Commission Conciliation, Mediation Arbitration, Nedlac, Productivity SA on their 2014 Strategic Plans

Meeting report

Commission for Conciliation, Mediation and Arbitration (CCMA) 2014 Strategic Plan Presentation
Mr Daniel Dube, Chairperson, Commission for Conciliation, Mediation and Arbitration outlined the vision and mission of the Commission (CCMA), noting that it aimed to be the premium dispute prevention, management and dispute resolution organisation, trusted by all social partners, in South Africa. It aimed to promote social justice and economic development in the work sector.

Ms Nerine Kahn, Director, Commission for Conciliation, Mediation and Arbitration, said that the ‘Siyphambili’ strategy and performance management of the CCMA was guided by its vision, mission and objectives. The current strategy ensured business continuity and CCMA had just entered the last year of this five-year plan. Its strategy also determined how funds and resources were allocated.

Ms Kahn highlighted the scorecards used, and said that the first target was always to enrich the role of the CCMA in the labour market, and it was doing well on that score.

Ms Ntombi Boikhutso, Chief Financial Officer, CCMA, said that the budgeted income for the year 2014/2015 came from a grant of R687 million. It was anticipated that R34 million would be earned as interest on monies invested in Money Market. R6.07 million was other income from other services rendered to the general public, reaching a total projected income of R728 million.

Ms Boikhutso said the capital expenditure (Capex) was shown in two portions, for normal operations and projects operation, and this was compared to the total income. The normal operations Capex amounted to R11 million and the projects operation Capex amounted to R36 million. The projects embarked on related to the Labour Law amendments, the rollout of a web-enabled Case Management System, establishment of the Employment Security Unit and opening of new offices in Welkom and Vaal triangle area. Additional funding was applied for to the National Treasury via the Ministry of Labour.

Ms Boikhutso described the split in budget as follows:
- 40% for case disbursement (core operations)
- 32% for salaries and benefits
- 27% reinvestment to develop operations
- 1% as a subsidy paid to bargaining councils.

There was about a 15% increase in budget over the three financial years from 2013 to 2015, due to additional funding secured for the projects.

Ms Kahn reiterated that one of the CCMA’s aims was the promotion of employment security. As a result of the increase in the number of retrenchments over the last year, commissioners had been trained to assist employers to adhere to legislation when retrenching. The CCMA also established a job security unit, as well as participated in the process of amending relevant portions of the employment legislation and assisted with policy development.

CCMA was also involved in collective bargaining, and verification exercises, as well as facilitating task teams- for example in the glass sector which was in crisis. It was working with the Department of Trade and Industry (dti) and the Economic Development Department (EDD) to promote labour market peace and stability.

Ms Kahn reported that the CCMA had partnered with five successful public universities (Nelson Mandela Metropolitan University, Stellenbosch University, the University of the Witwatersrand, the University of the Free State, and University of the Western Cape) in developing and delivering a Labour Dispute Resolution Practice qualification. University of KwaZulu Natal was accepted as another participant on this project at the beginning of 2014.  This ground breaking initiative would significantly contribute towards building skills and capacity in the labour relations practice industry, and benefit all role players in that industry.   

CCMA had 21 offices nationally and had linked its case management system with the Department of Labour (DOL), making it accessible to more people. In 2013/2014 the case load was 170 673. There had been no late awards by commissioners in this year, so operations efficiency was high, compared to 47% of late awards in 2011. The national settlement rate of disputes stood at 75%, which the CCMA was proud to report. Ms Kahn said that most cases received by the CCMA related to unfair dismissals and the main industries included the business sector, domestic sector and mining.

CCMA focused on promoting skills development, employment equity and women in Commissioner and leadership positions. It had 46% women in the workforce, of whom 69% were African.

Ms Kahn outlined some of the challenges. CCMA’s role, since 2011, had increasingly focused on verification exercises and pronouncing on representivity; There had been an increase in inter-union rivalry, unprotected strikes and the coalescing of workplace and community demands; The CCMA had responded with dynamic flexibility and had decisively and responsibly intervened in workplace and sector conflicts to prevent further escalation; The CCMA had supported social partners in their efforts to strengthen collective bargaining and related systems of social dialogue

She noted the key causes of labour dispute, which included:

- Societal fault lines arising through inequality, poverty and unemployment
- impatience in the streets and on factory floor
- inadequate awareness of internal and external labour market dynamics
- ineffective management of industrial relations
- absence of meaningful engagement
- absence of trust across in the labour market
- losing confidence in the mechanisms of peace in the labour market
- a fractious labour market
- squeeze of profit making
- adherence to inefficient bargaining processes.

Discussion
The Chairperson thanked CCMA for the presentation giving a back ground of what CCMA does and opened the floor to members to ask questions.

Mr I Ollis (DA) noted the reference to the Essential Services Committee in the organisational structure. He cited the media coverage of the Eskom situation and noted that about 9 000 members of the NUMSA union, which was striking, were working at Eskom, which provided essential services. He noted that not all workers would be classed as “essential workers” and asked CCMA to elaborate on how the distinctions were made. Mr Ollis said that Ms Khan was directly responsible for the secretariat function of this Essential Services Committee, and must ensure that it operated correctly. Employers would set up “essential services” using a “golden thread principle”. The task team and union representatives had to sit down and look at what was essential to keep work and the business going. He cited the example of a hospital, where the doorman and receptionist would be not be essential, but doctors and nurses were. At Eskom, some workers would similarly be essential.

Mr Ollis asked what the case disbursements of 40% comprised.

Ms Boikhutso said that the 40% case disbursements were made up mainly of commissioner fees, travelling costs for the commissioners, accommodation and costs of interpreters.

Mr Ollis asked why the glass sector was “near collapse”.

Mr Afzal Soobedaar, National Senior Commissioner: Mediation and Collective Bargaining, CCMA, said CCMA was facilitating industry talks between the glass employers, the Glass Association and the three unions, and this had been ongoing since the previous year.  The local industry competed with imported glass, plastic and paper. Issues included trade and tariff relief, cost of energy, competitiveness and representation. CCMA had meetings with the parties and the Department of Trade and Industry (dti). He clarified that although the sector was not “near collapse” it was going through a tough period

Mr Ollis asked what the CCMA meant by “inefficient labour practices”.

Mr Soobedaar said that the manner in which the CCMA bargained was one of the key challenges facing collective bargaining. Since 1994 the CCMA had been bargaining in the same way. Unions would come in asking for the highest percentage and the employer would in turn offer the lowest percentage, and this was described as “position-based bargaining”. “Interest based bargaining”, using a different approach, resulted in more amicable solutions.

Mr Ollis noted that the Minister of Mineral Resources had said, during the platinum strike, that the CCMA had not done a good job. He wondered if  CCMA was capacitated to deal with this kind of matter, and whether the CCMA felt that its way of mediating in these massive strikes was fair criticism.

Ms Kahn responded that the answer was not a simple yes or no, but the CCMA was set up to deal with work disputes involving the employer and employee, and that the collective bargaining was a key challenge.

Mr D America (DA) noted that the budget for 2014/2015 showed an income classification called “other”, and asked where this came from; its source might be viewed as compromising the independence of the CCMA.

Ms Boikhutso responded that “other” income had two components one of which was training. Universities approached the CCMA to render labour related services, which were done on a cost-recovery basis.

Mr America asked who needed to initiate the CCMA’s intervention for the job saving unit, and whether CCMA waited for approaches from employers or was proactive.

Ms Kahn responded that whilst it was common that Unions usually approached the CCMA, it also happened that employers approached the CCMA seeking advice on how to save jobs. Traditionally many of these processes had happened during the retrenchment process, but with the greater involvement of dti and Productivity SA, depending on the industry where the retrenchments happened, more assistance was given.

Mr America noted the CCMA’s objectives for collective bargaining processes and asked it to elaborate on the process because the success rate for settlements was low. He asked how the CCMA could help the bargaining councils.

Mr Soobedaar said the collective bargaining process involved the CCMA analysing several aspects, including what was done rightly or wrongly, and where it was possible to improve.

Mr America wanted to know whether the training provided to commissioners was purely internal, or was over and above training at the partnering universities.

Ms Kahn responded that the long term vision would be to have commissioner training done by the universities, as the CCMA could not issue certificates, and the training was over and above the internal training offered by the CCMA.

Ms F Loliwe (ANC) wanted to know the extent of CCMA’s role in labour peace, more detail n the stakeholder training and the rate of review for arbitration awards issued by the CCMA.

Mr Cameron Morajane, National Senior Commissioner: Legal, CCMA responded that the rate was at about 10% of case load; between 1 April 2013 and 31 May 2014 CCMA had processed about 221 reviews. It was practically impossible for the CCMA to completely eliminate reviews. The decision to review was a decision of the parties, and it was not only based on the performance of the commissioners. Some parties reviewed the rewards in order to delay the case, thus affecting vulnerable others, or reviewed in order to create new law.  The CCMA had developed an award quality index in the regions, through teams whose sole function was to ensure that all issues met the quality standards set by the CCMA.

Ms Loliwe asked for a breakdown on the equity statistics.

Ms Kahn said these figures were in the CCMA’s Annual Report, which she would send through by the following Monday.

Ms Loliwe asked who the beneficiaries were of the 1% paid as a subsidy.

Ms Boikhutso said the subsidy was paid to the bargaining councils that were accredited to perform dispute resolution functions, which was done by the sector bargaining councils.

The Chairperson asked if the subsidy was 1% of total grant, how often it was given, and how the CCMA accounted for it.

Ms Kahn answered that in addition to the CCMA, there were bargaining councils set by stakeholders for the interest of their sector, who dealt with dispute resolution, medical aid issues and other issues. They applied to the CCMA for accreditation for dispute resolution processes, and if they were accredited, that council would have to pay the CCMA for party to party cases. However, for non party-to-party cases, the CCMA would pay the councils, monthly, based on the number of cases heard and whether they had been concluded or not.

Mr H Nkoana (ANC) wanted to find out the performance of the CCMA in creating labour stability and peace, noting that this was a core function of the CCMA.

Mr Soobedaar responded by giving an example of the private security sector. In 2006 about 74 people lost their lives during actions, but the union had not had a strike since then, because the CCMA had worked with the parties and established the bargaining council, through which the CCMA negotiated successfully and peacefully with employers in 2009 and 2010

Mr Nkoana pointed out that there were always strikes and labour disputes, and this indicated that the work was not always effective. He asked what CCMA intended to do. He noted that usually CCMA was involved at the end, but wondered whether, at that time, it was able to give the necessary assistance or not.

Mr Soobedaar used the platinum strike as an example. CCMA had issued a certificate of unresolved dispute, and the strike began. The CCMA could only intervene after that with the consent of both parties. It was difficult for CCMA to intervene early on because the unions usually disagreed, and when it did intervene later, it was usually when the employer rejected the offer. In  95% of the cases where the CCMA had requested to intervene, the parties to the dispute had agreed.

Mr Nkoana wanted to find out how many offices the CCMA had, and how accessible they were. Noting that he had now seen that there were 21 offices, he asked if this was enough, given the intensive labour in the country.

Mr Nkoana stated that the CCMA had said that there was an increase in inter-union rivalry, and asked how it would deal with this. Finally, he noted that the underlying causes slide had spoken of labour brokering and wondered how this would be tacked, as the CCMA must not lose focus of its mandate.

Ms H van Schalkwyk (DA) raised concerns on the employment equity figures, particularly the low percentage on women and said there was no indication of the number of people with disabilities, or the number of vacancies.

Ms van Schalkwyk asked how the staff were benefiting from training partnerships with universities.

Ms van Schalkwyk asked if the CCMA had received clean audits.

Ms Boikhutso responded that the last audited financial statement, for year ended March 2013, was unqualified, and CCMA was positive that it would receive a similar outcome for the year ended March 2014.

Ms van Schalkwyk asked what minimum or essential service agreements had been signed.

Ms van Schalkwyk asked what interventions were made by CCMA with employers to reduce the number of unfair dismissals in the workplace.

Ms Kahn responded that CCMA linked up with the DOL and Productivity SA to find ways through the process of retrenchments

Ms van Schalkwyk said the presentation did not indicate how CCMA would render services in the rural areas, for instance, its media outreach.

Ms P Mantashe (ANC) asked what the role of CCMA with public service issues, by maintaining labour peace and stability, and whether it had not taken note of the five-month strike. She asked for more clarity on whether declaring some services as essential services would remove the right to strike that was enshrined in the Constitution.

Ms Mantashe asked how the increase in the budget had helped the CCMA in its work.

Ms Kahn responded that the CCMA was able to open new offices, implement the online case management system, train staff and stakeholders, allocate specialist commissioners who had to be trained, and design training courses. This also enabled accessibility to workers.

The Chairperson asked where the 21 CCMA offices were located; especially in the Western Cape.

Ms Kahn said there were two in Western Cape and one in George but there were certain days when staff went out and rendered their services in communities, so as not to over extend themselves. In addition commissioners travelled to all sort of venues and might, for instance, visit some areas twice a month. Interpreters were also present.

The Chairperson asked whether the offices were easily accessible to both employers and employees, commenting that many employees lived in Gugulethu, Khayelitsha, or Langa and not in Cape Town central, so she suggested that CCMA should prioritise offices in townships, to assist in service delivery.

Ms Kahn responded that in many cases the offices were easily accessible, but promised to address the Chairperson’s concerns. There were actually 78 venues that CCMA used, not 21. There was not a problem when hearing cases, but there was a shortage of offices to which to report cases. The links with the DOL helped CCMA, since it then had access to over 126 offices of the Department.

The Chairperson said that she was now confused on the numbers.

Mr W Madisha (COPE) said that the CCMA was a very important structure, particularly given the high unemployment rate. Office opening was linked to the budget and there should be sufficient budget allocated. He asked if the limited numbers of offices was as a result of limited budget. He recognised that the CCMA would use the DOL offices, but asked if they would be used effectively. The question was what had to be done to ensure that all workers in the country were assisted.  

Mr Madisha noted that the purpose of the CCMA was to bring the employee and employer parties together. Inter-union rivalries had risen very high, and it must be remembered that about 75% of workers did not belong to a union. He asked how CCMA deal with that.

Mr Soobedaar agreed that it was a major problem and had escalated over the years. Conducting verification exercises was no longer easy, because of intimidation threats amongst employees. CCMA had little to deal with inter-union rivalry and matters often descended to a turf war between unions. There had been a loss of confidence by the unions, through Marikana and Bombela Stadium construction, and a disregard for the rule of law.

Mr Madisha also noted that most unions were political desks for political parties nowadays and wanted to know how the CCMA dealt with this and what advice it could offer.

Mr Nkoana was concerned why the CCMA could not give a breakdown showing the addresses of the offices.  

The Chairperson wanted to know who decided on the location of the 21 offices, whether the officers in the regions did so, and motivated for them. People must report in order to start the case. Even the office in Langa was not accessible, being far from the station, and Delft and Mitchells Plain were not covered.

Ms Kahn said the Chairperson’s suggestions would be taken on board.

The Chairperson wanted to know who did the CCMA training.

Mr Morajane responded that the senior commissioners, who were well seasoned, conducted training for other commissioners. Training was conducted internally but additional expertise was engaged as and when the need arose.

National Economic Development and Labour Council (Nedlac) Presentation
Mr Alistair Smith, Executive Director, Nedlac, tendered the apologies of the overall convenors and the Operations Head, Mr Naidoo, who had been unable to attend.  

Mr Smith explained that the strategic plan which expired in 2015 was driven by the commitment and capacity of the partners to engage in social dialogue. There was a focus on the capacity of the Secretariat, in the first phase, to build Nedlac into a more effective organisation, and particularly to improve on turnaround time, improving governance and leadership and risk management.

Mr Smith said the Secretariat had a staff complement of 30 employees. There was much emphasis on financial risk and compliance as well as supply chain management (SCM). The head count was not enough and presently posed a challenge.

Mr Smith said that there was a specific target that none of the pieces of legislation should take more than six months to finalise at Nedlac, in future. There was another target to build more capacity in areas of communication, and to promote the social dialogue process although there were still capacity constraints.

In the year 2011/2012 there was a qualified audit and there was a forensic investigation that was commissioned, which spoke to a number of weaknesses with regards to corporate governance. That audit found that only 33% of the objectives in the Annual Performance Plan were met, for a number of reasons, which had included the Ministers deciding to withdraw the proposed legislative amendments. As a result, for the 2012/2013 year there were a number of changes, particularly on performance. Currently, the Auditor-General was busy with an audit, which should be completed by July. Everything for that was on track. This year, Nedlac hoped to achieve 80% of the objectives.

Mr Smith said that there was a number of gaps in the IT infrastructure, which had to be upgraded. There were renovations to Nedlac House, where the secretariat was based.

Mr Smith said that, compared to other Chapter 9 institutions, the amount of resources spent on social dialogue spoke a very different story. Nedlac had a budget of about R30 million for this financial year, which was very limited, and efforts were being made to shift it and focus on areas that could make the most impact in the Secretariat’s work. Nedlac managed the finances in a disciplined way and did not budget for a deficit.

Mr Smith said that Nedlac was meeting-intensive and involved travelling and significant administration. Nedlac was operating within the targets set by the budget. It had however made a proposal to the Department of Labour for a 70% increase in budget.

Mr Smith said that Nedlac had made positive contributions in legislative design. Its social dialogue was important. The triple challenges of unemployment, inequality and poverty remained a challenge. The training lay off scheme was introduced due to the global recession.

Discussion
Mr M Bagraim (DA) pointed out that in some cases Nedlac spent close to two years on legislation dialogue, but when this came to the Committee, the agreements were changed to a large degree. He wondered if the social partners felt that there had been value thus achieved from the two years of discussion.

Mr America asked how binding was the consensus within the Chamber, whether the parties could reopen the issues and have their own lobbying process, and what sanction were in place, should the consensus reached be violated.

Mr America wanted clarity whether delegations from partners often comprised junior personnel, who had no authority to take decisions, and asked if the stakeholders could be forced to send senior staff. The role of Nedlac was constantly being questioned.

Ms Loliwe asked why the Committee was given a summary of the expenditure, instead of the audit outcome.

Mr Smith said that once the final audit report was done, Nedlac would have a chance to come back and present it

Ms Loliwe asked about the time frames for the strategic plan, to enable the Committee to measure them.

Mr Smith said that most were Annual Performance Plan targets and so the final date would depend on when each processed commenced. However, it was intended that processes should generally be concluded within six months of starting.

Ms van Schalkwyk asked for a breakdown of the establishment of staff in terms of gender, disability and race and asked if Nedlac was making use of consultants.

Mr Smith said those statistics were in the Annual Report, and although he did not have copies with him, he would send them to the Committee.

Mr Ollis asked what the relevance of Nedlac was, and reminded Members that Nedlac tended to represent big business, big government, and big labour. For that reason it did not consider the position of small, medium and micro enterprises (SMMEs) and unemployed people

Mr Smith responded that at this stage he had no specific response as to what the solution should be, but it would be in all stakeholders’ interests to link up in a better way

Mr Nkoana noted his worry about the key people from Nedlac who had not attended, who knew exactly how the structures operated.

Mr Smith apologised again and promised to relay the message back to the executive. He also said that he would make the relevant legislation available to Members.

Mr Madisha wanted to know whether Nedlac considered itself still relevant, or whether it should be merged with other structures and institutions such as the CCMA

Mr Smith responded that he felt that Nedlac was more relevant than ever and if no effort was spent to build social dialogue then the society would be in deep trouble.

Ms Mantashe asked whether Nedlac was winning the battle against non-coherence amongst the social partners.

The question was not answered.

Productivity SA Presentation
Mr Alwyn Nel, Chairperson, Productivity SA, introduced the presentation, and noted the apologies of some staff unable to attend.

Mr Bongani Coka, Chief Executive Officer, Productivity SA, stated that Productivity SA was aligning itself with government priorities. Most job losses were in the agricultural and manufacturing sectors and the organisation was proactive in that regard. Productivity SA would be engaged in capacity building of future forums in the mining sector, to understand challenges facing that industry.

Productivity SA was driving four programmes: and highlighted the value chain, which was generating information to assist decision makers in making decisions, as well as the second Programme on knowledge management.

Mr Coka said that the targets set this financial year included running 63 capacitation workshops. It was trying to develop Productivity Ambassadors. It was initially looking at having three interns but had entered into an agreement with Ekurhuleni Municipality, with a goal of job creation and had agreed to help increase the number of graduates.

Mr Coka said that 432 enterprises would be participating in this programme and a newsletter would be distributed, which outlined the success stories of nine companies who had so far participated in programmes. He said that the programmes enabled companies to grow and thus provide job security.
Mr Coka said that, due to limited funding, only priority sectors could be covered. A study was done with Institute of Management Development on competitiveness, and this had improved by one level to 52^nd.

Mr Coka said that the Productivity Organisational Solutions programme looked at productivity training and this was given to individuals to change their attitude and knowledge towards productivity. He emphasised that development of small enterprises, including cooperatives, was critical, and there was a need to support SMMEs as they were critical to the economy. Productivity SA would be able to train 5 000 SMMEs and work with various partners to extend their reach. It would train about 900 educators, and about 800 workers, with a breakdown also given of managerial and other staff.

Mr Coka highlighted that Productivity SA did not only look to programmes in the private sector but also worked with municipalities to help them increase productivity on a cost basis, and not using their own budget. It was more effective to save a job then to create a new one, simply because the infrastructure was there. Where the market was saturated or there was lack of funding, Productivity SA tried to assist businesses to secure opportunities. It had a target of assisting 130 companies and estimated that it should be able to save a minimum of 10 400 jobs.

Mr Coka said companies were helped to develop early warning systems, to prevent a situation where somewhere down the line they would have to approach Productivity SA for the same services again. The aim of the overall programmes was to improve productivity, profitability and company performance through better marketing. There had been some media attention through print and television, that had assisted in creating more awareness about Productivity SA. Stakeholders received electronic newsletters monthly, as well as the quarterly Productivity magazine.

Mr Bheki Dlamini, Chief Financial Officer, Productivity SA, outlined the budget, and noted that Productivity SA got its money from various sources. It received R7.8 million from sources other than the State. The grants transfers from the Department of Labour accounted for R43 million (35.4%), transfers from the Department of Trade and Industry for R9.1 million (7.5%) and those from the Unemployment Insurance Fund (UIF) accounted for R69 million (57%).The total revenue was R129 million. The largest chunk of expenditure was related to employees and goods and services. Mr Dlamini said that the self-generated revenue had increased, by 66% compared to the last year, because of strategic partnerships.

Finally, he noted that the implementation of the Green Productivity Toolkit was in line with international standards of sustainability.

Discussion
Ms Loliwe asked why Productivity SA had been a “hidden” entity. She asked whether its mandate was to save existing jobs or to create new ones.

Mr Coka responded that Productivity SA operated mainly in Gauteng, Western Cape and Kwazulu Natal, but had partnerships in Limpopo and Eastern Cape, although he conceded that it was not yet doing sufficient work in the Northern Cape and Free State, due to lack of partnerships with stakeholders there. The UIF programme only looked at saving jobs, not job creation.

Mr America asked why the Annual Report for 2012/13 noted that Productivity SA had failed in its  strategic turnaround outcomes. He asked if it was a management consultancy, whether it engaged in research, and had the capacity to engage in research. There was a degree of confusion concerning the research outputs.

Mr Coka responded that indeed in the previous year, Productivity SA had not achieved all targets due to the fact that funding was secured very late. Previously this programme was funded under the National Skills Fund, but when this Fund was moved to the Department of Higher Education and Training, Productivity SA was unable to access funding from that source. He clarified that most of the research reports were done internally, through partners. Productivity SA collated the information then sent it through to its partners, who developed a report.

Mr America asked why there was no co-operation between Productivity SA, Nedlac and CCMA, since  all were concerned with job-saving.

Mr Coka said that the CCMA had alluded to the fact that it was unable to do everything to save jobs, and thus Productivity SA did work with the CCMA on saving of jobs. It would be worthwhile to consider working with Nedlac also.

Ms Mantashe asked why UIF money, which was “money from the poor”, was used to save jobs in big businesses that had made profits over the years.

Mr Coka responded that Productivity SA was assisting a minimum of 5 000 SMMEs per year and working with about 130 companies. Saving jobs was initiated by Nedlac, but Productivity SA was regarded as the perfect organisation to drive the process.

The meeting was adjourned