DEPARTMENT OF LABOUR PRESENTATION TO THE SELECT COMMITTEE ON ECONOMIC BUSINESS DEVELOPMENT

1. DEPARTMENT OF LABOUR PRESENTATION TO THE SELECT COMMITTEE ON ECONOMIC BUSINESS DEVELOPMENT WORKSHOP ON BUDGET REVIEW 22 JULY 2014 1

2. Table of contents Background on the Department of Labour - Organizational structure - Vision & Mission - Legislative, Policy mandate and Amendments - Labour Market challenges - DOL capacity Overview of DOL Programmes and Entities DOL Finances - 2013/2014 Budget allocation and expenditure - 2014/15 budget allocation - challenges 4. DOL Strategic Plan 2014-2019 - Alignment with NDP and MTSF 5. DOL Programmes 2013 / 2014 Annual Performance Reports, 2014/15 Annual Performance Plans and Challenges 5.1 Programme 1 Administration 5.2 Programme 2 Inspection and Enforcement Services 5.3 Programme 3 Public Employment Services 5.4 Programme 4 Labour Policy and Industrial Relations 2

3. 1.1. DoL’s Top Organizational Structure 3

4. 1.2. DoL’s Top Organizational Structure 4

5. 1.3. Our Vision The Department of Labour will strive for a labour market which is conducive to investment, economic growth, employment creation and decent work 5

6. 1.4. Our mission Regulate the south African labour market for a sustainable economy through : appropriate legislation and regulations Inspections ,compliance monitoring and enforcement Protection of human rights Provision of employment services Promoting equity Social and income protection Social dialogue 6

7. 1.5. Our Values • We treat employees with care, dignity and respect • We respect and promote: - Client centred services - Accountability - Integrity and ethical behaviour - Learning and development • We live the Batho Pele Principles • We live the principles of the Department’s Service Charter • We inculcate these values through our performance management system. 7

8. 1.6. Constitutional Mandate The DOL’s legislative framework is informed by the South African Constitution, Chapter 2 & Bill of Rights: • Section 9, ensure equal access to opportunities • Section 10, promotion of labour standards & fundamental rights at work • Section 18, Freedom of association • Section 23, to ensure sound Labour relations • Section 24, to ensure an environment that is not harmful to the health & will being of those in the workplace • Section 27, to provide adequate social security nets to protect vulnerable workers • Section 28, to ensure that children are protected from exploitative labour practices & not required or permitted to perform work or services that are inappropriate for a person of that child’s age or their well being, education, physical or mental health or spiritual, moral or social development is placed at risk • Section 34, access to courts & access to fair and speedy labour jusctice 8

9. 1.7. Legislative and other Policy Mandates The South African Constitution and related policies and prescripts, and learning from the various ILO Conventions and International Labour Standards, the Department of Labour administers the following labour legislation: • Labour Relations Act 66 of 1995 (LRA); • The Basic Conditions of Employment Act 75 of 1997 (BCEA); • The Employment Equity Act 55 of 1998 (EEA); • The Unemployment Insurance Act 30 of 1996 (UIA); • The Occupational Health and Safety Act 85 of 1993 (OHSA); • The Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA); and • National Economic Development and Labour Council (NEDLAC) Act, 35 of 1994. • Employment Services Act (Act No. 4 of 2014) 9

10. 1.8. Progress on legislative amendments • Basic Conditions of Employment Act, Act No.20 of 2013 • Promulgation target date : July 2014 2. Employment Equity Act, Act No. 47 of 2013 • Regulations that include method and criteria for equal pay for work of equal value finalised at NEDLAC • Promulgation target date: July 2014 3. Labour Relations Amendment Bill, 2012 • Currently with the State President for his assent • Draft Regulations are being finalised 10

11. 1.9. Progress on legislative amendments 4. Employment Services Act, Act No.4 of 2014 • Promulgation of chapters 1, 2, 4, 5 and 6 target date: July 2014 • Unemployment Insurance Fund Amendment Bill NEDLAC report and Cabinet approved Bill referred to Parliament 6. During 2014/2015 the Department will finalise proposed amendments to: - Occupational Health and Safety Act and - Compensation for Occupational Injuries and Diseases Act 11

12. 1.10. Challenges that DOL face in the Labour Market • Unemployment and under employment • Changing nature of work • Inequalities and unfair discrimination • Domestic and cross border labour migration • Inadequate instruments for constant performance, monitoring and evaluation of labour market and programmes to determine their impact on the economy 12

13. 3 509 953 Population: Major economic hub: 18 178 sq km Land area: 125 754 sq km; Pop. 5 404 868; 1 136 km; 104 882 land area sq Population 12 272 263; employed 4 794 unemployment rate (333 000 000 employed and 256 000 unemployed (18.4% 27.7% 000, unemployed 1 669 000 and 25.8% unemployment rate) in March 2014. GDP 7.1% unemployed); and 870 000 unemployment rate in March 2014) employed in March 2014 GDP 6.4% GDP 34.7% contribution to SA economy Highest labour absorption Smallest GDP growth & economic contribution with 1 145 861 people, 372 889 sq km, 29% unemployment rate (126 000 unemployed) and 308 000 employed in March 2014. GDP 2.2 % Population: 4 039 939; land area 76 495 sq km; 30.4% unemployment rate (492 000 unemployed); and 1 127 000 employed in March 2014 GDP 7.1% 2 745 590 land Population: sq km area 129 825 34.7% unemployment rate(384 000 unemployed); and 724 000 employed in March 2014. GDP 5.2% 6 562 053 Population: 168 966 land area sq km; largest 29.4% unemployment rate nd 2 - SA economy with 94 361 rd 3 largest - SA economy with 5 822 734 people ( 556 000 unemployed); sq km, 10 267 300 people, 2 527 000 living in 129 462 sq km, 2 237 000 employed, 1 332 000 and employed in employed and 20.7% unemployment rate (659 20.9% unemployment rate (593 000 unemployed) March 2014, GDP 7.5% in March 2014. GDP 14% 000 unemployed) in March 2014 GDP 15.8% 13

14. 1.12. DOL Offices across the country • - HQ and 2 Funds in Pretoria • 9 DoL Provincial Offices • 126 Labour Centres • 17 Mobile Units to access remote area visiting points • 2 well equipped PES Busses • Provide services in 72 out of 139 ThusongCentres once a week • 12 SEF Factories in 7 Provinces • (Except in MP & L) Limpopo Mpumalanga Gauteng North West KwaZuluNatal Free State Northern Cape Eastern Cape Western Cape 14

15. 2. Department of Labour Programmes 2014/2015 4. DEPARTMENT OF LABOUR PROGRAMMES: 2010/11 DoL programmes are as follows: • Programme 1: Administration:Ministry; Deputy Minister, Director General’s Office; Corporate Services (CS), Chief Operations Officer (COO), Chief Financial Officer (CFO) • Programme 2: Inspection and Enforcement Services (IES) • Programme 3: Public Employment Services • Programme 4: Labour Market Policy & Industrial Relations • Protected Employment Enterprises (currently trading as Sheltered Employment Factories • Unemployment Insurance Fund (Schedule 3A Public Entity) • Compensation Fund (Schedule 3A Public Entity) 15

16. 2.1. Public Entities Associated with DOL Entities established in terms of various legislations to assist DOL to meet its mandate: • Unemployment Insurance Fund (UIF) • Compensation Fund (CF) • Protected Employment Enterprises (currently trading as Sheltered Employment Factories[SEF]) • Commission for Conciliation, Mediation and Arbitration (CCMA) • National Economic Development and Labour Council (NEDLAC) • Productivity South Africa (Productivity SA) 16

17. UNEMPLOYMENT INSURANCE FUND JOB CREATION INITIATIVES 17

18. Strategic Objective 1: Fund Poverty Alleviation Schemes • The Minister of Labour approved and launched 9 training initiatives and committed R300 million for training of these unemployed beneficiaries. • The R 4 billion UIF/IDC partnership has resulted in 21,192 jobs saved and 23,268 jobs created since the inception of the partnership in 2009. • The proposal to create a Labour Activation Fund was submitted to the Minister on 31 March 2014 and approval to proceed to the next step of feasibility approved.

19. Unemployment Insurance Fund The UIF operates under the following Strategic Objectives: • Fund Poverty Alleviation Schemes • Improve Governance • Strengthen the Institutional Capacity of the Fund • Encourage Compliance through Service Delivery • Improve Stakeholder Relations

20. Strategic Objective 1: Fund Poverty Alleviation Schemes • The Minister of Labour approved and launched 9 training initiatives and committed R300 million for training of these unemployed beneficiaries. • The R 4 billion UIF/IDC partnership has resulted in 21,192 jobs saved and 23,268 jobs created since the inception of the partnership in 2009. • The proposal to create a Labour Activation Fund was submitted to the Minister on 31 March 2014 and approval to proceed to the next step of feasibility approved.

21. Strategic Objective 2: Improve Governance • 90% of all fraudulent cases were investigated and finalized during the financial year • Internal Audit were conducted in 28 offices with 90% of reports presented to and signed off by management. Implementation of improvement recommendations is in progress.

22. JOB CREATION INITIATIVES:Contribution to ndp

23. TRAINING OF THE UNEMPLOYED • In December 2013, the Minister of Labour approved and launched 9 training initiatives and committed R300 million for training of these unemployed beneficiaries. About 8000 unemployed beneficiaries are targeted. • During the 2013/14 financial year training schemes, which had been approved in prior year were implemented. • Proposal for the establishment of Labour Activation Fund approved. The next step in this current year is to undertake a feasibility study and submit the report to the Minister. • The Fund has signed a three year funding agreement with Productivity South Africa to fund the Turnaround Solutions. R 41 million was paid in 2013/14 and R58 million will be paid in 2014/15.

24. TRAINING OF THE UNEMPLOYED

25. SOCIAL RESPONSIBLE INVESTMENT UIF SRI FUND • 10% of the Investment Portfolio invested in Socially Responsible Investments • A R3 billion SRI Fund was established with the PIC to invest in job creation projects. • Within the SRI Fund, an Agriculture Fund has been established to invest in agricultural infrastructure and infrastructural land where jobs will be created UIF/IDC BOND • Since inception in 2009, there have been 218 approved deals (net of cancellations) with a total value of approx. R3.524 billion; • Total Jobs created = 23 268; • Jobs saved = 21 192; • Combined created and saved jobs of 44 460;

26. SOCIAL RESPONSIBLE INVESTMENT

27. COMPENSATION FUND IMPLEMENT TURN AROUND AND MORDENISATION STRATEGY 27

28. SERVICE DELIVERY OUTCOMES

29. CHALLENGES • Inefficient IT Systems. • Turnaround times in processing of compensation claims. • Backlog in processing claims and payments. • Delay and/or non-reporting of accidents. • Human capacity constraints. • Document management. • Records management system. • Centralised IT and post EOH contract. • Non-compliance by stakeholders in relation to incomplete information by employers, delays in the submission of banking details by beneficiaries and employers that fail to submit their annual returns • Fraudulent activities are still negatively affecting the finalisation of employer assessments and the debt book continues to increase.

30. PRIORITIES FOR 2014/15 • Implement a Turnaround and Modernisation Strategy by: • Conduct a scoping exercise on the ICT environment • Establishing of the Programme Management Office • Implementing business process re-engineering • Finalising of the decentralisation process including the placement of staff and resettlement to provinces • Implementing the Umehluko claims processing system • Investing in Socially Responsible Investment as part of the implementation of the Government’s Medium Term Strategic Framework 2014-2019 • Exploring ways to strengthen the capacity of DoL to conduct payroll audits • Implementing a comprehensive plan to address the disclaimer audit opinions • Finalising the amendments to COIDA • Improving human resource capacity through recruitment and capacity development

31. NEDLAC KEY ENGAGEMENTS IN CHAMBERS 31

32. Objectives of Nedlac Strive to promote the goals of economic growth, participation in economic decision-making, social equity Seek to reach consensus and conclude agreements on matters pertaining to social and economic policy Consider all significant changes to social and economic policy before it is implemented or introduced in Parliament Consider all proposed labour legislation relating to labour market policy before it is implemented or introduced in Parliament Encourage and promote the formulation of coordinated policy on social and economic matters The Nedlac Act, Act 35 of 1994 was one of the very first pieces of legislation to be signed-off by the first Democratic Parliament in 1994

33. Summary of Performance Composite Summary

34. Summary of Performance

35. Summary of Performance Key engagements in Chambers Public Finance and Monetary Policy Chamber Trade and Industry Chamber Labour Market Chamber Development Chamber

36. Where are we Now? 20 Years of Democracy Nedlac has made a significant impact on Policy, Legislative and Institutional Design -Improved performance and Output Social Dialogue is under pressure – role and relevance of Nedlac questioned. Adversarialism , Trust and Consensus Deficit Limited socio-economic impact. - Triple Challenge Employment , Inequality and Poverty Labour Market Key - Fragmentation , Conflict Skills and Social Protection Challenges

37. CCMA REVOLUTIONISING WORKPLACE RELATIONS 37

38. Arbitrate disputes that remain unresolved after conciliation; Conciliate Workplace Disputes; MANDATORY STATUTORY FUNCTIONS Facilitate the establishment of workplace forums and statutory councils; Compile and publish information and statistics about its activities; Consider applications for accreditation and subsidy from Bargaining Councils and private agencies; Establish Picketing Rules; Provide training and advice on the establishment of collective bargaining structures, workplace restructuring, consultation processes, termination of employment, employment equity programmes and dispute prevention. CCMA Revolutionizing Workplace Relations

39. DISCRETIONARY STATUTORY FUNCTIONS Supervise ballots for unions and employer organisations; Provide training and information relating to the primary objective of the LRA; Advise a party to a dispute about the procedures to follow; Offer to resolve a dispute that has not been referred to the CCMA; Publish guidelines on any aspect of the LRA and to make rules CCMA Revolutionizing Workplace Relations

40. Governance Environment Parliament Executive Authority Minister of Labour Organized Labour Governing Body Director Audit Committee Government Organized Business Governance, Social and Ethics Committee Essential Services Committee Accreditation & Subsidy Committee Commissioners & Staff Human Resource and Remuneration Committee Finance and Risk Committee CCMA Revolutionizing Workplace Relations

41. We will position the CCMA to impartially promote social justice and economic development in the world of work We will deliver professional, user-friendly, quality services with speed We will maintain organizational effectiveness and strive for continuous improvement GOALS AND STRATEGIC OBJECTIVES GOALS Enrich the role of the CCMA in the Labour Market. Build skills to achieve professionalism. Deliver excellent service rooted in social justice ensuring a balance between quality and quantity Enhance and entrench internal processes and systems for optimal deployment of resources Align the structure that will enable optimal implementation of the strategy. Entrench an organisational culture that supports the delivery of our mandate. OBJECTIVES 26 CCMA Revolutionizing Workplace Relations

42. CASELOAD 34 CCMA Revolutionizing Workplace Relations

43. CASE DISTRIBUTION BY SECTOR 2013-2014 36 CCMA Revolutionizing Workplace Relations

44. LABOUR LAWS AMENDMENTS 49 • In preparing for these amendments, the CCMA has undertaken a number of activities in order to make sure that the organization is ready to implement these proposed changes to employment laws. • A national task team led by the Director of the CCMA has been established comprising of experienced commissioners, internal and external technical experts. • Specialist working groups have been established that focus on the most complex sections of the bill such as organizational rights disputes, essential services, temporary employment services, equal pay for work of equal value(specialist commissioner panels) • Training material has been developed • Training has been delivered nationally and is ongoing(also to stakeholders) • Governing Body sub committee is working on Amendments and updating of CCMA rules • Regulations and forms are also being updated with DOL • Communication plan and advocacy programme developed CCMA Revolutionizing Workplace Relations

45. PRODUCTIVITY SOUTH AFRICA INSPIRING A COMPETITIVE SOUTH AFRICA 45

46. STRATEGIC PROGRAMMES Work Place Challenge Productivity Organisational Solutions 3. Turnaround Solutions 4. Productivity Awareness

47. Work Place Challenge targets 2014/15

48. POS targets 2014/15

49. Turnaround Solutions targets 2014/15

50. Productivity Awareness targets 2014/15