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Date
: 05/04/2005
Source: Department of Labour
Title: Mdladlana: Labour Dept Budget Vote 2005/2006
Budget speech by Membathisi Mphumzi Shepherd Mdladlana, Minister of
Labour
Chairperson,
Honourable members of Parliament,
Compatriots,
Ladies and Gentleman.
As the struggle for freedom reached its peak in the mid fifties, in
the midst of political turmoil and instability in the country, the
African National Congress was mapping the future of South Africa
– free from uncertainties of the time. During this time, the
country as a whole was mobilised, under the banner of the Congress
Movement, around one question: what kind of a nation do we want to
see South Africa become?
“The great road forward is lit by the Freedom Charter adopted
at the Congress of the People at Kliptown on 25 and 26 June. Which
one of us who heard the idea of the Congress of the People first
proposed at our Queenstown Conference by Professor Matthews foresaw
that it would be such a brilliant success?”
The Freedom Charter was not just another political document, the
Congress of the People not just another conference.
The Freedom Charter is the sum total of our aspirations, but more;
it is the road to new life. It is the uniting creed of all the
people struggling for democracy and for their rights, the mirror of
the future of South Africa.” These words are from the
National Executive Committee report to the ANC Conference in
December 1955.
Fifty years on, as we plan to celebrate the fiftieth anniversary of
the Freedom Charter on 26 June this year, the vision adopted then
seems almost prophetic. “Long before the first sailors had
compasses to navigate, people were sailing the seas using the stars
to guide them. The Freedom Charter set out the stars to guide us
through the darkness and we followed them”, these are the
words of the late Oom Gov shortly before he passed away – may
his soul rest in peace.
The Freedom Charter tells us that, “There shall be Work and
Security!” and it is with this in mind that my Ministry
adopted a Programme of Action, linked to the broader
government’s programme of action, for the current five-year
term of government. We have committed ourselves to contribute to
employment creation by ensuring that labour market policies, and
implementation thereof, complement the growth and development
objectives of government. My Department therefore seeks to ensure
that we create an enabling labour market environment, through a
series of interventions that we have adopted, that lead to work and
security - as enshrined in the Freedom Charter.
These two, work and security, are not meant to be mutually
exclusive - as some of our detractors would want to make us
believe.
We have furthermore, agreed that in the next five years which
started in April 2004, that we will enhance skills development,
promote equity in the workplace, continue to protect vulnerable
workers, strengthen our bilateral and multilateral relations with
countries and organisations in which we have an interest,
strengthen social protection, promote sound labour relations, and
strengthen the capacity of the Department and that of labour market
institutions linked to the Department. We also heed the
President’s call that the policy context for the
country’s transformation agenda has been set, and that it is
now time for implementation and making a difference in our
people’s lives. It is in this context that we have equally
undertaken to ensure that we rigorously monitor and evaluate the
impact of the interventions that we have put in place for the next
five years.
During the year under review, we have already begun to make strides
towards the achievement of the objectives we set ourselves for the
five-year period in a number of key ways.
We have contributed to employment creation by ensuring that part of
our strategy enhances job retention. This has been evidenced by the
saving of up to 14 000 jobs through the National Productivity
Institute’s contribution to the implementation of the Social
Plan.
This programme focuses on preventing job loss in distressed
companies by providing turnaround solutions.
In many cases, these turnaround solutions are often so successful
that they result in company expansion - an example being Serco
Industries in Durban. The company manufactures refrigerated truck
bodies but was losing clients due to late order deliveries. With
the assistance of the Social Plan, production has increased by 42%,
sales are up 32% and the number of jobs have increased by 40%.
Nationally, a report by the NPI tells us that productivity has
increased by close to 3.3% per annum since 1996. This is testament
to the fact that a sound labour relations environment, and
committed management and workers can turn around companies and
consequently prevent job losses. The Industrial Action Report for
2004 published by my Department further shows that there was a
decline in the number of strikes in 2004 compared to the previous
three years. There were 49 stoppages of work in 2004 because of
labour disputes, fewer than the total of 62 stoppages in 2003.
During 2004/2005 the CCMA was allocated with R 172 651 000.00 for
all its programmes and activities. Since April 2003 to February
2004 the CCMA had adjudicated over 115 894 cases with an average of
553 cases per day. For the period of April 2004 to February 2005
the CCMA was also involved in 169 cases of section 189A (Large
retrenchments) facilitation. The settlement rate of these cases
stood at 60%. The CCMA was also involved in 82 cases of section
188A Pre-Dismissal Arbitration. 43 674-conciliation/arbitration
cases and 476 applications for enforcement of arbitration awards as
order of court.
The Growth and Development Summit agreement, signed with our social
partners almost two years ago, remains one of the key government
interventions to contribute to employment.
Today, I am happy to inform the house that two reports on the
implementation of the Agreement were tabled before the Presidential
Joint Working Group, the last of which was in December 2004. What
we have however learnt from these reports is that a long way ahead
remains both on the achievements of the targets we have set
ourselves and the reporting thereof. We have taken steps to deal
with these two challenges. On the reporting processes, the
Management Committee at NEDLAC has established a GDS Implementation
Committee aimed at ensuring that all constituencies report on the
implementation of the Agreement. The Directors-General have also
established a Steering Committee of Directors-General or their
nominees to improve and ensure regular reporting by
Government.
On the achievement of the targets, we will need to further
consolidate our efforts both across government and jointly with our
social partners to speed up delivery in the next years of the
agreement. One of the key areas where speedy progress is being made
to achieve the targets is on skills development. You might recall
that as per the GDS agreement, we had undertaken to register 72 000
unemployed learners into learnerships by June last year. Similarly,
we also undertook to have 80 000 learners enrolled in learnerships
as per the first phase of the National Skills Development Strategy
by March 2005. On the GDS target, we had enrolled 69 000 learners
in learnerships by June 2004 – which was 3000 learners off
target.
We undertook then to intensify our efforts further in this regard.
By October 2004, four months later, we had exceeded our GDS target
by enrolling 85 735 learners in learnership programmes. By the end
of December 2004, these figures stood at 98 447.
I am happy to announce that by the end of February 2005, we had 107
925 unemployed youth below the age of 35 years enrolled in
learnerships and apprenticeship programmes. Further to these
achievements, through SETA levy grants and the National Skills Fund
projects, the following are worth noting:
* 5 562 174 workers have participated in structured learning
programmes of which 4 641 810 had completed successfully against
our target of 1 398 033
* 53% of firms employing between 50 and 150 workers are receiving
skills development grants against our target of 40%
* 37% of new and existing registered small businesses were
supported and benefiting from skills development initiatives under
SETA discretionary grants and the NSF, against our target of
20%
* R 65.3m was allocated to the National Student Financial Aid
Scheme (NSFAS) and National Research Foundation (NRF), of which R
15,8m was ring-fenced for assisting learners with disabilities
under the National Skills Fund for post-graduate bursaries in areas
of scarce skills, covering Honours to Post-Doctoral studies. 684
learners have benefited during the 2003/4 financial year
* 74% of the total NSF Strategic Projects R1 billion allocation
over three and half years was already spent by end of December 2004
and benefiting 44,838 ABET learners; 35,943 unemployed people who
completed structured learning programmes, and a further 9,332 who
participated in the various learnership programmes
* A total of R 722m has been spent since 2001 under the National
Skills Fund Social Development Funding Window to train 421,700
unemployed people over four years in the various local and
provincial skills development projects in which my
Department’s 10 provincial offices were involved.
Whilst we are very proud of these numbers, we are however conscious
that learnerships are not meant to be an end in themselves. They
must link to government’s broader efforts, and our
interventions, to contribute to employment creation. Therefore,
whilst we celebrate these numbers we will need to continually
ensure that learners in these programmes complete their learning
and workplace apprentice and ultimately move into some form of
formal or self-employment. It was with this in mind that my
Department commissioned a baseline evaluation of the learnership
programme. From this baseline study, on which we intend to
continually trace learners completing, some encouraging findings
have begun to emerge. The study has found out that not only are the
majority of learnership graduates finding employment, which
comprises 77% of the unemployed learners, but most of these
graduates end up being employed by the same employer with whom they
had just completed the programme.
A separate study commissioned to the Human Sciences Research
Council by my Department also tells us that, “The average
expenditure on training as a percentage of payroll in 2002/2003 was
2.1%. This compares very well to training expenditure as captured
in the 2000 Baseline survey of 1,3%.
This is a clear sign of increased commitment to skills development
among South African enterprises”.
In the same vain, I acknowledge that there are areas that we have
been trailing behind, aspects that I consider to be challenges, and
areas in which more work will have to be done that we were less
successful during the 2004/5 financial year. These areas
include:
* The inability of SETAs to meet their equity target of 85% of
their learners to be black, 54% being women and 4% learners with
disability
* The extremely variable and ranged pattern of grants claims by
employers from SETAs that ranged from 78% in the financial services
to 20% in the education sectors
* The levels of unspent money even though committed towards
projects and employer grants sitting in SETA coffers, and the
Department of Labour Provincial offices NSF account
* The unsatisfactory levels of participation and accountability of
government departments on their 1% payroll-training budget
including their 10 % financial contribution towards SETA
administration
* The need to strength our working relations with the Department of
Education and public and private institutions at FET and HET levels
in order to maximise our impact.
We move into this financial year having just launched the new
National Skills Development Strategy, which should take us to the
year 2010, the historic year when we will be hosting the world in
soccer spectacular never before hosted in our continent.
Even our detractors will have to agree that “if you cannot
beat them, then join them”. We are marching into this new
phase not only propelled by our successes, but further cognisant
that our success in the next five years will not only make us
proud, but will also make the continent and the world proud. Our
detractors could not stop us in the last years as the South African
skills revolution unfolded, they must therefore forget it in the
next years as the World’s skills revolution unravels.
Employment equity is another GDS target that forms part of our
programme of action. Those who are opposed to this can shout as
much as they want, even climbing on top of the Table Mountain, but
what they must know is that employment equity is here to stay.
Since this house passed the Employment Equity Act, my Department
has been ensuring that employers comply procedurally with the Act
by submitting their reports as required by the law. This focus has
led to more employers submitting their reports than was previously
the case – from 6 990 employers in 2002 to 9 364 employers in
October last year. The analysis of these reports has however been
showing that we are not making the necessary progress in this
regard. Top and middle management in companies continues to be
dominated by white males. We are therefore changing gear
significantly in this financial year.
We are now going to ensure that employers comply substantively with
the act and are not just meeting the minimum standard of submitting
reports without any equity changes in the workforce.
In an effort to strengthen monitoring and enforcement of the
implementation of this Act and other legislation, a National Roving
Inspectorate Unit will be introduced this year.
The key responsibility of this unit will be to conduct inspections
that require expert talent at national level. The agility of this
unit is expected to enhance the impact of inspectorate nationally
and thus raise compliance levels. In addition to this, strategic
partnerships will be explored to focus on administrative aspects of
inspection work to allow inspectors to focus on the core business
of the inspectorate. We have already taken a group of employers in
the clothing industry within the New Castle area to the Labour
Court for non-compliance with the legislation. Possible fines for
such non-compliance range form R500 000 to R900 000, should the
Labour Court judge find in our favour? We will also be initiating a
5-year impact study on the progress of the implementation of the
Employment Equity Act since its inception.
In my last Budget vote speech I mentioned that my Department was
looking at the sensitive topic of “casualisation and the
changing nature of work” in the country. I promised that the
report on the topic would be completed before the end of September
2004. That report was finalised and presented to NEDLAC for
discussion by our social partners. The social partners agreed that
there has been a significant growth of atypical forms of employment
and an increase in non-standard employment relationships. They also
agreed that there is a problem of abuse of some non-standard
employment relationships and evasion of labour legislation
resulting in the infringement of workers’ rights that
accompanies the increase in atypical work.
The social partners further agreed that there is a need for a
package of interventions to address these problems. These
interventions, discussions of which should be complete by November
this year, should assist us in our continued effort to protect
vulnerable workers.
Ngomhla wama-28 kule nyanga ka Tshazimpunzi ndiya kubandisazisa
isizwe ngolungelelwaniso lwemivuzo yabaqhubi bama-Tekisi. Ngumbi
ongelula ke lo kuba abaqhubi bafuna imali ethe xhaxhe babe bona
abanini zi-Teksi benqwenela umvuzo ophantsi. Abanini zi-Teksi
nabaqhubi babo mabazi ukuba inkunzi luthethwa-thethwano phakathi
kwabo ngaphezu kokuqxoga uMphathiswa weZemisebenzi. Kaloku kufuneka
singuRhulumente sivelele zonke iinkalo xa siqulunqa le mivuzo.
Sijonge ukuba abasebenzi bakhuseleke kananjalo sijonge nokuba
abaqeshi babenakho ukumelana nale mivuzo.
Further to our efforts to protect vulnerable workers we have also
been ensuring that our approach is similarly flexible and sensitive
to varying labour market needs.
It is with this in mind that we granted permissions to vary
prescribed minimum wages and conditions of employment for 502 of
the 703 applications received in the farm worker sector in 2003,
and granted similar permissions for 457 of the 797 applications
received in 2004.
On social protection, the Unemployment Insurance Fund remains an
important aspect of the overall Government Social Security
programme by bringing temporary economic relief to millions of
South African workers in times of need. The Fund continues to
provide short-term relief to workers when they become unemployed,
or are unable to work because of illness, maternity or adoption
leave. It also provides relief to the dependants of deceased
contributors.
Yes, we need to concede that the Fund is still facing challenges on
financial management, and that this is simply unacceptable. It is
of grave concern to me, as the Minister of Labour, seeing one of my
programmes being called to account before the Standing Committee of
Public Accounts (SCOPA), as the UIF did at the beginning of last
month. This simply means that we have some serious problems. In
response to the 2003/04 Auditor-General’s report I acted
swiftly by announcing corrective measures to rectify the situation
at the Fund. Some of the steps included the appointment of a Chief
Financial Officer (CFO), which was one of the issues hampering
financial governance.
I have also instituted two forensic probes in September 2004 into
the reported cheque fraud and into the reported unknown credit
entry amounting to R4.1 million as well as unknown debits amounting
to R10 million as contained in the AG’s report. The two
forensic investigations have been completed and I have received the
reports thereof.
Indications are that there is a need to investigate further and get
convincing information from affected financial institutions. We
have started to implement some of their recommendations towards
strengthening financial controls.
It is however not all doom and gloom. Allow me this opportunity to
allay the fears of workers and employers about the UIF. The Fund,
which just three years ago was declared technically insolvent,
became fully funded in December last year. What this means is that
the Fund has achieved one of its main turnaround objectives, that
of becoming financially sustainable. The actuaries required the UIF
to build reserves of up to R8.4 billion in order for the Fund to be
financially viable and now this has been achieved and was exceeded
in December 2004 when the UIF reached R9.3 billion of
reserves.
The Compensation Fund is one of the areas where we need to improve
in order to meet the expectations of the public. What we have
uncovered is that the Fund’s systems are obsolete and need
revamping. Among the key interventions planned for the current
financial year is a business process re-engineering intervention
aimed at making the Fund’s systems and processes equal to the
expectations of our clients. It is anticipated that it will address
many of the operational problems that the fund has
experienced.
It must however be stated that Compensation Fund has continued to
play a significant role in the social protection area as reflected
in its increasing amounts paid out to claimants.
The interventions and progress that I mentioned today is as a
result of our efforts to strengthen service delivery. To enable
compliance to our labour laws, and ensure that beneficiaries have
sufficient information regarding their rights and obligations, we
re-aligned our information dissemination processes and
communications systems. Not only was our website, as a rich source
of information to diverse users changed, we also leveraged our
Information Communications Technology systems to ensure that people
attending our labour centres are catered for with regards to key
information that they require. In line with the President’s
call, we have also ensured that our iimbizo are effectively used to
not only get feedback from our beneficiaries and stakeholders
regarding the levels of our service, but also to entrench the noble
concept of partnerships and the social contract in the spirit of
the People’s Contract. From this year, I have instructed top
officials of my department to spend more time in the provinces and
labour centres to ensure better service delivery.
Let me also announce to the house that our country will be hosting
the AU Labour and Social Affairs Commission from the 18 to 23 April
at the Caesars Conference Centre in Johannesburg. Key amongst the
issues to be looked at by the Commission will be a follow-up on the
plan of action agreed to by the 53 member states of the AU Summit
in Burkina Faso last year on employment creation and poverty
alleviation.
These are issues at the core of our government’s Programme of
Action, these are issues that shaped the Congress of the People in
Kliptown, and these are issues that continue to inform the
Strategic Plan of my Department.
Lastly let me take the opportunity of this Budget Vote speech to
thank statutory bodies and institutions linked to the work of the
Department, without whom these successes would not have been
achieved. These include the Commission for Employment Equity,
Employment Conditions Commission, National Productivity Institute,
Commission for Conciliation, Mediation, and Arbitration, National
Economic Development and Labour Council, and National Skills
Authority. Some of these bodies, including the ECC, CEE, and NSA
will be reconstituted during this financial year. We need to also
thank the Portfolio Committee especially our Chairperson for their
role and oversight of the Department’s work.
In conclusion this year not only serves as the 50th anniversary of
the Freedom Charter, it is also the twentieth anniversary of the
founding of the Congress of South African Trade Unions, and the
tenth anniversary of that important institution of ours –
Nedlac. As a Christian, I don’t think it is simply a
coincidence that we are celebrating these anniversaries in one
year. The aspirations of our people, their dreams, hopes, and as
the late Oom Gov put it, their stars - have been guiding them in
one direction, “that South Africa belongs to all who live in
it, black and white…”
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