Description
Labour market flexibility refers to the speed with which labour markets adapt to fluctuations and changes in society, the economy or production.
Introduction
Programme 4: Labour Policy and Labour Market Programmes
The main purpose of this programme consists of establishing an equitable and sound labour relations environment and promoting South Africa’s interests in international labour matters. There are nine main sub-programmes which aim to deliver on the following strategic objectives of the Department:
G G G
Monitoring the impact of legislation Promote equity in the workplace Strengthen social protection.
Within the labour market programmes, there are three sub-programmes. These are:
G G G
The Department has institutionalised monitoring and evaluation as one of its core priorities. In this regard, a comprehensive Research, Monitoring and Evaluation (RME) agenda was developed in 2006/07 and subsequently implemented. The RME Agenda focuses on research topics covering specific pieces of legislation, reflecting all the aspects of our regulatory framework. All research reports were completed in March 2008.
Research Policy and Planning
Research, Policy and Planning Labour Market Information and Statistics International Labour Matters.
Achievements
G
The following research reports were completed and submitted:
G
G G G
G G G G G G
G
G
Analysing Wage Formation in the South African Labour Market: The role of Bargaining Councils Labour Reform in South Africa: Measuring Regulation and a Synthesis of Policy Suggestions An empirical analysis of Dispute Resolution Minimum Wages, Employment and Household Poverty: Investigating the Impact of Sectoral Determinations Adherence to and Progress Made in respect of the Hours of Work provisions within the BCEA A synthesis analysis of labour regulation studies Employment and the informal economy in South Africa National research on identification of critical skills Sector specific research and related skills requirements Learnerships: Learning and employment pathways of leanership participants in the NSDS 2005-2010 Towards measuring the pool of designated groups that are suitably qualified in various sectors and occupational categories Tracking progress on the implementation and impact of the Employment Equity Act since its inception
38
G G
State of skills, 2006 National Skills Survey 2007 of small, medium and large firms.
G
G
Labour Market Information Statistics
Train five Masters Degree Research Interns over two years and five Human Science Research Council (HSRC) interns. Five appointed interns participated in a specific study as part of the RME programme. They are currently working on the final report under the employment and the informal economy project. The project is a joint collaboration between the Department of Labour and the Sociology of Work Unit in the Department of Sociology at WITS University. It is aimed at developing female researchers in the area of labour market policy as an intervention to bridge the identified gap in this regard Four (4) quarterly reports compiled on the implementation of the Growth and Development Summit (GDS) agreement.
The LMIS Directorate is responsible of collecting internal and external labour market statistics, analysing and producing reports to inform managers about progress made with regard to key specific indicators related to the Strategic Objectives of the Department. In addition, it produces reports based on various surveys and provides resource materials to various stakeholders to improve the knowledge based working environment.
Reports produced include the Annual Labour Market Bulletin and the Annual Industrial Action Report.
Achievements
G
G
The Unemployment and Job opportunity report 2007 was completed and will be published soon. It is designed to show the skills gap between job advertisements appearing in the weekly Sunday Times newspaper and unemployment insurance beneficiaries The placement verification survey report was completed. It provides information on placement
39
G
G
G
G
G
International Relations
Achievements
G
statistics to verify if the Department of Labour has reached placement targets in training projects funded under the Social Development Funding Window of the National Skills Fund, as established by the Skills Development Act, 1998 and Skills Development Levies Act. 1999 Other reports produced include the 2007 Annual Labour Market Bulletin and the 2007 Annual Industrial Action report The Labour Market Information System has been developed and web-enabled. The system pools information from various sources into one database to ease comparison The library provided support to Provincial Offices with regard to the establishment of resource centres. It hosted the Library Open day to promote knowledge based working environment The scope of the Job Opportunity Index extended to Provincial Offices to cover other provincial job advertisements As from February 2008, the Department sent five (5) officials for capacity development at the International Labour Organisation (ILO) through the ILO Associate Experts Programme. These officials will be trained over a period of two years with a specific focus on Labour Market Information and Statistics. This intervention will assist to increase a pool of labour market statistical analysts from previously disadvantaged backgrounds.
Re-establishment of the SADC employment and labour sector (SADC-ELS)
At the African Regional Labour Administration Centre (ARLAC) Governing Council of Ministers’ meeting held at Vumba, Zimbabwe, on 9 February 2006, the following SADC Member States convened to discuss and agreed to the re-establishment of the SADC ELS: Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe. This process was spearheaded by South Africa As a follow up to the above mentioned meeting, a preparatory meeting of Senior Officials was convened on 5 April 2006 at SADC Secretariat in Gaborone, Botswana. The meeting was attended by the Deputy Director-General of Labour Policy and Labour Market Programmes, Mr L Kettledas Since the revival of the SADC Employment and Labour Sector, the Department of Labour has played an active role in terms of following up on outstanding issues and have been represented by tripartite delegations. The next meeting of the SADC-ELS will be convened from 31 March to 4 April 2008, in Lesotho.
G
G
Bilateral
G
The Department continues to actively participate in the activities of the ILO through the Governing Body and International Labour Conference. Periodic reports are also submitted in terms of the conventions
International Labour Organisation (ILO)
Multilateral relations
The Department has signed a number of bilateral cooperation memoranda of understanding with countries like Zimbabwe, Mozambique, Lesotho, Cuba and China. This is based on the need to exchange and share experiences with other countries with regard to a number of labour related challenges
40
and recommendations which the Department is party to.
The Department specifically participates in the African Union Labour and Social Affairs Commission (AULSAC). Activities of this body are aimed at harmonising labour and social development standards in the continent and thus contribute to the eradication of unemployment and poverty.
African Union Labour and Social Affairs Commission
Challenges
G
G
G
Sheltered Employment Factories
Achievements
G
The Restructuring of SADC Institutions which was approved by the Summit in 2001, entailed centralisation of activities at the SADC Secretariat based in Gaborone, Botswana. Accordingly, SADC Employment and Labour Sector (ELS) Programmes that where hitherto being coordinated by Zambia on behalf of Member States, were transferred to the Directorate of Social and Human Development and Special Programmes of the SADC Secretariat The functions of the Desk on Employment and Labour were put on hold. In addition, the ELS Policy Documents, Programmes and activities remained unattended to in terms of coordinated implementation, monitoring and evaluation The main challenge with regards to cooperation agreements remains the collective implementation by all stakeholders in the Department. Cooperation with Departments/Ministries in other countries is seen by Programmes as an added responsibility which is burdensome and is not embraced in a positive way.
G
G
G
G G
G G
Challenges
G
Broad direction of a turn-around strategy developed and approved by the Minister of Labour. The Minister visited both Cape Town factories and impressed with the work within the Sheltered Employment Factories (SEF) Awarded a R2,8 million tender by the Eastern Cape Department of Health for 2007/08 and a further R10.8 million by the Northern Cape Department of Education Contact was made with three SETA’s and they have shown interest in assisting with skills development – CTFL, MERSETA and SERVICES SETA Private sector interest is beginning to mount and several meetings have been arranged that include SA Cricket, Local Organising Committee for 2010 soccer and PEP stores As at February 2008 the order book totalled R14.7 million and production was in progress Compliance with SA GAAP; assets were reconciled and a new asset register was compiled; accounting practices were revised and the SEF is now fully GAAP compliant All Audit qualifications will be dealt with by March 2008 All disciplinary matters have been finalised.
G
Legal identity of SEF: preparation of a business case for possible listing has commenced. However the assistance of external resources will be required. Funding and assistance to accomplish this has been required from the National Treasury No progress was made in addressing the disadvantages imposed by the Preferential Procurement Policy Framework Act.
41
Labour Relations
The main focus of the Labour Relations Programme is the implementation of the Employment Equity Act, Basic Conditions of Employment Act, Labour Relations Act and the administration of the Strengthening of the Civil Society Fund (SCSF). This report outlines the activities and achievements of the Programme for the 2007/08 financial year.
Introduction
Achievements
Employment equity implementation and enforcement mechanisms strengthened
Promote equity in the workplace
In order to continue enhancing the implementation and enforcement mechanisms of the Employment Equity Act, the Department adopted a vigorous approach in conducting the Director-General’s Review (DG Review) in various companies which cut across a number of sectors. As was the case in the previous financial year, the DG Review process focused again on the assessment of substantive compliance of companies listed in the top 100 of the Johannesburg Securities Exchange (JSE). To ensure that the DG Reviews make the necessary impact on increasing the compliance levels of employers with the requirements of the Act, seven companies were identified and subjected for a review by the Director-General in terms of section 43 of the Employment Equity Act. This process included the review of subsidiaries that fell under each of these companies. In order to ensure that all areas pertaining to substantive compliance with the Act were assessed, additional information, i.e. employment equity plans and any records deemed important for the review process had to be sourced from these companies. This information enabled the Department to conduct an intensive qualitative analysis of the level of compliance of each of these companies. After completion of this analysis, on-site verification meetings were conducted in each company to inform the finalisation of the compliance recommendations to these companies by the Director-General. The recommendations together with specific time frames within which each company is expected to comply with the requirements of the Act, were then presented and accepted by each company. Follow-ups to assess the extent to which each company was able to comply with the DG Review recommendations will be conducted in the 2008/09 financial year. Failure by these companies to comply as required may result in the matter being referred to the Labour Court in terms of section 45 of the Act. In order to continue enhancing the accuracy and integrity of the employment equity data being received by the Department from the designated employers in each reporting cycle, the programme embarked on an awareness campaign in June and July 2007. The campaign focused mainly on educating employers regarding their legislative duties as designated employers, such as consultation with workers, conducting the workplace analysis, preparing and implementing an Employment Equity Plan, including the preparation and submission of the EE Report to the Department of Labour on 1 October 2007. In addition, employers were encouraged to cut the paper work and submit their EE reports utilising the EE Online service provided by the Department of Labour. To further enhance the capacity of the Department to be able to provide quality assistance to designated employers during the reporting period of October 2007, the EE System was rolled-out to the
42
provinces, including providing training to provincial staff on the capturing of the EE Reports on the EE System. This initiative enabled the provincial offices to acquire the necessary knowledge and skills required not only to capture the reports, but also to be in a better position to assist and guide their own provincial stakeholders during the EE Reporting period. Again, it is worth noting that this initiative forms part of the broader agenda of the Department, i.e. the decentralisation of certain functions to Provinces aimed at empowering the provincial staff with the necessary knowledge and skills required in assisting and enforcing the compliance of their own stakeholders with the Employment Equity Act. As part of its advocacy interventions to ensure that the existing employment equity implementation tools such as Codes of Good Practice are made accessible to all stakeholders in other official languages, the Programme managed to translate a number of the different Codes into more than one official language, i.e. Disability Code (Sesotho, Afrikaans, Siswati); HIV and Aids Code (Setswana) and Sexual Harassment Code (Siswati, Sesotho, Tshivenda and Afrikaans). These translations are due for publication in the next financial year. There is also a continuous drive by the programme to monitor the progress made in the implementation of the Act and providing feedback to the nation regarding the status of employment equity in the country. In order to fulfill this mandate, the Commission for Employment Equity (CEE) published its 7th CEE Annual Report on 15 May 2007. Furthermore, the CEE and the programme are in the process of developing the 8th CEE Annual Report and the 2007 EE Public Register, which are due to be released in the next financial year.
Challenges
G
G
G
Employment Standards has two key areas of focus:
G G
Achievements
Protect vulnerable workers
A key challenge for the Department is to strengthen the implementation and enforcement mechanisms of the Act through enhancing the capacity of the labour inspectors to be able to enforce the Act A second challenge is to enhance the capacity of provincial staff to be able to manage the EE reporting process of their provincial stakeholders Finally, the Department aims to overcome recurring IT problems that impact negatively on the integrity of the employment equity data and reports.
The establishment and review of sectoral determinations The administration of the Basic Conditions of Employment Act (BCEA), which includes child labour, as well as the assessment of applications for variations of minimum wages and conditions of employment received from employers.
Employers active within the performing arts are also required to apply for permits before they employ children younger than 15 years. The Directorate made huge strides in ensuring that employers and other role players are aware of this new requirement, contained in the sectoral determination published to protect children in this sector. A total of 639 applications for permits have been granted since August 2004. The Earnings Threshold was reviewed and published in the Government Gazette. The purpose of the
43
Employers active within the performing arts are also required to apply for permits before they employ children younger than 15 years.
threshold is to fundamentally reduce the burden of compliance on employers in respect of those employees who earn in excess of the new threshold of R149 736. What the new notice does is that it aligns this threshold with the UIF threshold. Investigations were embarked on in the following sectors: Hospitality; Welfare; Unskilled workers (all sectors) and the Taxi Sector. The reduction of working hours and wage differentials were also investigated. A new determination was published for the Hospitality Sector. It combined at least three old wage determinations into a single one as well as extended the protection of this determination to other workers in the Hospitality Sector. What is significant is that the determination separates the wages of waiters and waitresses from the tips that they invariably receive. With respect to the Welfare Sector significant progress was made in the deliberations at the Employment Conditions Commission level. The research process that was initially envisaged to be conducted by external stakeholders will now be conducted internally. A research programme was developed, training was conducted with the relevant provincial offices and the field work will be conducted internally. In the Unskilled investigation 17 existing old determinations were cancelled. This brought the workers that were covered by these determinations into the fold of the current Basic Conditions of Employment Act which they were hitherto excluded from. This has identified the need to do further investigations into particular categories of employment such as funeral undertaking and stonecrushing. The investigation into the Taxi Sector with a view to review wages and conditions of employment has been finalised. One of the critical areas of concern that has emerged from this investigation is the consultation process. This has posed a significant challenge in certain provinces where it was extremely difficult to consult with the different stakeholders. Another area of concern that has come out of this investigation is that the determination is not being fully enforced.
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A revised national Child Labour Programme of Action (CLPA) for the next five years was completed. A critical element in the CLPA is the need for support from different government departments. At a high level meeting, comprising of Deputy Directors-General held in September, this matter was raised with the different departments. There are however significant challenges in this regard. A process to phase out the Towards the Elimination of the Worst Forms of Child Labour (TECL) programme was started this year since the contract of the service provider expires at the end of March 2008. A number of exit meetings were held with key government departments such as Social Development, Water Affairs and Forestry, and the South African Police Service so that these departments could mainstream the activities performed by TECL into their work plans.
Highlights in respect of Child Labour
All the applications received from the broader industry have been dealt with. The following show the number of applications for variation that were dealt with during the year and their outcome. Brought forward (from 2006/07) Total number received Total number granted Total number refused Number withdrawn Further information requested 28 520 373 104 15 56
Variations to the Basic Conditions of Employment Act, 1997
Challenges
G
G
G
G
Sixty three collective agreements of bargaining councils were extended to non-parties covering 884 403 workers. These agreements were main collective agreements covering wages and basic conditions, as well as agreements dealing with council levies, illness benefits, pension and provident funds. In the current financial year 38 bargaining councils were visited to determine their representivity and 12 representivity certificates were issued in terms of section 49 of the Labour Relations Act. At the end of 2007, there were 52 registered bargaining councils. The Department received a total of 99 applications for the registration of employers organisations and
Achievements
Promote sound labour relations
Acceding to the greater demands for wider and thorough consultation whilst on the other hand meeting the deadlines for publication of sectoral determinations remains a challenge Coordinating and ensuring the consistent participation of government departments in the implementation of the Child Labour Programme of Action has proved very challenging An ongoing challenge is raising awareness of all the sectoral determinations and ensuring awareness of annual wage increases Finally, supporting provincial offices and labour centres in respect of the implementation of the sectoral determinations remains a challenge.
45
trade unions. Of these, only 13 applications were approved – four in respect of employers organisations and nine applications for the registration of trade unions. The registration of 15 employers organisations and 42 trade unions were cancelled during the year. The total number of registered trade unions is currently 265 and there are 203 registered employers organisations.
The registration of 15 employers organisations and 42 trade unions were cancelled during the year.
An amount of R265million was transferred to the CCMA for its budget for the 2007/08 financial year. From 1 April to 31 December 2007 the CCMA received 99 502 referrals and settled 68% of its cases. It conducted 29 280 con/arbs, facilitated 149 section 189A cases (dismissals based on operational requirements) and conducted 42 pre-dismissal arbitrations. A large number of Department of Labour officials (834) in the provincial offices and labour centres were given access to the CCMA Case Management System (CMS). Having access to the CMS will enable the Department to advise clients about progress of their cases at the CCMA. The Department of Labour continued its active involvement in the governance structures of the CCMA during the year. A section 77 application to engage in protest action to promote or defend socio-economic interests of workers was brought by the Motor Transport Workers’ Union of South Africa. The application arose from a safety and security hazard for workers and the public due to unsafe conditions arising from the transportation of cash. The matter was resolved through the parties agreeing to a set of measures to be followed in the transportation of cash.
Ensuring compliance with the requirements of the Labour Relations Act by registered trade unions and employers organisations remains a challenge. The number of organisations whose registration has been cancelled remains high and, in most cases, the grounds for cancellation relate to non-compliance with administrative requirements. The number of employers organisations that use their status mainly to access the CCMA, remains high and ensures that there continue to be organisations that do not
Challenges
46
operate as genuine employers organisations. Changing this behaviour remains a challenge for the Department. During 2007, amendments were effected to the Pension Funds Act, 1956 (PFA) requiring the pension and provident funds established under the auspices of bargaining councils, to register in terms of the PFA. The funds under the LRA are the outcome of a process of collective bargaining and therefore differ in certain respects from funds established under the control of an employer as per the PFA. A challenge for the bargaining councils will be to bring their constitutions, agreements and fund rules in line with the PFA. The Department will have to oversee this process and continue its responsibilities in relation to the amendment of constitutions and the extension of agreements. The registration of council pension and provident funds under the PFA may also require technical amendments to the Labour Relations Act in time.
The Strengthening Civil Society Fund aims to improve working conditions of vulnerable workers by contributing to a stable and well functioning labour market.
Strengthening Civil Society Fund Achievements
The Fund was granted a budget of R9 919 000 for the 2007/08 financial year. The table below indicates the names of organisations that were allocated funds and the amounts allocated during the year.
Na me of org anisati on Amo un t R al l o ca te d 7 614 782 172 425 673 050 126 797 239 930 219 638 375 360 9 60 0 06 9 86 627 91 460
DITSELA
Sterkstroom Advice Centre Workers College Natal
South African Labour Bulletin Barkly East Advice Office
Nkomazi Community Advice Centre Lotavha Labour Advice Office FEDUSA/NACTU Workshop Total Network Against Child Labour
The secretariat of the Strengthening Civil Society Fund will continue to monitor all the projects to ensure financial control and accountability. In terms of the financing agreement, all funded projects submit progress reports of their activities to the Department.
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Unemployment Insurance Fund
Introduction
Programme 5: Social Insurance
The Unemployment Insurance Fund contributes to the alleviation of poverty by providing effective short-term unemployment insurance to all workers who qualify for unemployment and related benefits. The Fund strives to render an effective and accessible service to all stakeholders. Furthermore the Fund strives to be a sustainable organisation with sufficient reserves. No new legislation was introduced during 2007/08. The Fund continued to administer the Unemployment Insurance Act, 2001 as amended. This Act deals with the administration of the Fund and the payment of benefits. The Act also makes provision for the Commissioner to maintain an employer/employee database which is used to pay benefits to beneficiaries. The South African Revenue Service (SARS) continued to administer the Unemployment Contributions Act, 2002. The SARS collects contributions from all those employers who have employees who pay the PAYE tax and the collection of contributions from all other employers is delegated to the Unemployment Insurance Commissioner. As at the end of January 2008, the Fund had 381 employees at its Head Office. There are 65 vacant posts. With regards to equity, 25.5% of staff members are White, 4.7% are Coloured, 2.1% are Asian and 67.7% are Black. Staff development plays a major role in the Fund and 44 staff members were awarded bursaries for personal development. Amongst these, four are pursuing Masters Degrees and 10 are doing Honors Degrees.
Achievements
G
G
G G
G G
G
G
G G
Challenges
G G G
The call centre received 226 482 calls and of these 219 679 were answered, resulting in a response rate of 97% and the average time spent in the queue was 13 seconds Of the 395 873 applications received for benefits, 385 706 were approved giving an approval rate of 97.4% On average, more than 140 000 payments are made per month to beneficiaries As at the end of December 2007, the fund had collected R6.685 billion in contributions and paid R2.176 billion to beneficiaries The Fund’s total assets amounted to R26.006 billion as at the end of December 2007 As at end of December 2007, the Fund had 7 371 230 employees on its database of which 633 062 are domestic, 6 732 722 are commercial and 5 441 are Taxi Industry employees There were 1 153 523 employers on the database of which 555 804 are domestic, 592 857 are commercial and 4 862 are taxi owners Decentralisation of functions has resulted in an increase in the number of claims payment centres from 14 to 57 All beneficiaries are paid through electronic funds transfer into their banking accounts The signing of the unemployment register has been replaced by a user friendly declaration document that the beneficiary completes, signs and delivers to the labour centre, when convenient for him/her.
Elimination of work and draw cases Recovery of overpaid amounts Reduction of opportunities for fraud
48
G G G G G G
Compensation Fund
Introduction
Implementation of schemes to alleviate the harmful effects of unemployment Extension of UIF coverage to the Taxi Industry Improving on claims turn-around times Implementing a new service delivery model Implementation of a fraud prevention plan Recruiting and retaining competent staff.
The Compensation Fund renders assistance to workers who were injured in the workplace or who contracted a disease in the workplace, as well as to assist the families of those workers who died in workplace incidents.
Achievements
G
G
G
G
G
G
During the financial year the Fund introduced a strategy to reduce the backlog dating as far back as 2004 and was able to achieve an 84% reduction in the backlog in the claims area A new imaging system (Kofax) was piloted and implemented during the same year and 2, 5 million documents were scanned, indexed and filed The Fund did away with a cheque payment method and introduced a new system that ensures that all payments are paid directly into the bank accounts of individual claimants through an Electronic Funds Transfer System Revenue Collection initiatives realised an improvement of around 2% from R2.5billion in 2006 to R3.3billion Despite the challenges still faced by the Fund in the management of claims processing, 117 272 of the 182 723 claims received were processed and accepted, representing 64%. A new communication strategy was developed and finalised.
The Fund subsidise rehabilitation centres where injured workers are treated.
49
Challenges
G G G G G
Consolidating the EFT Payments Improving Revenue Collection Improving the Claims Turn-around time Development of the Fund’s Information System Addressing the Human Capacity Challenge.
50
51
doc_584798548.pdf
Labour market flexibility refers to the speed with which labour markets adapt to fluctuations and changes in society, the economy or production.
Introduction
Programme 4: Labour Policy and Labour Market Programmes
The main purpose of this programme consists of establishing an equitable and sound labour relations environment and promoting South Africa’s interests in international labour matters. There are nine main sub-programmes which aim to deliver on the following strategic objectives of the Department:
G G G
Monitoring the impact of legislation Promote equity in the workplace Strengthen social protection.
Within the labour market programmes, there are three sub-programmes. These are:
G G G
The Department has institutionalised monitoring and evaluation as one of its core priorities. In this regard, a comprehensive Research, Monitoring and Evaluation (RME) agenda was developed in 2006/07 and subsequently implemented. The RME Agenda focuses on research topics covering specific pieces of legislation, reflecting all the aspects of our regulatory framework. All research reports were completed in March 2008.
Research Policy and Planning
Research, Policy and Planning Labour Market Information and Statistics International Labour Matters.
Achievements
G
The following research reports were completed and submitted:
G
G G G
G G G G G G
G
G
Analysing Wage Formation in the South African Labour Market: The role of Bargaining Councils Labour Reform in South Africa: Measuring Regulation and a Synthesis of Policy Suggestions An empirical analysis of Dispute Resolution Minimum Wages, Employment and Household Poverty: Investigating the Impact of Sectoral Determinations Adherence to and Progress Made in respect of the Hours of Work provisions within the BCEA A synthesis analysis of labour regulation studies Employment and the informal economy in South Africa National research on identification of critical skills Sector specific research and related skills requirements Learnerships: Learning and employment pathways of leanership participants in the NSDS 2005-2010 Towards measuring the pool of designated groups that are suitably qualified in various sectors and occupational categories Tracking progress on the implementation and impact of the Employment Equity Act since its inception
38
G G
State of skills, 2006 National Skills Survey 2007 of small, medium and large firms.
G
G
Labour Market Information Statistics
Train five Masters Degree Research Interns over two years and five Human Science Research Council (HSRC) interns. Five appointed interns participated in a specific study as part of the RME programme. They are currently working on the final report under the employment and the informal economy project. The project is a joint collaboration between the Department of Labour and the Sociology of Work Unit in the Department of Sociology at WITS University. It is aimed at developing female researchers in the area of labour market policy as an intervention to bridge the identified gap in this regard Four (4) quarterly reports compiled on the implementation of the Growth and Development Summit (GDS) agreement.
The LMIS Directorate is responsible of collecting internal and external labour market statistics, analysing and producing reports to inform managers about progress made with regard to key specific indicators related to the Strategic Objectives of the Department. In addition, it produces reports based on various surveys and provides resource materials to various stakeholders to improve the knowledge based working environment.
Reports produced include the Annual Labour Market Bulletin and the Annual Industrial Action Report.
Achievements
G
G
The Unemployment and Job opportunity report 2007 was completed and will be published soon. It is designed to show the skills gap between job advertisements appearing in the weekly Sunday Times newspaper and unemployment insurance beneficiaries The placement verification survey report was completed. It provides information on placement
39
G
G
G
G
G
International Relations
Achievements
G
statistics to verify if the Department of Labour has reached placement targets in training projects funded under the Social Development Funding Window of the National Skills Fund, as established by the Skills Development Act, 1998 and Skills Development Levies Act. 1999 Other reports produced include the 2007 Annual Labour Market Bulletin and the 2007 Annual Industrial Action report The Labour Market Information System has been developed and web-enabled. The system pools information from various sources into one database to ease comparison The library provided support to Provincial Offices with regard to the establishment of resource centres. It hosted the Library Open day to promote knowledge based working environment The scope of the Job Opportunity Index extended to Provincial Offices to cover other provincial job advertisements As from February 2008, the Department sent five (5) officials for capacity development at the International Labour Organisation (ILO) through the ILO Associate Experts Programme. These officials will be trained over a period of two years with a specific focus on Labour Market Information and Statistics. This intervention will assist to increase a pool of labour market statistical analysts from previously disadvantaged backgrounds.
Re-establishment of the SADC employment and labour sector (SADC-ELS)
At the African Regional Labour Administration Centre (ARLAC) Governing Council of Ministers’ meeting held at Vumba, Zimbabwe, on 9 February 2006, the following SADC Member States convened to discuss and agreed to the re-establishment of the SADC ELS: Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe. This process was spearheaded by South Africa As a follow up to the above mentioned meeting, a preparatory meeting of Senior Officials was convened on 5 April 2006 at SADC Secretariat in Gaborone, Botswana. The meeting was attended by the Deputy Director-General of Labour Policy and Labour Market Programmes, Mr L Kettledas Since the revival of the SADC Employment and Labour Sector, the Department of Labour has played an active role in terms of following up on outstanding issues and have been represented by tripartite delegations. The next meeting of the SADC-ELS will be convened from 31 March to 4 April 2008, in Lesotho.
G
G
Bilateral
G
The Department continues to actively participate in the activities of the ILO through the Governing Body and International Labour Conference. Periodic reports are also submitted in terms of the conventions
International Labour Organisation (ILO)
Multilateral relations
The Department has signed a number of bilateral cooperation memoranda of understanding with countries like Zimbabwe, Mozambique, Lesotho, Cuba and China. This is based on the need to exchange and share experiences with other countries with regard to a number of labour related challenges
40
and recommendations which the Department is party to.
The Department specifically participates in the African Union Labour and Social Affairs Commission (AULSAC). Activities of this body are aimed at harmonising labour and social development standards in the continent and thus contribute to the eradication of unemployment and poverty.
African Union Labour and Social Affairs Commission
Challenges
G
G
G
Sheltered Employment Factories
Achievements
G
The Restructuring of SADC Institutions which was approved by the Summit in 2001, entailed centralisation of activities at the SADC Secretariat based in Gaborone, Botswana. Accordingly, SADC Employment and Labour Sector (ELS) Programmes that where hitherto being coordinated by Zambia on behalf of Member States, were transferred to the Directorate of Social and Human Development and Special Programmes of the SADC Secretariat The functions of the Desk on Employment and Labour were put on hold. In addition, the ELS Policy Documents, Programmes and activities remained unattended to in terms of coordinated implementation, monitoring and evaluation The main challenge with regards to cooperation agreements remains the collective implementation by all stakeholders in the Department. Cooperation with Departments/Ministries in other countries is seen by Programmes as an added responsibility which is burdensome and is not embraced in a positive way.
G
G
G
G G
G G
Challenges
G
Broad direction of a turn-around strategy developed and approved by the Minister of Labour. The Minister visited both Cape Town factories and impressed with the work within the Sheltered Employment Factories (SEF) Awarded a R2,8 million tender by the Eastern Cape Department of Health for 2007/08 and a further R10.8 million by the Northern Cape Department of Education Contact was made with three SETA’s and they have shown interest in assisting with skills development – CTFL, MERSETA and SERVICES SETA Private sector interest is beginning to mount and several meetings have been arranged that include SA Cricket, Local Organising Committee for 2010 soccer and PEP stores As at February 2008 the order book totalled R14.7 million and production was in progress Compliance with SA GAAP; assets were reconciled and a new asset register was compiled; accounting practices were revised and the SEF is now fully GAAP compliant All Audit qualifications will be dealt with by March 2008 All disciplinary matters have been finalised.
G
Legal identity of SEF: preparation of a business case for possible listing has commenced. However the assistance of external resources will be required. Funding and assistance to accomplish this has been required from the National Treasury No progress was made in addressing the disadvantages imposed by the Preferential Procurement Policy Framework Act.
41
Labour Relations
The main focus of the Labour Relations Programme is the implementation of the Employment Equity Act, Basic Conditions of Employment Act, Labour Relations Act and the administration of the Strengthening of the Civil Society Fund (SCSF). This report outlines the activities and achievements of the Programme for the 2007/08 financial year.
Introduction
Achievements
Employment equity implementation and enforcement mechanisms strengthened
Promote equity in the workplace
In order to continue enhancing the implementation and enforcement mechanisms of the Employment Equity Act, the Department adopted a vigorous approach in conducting the Director-General’s Review (DG Review) in various companies which cut across a number of sectors. As was the case in the previous financial year, the DG Review process focused again on the assessment of substantive compliance of companies listed in the top 100 of the Johannesburg Securities Exchange (JSE). To ensure that the DG Reviews make the necessary impact on increasing the compliance levels of employers with the requirements of the Act, seven companies were identified and subjected for a review by the Director-General in terms of section 43 of the Employment Equity Act. This process included the review of subsidiaries that fell under each of these companies. In order to ensure that all areas pertaining to substantive compliance with the Act were assessed, additional information, i.e. employment equity plans and any records deemed important for the review process had to be sourced from these companies. This information enabled the Department to conduct an intensive qualitative analysis of the level of compliance of each of these companies. After completion of this analysis, on-site verification meetings were conducted in each company to inform the finalisation of the compliance recommendations to these companies by the Director-General. The recommendations together with specific time frames within which each company is expected to comply with the requirements of the Act, were then presented and accepted by each company. Follow-ups to assess the extent to which each company was able to comply with the DG Review recommendations will be conducted in the 2008/09 financial year. Failure by these companies to comply as required may result in the matter being referred to the Labour Court in terms of section 45 of the Act. In order to continue enhancing the accuracy and integrity of the employment equity data being received by the Department from the designated employers in each reporting cycle, the programme embarked on an awareness campaign in June and July 2007. The campaign focused mainly on educating employers regarding their legislative duties as designated employers, such as consultation with workers, conducting the workplace analysis, preparing and implementing an Employment Equity Plan, including the preparation and submission of the EE Report to the Department of Labour on 1 October 2007. In addition, employers were encouraged to cut the paper work and submit their EE reports utilising the EE Online service provided by the Department of Labour. To further enhance the capacity of the Department to be able to provide quality assistance to designated employers during the reporting period of October 2007, the EE System was rolled-out to the
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provinces, including providing training to provincial staff on the capturing of the EE Reports on the EE System. This initiative enabled the provincial offices to acquire the necessary knowledge and skills required not only to capture the reports, but also to be in a better position to assist and guide their own provincial stakeholders during the EE Reporting period. Again, it is worth noting that this initiative forms part of the broader agenda of the Department, i.e. the decentralisation of certain functions to Provinces aimed at empowering the provincial staff with the necessary knowledge and skills required in assisting and enforcing the compliance of their own stakeholders with the Employment Equity Act. As part of its advocacy interventions to ensure that the existing employment equity implementation tools such as Codes of Good Practice are made accessible to all stakeholders in other official languages, the Programme managed to translate a number of the different Codes into more than one official language, i.e. Disability Code (Sesotho, Afrikaans, Siswati); HIV and Aids Code (Setswana) and Sexual Harassment Code (Siswati, Sesotho, Tshivenda and Afrikaans). These translations are due for publication in the next financial year. There is also a continuous drive by the programme to monitor the progress made in the implementation of the Act and providing feedback to the nation regarding the status of employment equity in the country. In order to fulfill this mandate, the Commission for Employment Equity (CEE) published its 7th CEE Annual Report on 15 May 2007. Furthermore, the CEE and the programme are in the process of developing the 8th CEE Annual Report and the 2007 EE Public Register, which are due to be released in the next financial year.
Challenges
G
G
G
Employment Standards has two key areas of focus:
G G
Achievements
Protect vulnerable workers
A key challenge for the Department is to strengthen the implementation and enforcement mechanisms of the Act through enhancing the capacity of the labour inspectors to be able to enforce the Act A second challenge is to enhance the capacity of provincial staff to be able to manage the EE reporting process of their provincial stakeholders Finally, the Department aims to overcome recurring IT problems that impact negatively on the integrity of the employment equity data and reports.
The establishment and review of sectoral determinations The administration of the Basic Conditions of Employment Act (BCEA), which includes child labour, as well as the assessment of applications for variations of minimum wages and conditions of employment received from employers.
Employers active within the performing arts are also required to apply for permits before they employ children younger than 15 years. The Directorate made huge strides in ensuring that employers and other role players are aware of this new requirement, contained in the sectoral determination published to protect children in this sector. A total of 639 applications for permits have been granted since August 2004. The Earnings Threshold was reviewed and published in the Government Gazette. The purpose of the
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Employers active within the performing arts are also required to apply for permits before they employ children younger than 15 years.
threshold is to fundamentally reduce the burden of compliance on employers in respect of those employees who earn in excess of the new threshold of R149 736. What the new notice does is that it aligns this threshold with the UIF threshold. Investigations were embarked on in the following sectors: Hospitality; Welfare; Unskilled workers (all sectors) and the Taxi Sector. The reduction of working hours and wage differentials were also investigated. A new determination was published for the Hospitality Sector. It combined at least three old wage determinations into a single one as well as extended the protection of this determination to other workers in the Hospitality Sector. What is significant is that the determination separates the wages of waiters and waitresses from the tips that they invariably receive. With respect to the Welfare Sector significant progress was made in the deliberations at the Employment Conditions Commission level. The research process that was initially envisaged to be conducted by external stakeholders will now be conducted internally. A research programme was developed, training was conducted with the relevant provincial offices and the field work will be conducted internally. In the Unskilled investigation 17 existing old determinations were cancelled. This brought the workers that were covered by these determinations into the fold of the current Basic Conditions of Employment Act which they were hitherto excluded from. This has identified the need to do further investigations into particular categories of employment such as funeral undertaking and stonecrushing. The investigation into the Taxi Sector with a view to review wages and conditions of employment has been finalised. One of the critical areas of concern that has emerged from this investigation is the consultation process. This has posed a significant challenge in certain provinces where it was extremely difficult to consult with the different stakeholders. Another area of concern that has come out of this investigation is that the determination is not being fully enforced.
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A revised national Child Labour Programme of Action (CLPA) for the next five years was completed. A critical element in the CLPA is the need for support from different government departments. At a high level meeting, comprising of Deputy Directors-General held in September, this matter was raised with the different departments. There are however significant challenges in this regard. A process to phase out the Towards the Elimination of the Worst Forms of Child Labour (TECL) programme was started this year since the contract of the service provider expires at the end of March 2008. A number of exit meetings were held with key government departments such as Social Development, Water Affairs and Forestry, and the South African Police Service so that these departments could mainstream the activities performed by TECL into their work plans.
Highlights in respect of Child Labour
All the applications received from the broader industry have been dealt with. The following show the number of applications for variation that were dealt with during the year and their outcome. Brought forward (from 2006/07) Total number received Total number granted Total number refused Number withdrawn Further information requested 28 520 373 104 15 56
Variations to the Basic Conditions of Employment Act, 1997
Challenges
G
G
G
G
Sixty three collective agreements of bargaining councils were extended to non-parties covering 884 403 workers. These agreements were main collective agreements covering wages and basic conditions, as well as agreements dealing with council levies, illness benefits, pension and provident funds. In the current financial year 38 bargaining councils were visited to determine their representivity and 12 representivity certificates were issued in terms of section 49 of the Labour Relations Act. At the end of 2007, there were 52 registered bargaining councils. The Department received a total of 99 applications for the registration of employers organisations and
Achievements
Promote sound labour relations
Acceding to the greater demands for wider and thorough consultation whilst on the other hand meeting the deadlines for publication of sectoral determinations remains a challenge Coordinating and ensuring the consistent participation of government departments in the implementation of the Child Labour Programme of Action has proved very challenging An ongoing challenge is raising awareness of all the sectoral determinations and ensuring awareness of annual wage increases Finally, supporting provincial offices and labour centres in respect of the implementation of the sectoral determinations remains a challenge.
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trade unions. Of these, only 13 applications were approved – four in respect of employers organisations and nine applications for the registration of trade unions. The registration of 15 employers organisations and 42 trade unions were cancelled during the year. The total number of registered trade unions is currently 265 and there are 203 registered employers organisations.
The registration of 15 employers organisations and 42 trade unions were cancelled during the year.
An amount of R265million was transferred to the CCMA for its budget for the 2007/08 financial year. From 1 April to 31 December 2007 the CCMA received 99 502 referrals and settled 68% of its cases. It conducted 29 280 con/arbs, facilitated 149 section 189A cases (dismissals based on operational requirements) and conducted 42 pre-dismissal arbitrations. A large number of Department of Labour officials (834) in the provincial offices and labour centres were given access to the CCMA Case Management System (CMS). Having access to the CMS will enable the Department to advise clients about progress of their cases at the CCMA. The Department of Labour continued its active involvement in the governance structures of the CCMA during the year. A section 77 application to engage in protest action to promote or defend socio-economic interests of workers was brought by the Motor Transport Workers’ Union of South Africa. The application arose from a safety and security hazard for workers and the public due to unsafe conditions arising from the transportation of cash. The matter was resolved through the parties agreeing to a set of measures to be followed in the transportation of cash.
Ensuring compliance with the requirements of the Labour Relations Act by registered trade unions and employers organisations remains a challenge. The number of organisations whose registration has been cancelled remains high and, in most cases, the grounds for cancellation relate to non-compliance with administrative requirements. The number of employers organisations that use their status mainly to access the CCMA, remains high and ensures that there continue to be organisations that do not
Challenges
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operate as genuine employers organisations. Changing this behaviour remains a challenge for the Department. During 2007, amendments were effected to the Pension Funds Act, 1956 (PFA) requiring the pension and provident funds established under the auspices of bargaining councils, to register in terms of the PFA. The funds under the LRA are the outcome of a process of collective bargaining and therefore differ in certain respects from funds established under the control of an employer as per the PFA. A challenge for the bargaining councils will be to bring their constitutions, agreements and fund rules in line with the PFA. The Department will have to oversee this process and continue its responsibilities in relation to the amendment of constitutions and the extension of agreements. The registration of council pension and provident funds under the PFA may also require technical amendments to the Labour Relations Act in time.
The Strengthening Civil Society Fund aims to improve working conditions of vulnerable workers by contributing to a stable and well functioning labour market.
Strengthening Civil Society Fund Achievements
The Fund was granted a budget of R9 919 000 for the 2007/08 financial year. The table below indicates the names of organisations that were allocated funds and the amounts allocated during the year.
Na me of org anisati on Amo un t R al l o ca te d 7 614 782 172 425 673 050 126 797 239 930 219 638 375 360 9 60 0 06 9 86 627 91 460
DITSELA
Sterkstroom Advice Centre Workers College Natal
South African Labour Bulletin Barkly East Advice Office
Nkomazi Community Advice Centre Lotavha Labour Advice Office FEDUSA/NACTU Workshop Total Network Against Child Labour
The secretariat of the Strengthening Civil Society Fund will continue to monitor all the projects to ensure financial control and accountability. In terms of the financing agreement, all funded projects submit progress reports of their activities to the Department.
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Unemployment Insurance Fund
Introduction
Programme 5: Social Insurance
The Unemployment Insurance Fund contributes to the alleviation of poverty by providing effective short-term unemployment insurance to all workers who qualify for unemployment and related benefits. The Fund strives to render an effective and accessible service to all stakeholders. Furthermore the Fund strives to be a sustainable organisation with sufficient reserves. No new legislation was introduced during 2007/08. The Fund continued to administer the Unemployment Insurance Act, 2001 as amended. This Act deals with the administration of the Fund and the payment of benefits. The Act also makes provision for the Commissioner to maintain an employer/employee database which is used to pay benefits to beneficiaries. The South African Revenue Service (SARS) continued to administer the Unemployment Contributions Act, 2002. The SARS collects contributions from all those employers who have employees who pay the PAYE tax and the collection of contributions from all other employers is delegated to the Unemployment Insurance Commissioner. As at the end of January 2008, the Fund had 381 employees at its Head Office. There are 65 vacant posts. With regards to equity, 25.5% of staff members are White, 4.7% are Coloured, 2.1% are Asian and 67.7% are Black. Staff development plays a major role in the Fund and 44 staff members were awarded bursaries for personal development. Amongst these, four are pursuing Masters Degrees and 10 are doing Honors Degrees.
Achievements
G
G
G G
G G
G
G
G G
Challenges
G G G
The call centre received 226 482 calls and of these 219 679 were answered, resulting in a response rate of 97% and the average time spent in the queue was 13 seconds Of the 395 873 applications received for benefits, 385 706 were approved giving an approval rate of 97.4% On average, more than 140 000 payments are made per month to beneficiaries As at the end of December 2007, the fund had collected R6.685 billion in contributions and paid R2.176 billion to beneficiaries The Fund’s total assets amounted to R26.006 billion as at the end of December 2007 As at end of December 2007, the Fund had 7 371 230 employees on its database of which 633 062 are domestic, 6 732 722 are commercial and 5 441 are Taxi Industry employees There were 1 153 523 employers on the database of which 555 804 are domestic, 592 857 are commercial and 4 862 are taxi owners Decentralisation of functions has resulted in an increase in the number of claims payment centres from 14 to 57 All beneficiaries are paid through electronic funds transfer into their banking accounts The signing of the unemployment register has been replaced by a user friendly declaration document that the beneficiary completes, signs and delivers to the labour centre, when convenient for him/her.
Elimination of work and draw cases Recovery of overpaid amounts Reduction of opportunities for fraud
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G G G G G G
Compensation Fund
Introduction
Implementation of schemes to alleviate the harmful effects of unemployment Extension of UIF coverage to the Taxi Industry Improving on claims turn-around times Implementing a new service delivery model Implementation of a fraud prevention plan Recruiting and retaining competent staff.
The Compensation Fund renders assistance to workers who were injured in the workplace or who contracted a disease in the workplace, as well as to assist the families of those workers who died in workplace incidents.
Achievements
G
G
G
G
G
G
During the financial year the Fund introduced a strategy to reduce the backlog dating as far back as 2004 and was able to achieve an 84% reduction in the backlog in the claims area A new imaging system (Kofax) was piloted and implemented during the same year and 2, 5 million documents were scanned, indexed and filed The Fund did away with a cheque payment method and introduced a new system that ensures that all payments are paid directly into the bank accounts of individual claimants through an Electronic Funds Transfer System Revenue Collection initiatives realised an improvement of around 2% from R2.5billion in 2006 to R3.3billion Despite the challenges still faced by the Fund in the management of claims processing, 117 272 of the 182 723 claims received were processed and accepted, representing 64%. A new communication strategy was developed and finalised.
The Fund subsidise rehabilitation centres where injured workers are treated.
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Challenges
G G G G G
Consolidating the EFT Payments Improving Revenue Collection Improving the Claims Turn-around time Development of the Fund’s Information System Addressing the Human Capacity Challenge.
50
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