Department of Labour on its Annual Performance Plan, with Deputy Minister

Meeting report

The Minister of Labour, Ms Mildred Oliphant, and Director General of the Department of Labour, Mr Thobile Lamati, extended apologies for not being able to attend the meeting as they were attending the International Labour Organisation’s (ILO’s) Conference in Geneva, Switzerland.
However, Deputy Minister of Labour Mr Patekile Holomisa had availed himself to attend the meeting.

Opening remarks by Deputy Minister of Labour
Deputy Minister Holomisa at the outset informed the Committee that he would be leaving the meeting early as he had to attend another meeting in the National Assembly. He noted that the DoL’s Strategic Plan and Annual Performance Plan had to be reviewed due to changes in the labour market. High levels of employment and unemployment had led to an increase in the demand for the DoL’s services. Growing uncertainty in the future had been impacted upon by the Fourth Digital Industrial Revolution. The DoL’s constitutional imperatives, obligations and the paradigm shift of how the DoL measured its performance in the labour market necessitated the DoL to address the previous findings of the Office of the Auditor General of SA (AG) whilst dealing with its current financial constraints.

The reviewed Strategic Plan and Annual Performance Plan sought to accelerate the DoL’s contribution to socio-economic development and the reintegration of previously disadvantaged communities, and also took into consideration the increase in demand of the DoL’s services. The DoL needed to improve upon its service delivery and operational efficiencies even with the financial constraints that it had. The DoL thus planned to do more with less. The DoL had made changes in its planning for years to come. In the reviewed Strategic Plan and the Annual Performance Plan the DoL had reduced key priorities and had refined and sharpened strategic objectives. The DoL wished to derive maximum impact even with its limited resources. The DoL had also consolidated some of its indicators to reduce them to a manageable number. In addition, targets had been reviewed based on historical achievements and were adjusted accordingly after discussion with National Treasury and the Auditor General of SA. The DoL had furthermore relegated indicators that were operational to individual branch work plans so that the DoL could continue to fulfil its legislative obligations. The DoL did its best to meet targets on provinces especially on the DoL’s two core functions i.e. Inspection & Enforcement and Public Employment Services

Deputy Minister Holomisa asked the Committee if he could be excused and permission was granted.  

Department of Labour (DoL) on its reviewed Strategic Plan 2015-2020 and Annual Performance Plan 2017/18
The delegation comprised of amongst others Mr Sam Morotoba, Acting Director General; Mr Bheki
Maduma, Chief Financial Officer (CFO); Ms Fikiswa Mncanca, Chief Director: Inspection and Enforcement Service; Ms Mandisa Matyila Chief Director: Human Resources Management; and Mr Mawele Ntamo, Acting Chief Director: Western Cape Provincial Operations. Mr Morotoba undertook the briefing.

Strategic Plan
The first leg of the briefing kicked off with an overview of the DoL’s Strategic Plan 2015-2020 finding translation in its Programmes i.e. Administration, Inspections and Enforcement Services, Public Employment Services and lastly Labour Policy and Industrial Relations.

Administration Programme
With the objective statement being to disseminate and improve access to information about the DoL the intention was to have the Departmental Communication Strategy implemented by end March 2021. The baseline was to have the Communication Strategy 2016-2021 reviewed with the PCOs and entities.

Inspection and Enforcement Services (IES) Programme
With the objective statement being to ensure decent work principles were adhered to by protecting workers through the inspection and enforcement of employment law, the baseline was that in 2015/16 187 497 inspections had been performed. 98% (36 441 of 37 272) of non-compliant employers had been issued with notices. 82% (1080 of 1309) incidents had been investigated and finalised within prescribed time frames. The five-year target was to increase the number of inspections by 30%.
 
Public Employment Services (PES) Programme
The objective statement was to register work seekers on the Employment System of SA (ESSA). The baseline was set at having 634 503 work seekers registered. The five-year target was to have work seekers registered on the ESSA for opportunities.
 
Labour Policy and Industrial Relations Programme
With the objective statement being to set standards to reduce inequality in pay and minimum wages for vulnerable workers, the baseline was to have taxi and hospitality workers and contract cleaning workers sectoral determinations reviewed. The five-year target was to have 95% of the gaps in minimum wage determinations covered.

Annual Performance Plan 2017/18
The second leg of the briefing was on the Annual Performance Plan 2017/18. Members were provided with detail on the targets that had been set for each of the DoL’s Programmes for the financial year.

Administration Programme
On the Departmental Communication Strategy which was to be implemented by 2021, the annual target was to have the Communication annual action plan approved. There was also to be 100% implementation of activities in the annual action plan.

Inspection and Enforcement Services (IES) Programme
The annual target was set at 217 008 employers to be inspected to determine compliance with employment law. The Committee was provided with a breakdown of the 217 008 figures as per province. From the breakdown, it would seem that the highest number of inspections was planned for the Gauteng, KwaZulu-Natal and the Western Cape Provinces. The Committee was also provided with a breakdown of provincial inspection figures in terms of the Employment Equity Act, the Basic Conditions of Employment Act, Occupational Health and Safety (OHS), the Unemployment Insurance Act and the Unemployment Insurance Contributions Act.
     
Public Employment Services (PES) Programme
The annual target was set at having 500 000 work seekers registered on the ESSA System. Members were provided with a provincial breakdown of the 500 000 figure. The Gauteng, KwaZulu-Natal and Western Cape Provinces once again topped the list.

Labour Policy and Industrial Relations Programme
The annual target was to have the institution of the National Minimum Wage set up by March 2018. On the number of policy instruments to be developed and promoted to enhance implementation of the Employment Equity Act by March 2018 the annual targets were to have the 2016/2017 Annual Employment Equity Report and Public Register published by 30 June 2017 and to have the 2017/18 Annual Employment Equity Report and Public Register developed by 31 March 2018.

The briefing concluded on the budgetary allocations to the DoL. From the figures provided it would seem for the period 2013/14 to 2019/20 there was an increase in budgetary allocations. Notwithstanding the increases the DoL felt it was financially constrained. For 2017/19 the allocation amounted to R3.06bn. 

Discussion
Mr J Londt (DA, Western Cape) referred to page 34 of the presentation and asked why such a large target of 216 inspections had been set for the Limpopo Province when compared to other provinces having all targets set at 96. What had happened in the Limpopo Province that had justified setting up such a large target? He asked whether the problem in the Limpopo Province had been addressed.

Ms Mncanca explained that targets were allocated per province depending on the human resources available in the province.  The Limpopo Province had sufficient staff capacity and hence the huge target was set.

The Chairperson said that most foreign nationals entered SA via the Limpopo Province. Perhaps more inspectors were needed to carry out inspections of workplaces.

Ms Mncanca stated that the figures being spoken to were in relation to the Unemployment Insurance Fund (UIF).

Mr Morotoba, on the migration of workers from SA’s neighbouring countries said that the Immigration Act and other legislation required the DoL to play a major role. For example, commercial farms needed to have a corporate permit to bring migrants in to work in SA. All local sources of labour had to first be exhausted in order to bring in foreign nationals. Foreigners often entered SA as asylum seekers and thereafter they applied to obtain refugee status. Due to the fact that SA did not have refugee camps these individuals were allowed to work but had to obtain a work permit. The DoL had interventions in place. There was an inter-ministerial committee of Police, Defence, Intelligence, Trade and Industry, Labour, Home Affairs as well as of Provincial and Local Governments to deal with the issue of movement of persons. Everyone had a specific task. The DoL did joint raids with the South African Police Service (SAPS). There were ongoing arrangements. Raids were done on farms and after hours at restaurants. He however on joint operations said that there were issues that one had to be sensitive about. One of these was Xenophobia.

Mr L Magwebu (DA, Eastern Cape) responded that the rationale given for the huge Limpopo Province figure did not make sense. He felt it ill-conceived and misplaced. Resources needed to go where the need was.

Ms Mncanca further explained that inspectors were allocated based on whether provinces were big or small. It depended on the levels that officials were appointed at. The more people there were at lower level the higher the targets.

Mr Magwebu, on inspections and enforcement, asked when unlawful actions were found he was sure that the DoL imposed sanctions but he wished to know whether the DoL also named and shamed the wrongdoers.
On public employment services, he asked how the DoL registered job seekers. Did the DoL have walk-ins? How did people access the services that the DoL had on offer?
He noted that the unemployment rate in SA sat at 27.7%. On employment if the target was set at 634 503 and the amount of unemployed people in SA was just under 9m it seemed to him that the target was set too low. He asked whether the DoL had a database of the work that it did on registering job seekers. Was the database transparent and could anyone check on how many people had received jobs.
Relating to inspections he noted that the Employment Services Act required foreigners to have permits in order to work. There were employers and businesses that violated this and he asked whether they were exposed.

Ms Mncanca responded that where there was non-compliance by employers then the DoL served them with a notice. The employer was given 14 days within which to comply. After expiry of the 14 days and if the employer had not complied then the matter was referred to Labour Courts. The challenge was that there were huge numbers of cases. Even the Labour Courts had capacity issues to deal with the multitude of cases. The DoL had not as yet done naming and shaming. The Minister of Labour had instructed the DoL to do so.

Mr Morotoba stated that it was almost the end of quarter one of 2017/18. The Committee would be provided with figures on the people that had been assisted by the DoL. He pointed out that the DoL did have follow up processes in place after officials had handed in their reports. The Director General would do a review of the reports and take the necessary action. The processes followed on taking action differed between the private and public sector. In the private sector companies were sanctioned by way of a fine. The problem with fines was that companies simply paid it and carried on with business as usual. Whether a fine was effective was another issue.  Information on work seekers would be provided to the Committee. On how work seekers were registered, members were welcome to visit labour centres to see how it was done. There were manual registrations but self-service kiosks were being installed. He was wary of making peoples personal information available to everyone. There could be a misuse of the information. There needed to be genuine employment opportunities. Efforts were also being made to develop cell phone applications for work seekers to register themselves. The DoL’s figure for its work seekers registered database was 4.8m. StatsSA’s figure was 5.2m. Information that needed to be known was where the work seeker was located, what skill the person had and what employment opportunity was out there. He added that counselling services was also assisting in providing guidance to people. It was about empowering people.   

Mr W Faber (DA, Northern Cape) pointed out that up until a few years ago the DoL had training facilities in place to capacitate people in order to find jobs. He asked what had happened to all those DoL staff that had worked on that. Where were the staff members employed at present? The entire function was no longer part of the DoL and was taken over by Further Education and Training (FET) Colleges. He observed that the DoL had reduced its targets almost by one third. This meant that the DoL had less to account to parliament. The DoL was asked to shed light on the matter.

Mr Morotoba, on the issue of staff that had been involved in training, said that the staff had moved to the Department of Higher Education. There had been 151 regional training centres. Most of the staff involved in training had not been government employees. They had been section 21entity employees. Many of these entities had closed down. Lots of people had been retrenched. Others went to Technical Vocational Education and Training (TVET) Colleges. He explained that there had been a change in focus. Training that the DoL had done in the past was from 6 weeks to three months. These programmes were discontinued. A discussion was now taking place on what the way forward should be. The reduction in targets was not done at a whim but the decision was taken due to a change in the environment and circumstances. Funding that should have come to the DoL had been reprioritised. Hence the DoL could not increase its number of inspectors.

Mr M Shabangu (EFF, Free State) asked what the functions of labour centres were. Workers often complained to Members about work issues. He asked how the relationship between employers and employees could be improved. What was the purpose of registering work seekers? He asked whether it was just to entice workers. In any case only a few of the registered job seekers had work opportunities. Even though the Free State Province was one of the largest provinces and had huge unemployment, budgets for the Province were always on the low side. He had received complaints from workers in Harrismith that they were not being treated well. What was the DoL doing about improving worker-employer relations?

Mr Morotoba, on the Harrismith issue, said he needed details in order to do follow up. Collective bargaining process addressed employer-employee relations. Unionisation in SA only sat at 30%. This increased the workload of the DoL to deal with labour issues. The DoL with its 1000 inspectors had limited capacity.  Labour centres took complaints from workers and referred them to the Commission for Conciliation, Mediation and Arbitration (CCMA). When members visited labour centres the success of registering work seekers could be observed.

Ms M Dikgale (ANC, Limpopo) asked how many job seekers had been assisted after registering with the DoL. She asked whether there were bilaterals and multilaterals that were weak. If so, what was the reason for it being so. She was glad that bilaterals and multilaterals were being strengthened.

Mr Morotoba said that the DoL did its best to work with the Southern African Development Community (SADC). Efforts were being made to strengthen labour laws. Companies often did not comply. They relocated to places like Lesotho and flaunt labour laws. The DoL ensured that there was synergy on labour laws when it came to the SADC. The same was done on the African Union.

Mr E Makue (ANC, Gauteng) pointed out that if there were irregular and fruitless expenditure and efforts were being made to address supply chain management issues 100%, where was the DoL’s efforts in dealing with the issue. He asked the DoL for assurances that it had the required capacity to carry out inspections that were needed. The DoL was asked to provide the Committee with detailed figures when it presented its APP and on its progress. He asked for specifics on persons with disabilities. Most departments tend to set a target of 3% when it came to persons with disabilities. He felt the 3% figure to be far too low. He asked if the DoL had done any work on illegal mining activities.

Mr Maduma explained that the Public Finance Management Act (PFMA) was very specific about what needed to be achieved. The target had been set at 100% achievement. The DoL worked with people around the country. There had to be compliance with rules and regulations. The DoL trained its officials. The DoL experienced hiccups due to large staff turnover. Once noncompliance was discovered then consequence management kicked in. Investigations were undertaken. Targets were set to reduce wasteful and fruitless expenditure. It was a continuous exercise to train officials.

Ms Mncanca, on assurance that there was capacity, said the 217 targets set for inspectors had been set based on capacity that was there.

Mr Morotoba agreed to provide the Committee with specific figures as well as figures on persons with disabilities. The DoL had 12 factories in SA where persons with disabilities were working. There were two factories in the Western Cape. The Limpopo and Mpumalanga Provinces were the only provinces that did not have factories but plans were being made to establish them. On mining, he explained that Members had to bear in mind that there was a demarcation of responsibilities and scope. Labour inspectors were not allowed to do inspections on mining. The DoL did however provide compensation where injuries occurred in mining. Illegal mining activities were being discussed as syndicates were operating in the sector. 

The Chairperson felt that efforts on employment equity needed to be intensified. On inspections and enforcement, he asked what the DoL did when there was non-compliance by employers. He had received a complaint about cashiers at a Spar in East London having to stand the entire day whilst they were on duty. He had raised the matter with the DoL but was not sure what had been done about it. Targets looked good on paper but what mattered was what happened at grassroots level. How was radical economic transformation improving the lives of people in the rural areas?  The Committee appreciated the breakdown that the DoL had provided on its offices, labour centres, satellite offices and mobile units. However, the Committee needed a breakdown of its inspectors in terms of the provinces. He asked if inspectors were given specific areas of focus such as, for instance, health and safety, farm workers, domestic workers and also compliance with the Basic Conditions of Employment Act etc. The breakdown should be of national and provincial figures. There should be sector specific inspectors.

Ms Mncanca noted the point on employment equity and the fact that transformation was taking place slowly. Unfortunately, the DoL did not have inspectors trained on employment equity. The DoL was taking steps to train inspectors in specific sectors. Hence efforts had been made to train inspectors on employment equity but funding was an issue. Funds that had been allocated to the DoL for the training had been reallocated to be used for the “fees must fall” issue. She said the breakdown of figures requested by the Chairperson would be provided to the Committee. On Occupational Health and Safety (OHS) there were a total of 40 inspectors for the whole of SA. There were inspectors at labour centres as well.

Mr Morotoba agreed that figures requested on inspectors in the provinces would be provided to the Committee. The DoL would follow up on the Spar matter in East London.  

Mr Magwebu, on good governance, said that for 2015/16 there were thirteen cases amounting to R29.4m on irregular expenditure and sixteen cases amounting to R82 000 on fruitless and wasteful expenditure. For the current APP, how did the DoL intend to avert these occurrences. On 21 June 2017 members would be debating the budget of the DoL. How did the DoL deal with 26 misconduct/criminal cases? He wished to know the statuses of these cases before the debate.

The Chairperson, addressing Mr Magwebu, said the information referred to was on the 2015/16 Annual Report. Members should raise these issues when the DoL presented its Annual Report. However, the DoL could provide the information requested in writing to the Committee. The Committee was at present dealing with the 2017/18 APP. Members could check when the 2016/17 Annual Report was presented by the DoL whether the irregular and fruitless and wasteful expenditures had continued. The information to be provided to the Committee should state what had happened to guilty parties. Were cases opened and if they were the Committee should be provided with the case numbers.
The issue of unionisation was important especially since the figure only sat at 30%. It seemed Unions were a last resort. People were perhaps of the view that it was the responsibility of the DoL to protect them given that their rights were codified by various pieces of legislation.

Committee Minutes
Committee Minutes dated 30 May 2017 were adopted as amended.

The meeting was adjourned.