Hon Chairperson; Deputy Minister whom I know should be here as we have a meeting with one stakeholder; hon Chairperson and members of the Select Committee on Trade and Industry, Economic Development, Tourism, Employment and Labour; the Leadership of organised labour, organised business and community organisations; the DG and senior management of the department; members of the media; honoured guests and members of the public, as I address the National Council of Provinces, it is appropriate that I make the following observations. Although Employment and Labour is a national department of government with no concurrent powers with provinces, nonetheless, it has a truly national footprint across all provinces and localities.
The department has nine provincial offices, 126 Labour Centres, 25 satellite offices and 467 visiting points which are part-time offices. To this, we will add 10 specialised youth centres over the next two years. Indeed, we launched the first of these here in Cape Town yesterday, very exciting, buzzing with the young people. They were doing everything there and applying for jobs and so on. This
means that the staff establishment of the department - some 6 000 - is spread proportionally across the provinces and localities to promote access at the point of delivery. We are going to give you the details later as members so that you are able to visit those which are closer to your constituencies. This also means that the Public Employment Services, Inspection and Enforcement Services, Unemployment Insurance Fund, UIF and the Compensation Fund claims are all decentralised across the provinces and localities. That also means the resources in the form of payments filter down to the base. Indeed hon Chairperson, we have allocated 54% of the overall budget of the department amounting to nearly R1,2 billion for our provincial operations because we have to deal with the ground.
Hon members will ask the question: What are the implications of the reconfiguration and renaming of the department? Clearly, this reflects that the priority for this sixth administration is jobs, jobs and jobs. The renaming and reconfiguration of the department reflects the refocusing from purely labour regulation and relations to the transformation of the labour market, employment and conditions of employment. We cannot achieve this alone. We continue to depend on the private sector to propel employment. That is why the President's investment drive is so important.
So, let me share with you our thinking on the role of the reconfigured department. Firstly, where we can, we will leverage the resources of the department and of our entities, which are our labour market instruments, i.e the UIF and Compensation Fund, CF to preserve jobs and invest in job- creating initiatives. Therefore, colleagues must remember that a lot of the tools or market instruments are seated with the different departments but we do have these two major tools which we can be able to leverage. Secondly, as the department, we provide co-ordination and seek to collaborate and align our efforts with other departments and agencies to create jobs and ensure that our people get skills required in the market place. The issue of co-ordination and collaboration is very important because you have a lot of the initiatives in the different departments, and sometimes not talking to one another. So, that is one of our responsibilities now. Thirdly, we intensify efforts to strengthen the labour market through the variety of tools at our disposal and in line with the vision of the department to "strive for a labour market conducive for investment, economic growth, employment and decent work."
This must include doing away with red tape. One of the problems in government is the red tape, where you have a submission going from a director up to the DG just for some minor approval. We'll have to do
away with those red tapes because they are frustrating our people. However, it does not mean when we do away with the red tape we must reduce the workers' rights as proposed by some opposition parties who argue that we have to talk about labour market flexibility and so on, which constantly exaggerates a perception of the supposedly- rigid labour market. Indeed, research indicates that there is a relatively-high level of relocation and easy movement of labour between firms. In the current situation of deep systemic unemployment and slow growth, government has to use its active labour market policies to improve access to jobs and skills.
Let us go to the specifics. Our Public Employment Services branch has been allocated R611 million to drive the implementation of these active labour market policies including providing free career counseling, retraining and upskilling, job placing and providing subsidies to support workers with disabilities in the employment. This includes 13 factories under the Supported Employment Enterprises programme producing high-quality furniture and linen. They need to be supported by all government structures as well as the private sector. As we speak, the former Minister of Health had already contracted those for the distribution of linen to a number of hospitals by the disabled people who are also doing some furniture. I think hon members must start arguing that their
furniture be ordered from those people so that we can be able to uplift them.
In this financial year, we will also ensure that our entrenched labour market tools, mainly - as I have mentioned - the UIF, strengthen our Labour Activation programme to focus on the following: Vocational and remedial training of the unemployed; programmes for the youth in transition from school to work, including apprenticeships and some 130 000 learnerships over three years; and also subsidised, targeted measures to provide employment including hiring subsidies paid to private sector employers, and assistance to the unemployed persons who wish to start their own businesses.
As part of the transformation, funds have been allocated to the three new black asset management companies. They must no more just give to only white management companies. We are now giving to black asset management companies to achieve. Yes, it depends how many you do have. If you do your statistics, you'll know what we are talking about. To achieve this, the UIF has budgeted R7,9 billion over the next three years. The focus is to fund jobs, not just training. We have to also go beyond training. The department will form partnerships with the employers and training institutions,
particularly in collaboration with the Department of Higher Education and Training to address the future skills needs of the labour market. The President has said that we must train the youth for the digital jobs which are expected to be created in the wake of the Fourth Industrial Revolution. Our argument is that the Fourth Industrial Revolution should not just be technicist and technical. This means that it must talk about the human beings and must have the human face.
The President has flagged the need for the social dialogue and social compact. Nedlac is critical to this. The department will consult with all social partners to review the constitution of the council to promote greater inclusivity. Governance challenges at Nedlac, which resulted in the disciplinary processes against senior officials, are being firmly addressed. Hon Chairperson, in October 2018, the Presidential Jobs Summit was convened by Nedlac. Of the 77 commitments made, 70% are on track for implementation. I should mention that in contrast to the previous summits, a monitoring and evaluation tool was put in place to track the outcomes.
Already these interventions have resulted in saving jobs through the Training Layoff Scheme, and via a sizeable investment from the UIF's High Social Impact Fund. A total of R1,2 billion was invested in
Edcon, preventing the loss 140 000 direct and upstream jobs. I need to mention that the investment comes with strict conditions to guarantee the investment capital and a sustainable turnaround in the business.
Hon Chairperson, it is worth noting that the Ministers of Employment and Labour in the SADC region have agreed to develop a regional labour migration policy by the end of 2019. In turn, the department will finalise a new national migration and employment policy in consultation with all the social partners. I think this is the issue we must confront. You can see what happened with the burning of the trucks in Durban. Some of the companies had employed 100% foreign nationals as drivers. You can see the trend is going into agriculture. The trend is there in some other sectors but what is even disturbing is that, even in retail now the employers are preferring the foreign nationals. But the motive is very simple, to exploit the cheap labour. That's the motive; just to exploit the vulnerable workers who are very desperate. We'll have to handle that matter in a sensitive way especially now that we are talking about the intra-African trade. We'll have to talk about that properly.
Chairperson, we preserve jobs by improving productivity and competitiveness of our businesses. Productivity SA, an entity of the
department, has done sterling work in assisting the SMMEs through its Turn- Around Solution programme. The department is currently reviewing the funding model so that Productivity SA can expand its work.
Chairperson, a stable labour market is necessary for creating an environment conducive for investment. Recent amendments to the Labour Relations Act address strikes or lockouts that are intractable and violent. These provided for the establishment of an advisory arbitration. The CCMA is responsible for implementing these measures. Imagine, hon member, somebody demanding a salary of R16 000 for the workers who are earning R5 000, taking them for five months and taking them back without anything after having lost everything. Is that responsible? Can we allow that?
This year marks 22 years of the existence of the CCMA and saw the enactment of the long-awaited National Minimum Wage Act and employment law amendments, expanding the jurisdiction of the CCMA to provide protection to the most vulnerable workers. Some 194 000 cases were referred to the CCMA during 2018-19, compared to 187 000 referrals in 2017-18. This large caseload is indicative of the failure by both business and labour to moderate workplace conflict.
Nevertheless, this institution continues to serve a critical role in stabilizing labour relations.
The National Minimum Wage was initially set at R20 per hour. This is not enough to lift the people out of poverty, but it is an important start, and indications are that some 6 million workers will benefit. Inspections to date indicate that 93% of the employers are paying the prescribed rate. Prophesies that wholesale retrenchments would follow the introduction of the National Minimum Wage were not borne out. An expected massive spike in the CCMA cases has not occurred. By the end of September, the National Minimum Wage Commission will publish research into the impact of the changes on employment, poverty levels and wage differentials.
Hon Chairperson, in pursuit of social justice and a transformed labour market, the department published the Employment Equity Amendment Bill 2018 for public comment. The 2018 Employment Equity Report reflects that at top and senior management levels, women only account for 23,5% and 34% respectively, whereas persons with disabilities remained at 1% across all the sectors of the economy.
The Employment Equity Amendment Bill will be prioritised for tabling in Parliament to regulate the setting of sector-specific employment
targets to address the gross under-representation of blacks, women and persons with disabilities. In addition, it will also ensure that the Employment Equity Certificate of Compliance becomes a precondition for access to state contracts. A total of R1,2 billion has been budgeted for this programme.
Despite carrying out 167 000 inspections during the current year, we don't have adequate numbers of inspectors to reach every workplace. We rely on the activism of the shop stewards and the public to be our eyes and ears, as well as the goodwill of the responsible corporate citizens. Remember, we have 1,7 million registered employers. Therefore, we can't even have a quarter of the inspectors to be able to cover a quarter of that number. This means we won't be at every workplace but we'll rely on the trade union movement, on the responsible corporate citizens, and the responsible employers. During the course of this financial year, we will add 200 inspectors to the current team that is working to ensure implementation of the national minimum wage. With the Deputy Minister and the DG we will be launching a blitz of inspections in the near future. Hon members of the portfolio committee are also welcome to join us. We'll give you a programme. Our Inspection and Enforcement Services branch has been allocated a budget of R628 million for the current financial year.
Chairperson, I cannot overemphasise the importance of social protection in our fight against poverty. As part of the government's entrenched labour market policy, the UIF mitigates the effects of retrenchments. Recent amendments to the Unemployment Insurance Amendment Act will expand the coverage and period for UIF beneficiaries from different industries such as domestic workers, interns and those in the learnerships. There'll be an increase in the income replacement rate for maternity benefits to 66%. We'll extend a contributor's entitlement to benefits under certain circumstances and there'll also be finance employment services.
The average turnaround time of payment of UIF claims has been shortened from 10 to seven days. So, the UIF contributes to fighting poverty and unemployment in that 20% of the Social Responsibility Investment, SRI Fund is invested in that high-impact job creation business ventures across all sectors and provinces. To date, almost R17 billion has been allocated to the SRI Fund for investment, which has in turn created 23 442 jobs.
Hon Chairperson, the recent International Labour Organisation, ILO Conference resolved that the Occupational Health and Safety be elevated to a fundamental principle and right. Let me mention the good work done by the media in exposing noncompliance and failure to
report accidents by employers. My department is processing the compensation claims of the injured persons concerned. Earlier this year, we launched a campaign to encourage those who have suffered workplace accidents or diseases and their claims were not processed, to report this to our Labour Centres. Furthermore, during this year we will appoint an additional 500 occupational health and safety officers.
Chairperson, we have worked tirelessly to restructure the Compensation Fund and there have been real improvements. We will soon present to this House amendments to the Compensation for Occupational Injuries and Diseases Act, Coida. Thank you, Madam. [Time expired.]