Date: 05/04/2005
Source: Ministry 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.
Okwesibini nokona kubalulekileyo kukuba abasebenzi bazi ukuba bafanele ukuba imivuzo yabo ixoxwa kwiqonga elimiselwe oko (Bargaining Council). Lo nto ke iyakubanika amandla nenkululeko ukuze bangaxhomekeki ekukhongozweni nguMphathiswa. Lihlazo elikhulu ukuba umbutho wamaSebenzi uxwaxwe uMphathiswa ngemivuzo abamele ukuba bayazilwela ngayo nabaqeshi babo.
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…”
I thank you
Issued by: Ministry of Labour
5 April 2005
Source: Ministry 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.
Okwesibini nokona kubalulekileyo kukuba abasebenzi bazi ukuba bafanele ukuba imivuzo yabo ixoxwa kwiqonga elimiselwe oko (Bargaining Council). Lo nto ke iyakubanika amandla nenkululeko ukuze bangaxhomekeki ekukhongozweni nguMphathiswa. Lihlazo elikhulu ukuba umbutho wamaSebenzi uxwaxwe uMphathiswa ngemivuzo abamele ukuba bayazilwela ngayo nabaqeshi babo.
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…”
I thank you
Issued by: Ministry of Labour
5 April 2005
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