Report of the Portfolio Committee on Labour on Budget Vote 17: Labour, dated 31 March 2005:

The Portfolio Committee on Labour, having considered Budget Vote 17: Labour, reports as follows:

A. Introduction

The Committee met with the Department of Labour (DOL) on 15 March 2005. Four entities made presentations to the Committee, namely the Compensation Fund, the Umsobomvu Youth Fund (UYF), and the National Productivity Institute (NPI) on 18 March 2005 and the Unemployment Insurance Fund (UIF) on 31 March 2005.

Persons who appeared before the Committee included –

Ms M Xaba, DDG: Corporate Services, DOL;
Mr P Mothiba, Acting DDG: Service Delivery, DOL;
Mr S Morothoba, Acting DDG: Employment and Skills Development Services /
Human Resource Development, DOL;
Dr Yvonne Dladla, Executive Director: NPI;
Mr Kobus Laubscher, Deputy Chairperson: NPI;
Mr Bongani Coka, Finance, IT and Administration: NPI;
Mr Sello Mosai, Research and Advocacy: NPI;
Mr Malose Kekana, Chief Executive Officer: UYF;
Mr M Mshali, Director: Business Development Services, UYF;
Ms Nerine Khan, Acting Compensation Commissioner: Compensation Fund;
Mr Gawie Dreyer, Chief Financial Officer: Compensation Fund;
Mr S Mkhonto, Unemployment Insurance Commissioner;
Mr S Govender, Operations Manager: UIF;
Mr B Seruwe, Chief Financial Officer: UIF;
Mr I Modise, Chief Information Officer: UIF; and
Mr S Khomotso, Communications Manager: UIF.

B. Committee deliberations on Budget Vote 17

Department of Labour

The DOL briefed the Committee on the Ministerial Programme of Action, which covered addressing challenges relating to the high levels of income poverty; inequalities and discrepancies in terms of ownership, shareholding and management; the changing nature of work; domestic and cross-border migration; strengthening labour market institutions and increasing their capacity to carry out their mandates; the management of HIV and AIDS in the workplace; and ensuring that the labour market has an efficient and effective system of occupational health and safety fully integrated with a system of compensation for occupational injuries and diseases across government.

The presentation included a reference to strategic objectives, as follows:

Contribute to employment creation
Enhance skills development
Promote equity in the labour market
Protect vulnerable workers
Strengthen multilateral and bilateral relations
Strengthen social protection
Promote sound labour relations
Strengthen the capacity of labour market institutions
Monitor the impact of legislation
Strengthen the institutional capacity of the Department

The main divisions of the Vote, with 2005/2006 allocations reflected, were made up of –

Administration – R 274 282 million
Service Delivery – R 539 275 million
Employment and Skills Development Services /
Human Resource – R147 179 million
Labour Policy and Labour Market Programmes – R 330 814 million
Social Insurance – R 22 427 million

An amount of R 4 billion was allocated for SETAs and R 1 billion was allocated for the National Skills Fund. The total allocation for 2005/2006 amounted to
R 6,3 billion.

National Productivity Institute

The NPI indicated that they were faced with limited resources, namely that approximately 84 professionals were supposed to service the whole country in terms of programmes provided by the NPI. Because of its size and budget, it was thinly spread to achieve its national mandate.

Two-thirds of the revenue comes from government grants. In other words, two-thirds of the NPI’s achievements can be attributed to government funding. The NPI needs to generate the remaining one-third of the funding. In the past NPI donor funding augmented the NPI’s budget. An additional R 33 million over the three-year term would constitute better funding.

Umsobomvu Youth Fund

The UYF did not have an official position on the merger between itself and the National Youth Commission. The delay in submitting its previous annual report was due to group reporting, where each of the entities involved financially with the UYF had to be audited as well before its report could be submitted. The UYF would like to impact 60 parliamentary constituency offices in the near future. One of the targets for 2006 is the creation of 55 000 jobs.

A total of R 855 million was received from government thus far. An amount of R501 million was committed to core projects, of which R 305 million was already disbursed. This year R 322 million will be committed and R 304 million will be disbursed to various initiatives.

The impact of the UYF can be seen by the exponential increase in the number of young people that are being trained. This year the aim is to create 20 000 jobs. The UYF is looking to leverage R 440 million from government departments, other development funding institutions and the private sector.

The UYF would be called to appear before the Committee at a later stage so that the Committee could engage further with the UYF on a range of issues.

Compensation Fund

The Fund does not receive money from the DOL. The DOL budgets for the salaries of the Fund’s staff, but later claims this amount back from the Fund. The DOL also budgets for administrative fees related to the Fund in respect of medical expenses of employees who sustained injuries while on duty.

The Fund has experienced a number of problems, such as delays in the payment of claims and a lack of response from the employer and employee in supplying information relating to claims. The backlog was also IT and HR-related.

In order to address communication problems the first pilot phase for a new IT system will take place in KwaZulu-Natal during the next quarter of the financial year. Claims enquiries will, therefore, be decentralised to provinces. The telephone system will also be updated in the next few months.

The Committee would need to interact further with the Fund in future, and possibly visit the offices of the Fund, in order to establish what progress has been made on a number of issues.

Unemployment Insurance Fund

The UIF made a presentation to the Committee on the operations of the Fund and on the Budget for 2005/2006 falling under Budget Vote 17: Labour.

C. Concluding remarks

The Committee would like to thank the various stakeholders with whom it interacted in dealing with Budget Vote 17: Labour, and looks forward to further interaction in future with those stakeholders who faced challenges in carrying out their mandates and reaching their targets.