Report of the Labour Portfolio Committee on Budget vote No22, dated 20 April 1998 as follows:

National Assembly

The Portfolio Committee on Labour, having considered and examined the Labour Budget Vote No22 and also have heard evidence from Department of Labour and interested stake holders, reports as follows: -


The Committee extended an invitation to interested parties to submit oral and / or written submissions on the budget. STANDING Rules relating to functions of the Portfolio Committees, rules 52(1) c refers.

Public hearings on this Budget vote were scheduled for 20 - 21 April 1998. The hearings were however only held on the 20 April 1998 due to less number of parties responded to the invitation prior the closing date.

The following organisations and institutions made oral and written submissions:
a) Department of Labour
b) Free Market Foundation
c) Disabled People of South Africa
d) AHI
f) SACBC (only written submission)
g) SACOB (only written submission)

The DG from the DOL briefed the Committee on the 1997 Annual Report that came at the end of the fourth year of the Minister of Labour's Five year programme (1994-1998). The report includes reports of bodies like the CCMA, NEDLAC, UIF and Compensation Fund. The report covered the first year of the Strategic Plan (1997-2000) of the DOL which was adopted in 1996.

It was indicated that the policy reform programme is incomplete but the benefits of the strategic planning are evident with 71% of the budget going to new policy initiatives. There has been an improved monitoring of implementation of programmes in 1997. The planning and monitoring processes have helped improve budgeting and expenditure in the department. Underspending has been reduced from 38.27% in 1995/96, 16.17% in 1996/97 to 6,26% in 1997/98.

There are major changes in staff composition. Tremendous strides have been made to promote affirmative action and bring into the organisation change agents that play a significant role in transformation. The Department has two categories of senior managers who have united commitment to transformation despite their varied backgrounds. The Department has mad investment in technological infrastructure, staff, training and recruitment of high calibre officers and as such this is aimed at improving delivery with a reduced work force.

Strong control measures have been introduced with the improvement of the capacity of the Internal Audit Unit. The establishment of this unit and Audit Review Committee is to investigate all unauthorised expenditure with a view of taking appropriate remedial steps before matters are reported by the DG. Through the work of this unit, the department has been able to crack down fraud.

The Department is rendering the following major services which are:
-Human resources development and Career services
-Labour relations
-Occupational Health and Safety
-Labour Market Policy
-Human Resources Management

It was indicated that SA has a very low skill profile as compared to her trading partners. There is high level of unemployment and the majority of the unemployed both young and old, lacks practical skills to enhance their employability. Restructuring of various enterprises has resulted in retrenchments, which have exacerbated the problem of unemployment. However the department had its own achievements based on the strategic plan in 1997 which are:

Training of unemployed people.
-In November 1996 to October 1997, a total of 66 475 people were trained by Training of Unemployed Persons Scheme
-7 843 unemployed people from identified target groups were trained, including prisoner and people associated with the Service Corps
-Total of 26 271 people were trained within the context of job creation schemes.

Assessment of tradespeople
-Total of 4518 apprentice underwent trade tests at the Central Organisation for Trade Testing.
-3 600 people who had acquired their skill in informal ways, came for assessment outside of the traditional apprenticeship route. Those who succeed are awarded their NQF to increase their employability.

Counselling and placement services to the unemployed
-During 1997, 3 692 053 people voluntarily registered with the department as unemployed for purpose of placement or to apply for UI benefits.
-A bursary scheme to assist people with disabilities is managed by the department and 98 people have benefited in 1997.
-292 people with disabilities were placed in employment in 1997. The problem is in the attitude of the employers when placing the disabled people
-Clients seen for counselling on individual basis is 4 825 in 1997 and 58 288 groups.

1997 saw an increase in the registration of trade unions, employers organisation and bargaining councils. 417 trade union registered representing 3.312 million workers, 64% of workers in non-agricultural employment and 24% of the economically active population. 258 employers organisation and 73 bargaining councils registered.
The department oversees the collective agreements of bargaining councils and facilitates the extension of agreements to non-parties. 69% of the agreements were extended to non-parties. The department is working with CCMA to assist the bargaining councils to the requirements of the New LRA. The department monitors the activities of the CCMA and the Chief Director represents the DOL on the Governing Body of the CCMA.

Employment Equity
A draft Bill was published for public comment at the beginning of December 1997. Negotiations with NEDLAC is almost completed and it is expected that Bill will passed by Parliament this and be implemented in 1999. A research project under the USA/SA Binational Commission on Codes of Good Practice on the extent of employment equity in South Africa. A project that will monitor employment equity plans and ensuring compliance with the proposed legislation will be completed by the end of April 1998.

Minimum Standards
The department is establishing the mechanisms to ensure effective implementation of the Basic Conditions of Employment Act. Section on Child Labour will be promulgated in March 1998 and the rest of the Act will be promulgated between August and October 1998. The success of employment conditions legislation needs more resources and support for inspection to ensure compliance.

Strengthening Civil Society
As part of the five-year plan programme the department has established the Strengthening Civil Society Fund for the purpose of strengthening the capacity of labour market institutions. R6m was disbursed to following organisations:
-IMMSA: R891.000
-South African Labour Bulletin: R200.000
-Workers Library and Museum: R100.000
-Industrial Health Unit: R300.00
-Worker's College: R360.000

The focus of the department this year will be on preventive approach as such:
-proactive inspections in high risk sectors
-promotion of self regulation
-improving legislation
-increasing OHS awareness in the formal business sector
-marketing and OHS information dissemination

Major operational constraints of the department was a severe staff shortage and this hampered the pro activity and preventiveness aim. There were incidents and fatalities investigated and finalised by the OHS for the department. 66% of prosecution was carried out and this percentage is lower than that of 1996 because of two reasons that of junior staff under training and high inspector vacancy rate of 33%.
The focus of the department is to align OHS with the transformation and restructuring strategy of the department. To this end a pilot project with the Compensation Commissioner's office and initiated discussion with the Department of Health aimed at establishing a closer working relationship. The computer programme called Integrated Occupational Safety System, for administration and management of offices.

Major activities of the Chief Directorate Labour Market Policy are the following:
-to co-ordinate interdepartmental consultations regarding the preparation of government's employment strategy in anticipation of the forthcoming President's job summit.
-capacity building through training
-initiation of research programs
-consultation with CSS regarding rationalisation of the labour market information and statistics.
-development of monitoring mechanisms of the internal and external impact of the department's policies.
-the Chief Director has to represent the department and to participate on bilateral and interdepartmental committees.
-the Chief Director has the responsibility of overseeing the activities of the NPI, which receives funds from the department on the annual basis.

Strategic Planning Unit
The department developed a three-year strategic plan in 1996, the Chief Director HRM has to focus in on its implementation in the first year 1997.

-three year strategic plan developed and aligned with National Objectives.
-provincial and chief directorates business plan aligned with the objectives of the department.
-oriented management system has been developed on programming, monitoring, evaluation and reporting
-bi-monthly reports submitted to continuously monitor progress on execution of plans.

Organisation and Work study
-the decentralisation process and delegation of powers is in progress to ensure empowerment of provincial offices and labour centres with a view to enhance efficiency.
-restructuring labour centres in order to ensure:
.accessibility of the labour centres .provision of single inspection service

Client Orientation Strategy (Batho Pele)
This strategy has been developed to:
-identify clients and stake holders of the department
-identify and address clients needs
-ensure effective communication of service provided by the department.
-ensure the publication of programmes and provincial annual work plans with clear performance standards.

-promoting performance management
-performance standards have already been set in the following areas:
time frames for processing UI and CC claims/ applications .time frames for processing of labour relations complains .policy on performance contracts and job agreements finalised

Training and Development
-programme on Adult Basic Education is being piloted at COTT.
-bursary and internship policy developed.
-orientation and re-orientation of senior managers and staff in progress, orientation booklets and manuals have been developed and distributed

Diversity Management
A diversity strategy has been developed to guide the department in dealing with the new situation. Diversity workshops has been organised with the focus on enabling staff to deal with a racially and culturally diverse workplace.

Recruitment and Selection Race representivity
Total number of employees: 5549
Total number of:
Blacks: 2820 = 51%
Coloured: 478 = 0.8%
Asians : 169 = 9%
Disabled: 45 = 0.8%
Whites: 2082 = 38%

Gender composition
Male: 2 509 = 45%
Female: 3 040 = 55%
Total: 5 549 = 100%

Service Benefits

-Number of employees retired and approved severance packages is follows:
Year Retired Severance packages Resignations
1996 11 10 368
1997 10 60 349
1998 04 2 86

The Directorate: Administration is responsible for the following activities:
Financial Management IT and Administration
Legal Services
Internal Audit

The following organisation made oral and submitted written submissions:

1. Free Market Foundation of South Africa
The Free Market Foundation felt that the primary objective of the government is to create an enabling environment in which South African citizens will have the opportunity to improve the quality of their lives by increasing the standard of living. It has indicated that if South Africa has compete globally it must be given greater economic freedom. There clear indication of policies needed to achieve a freer economy and in broad terms the policies are consistent with the GEAR Strategy.

The department must address the occupational health and safety of persons seriously and as a legitimate concerns. The department should take into account the difference in size of enterprises when imposing health and safety measures on these enterprises. The smaller enterprises will be disadvantaged on cost of compliance as opposed the large organisations.

The Free Market Foundation indicated that most companies are investing more in the human capital. South African companies are exposed to global competition. To ensure human resources development, government must remove all unnecessary encumbrances to enterprises. It indicated that the DOL has a primary role to play in eliminating unemployment and therefore the department should increase the demand for labour.

2. AHI
The AHI suggested that labour and business be invited to a briefing by the DOL on their budget prior to debate in the portfolio Committee. The DOL should supply business and labour with information that will assist them to make constructive presentation to the Portfolio Committee.
The AHI has a number of programmes inform of questions that will assist the Committee on its deliberations and these questions are kept by Committee Section for documentation.
The AHI also suggested that unions should be strengthen and SMME's be trained to increase their capacities.

The major problem facing the labour force in South Africa is
amounting rate of unemployment. According to FEDUSA South Africa needs an economic growth rate of 5% just to absorb the new entrants to the labour market. It feels that labour policies should incorporate:

-the elimination of discrimination in the labour market
-focussing on training and education to strengthen human resource function
-focus on health and safety aspect of the workplace and ensure that workplace meet international standards
-introduction of labour legislation which address the various aspect of training, discrimination and health and safety.

The Committee appreciates the efforts of those who participated in the hearings and promised to support the initiatives that the department have in their budget.

The Committee will continue to co-operate with the Ministry, Department and all stake holders as means to create economic growth and social justice.