Date: 10/09/2003
Source: Ministry of Labour
Title: Mdladlana: Parliamentary Media Briefing, September 2003
BRIEFING BY THE MINISTER OF LABOUR, MMS MDLADLANA, AT THE PARLIAMENTARY MEDIA BRIEFING, Cape Town, 10 September 2003
The challenges facing our government - indeed our people - remain huge and nowhere is that more apparent than in the South African labour market. Our interventions in the labour market remain defined by having to deal with the legacy of apartheid and colonialism. However, the picture is not bleak, because government is on track in delivering a better life for all.
The key here is delivery, delivery of our vision of a labour market which is conducive to economic growth, investment and employment creation and is characterised by rising skills, equity, sound labour relations, respect for employment standards and worker rights.
There are numerous ways - disparate when looked at in isolation - but extremely powerful when regarded in their entirety that are enhancing our ability to deliver. These range from ongoing advocacy, implementation and enforcement programmes, to the formulation of further interventions to protect vulnerable workers and to the sharpening of current legislation to enhance its efficacy.
In this briefing I will not detail all the activities of the Department but I wish to focus on the following areas:
- Skills Development Act Amendments
- The Unemployment Insurance Act Amendments
- IES activities
- Sectoral Determination for the Taxi Sector
- Developments emerging from the Growth and Development Summit.
Before I address the two Amendment Bills I will take through Parliament during this sitting, I want to emphasise that neither of these Bills constitute a major policy shift, but are adjustments aimed at ensuring that we are even more effective in the delivery of these services.
The Skills Development Bill
As with all labour legislation and regulations, the Amendments have been developed in partnership with organised business, organised labour and the community constituency. In this instance there were three distinct phases to the consultation procedure in the preparation of these amendments.
- A draft Bill was prepared which was circulated for discussion amongst all of the Sector Education and Training Authorities, the constituency members of the National Skills Authority and affected government departments
- A draft incorporating these changes was tabled at the National Skills Authority which provided advice on the matter to me, as a result of which a third draft was prepared
- The third phase of the consultation followed Cabinet approval of the revised draft Bill. This phase was divided into two parts, the one involving the National Economic, Development and Labour Council (Nedlac) and the other involving the publication of the draft Bill for public comment.
This Bill is intended to support and strengthen the implementation of the Skills Development Act, 1998. A key objective is to strengthen the Minister's powers to influence the work of, and hold to tighter account, the Sector Education and Training Authorities (SETAs).
These measures include:
Service Level Agreements: It will become mandatory for SETAs to enter an annual service level agreement with the Department of Labour. This will define performance targets in relation to the implementation of the National Skills Development Strategy and detail reporting requirements. The proposals empower the Minister to issue an instruction to a SETA if it fails to meet its obligations under the service level agreement or applicable legislation.
Regulation of SETA administration: The Minister is currently only able to set the limit on the funds SETAs can utilise for administrative purposes. The Minister's discretionary powers will be extended to determine salaries for staff and allowances of Board members, should the Minister deem it necessary to do so.
Equity considerations: Skills development and the achievement of employment equity are inextricably linked. It is proposed to make it obligatory for each SETA to address the question of equity both on its governing body and in its staff composition.
Employment and Skills Development Agencies: This amendment seeks to eliminate the so-called hassle factor that small and medium enterprises experience in implementing skills development. The changes will enable small firms and even non-governmental organisations to take on learners without having to take on the administrative functions associated with learnerships by allowing them to contract a dedicated agency to perform the functions of the employer in terms of learnership agreements.
A new SETA function is introduced: Currently the Department of Labour is piloting the internationally recognised Investors in People standard. The National Skills Authority is extensively involved in the piloting exercise. It is a standard that recognises organisations that have demonstrated their commitment to developing and recognising their people. The proposed amendment will empower the Minister to recognise a national standard and enable the Minister to give institutional effect to this commitment.
Private Employment Agencies: Whilst there has always been an obligation for private employment agencies to register with the Department of Labour there has been some confusion about the power of the Director General to de-register unscrupulous private employment agencies and to compel them to close down. The Bill seeks to clarify this matter.
Other changes include, empowering the Minister to effect changes to the scope of a SETA's coverage or the merger of SETAs. The Bill also clarifies the Minister's position regarding the take over of the administration of a Seta.
Before talking of the changes to the UI Act, I would like to outline some of the successes that the Skills Development Act has already enabled, these successes will be accelerated by the passing of this legislation.
The number of learnership programmes registered has more than doubled between 2001/2 and 2002/3 to 478. This is in line with the targets set in the National Skills Development Strategy, while the number of learners enrolled on learnerships was almost seven times greater in March 2003 compared to March 2002. The NSF funded 577 scholarships and almost 2700 under-graduate bursaries in areas of scarce skills.
This is a huge achievement for the ANC government in a very short period of time. However, it is imperative that the focus continues to be placed on learnership implementation in order to reach the target of 80 000 by March 2005. This will be supported in the next year by the agreements reached at the Growth and Development Summit - which I will talk to later. Measured by any standard, the skills programme is a success and learnerships are on track.
The Portfolio Committee on Labour has adopted both the Unemployment Insurance Amendment and Skills Development Amendment Bills without reservations. The Bills will now be debated in the National Assembly on Wednesday, 17 September 2003.
The UI Amendments are part of the successful turnaround strategy being implemented by the fund, based on four main pillars, i.e., legislative reform, information technology, human resources and institutional restructuring.
The successful and ongoing implementation of this strategy has already resulted in an increase in the Fund's income from R2.1 billion in 2001 to R3.8 billion in 2002/2003.
The fund also continued to provide benefits to the unemployed workers. Despite the fact that 2002/2003 saw a decline in unemployment and illness benefits, UIF experienced an increase in benefits paid to workers on maternity leave and the dependants of deceased contributors. A total of R2.3 billion was paid out to the unemployed workers, while over 3 million commercial employees have been registered with the Fund.
The Fund has a surplus of R1.4 billion from a previous string of deficits. As part of the turnaround strategy, we were able to contain expenditure in an attempt to return to financial health and to create the financial strength needed to bring about lasting change.
Part of the new policy framework is an annual actuarial evaluation. In the 2002/3 evaluation the actuary concluded, "The fund was in a sound financial state on a cash flow basis." In line with the sound financial practice, the fund has started to implement a reserve policy with effect from 2002/2003 financial years.
As I mentioned, one of the pillars was the implementation of new legislation, which saw the Fund widening its coverage, increasing its revenue base and also improving the compliance levels.
The widening of coverage included the incorporation of domestic employees - achieving another milestone in the ANC government's commitment to protecting the most vulnerable members of our society. This was also a world record, as no other country has extended these types of benefits to the domestic sector before.
To date more than 560 000 domestic employers have registered and the details of over 430 000 domestic workers have been captured in the database of the fund.
The removal of the CCMA's jurisdiction over UIF Appeals: The removal of the definition of CCMA in Section 1 of the Act 1 will mean the CCMA will no longer have jurisdiction over UIF appeals and Regional Appeals Committees will take over this function. This change was introduced to ensure that appeals are handled by those who have direct experience of functioning of the fund.
The inclusion of seasonal workers: The removal of the definition of seasonal workers will give this category of employee coverage. The previous exclusion was unfair and in my view discriminatory.
Clarifying the status of all public servants: With the amendments we also exclude Public Servants as defined under Section 1(1) of the Public Service Act of 1994.
Multiple employers: The amendments address the situation of multiple employment relationships of domestic workers and bring in a concept of partial unemployment for those workers with more than one employer. This amendment is aimed at ensuring that a domestic worker, who is employed by more than one employer and loses one or more of those employers, shall be entitled to benefits. The amendments will also recognise that unemployment may arise for domestic workers in the event of the death of an employer.
Streamline the benefits: We also intend to streamline the benefits to allow claims officers to top-up benefits for those employees who continue to receive income from their employers whilst unemployed as a result of maternity, ill-health or are required by law to take adoption leave.
The hiccups have been identified and will be dealt with thereby enhancing the delivery of a social security net to those who need it.
Sectoral Determinations
This ANC government's commitment to the protection of vulnerable workers does not only find expression in the social security net we provide, but also in the sectoral determinations. These are interventions aimed at providing a floor of rights to workers, who because of isolation and in many instances the brutal legacy of our past, are not in a position to negotiate these rights.
The implementation of sectoral determinations holds many benefits and not just for the employee who is guaranteed a minimum wage and other basic conditions. One of the drivers behind our commitment to implement the farm worker determination was the huge, positive impact that the minimum wage would have on addressing the vicious cycle of rural poverty.
A frequently cited cause for the high number of road accidents is driver fatigue, while overloading, or too many passengers per vehicle exacerbate the terrible mortality rate. The drivers of minibus taxis constantly chasing absurdly low wages, are often those exhausted drivers with too many passengers. Addressing the way in which wages are paid and the conditions under which the drivers operate will play no small part in making South Africa's roads safer.
As I indicated earlier, a defining feature of our labour market landscape is social dialogue and this is no exception. While we have reached the final stages of the consultative process, it is yet to be completed.
This process of setting a sectoral determination for the minibus taxi sector began almost exactly four years ago, when public comments were invited on the setting of employment conditions in the sector. This was followed by information sharing sessions in the provinces that took place in 2000 and ongoing bilateral meetings with employer and worker organisations.
Running simultaneously with this process was research into the salient features of the sector. The initial research was completed, investigating:
- current conditions of employment
- appropriate definitions of small, medium and large enterprises
- the regulation of benefits.
The Employment Conditions Commission, which advises me on issues of employment standards, recommended that further research be conducted, specifically on current wage levels and the manner in which drivers get paid - whether by shift, commission or time spent driving. More information on the type of employees - such as drivers, queue marshals and the like - was also identified as necessary. The final report is expected by the end of September 2003.
Further consultations with the stakeholders will follow to discuss the outcome of the research as well as proposals on minimum wage levels and other conditions of employment. These consultations will be based at national level, and will ensure maximum input from stakeholders to the departmental process. The ECC will then consider the inputs and advise me accordingly.
The volatile nature of the industry and the essential role it plays in the lives of the majority of commuters means it is essential that all stakeholders are on board ahead of implementation, and we anticipate some tough consultations and hard decisions. However, as a result of our on-going engagement the main employer body and workers organisations are all committed to the successful implementation of a Determination.
On the issue of Sectoral Determinations, the Department implicitly took responsibility for child labour in an employment context. The BCEA places a legal prohibition on the employment of children under 15 years or those who are under the minimum school leaving age. The Act protects children between 15 and 18 years, if the employment is inappropriate for the age of the child or if the work places at risk the child's well-being, education, physical or mental health, or spiritual, moral or social development or has been prohibited through regulations.
However, special provision can be made to accommodate the employment of children in the performance of advertising, sport, artistic or cultural activities. To this extent the DoL has completed an investigation on setting appropriate conditions of employment, which will ensure that these children are protected from exploitation.
The ECC has also completed their deliberations and made recommendations for my consideration.
One of the recommendations is that employers within the sector should apply for a permit before engaging these children. The Department is investigating the establishment of an appropriate electronic permit application and case management system. Such system will expedite the processing of applications. Once this has been done, I will consider the recommendations of the ECC and promulgate a sectoral determination.
In just over a year four determinations have been introduced, for the domestic worker sector, the agricultural sector, the private security sector and the wholesale and retail sectors. These determinations all set minimum wages and are in force. Inspector and Enforcement Services is the section that ensures implementation and enforcement.
Focus on implementation and service delivery
Having put in place sound policies and legislation we charged the Department of Labour (DoL) attention to focus on implementation.
Demarcation of labour centres
- To enhance institutional capacity for effective service delivery we commissioned the Human Sciences Research Council to conduct a study on the demarcation of DoL labour centres in line with the local government structures and more importantly to bring Doll services closer to the people
- Resultant from this demarcation in addition to the existing 124 labour centres five more labour centres and 37 satellite offices will be initiated in the next MTEF budget cycle. Those that have no budgetary constraints will be effected immediately. In line with the principle of getting services to where the people are, during the Eastern Cape Imbizo in August, I visited Mount Ayliff and declared that a DoL labour centre will be established to serve local communities, which were serviced by the Lusikisiki office which, is many kilometres away. Similarly a new labour centre will be established in Soweto.
Inspection and Enforcement Services (IES)
- Having signed the historic OHS Accord with the social partners namely organised labour and organised business we embarked on a vigorous OHS campaign. This campaign focused on OHS awareness; capacity building for inspectors and backlog reduction
- Proactive, reactive and blitz inspections were done. We emphasized the two "es" namely educate and enforce. Inspector visibility coupled with advocacy has increased awareness remarkably. The blitz innovation has improved inspector productivity beyond the set standard. DOL inspectors are expected to conduct 6 inspections per inspector per week. Currently an average, one inspector conducts 8.5 inspections per week. The number of inspections increased from 51 751 to 87 815 in 2002/3 financial year
- Lessons drawn from this campaign led us to adjust our strategy. Between May 2003 and March 2004 we targeted agriculture, domestic, construction and wholesale and retail sectors, for each with a month dedicated to advocacy followed by a month of blitz inspections throughout the country
- The two topical sectoral determinations for farm and domestic workers were promulgated to protect these most vulnerable workers. Our inspections have revealed that in the agricultural sector, compliance with the determination ranges from 65 to 90 percent in different parts of the country. On average 1073 domestic inspections were conducted in August 2003 by our ten provincial offices. This proved to be the friendliest sector to inspect and compliance is generally higher than in agriculture. In a number of instances employers pay more than the minimum wage determined. Some employers indicated that one of the reasons why there was such positive response was the advocacy work that preceded the inspections. People knew about inspections and their purpose beforehand. This experience in the domestic sector may be generalised for use in other sectors where possible
- To contain the problem of OHS backlog accumulated over many years we developed a backlog reduction strategy. Currently backlog is reduced at an average rate of 21% per month thus allowing us to project that we will finish the OHS backlog before March 2004
- From the past financial year hitherto about 650 inspectors have undergone training through Technikon South Africa. We have tried to equip our inspectors with better skills and tools of trade are supplied to enable them to discharge their duties better. About 400 vehicles have been distributed to inspectors in the past 6 months.
Employment Services
During the period under review we focused on promotion of skills development for employability and sustainable livelihood through social development initiatives in our 10 provincial offices.
- The Social Development Funding Window (SDFW) of the National Skills Fund was used to train unemployed people to become self-employed, employers or employees. In the past year R152 103 570 was spent in training 37 491 unemployed people and 26 316 of them were placed in income-generating opportunities. This is equal to a 70% placement rate compared to 36% previous year
- Of SDFW budget we allocated R77 270 978 to poverty alleviation projects, which benefited about 23 670 people mainly rural women and youth
- To further enhance our drive to use the SDFW to reduce poverty, we identify and establish partnerships with the provincial and local economic development initiatives, thus linking our Provincial Skills Development Plans with these local initiatives. Examples of these partnerships are the Working for Water project where the DoL handles the skills development part. Another example at a local level is the OR Tambo District Municipality partnership with the DoL where R8 million has been allocated targeting skills development in line with their IDP. This approach is relatively new but it has started to show the benefits of integrated planning and implementation.
The Growth and Development Summit
As all of you would know, President Mbeki convened the Growth and Development Summit (GDS) on 7 June this year, calling on social partners to lend a hand in mobilizing investment, addressing the challenges of unemployment, issues of equity and skills; as well as the development deficit.
Despite ill-conceived criticism from detractors who pronounced its failure even before it took place the GDS did take place and it was a resounding success. At the GDS, social partners demonstrated that despite differences and contradictions that characterize social dialogue; challenges that face us required each constituency to rise above their sectarian interests and seek to work together to address challenges they together identified as requiring urgent attention.
The challenge we now all face is to ensure that what has been agreed to at the GDS is implemented. Let it be understood that while the GDS was a successful event preceded by a successful process of negotiation, agreements, we have always been mindful of the fact that the implementation of agreement reached will not be an event but a process that will take place over many years. The nature of agreements reached require in the first instance, the development of appropriate institutional frameworks for implementation. Implementation of these agreements also needs sequencing in order to ensure maximum impact.
At its previous meeting, the Nedlac Executive Council, which as you know has been entrusted with the responsibility to monitor implementation of the GDS Agreements, established an implementation task-team to develop a detailed implementation plan. The said plan would focus on areas in which the collaboration of all Social Partners is necessary to ensure successful implementation. The plan would need to prioritise and sequence the implementation process. It is anticipated that this plan would be completed before the end of this month. With the new Executive Director of Nedlac, Herbert Mkhize, scheduled to commence his duties on 15 September, the finalisation of the plan will undoubtedly gain momentum.
However, the implementation of commitments made by individual constituencies will continue while the comprehensive plan is still being finalized. While I cannot speak for organised business and organised labour, I can at least mention that the former has confirmed at the previous Nedlac Exco that they have completed their implementation plan in relation to their specific commitment to the GDS. Organised labour on the other hand has reported that they have made substantial progress in putting together a plan for carrying-out their constituency - specific commitments and also in relation to areas where they have a vested interest.
As regard government, you will remember that over and above joint agreements with other stakeholders, we have also pledged to expand the public works programme that will target unskilled people who are able and willing to work but are unable to find work. The Expanded Public Works Programme (EPWP) largely involves an expansion of existing best practices in relation to current government funded labour-intensive programmes. To this end a review of existing infrastructure and poverty relief initiative has been undertaken.
Following a GDS agreement to that effect, government has re-orientated billion infrastructure programme to labour based delivery methods where technically and economically feasible. All national government departments, provincial departments, municipalities and parastatals involved in infrastructure provision are now required to consider this approach when they issue-out infrastructural development tenders. This approach will be used in addressing the current backlogs in rural roads, water and sewer pipelines and storm water drainage. Over the next five years, national government will be increasing its budgetary allocations to reduce these backlogs, through increasing provincial and municipal infrastructure grant allocations.
Expenditure in infrastructure will result in improvement of 37 000km of rural and municipal roads, 31 000km of water and sewer pipes and 1500km of storm water channels. Since these backlogs exist where the majority of the unemployed are found, it is anticipated that this intervention would create opportunities for at least 500 000 local jobs. Since these jobs are for a short-term duration, this programme is underpinned by a skills development component so as to increase the chances of participants to obtain skills that will make them employable or provide employment for themselves and others.
Over and above the commitment relating to the improved utilisation of SETAs to be effected inter alia through the proposed legislative changes I referred to earlier, I am happy to announce that Cabinet agreed at the July Lekgotla that a task team consisting of National Treasury and the Department of Labour be set up to investigate the possibility to extend financial incentives enjoyed by companies that employ learners to include those who employ interns. This initiative is aimed at creating an incentive for companies to provide work experience to as many technikon and university graduates as possible. As regards learnerships and internships within government, I would like to report that Cabinet has agreed that each government department would employ a number of learners and interns equal to 5% of its establishment. Many departments including the Department of Labour have already given effect to this decision. All government departments are expected to budget for this commitment in their Medium Term Expenditure Framework. This signals the fact that not only is government committed to the implementation of GDS agreements but that it is also committed to do everything possible to contribute towards reducing unemployment.
Employment Equity reporting deadline
Promoting diversity in the workplace remains a priority for this government. It is essential that at all levels of business, government and non-governmental organisations the workforce is representative of the broader demographics of our society.
In order to achieve this, we have crafted the Employment Equity Act, which is aimed at assisting those people who were unfairly excluded from vast tracts of the labour market in gaining their rightful places.
A key aspect of this legislation is the collection of data on progress being made by designated employers. The deadline for the submission of Employment Equity reports by employers who employ more than 150 workers is 1 October 2003 and I call on all employers to meet this deadline. I would like to remind employers in particular that in the GDS all social partners agreed to work with government in ensuring that the spirit and letter of employment equity legislation become reality. Figures produced by the Commission of Employment Equity earlier this year, reflect progress of only one percent in relation to new entrants into top management positions by black people.
This is not acceptable and needs to be addressed. We will continue to work with and assist companies that seek to comply with this law and are experiencing challenges but I must warn that those companies that do not want to transform, that the net will soon close on them.
Issued by: The Ministry of Labour
10 September 2003
Source: Ministry of Labour
Title: Mdladlana: Parliamentary Media Briefing, September 2003
BRIEFING BY THE MINISTER OF LABOUR, MMS MDLADLANA, AT THE PARLIAMENTARY MEDIA BRIEFING, Cape Town, 10 September 2003
The challenges facing our government - indeed our people - remain huge and nowhere is that more apparent than in the South African labour market. Our interventions in the labour market remain defined by having to deal with the legacy of apartheid and colonialism. However, the picture is not bleak, because government is on track in delivering a better life for all.
The key here is delivery, delivery of our vision of a labour market which is conducive to economic growth, investment and employment creation and is characterised by rising skills, equity, sound labour relations, respect for employment standards and worker rights.
There are numerous ways - disparate when looked at in isolation - but extremely powerful when regarded in their entirety that are enhancing our ability to deliver. These range from ongoing advocacy, implementation and enforcement programmes, to the formulation of further interventions to protect vulnerable workers and to the sharpening of current legislation to enhance its efficacy.
In this briefing I will not detail all the activities of the Department but I wish to focus on the following areas:
- Skills Development Act Amendments
- The Unemployment Insurance Act Amendments
- IES activities
- Sectoral Determination for the Taxi Sector
- Developments emerging from the Growth and Development Summit.
Before I address the two Amendment Bills I will take through Parliament during this sitting, I want to emphasise that neither of these Bills constitute a major policy shift, but are adjustments aimed at ensuring that we are even more effective in the delivery of these services.
The Skills Development Bill
As with all labour legislation and regulations, the Amendments have been developed in partnership with organised business, organised labour and the community constituency. In this instance there were three distinct phases to the consultation procedure in the preparation of these amendments.
- A draft Bill was prepared which was circulated for discussion amongst all of the Sector Education and Training Authorities, the constituency members of the National Skills Authority and affected government departments
- A draft incorporating these changes was tabled at the National Skills Authority which provided advice on the matter to me, as a result of which a third draft was prepared
- The third phase of the consultation followed Cabinet approval of the revised draft Bill. This phase was divided into two parts, the one involving the National Economic, Development and Labour Council (Nedlac) and the other involving the publication of the draft Bill for public comment.
This Bill is intended to support and strengthen the implementation of the Skills Development Act, 1998. A key objective is to strengthen the Minister's powers to influence the work of, and hold to tighter account, the Sector Education and Training Authorities (SETAs).
These measures include:
Service Level Agreements: It will become mandatory for SETAs to enter an annual service level agreement with the Department of Labour. This will define performance targets in relation to the implementation of the National Skills Development Strategy and detail reporting requirements. The proposals empower the Minister to issue an instruction to a SETA if it fails to meet its obligations under the service level agreement or applicable legislation.
Regulation of SETA administration: The Minister is currently only able to set the limit on the funds SETAs can utilise for administrative purposes. The Minister's discretionary powers will be extended to determine salaries for staff and allowances of Board members, should the Minister deem it necessary to do so.
Equity considerations: Skills development and the achievement of employment equity are inextricably linked. It is proposed to make it obligatory for each SETA to address the question of equity both on its governing body and in its staff composition.
Employment and Skills Development Agencies: This amendment seeks to eliminate the so-called hassle factor that small and medium enterprises experience in implementing skills development. The changes will enable small firms and even non-governmental organisations to take on learners without having to take on the administrative functions associated with learnerships by allowing them to contract a dedicated agency to perform the functions of the employer in terms of learnership agreements.
A new SETA function is introduced: Currently the Department of Labour is piloting the internationally recognised Investors in People standard. The National Skills Authority is extensively involved in the piloting exercise. It is a standard that recognises organisations that have demonstrated their commitment to developing and recognising their people. The proposed amendment will empower the Minister to recognise a national standard and enable the Minister to give institutional effect to this commitment.
Private Employment Agencies: Whilst there has always been an obligation for private employment agencies to register with the Department of Labour there has been some confusion about the power of the Director General to de-register unscrupulous private employment agencies and to compel them to close down. The Bill seeks to clarify this matter.
Other changes include, empowering the Minister to effect changes to the scope of a SETA's coverage or the merger of SETAs. The Bill also clarifies the Minister's position regarding the take over of the administration of a Seta.
Before talking of the changes to the UI Act, I would like to outline some of the successes that the Skills Development Act has already enabled, these successes will be accelerated by the passing of this legislation.
The number of learnership programmes registered has more than doubled between 2001/2 and 2002/3 to 478. This is in line with the targets set in the National Skills Development Strategy, while the number of learners enrolled on learnerships was almost seven times greater in March 2003 compared to March 2002. The NSF funded 577 scholarships and almost 2700 under-graduate bursaries in areas of scarce skills.
This is a huge achievement for the ANC government in a very short period of time. However, it is imperative that the focus continues to be placed on learnership implementation in order to reach the target of 80 000 by March 2005. This will be supported in the next year by the agreements reached at the Growth and Development Summit - which I will talk to later. Measured by any standard, the skills programme is a success and learnerships are on track.
The Portfolio Committee on Labour has adopted both the Unemployment Insurance Amendment and Skills Development Amendment Bills without reservations. The Bills will now be debated in the National Assembly on Wednesday, 17 September 2003.
The UI Amendments are part of the successful turnaround strategy being implemented by the fund, based on four main pillars, i.e., legislative reform, information technology, human resources and institutional restructuring.
The successful and ongoing implementation of this strategy has already resulted in an increase in the Fund's income from R2.1 billion in 2001 to R3.8 billion in 2002/2003.
The fund also continued to provide benefits to the unemployed workers. Despite the fact that 2002/2003 saw a decline in unemployment and illness benefits, UIF experienced an increase in benefits paid to workers on maternity leave and the dependants of deceased contributors. A total of R2.3 billion was paid out to the unemployed workers, while over 3 million commercial employees have been registered with the Fund.
The Fund has a surplus of R1.4 billion from a previous string of deficits. As part of the turnaround strategy, we were able to contain expenditure in an attempt to return to financial health and to create the financial strength needed to bring about lasting change.
Part of the new policy framework is an annual actuarial evaluation. In the 2002/3 evaluation the actuary concluded, "The fund was in a sound financial state on a cash flow basis." In line with the sound financial practice, the fund has started to implement a reserve policy with effect from 2002/2003 financial years.
As I mentioned, one of the pillars was the implementation of new legislation, which saw the Fund widening its coverage, increasing its revenue base and also improving the compliance levels.
The widening of coverage included the incorporation of domestic employees - achieving another milestone in the ANC government's commitment to protecting the most vulnerable members of our society. This was also a world record, as no other country has extended these types of benefits to the domestic sector before.
To date more than 560 000 domestic employers have registered and the details of over 430 000 domestic workers have been captured in the database of the fund.
The removal of the CCMA's jurisdiction over UIF Appeals: The removal of the definition of CCMA in Section 1 of the Act 1 will mean the CCMA will no longer have jurisdiction over UIF appeals and Regional Appeals Committees will take over this function. This change was introduced to ensure that appeals are handled by those who have direct experience of functioning of the fund.
The inclusion of seasonal workers: The removal of the definition of seasonal workers will give this category of employee coverage. The previous exclusion was unfair and in my view discriminatory.
Clarifying the status of all public servants: With the amendments we also exclude Public Servants as defined under Section 1(1) of the Public Service Act of 1994.
Multiple employers: The amendments address the situation of multiple employment relationships of domestic workers and bring in a concept of partial unemployment for those workers with more than one employer. This amendment is aimed at ensuring that a domestic worker, who is employed by more than one employer and loses one or more of those employers, shall be entitled to benefits. The amendments will also recognise that unemployment may arise for domestic workers in the event of the death of an employer.
Streamline the benefits: We also intend to streamline the benefits to allow claims officers to top-up benefits for those employees who continue to receive income from their employers whilst unemployed as a result of maternity, ill-health or are required by law to take adoption leave.
The hiccups have been identified and will be dealt with thereby enhancing the delivery of a social security net to those who need it.
Sectoral Determinations
This ANC government's commitment to the protection of vulnerable workers does not only find expression in the social security net we provide, but also in the sectoral determinations. These are interventions aimed at providing a floor of rights to workers, who because of isolation and in many instances the brutal legacy of our past, are not in a position to negotiate these rights.
The implementation of sectoral determinations holds many benefits and not just for the employee who is guaranteed a minimum wage and other basic conditions. One of the drivers behind our commitment to implement the farm worker determination was the huge, positive impact that the minimum wage would have on addressing the vicious cycle of rural poverty.
A frequently cited cause for the high number of road accidents is driver fatigue, while overloading, or too many passengers per vehicle exacerbate the terrible mortality rate. The drivers of minibus taxis constantly chasing absurdly low wages, are often those exhausted drivers with too many passengers. Addressing the way in which wages are paid and the conditions under which the drivers operate will play no small part in making South Africa's roads safer.
As I indicated earlier, a defining feature of our labour market landscape is social dialogue and this is no exception. While we have reached the final stages of the consultative process, it is yet to be completed.
This process of setting a sectoral determination for the minibus taxi sector began almost exactly four years ago, when public comments were invited on the setting of employment conditions in the sector. This was followed by information sharing sessions in the provinces that took place in 2000 and ongoing bilateral meetings with employer and worker organisations.
Running simultaneously with this process was research into the salient features of the sector. The initial research was completed, investigating:
- current conditions of employment
- appropriate definitions of small, medium and large enterprises
- the regulation of benefits.
The Employment Conditions Commission, which advises me on issues of employment standards, recommended that further research be conducted, specifically on current wage levels and the manner in which drivers get paid - whether by shift, commission or time spent driving. More information on the type of employees - such as drivers, queue marshals and the like - was also identified as necessary. The final report is expected by the end of September 2003.
Further consultations with the stakeholders will follow to discuss the outcome of the research as well as proposals on minimum wage levels and other conditions of employment. These consultations will be based at national level, and will ensure maximum input from stakeholders to the departmental process. The ECC will then consider the inputs and advise me accordingly.
The volatile nature of the industry and the essential role it plays in the lives of the majority of commuters means it is essential that all stakeholders are on board ahead of implementation, and we anticipate some tough consultations and hard decisions. However, as a result of our on-going engagement the main employer body and workers organisations are all committed to the successful implementation of a Determination.
On the issue of Sectoral Determinations, the Department implicitly took responsibility for child labour in an employment context. The BCEA places a legal prohibition on the employment of children under 15 years or those who are under the minimum school leaving age. The Act protects children between 15 and 18 years, if the employment is inappropriate for the age of the child or if the work places at risk the child's well-being, education, physical or mental health, or spiritual, moral or social development or has been prohibited through regulations.
However, special provision can be made to accommodate the employment of children in the performance of advertising, sport, artistic or cultural activities. To this extent the DoL has completed an investigation on setting appropriate conditions of employment, which will ensure that these children are protected from exploitation.
The ECC has also completed their deliberations and made recommendations for my consideration.
One of the recommendations is that employers within the sector should apply for a permit before engaging these children. The Department is investigating the establishment of an appropriate electronic permit application and case management system. Such system will expedite the processing of applications. Once this has been done, I will consider the recommendations of the ECC and promulgate a sectoral determination.
In just over a year four determinations have been introduced, for the domestic worker sector, the agricultural sector, the private security sector and the wholesale and retail sectors. These determinations all set minimum wages and are in force. Inspector and Enforcement Services is the section that ensures implementation and enforcement.
Focus on implementation and service delivery
Having put in place sound policies and legislation we charged the Department of Labour (DoL) attention to focus on implementation.
Demarcation of labour centres
- To enhance institutional capacity for effective service delivery we commissioned the Human Sciences Research Council to conduct a study on the demarcation of DoL labour centres in line with the local government structures and more importantly to bring Doll services closer to the people
- Resultant from this demarcation in addition to the existing 124 labour centres five more labour centres and 37 satellite offices will be initiated in the next MTEF budget cycle. Those that have no budgetary constraints will be effected immediately. In line with the principle of getting services to where the people are, during the Eastern Cape Imbizo in August, I visited Mount Ayliff and declared that a DoL labour centre will be established to serve local communities, which were serviced by the Lusikisiki office which, is many kilometres away. Similarly a new labour centre will be established in Soweto.
Inspection and Enforcement Services (IES)
- Having signed the historic OHS Accord with the social partners namely organised labour and organised business we embarked on a vigorous OHS campaign. This campaign focused on OHS awareness; capacity building for inspectors and backlog reduction
- Proactive, reactive and blitz inspections were done. We emphasized the two "es" namely educate and enforce. Inspector visibility coupled with advocacy has increased awareness remarkably. The blitz innovation has improved inspector productivity beyond the set standard. DOL inspectors are expected to conduct 6 inspections per inspector per week. Currently an average, one inspector conducts 8.5 inspections per week. The number of inspections increased from 51 751 to 87 815 in 2002/3 financial year
- Lessons drawn from this campaign led us to adjust our strategy. Between May 2003 and March 2004 we targeted agriculture, domestic, construction and wholesale and retail sectors, for each with a month dedicated to advocacy followed by a month of blitz inspections throughout the country
- The two topical sectoral determinations for farm and domestic workers were promulgated to protect these most vulnerable workers. Our inspections have revealed that in the agricultural sector, compliance with the determination ranges from 65 to 90 percent in different parts of the country. On average 1073 domestic inspections were conducted in August 2003 by our ten provincial offices. This proved to be the friendliest sector to inspect and compliance is generally higher than in agriculture. In a number of instances employers pay more than the minimum wage determined. Some employers indicated that one of the reasons why there was such positive response was the advocacy work that preceded the inspections. People knew about inspections and their purpose beforehand. This experience in the domestic sector may be generalised for use in other sectors where possible
- To contain the problem of OHS backlog accumulated over many years we developed a backlog reduction strategy. Currently backlog is reduced at an average rate of 21% per month thus allowing us to project that we will finish the OHS backlog before March 2004
- From the past financial year hitherto about 650 inspectors have undergone training through Technikon South Africa. We have tried to equip our inspectors with better skills and tools of trade are supplied to enable them to discharge their duties better. About 400 vehicles have been distributed to inspectors in the past 6 months.
Employment Services
During the period under review we focused on promotion of skills development for employability and sustainable livelihood through social development initiatives in our 10 provincial offices.
- The Social Development Funding Window (SDFW) of the National Skills Fund was used to train unemployed people to become self-employed, employers or employees. In the past year R152 103 570 was spent in training 37 491 unemployed people and 26 316 of them were placed in income-generating opportunities. This is equal to a 70% placement rate compared to 36% previous year
- Of SDFW budget we allocated R77 270 978 to poverty alleviation projects, which benefited about 23 670 people mainly rural women and youth
- To further enhance our drive to use the SDFW to reduce poverty, we identify and establish partnerships with the provincial and local economic development initiatives, thus linking our Provincial Skills Development Plans with these local initiatives. Examples of these partnerships are the Working for Water project where the DoL handles the skills development part. Another example at a local level is the OR Tambo District Municipality partnership with the DoL where R8 million has been allocated targeting skills development in line with their IDP. This approach is relatively new but it has started to show the benefits of integrated planning and implementation.
The Growth and Development Summit
As all of you would know, President Mbeki convened the Growth and Development Summit (GDS) on 7 June this year, calling on social partners to lend a hand in mobilizing investment, addressing the challenges of unemployment, issues of equity and skills; as well as the development deficit.
Despite ill-conceived criticism from detractors who pronounced its failure even before it took place the GDS did take place and it was a resounding success. At the GDS, social partners demonstrated that despite differences and contradictions that characterize social dialogue; challenges that face us required each constituency to rise above their sectarian interests and seek to work together to address challenges they together identified as requiring urgent attention.
The challenge we now all face is to ensure that what has been agreed to at the GDS is implemented. Let it be understood that while the GDS was a successful event preceded by a successful process of negotiation, agreements, we have always been mindful of the fact that the implementation of agreement reached will not be an event but a process that will take place over many years. The nature of agreements reached require in the first instance, the development of appropriate institutional frameworks for implementation. Implementation of these agreements also needs sequencing in order to ensure maximum impact.
At its previous meeting, the Nedlac Executive Council, which as you know has been entrusted with the responsibility to monitor implementation of the GDS Agreements, established an implementation task-team to develop a detailed implementation plan. The said plan would focus on areas in which the collaboration of all Social Partners is necessary to ensure successful implementation. The plan would need to prioritise and sequence the implementation process. It is anticipated that this plan would be completed before the end of this month. With the new Executive Director of Nedlac, Herbert Mkhize, scheduled to commence his duties on 15 September, the finalisation of the plan will undoubtedly gain momentum.
However, the implementation of commitments made by individual constituencies will continue while the comprehensive plan is still being finalized. While I cannot speak for organised business and organised labour, I can at least mention that the former has confirmed at the previous Nedlac Exco that they have completed their implementation plan in relation to their specific commitment to the GDS. Organised labour on the other hand has reported that they have made substantial progress in putting together a plan for carrying-out their constituency - specific commitments and also in relation to areas where they have a vested interest.
As regard government, you will remember that over and above joint agreements with other stakeholders, we have also pledged to expand the public works programme that will target unskilled people who are able and willing to work but are unable to find work. The Expanded Public Works Programme (EPWP) largely involves an expansion of existing best practices in relation to current government funded labour-intensive programmes. To this end a review of existing infrastructure and poverty relief initiative has been undertaken.
Following a GDS agreement to that effect, government has re-orientated billion infrastructure programme to labour based delivery methods where technically and economically feasible. All national government departments, provincial departments, municipalities and parastatals involved in infrastructure provision are now required to consider this approach when they issue-out infrastructural development tenders. This approach will be used in addressing the current backlogs in rural roads, water and sewer pipelines and storm water drainage. Over the next five years, national government will be increasing its budgetary allocations to reduce these backlogs, through increasing provincial and municipal infrastructure grant allocations.
Expenditure in infrastructure will result in improvement of 37 000km of rural and municipal roads, 31 000km of water and sewer pipes and 1500km of storm water channels. Since these backlogs exist where the majority of the unemployed are found, it is anticipated that this intervention would create opportunities for at least 500 000 local jobs. Since these jobs are for a short-term duration, this programme is underpinned by a skills development component so as to increase the chances of participants to obtain skills that will make them employable or provide employment for themselves and others.
Over and above the commitment relating to the improved utilisation of SETAs to be effected inter alia through the proposed legislative changes I referred to earlier, I am happy to announce that Cabinet agreed at the July Lekgotla that a task team consisting of National Treasury and the Department of Labour be set up to investigate the possibility to extend financial incentives enjoyed by companies that employ learners to include those who employ interns. This initiative is aimed at creating an incentive for companies to provide work experience to as many technikon and university graduates as possible. As regards learnerships and internships within government, I would like to report that Cabinet has agreed that each government department would employ a number of learners and interns equal to 5% of its establishment. Many departments including the Department of Labour have already given effect to this decision. All government departments are expected to budget for this commitment in their Medium Term Expenditure Framework. This signals the fact that not only is government committed to the implementation of GDS agreements but that it is also committed to do everything possible to contribute towards reducing unemployment.
Employment Equity reporting deadline
Promoting diversity in the workplace remains a priority for this government. It is essential that at all levels of business, government and non-governmental organisations the workforce is representative of the broader demographics of our society.
In order to achieve this, we have crafted the Employment Equity Act, which is aimed at assisting those people who were unfairly excluded from vast tracts of the labour market in gaining their rightful places.
A key aspect of this legislation is the collection of data on progress being made by designated employers. The deadline for the submission of Employment Equity reports by employers who employ more than 150 workers is 1 October 2003 and I call on all employers to meet this deadline. I would like to remind employers in particular that in the GDS all social partners agreed to work with government in ensuring that the spirit and letter of employment equity legislation become reality. Figures produced by the Commission of Employment Equity earlier this year, reflect progress of only one percent in relation to new entrants into top management positions by black people.
This is not acceptable and needs to be addressed. We will continue to work with and assist companies that seek to comply with this law and are experiencing challenges but I must warn that those companies that do not want to transform, that the net will soon close on them.
Issued by: The Ministry of Labour
10 September 2003
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