DEL preliminary assessment of 2019/20 annual report; with Deputy Minister

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Employment and Labour

21 October 2020
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

Tabled Committee Reports

The Department of Employment and Labour (DEL) briefed the Committee on the performance outcome of three of its programmes -- the inspection and enforcement services, the public employment services and the labour policy and industrial relations.

The Department’s presentation covered issues such as the challenges encountered in dealing with misconduct cases; consequence management; the number of workplaces inspected and areas of non-compliance where actions/interventions had been implemented; the impact of the Covid-19 pandemic and the anticipated challenges due to poor economic conditions and its corresponding mitigation plans; and a summary of the DEL’s financial performance.

Members of the Committee suggested that some of the Department’s good results were the result of setting targets that were too low, although the DEL countered they had been realistically based on its capacity and resources. The Committee also discussed the employment prospects of candidates with criminal records; issues about employers who were underpaying their employees; and the long-awaited report of the national minimum wage commission.
 

Meeting report

Opening Remarks

The Chairperson said that the focus of the meeting would be on the third and fourth quarter presentation which had been circulated to Members between two and three days ago. After this presentation, they would do a preliminary assessment of the Department of Employment and Labour (DEL) from quarter one until quarter four.  

Remarks by the Deputy Minister

Ms Boitumelo Moloi, Deputy Minister of Employment and Labour, said that the presentation by the DEL would give a summary of the Auditor-General's (AG’s) report and the Annual Report itself. As the Committee knew, they had committed themselves to achieving a clean audit in the current financial year after four years of unqualified audit review findings. Little did they realise that there would be a pandemic disruption which would severely impact on the plans of the DEL and result in the shifting of all resources. To achieve a clean audit did not necessarily mean producing credible and reliable financial statements that were free of financial misstatements. It meant the financial reports must be useful on measured performance. The reports must be reliable and aligned to predetermined objectives in the Annual Performance Plan (APP).

She said that the COVID-19 pandemic disruptions had had a major impact on the quarters 3 and 4 results. The DEL presentation would highlight the critical focus areas of the strategic plans and reflect on how the targets were affected during these periods and how other targets were achieved. It was rare to commend to the officials, as one often did not find anything commendable with their work, but she thought it was fitting that the DEL officials, under the capable leadership of the Director General (DG), Mr Thobile Lamati, should be commended. Even under the extreme and unanticipated pressures brought about by COVID-19, the team had managed to maintain the same audit outcomes which had been achieved in the previous year.

They were still working on improving the lives of people under the prevailing circumstances. They needed to remain focused and strong, as the worst of the COVID-19 was behind them. One could not expect to be too demanding when there was anxiety and panic during these quarters. However, they should thank God for his mercies and pulling them through during these difficult times.

DEL presentation

Mr Thobile, Lamati, Director-General, said that the presentation document would be shared as the presentation was made. Mr Sam Morotoba, Deputy Director-General (DDG): Public Employment Services, DEL, would make the presentation.

Mr Morotoba said that he was going to run through the presentation concurrently with the slides already provided. He said that he would skip slide 1 to 14 because they just gave a background. Slide 14 gave an indication of the overall performance for quarter 4. Slide 16 indicated the performance for each programme. Slide 17 provided a summary of the performance from quarter 1 to quarter 4. Slide 19 showed the Inspection and Enforcement Services (IES) for quarter 4, and the results had been distinguished according to provinces. Where there was more than one labour centre in each province, such as in Gauteng, the results of all the labour centres had been consolidated at the provincial level. On slide 20, one would notice that Public Employment Services (PES) per provinces was generally good, with a few exceptions, such as KwaZulu-Natal and Mpumalanga in quarter 4. From slide 24, the indication of the performance per programme was given.

Regarding issues of consequence management, slide 30 showed the number of misconduct cases that were reported during the financial year, slide 31 gave a provincial breakdown of such reported cases, while slide 32 showed the number and types of misconduct cases reported. Other slides would be skipped and hopefully discussed later if questions were asked by the Members.

Slide 34 showed a list of challenges encountered when processing the misconduct cases, such as depending on external sources to conduct hearings, delays caused by the national lockdown and so on. Slide 37 showed the summary of the overall performance. In summary, the annual target had been 220 692 inspections, and 228 002 inspections had been conducted, which constituted 103% even though some provinces had performed poorly.

Slides 41 and 42 showed areas of non-compliance and actions/interventions which had been implemented. In summary, slide 43 showed that the annual target was 1 640 for case re-assessments, and 1 007 had actually been conducted, which constituted 61.4% of the desired result. The slide also provided a breakdown for each province. Slide 44 showed that 166 368 workplaces were inspected against a target of 167 160, which constituted 99% for measuring compliance against the Basic Conditions of Employment Act (BCEA). Slide 44 also showed the results per province. Slide 45 showed the amounts recovered in each sector from quarter 1 to quarter 4 were there were non-compliance cases, particularly regarding the national minimum wage, amongst other things. Slide 47 showed the money that was recovered in each sector for the benefit of workers who had not been properly paid. The recovered money was paid to the relevant workers. Slide 48 showed that 4 337 cases were found to be non-compliant with the BCEA, with four sectors listed in which non-compliance was prevalent.

On slide 51, the employment audit services were shown, indicating that 14 539 procedural audits were conducted against a target of 15 576, which constituted 93%. 13 079 (89.0%) of those employers audited were found to be compliant, and the 1 460 (10.0%) found to be non-compliant were all issued with enforcement notices to comply within 14 days. The outcome for each province was given in this slide.

Slide 52 showed the employers’ payrolls that were audited. A total of 5 307 payroll audits were conducted against a target of 1 680, which constituted 315.9%. 4 253 (80.1%) of the employers audited were classified as compliant, and 1 054 were non-compliant, and were all issued with notices to comply within 14 days. The outcome for each province was given in this slide.

Slide 55 showed the employers’ payrolls audited in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA). A total of 9 243 payroll audits were conducted against a target of 7 740, which constituted a 119.4% performance level. 8 144 (88.1%) of employers audited were classified as compliant, and 1 099 were non-compliant and issued with notices to comply within 14 days. The outcome for each province was given in this slide.

Slide 56 showed the number of prosecutions under each province and the applicable laws. Slide 58 gave a sense of the sectoral compliance. Slides 66 and 67 gave the number of incidents versus those finalised for the period – pegged at 84% for the year, leading to the target being achieved.

Slide 70 showed the anticipated challenges due to poor economic conditions and the corresponding mitigation plans. Slides 72 to 79 show the overall results of PES for each province. Slide 80 showed the provincial break downs in the graph. Overall results were as follows:

  • Opportunity rate against work seekers registered was 60%.
  • Placement rate against work seekers registered was 24%.
  • Placement rate against registered opportunities was 40%.

The Department’s aim was to increase the placement rates even if the final decision did not remain with the DEL, as it ultimately remained with the employer. Slides 82 to 84 captured the contingencies plans on the established outcomes.

From slide 85 -- Programme 4: Labour Policy and Industrial Relations (LP&IR) -- one would notice that the review of the National Minimum Wage had not been achieved as anticipated by 1 January 2020 as a result of delays from third parties (the National Minimum Wage Commission). Slide 86s to 90 provided the results that had been achieved.

On slide 91, the number of research services providers was not achieved, as the time it took to complete the evaluation and the data collection was underestimated. Slide 92 showed the challenges and the mitigating/contingency measures implemented. Slide 96 gave a summary of the performance per programme. From slide 97, the budget information was indicated.

He intended to hand over this section of the presentation to Mr Bheki Maduna, the Chief Financial Officer, but he was struggling to connect and therefore Mr Morotoba carried on with the presentation.

From slide 97 to 99, the breakdown of the financial information was given. From slide 100, the budget of the DEL for the 2020/2021 financial year was shown. The rest of the slides, from 101 to 116, included the employee racial profile in the factories in each province, the products produced and the procurements of raw material, invoices which had been processed, and the PES budget for the 2019/2020 financial year.

Discussion

Mr N Hinana (DA) referred to slide 16, and said that one might be deceived by a performance outcome that was 100% when the targets were low. Why were the targets low? On slide 30, what was the DEL trying to achieve by categorising the perpetrators of misconduct according to gender and race? Should the position of the people implicated not rather be featured, to show at what occupational position the perpetrator of the misconduct was? Regarding slide 34 on the challenges, particularly about fraud, the Committee was not told how many of those were completed, the value of the money involved and how restitution would occur.

Ms C Mkhonto (EFF) referred to the provinces that were underperforming, such as Gauteng, Mpumalanga and KwaZulu-Natal, and asked if these provinces were adequately staffed.

Ms A Zuma (ANC) said that she wanted to get clarity from the DEL regarding the employers that owed money to their employees and still had not paid them. Were there any measures or follow-ups undertaken by the DEL regarding these employers? How was the DEL going to assist the provinces that did not perform well?

Ms N Ntlangwini (EFF) referred to the slide that noted the misconduct cases that were pending due to various reasons, but highlighting the national lockdown as a factor for the delay. She said that these cases would need to be addressed, notwithstanding the lockdown, as an example could be seen by the court system which was using online platforms to continue their work. What steps had the DEL put in place to ensure that these cases were resolved on an urgent basis?

The Chairperson said that her question was on the placement of new employees. She came across young people who were frustrated at not being employed because of old criminal charges against them, amongst other things. What was the DEL doing about this? Her understanding was that there was a commission on the national minimum wage which still needed to give a report on it. The Committee had been planning to get the commission to provide it with feedback, but such plans had been disrupted by COVID-19. Had the DEL been in touch with this commission regarding the report on the national minimum wage?

DEL’s response

Mr Lamati referred to the question about setting low targets, and said this was not a true reflection. When targets were set, they were made proportional to the financial and human resources available. In the past, there had been concern regarding their inability to achieve targets that they set for themselves. Now that they were achieving realistic targets, there was a perception that they had set the targets low, which was not the case. He said that on a yearly basis, once the target was achieved, they increased the targets while considering the available financial and human resources.

Regarding the reason for categorising the perpetrators of misconduct by race and gender, it showed the challenges experienced by each group. When they put together interventions, they considered everyone's social background. The position of each perpetrator was available and could be provided upon request.

On the question about fraud and restitution of the funds, there was a forensic investigation under way. The amount of fraud amounted to just over R2 million in terms of the preliminary report from the forensic investigation. Implicated persons were still to be investigated, and the restitution effects would be made available once the investigations were completed.

The question regarding provinces that did not perform well did not have to do with financial and human resources. The reasons were poor planning and the non-monitoring of the targets that were set in these provinces. Several of the labour centres in these regions were not doing what they needed to do. The DEL had taken steps to make sure that the underperformance was addressed and provincial heads held accountable for underperformance moving forward. They also do quarterly assessments as the DEL, and provinces were expected to develop steps to address underperformance, The DEL provides them with the necessary financial resources to address the issues concerned.

On the question about following up on employers that do not pay employees, in the report they had stated the money they had received on behalf of the employees. If not, they take the matters to court. Regarding resolving misconduct cases, they were moving swiftly to make sure that pending cases were resolved.

On the employment or placement of new employees, there were a variety of reasons why young people were not employed. However, criminal record issues were most certainly an issue, and maybe moving forward they should work with the Department of Justice.

The lockdown had contributed to the delay in respect of the National Minimum Wage Commission report.

Ms Bahumi Matebesi, Deputy Director-General: Corporate Services, DEL, said she would like to add to the response about what could be done to assist young people with criminal records to secure employment. She said that from practical experience, the onus was on the applicant to disclose a criminal record. Then the Department would assess the criminal record against the employment opportunity.

The Chairperson said that applicants should be encouraged to disclose criminal records, and they must not be discriminated against when they should be getting employment, as the Committee was responsible for ensuring that all people were able live above the poverty line.

Mr M Nontsele (ANC) said that the issue of criminal records preventing young people from securing employment was serious, and should not be taken lightly. To illustrate the point, criminal records had been used to discriminate against persons that should be appointed at a senior level. Regarding slide 35 on the outsourcing of fraud investigations, she asked how this had been undertaken and whether the reasons for outsourcing were monetary or otherwise.

Mr Lamati said that the DEL did not have a forensic investigation capacity in the Department, so they had to outsource such services to investigate any fraud cases. The reasons for outsourcing were not monetary, but that of capacity. Regarding criminal record disclosures in interviews, there was generally no need to disclose such information, as such disclosure put such persons at risk of being discriminated against.   

A member of the DEL’s inspectorate said that she wanted to add a comment regarding the under-performance issues. The factor of staff movement, structured study leave and maternity leave had also influenced the results. Staffing and capacity had also been a factor in under-performing provinces. Regarding employers that withheld money from employees, the DEL tried to recover the money through the issuance of notices which gave employers 15 days to pay their employees. More often then not, they were able to recover employees' money from the employers.

The Chairperson said the issue of criminal records preventing people from securing employment or advancing within their employment should be considered highly and researched, and then efforts must be made to collaborate with other departments, such as that of justice, to find a workable solution.

Deputy Minister Moloi referred to criminal records plaguing prospective employees, and said that in terms of the Criminal Procedure Act, a person with a criminal record must apply to remove the record if the conviction had occurred more than a decade ago or even less, as the case may be.

In closing, she said that as a Ministry, they committed to providing written responses where Members had fallen short of responses, and where queries arose from time to time. She said that the DEL had requested that queries should be sent to their office from time to time so that a resolution could be sought on an urgent basis.

The Chairperson thanked the DEL delegate and excused them, but said Members should not log off yet.

She said that the presentation was now complete, and that the Members could now commence with a preliminary assessment. To avoid producing sub-standard work, did the Members agree to meet on another day to discuss the results of the presentation? She recommended a suitable date to discuss the results of the presentation in the future. She added that a quarter 3 and 4 report would be adopted at this future discussion.

All Members agreed with the Chairperson’s recommendation.

The meeting was adjourned.

 

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