIF and Worker’s Compensation Fund had treated the South African public badly and over the last twenty years there had been problems with both UIF and Worker’s Compensation Fund.

The Department said it was in the process of changing its computer system again. Every year promises were made, by these two entities, that they would improve but there had been no improvements. He said that he received complaints, from the public, about the two entities numerous times a day.

A recommendation should be that the UIF and Worker’s Compensation Fund sort out their systems to make their systems efficient. Too many people were injured and never received their money.

The second recommendation was to enforce the legislation of paternity leave. The paternity leave legislation had received great fanfare and media attention, and it was passed in both Houses of Parliament and signed by the President, but it was still not enforced by the Department. The Department had been ‘absolutely reckless’ and had not put its paperwork together.

The additional recommendation would be that when the Houses of Parliament passed legislation that the Department had its house in order.

Mr Mdabe remarked on recommendation 7.3. The recommendation emanated from observation 6.3, as per the discussion. He did not think it would be proper to add recommendations which were not presented to the Committee, or not contained within the Report. The entity of the UIF had not made a presentation to the Committee on its functioning, its efficiency, effectiveness, or the challenges that they had. Therefore, it would be a grave mistake to make recommendations based on matters not contained in the Report.

The Chairperson responded that the issues Mr Bagraim raised had not been presented or discussed by the Department during its presentation. As such it would be unfair to put forward a recommendation that the entire Committee was not informed on.

She said she would put forward a proposal that straight after the Budget Vote, on 10 July 2019, the Committee would have another session with the Department. The various issues, raised by Mr Bagraim, that were not contained in the Report would be discussed and debated. Those issues fell outside the scope of the current meeting and would be discussed on the 10th.

Mr Bagraim remarked that he did not approve of the Report. He understood the constraints of the new Committee and that many people did know about the many problems that existed, within the UIF and Worker’s Compensation and CCMA, and respected that but still could support and agree with the Report. He noted that many of the new Members were not aware of the ‘failures within the Department’ but also reaffirmed that he could not agree with the Report being passed and adopted in the Parliament.

The Chairperson responded that Mr Bagraim should not assume that the Committee was unaware of the challenges facing the Department and its various entities. She said that the Committee had not engaged the Department on the issues that he had raised yet. The Committee noted the issues and concerns Mr Bagraim raised and would debate on them the 10th.

Mr Nontsele raised concern that the issues, relating to the Worker’s Compensation Fund and CCMA, had not been raised during that presentation. Entities of the Department needed to present themselves to the Committee first before recommendations were made. It would not be fair for the Committee to make recommendations before the relevant entities of the Department were allowed to present for themselves.

Adoption of the Report

The Chairperson asked for a formal mover to adopt the report with amendments.

Ms NP Nkabane (ANC) moved to adopt the report with amendments and was seconded by Mr Mdabe.

Mr Bagraim stated that for the record that he did not approve the Report.

The Chairperson raised the issue of certain Members having more experience in the Committee. The Chairperson noted to the new Members, that they had the right to disagree, agree and raise issues. She thanked the Members for attending the meeting and reminded all Members to prepare for an upcoming Budget Vote on the 10th of July in the Old Assembly Wing.

Mr Bagraim thanked the Chairperson for showing tolerance and patience. He respected the Chairperson enormously and thanked the support staff for their work.

The meeting was adjourned.