PROGRESS REPORT ON THE IMPLEMENTATION OF THE DOD HUMAN RESOURCE STRATEGY 2010 WITH PARTICULAR REFERENCE TO PERSONNEL FLOW IN THE DEPARTMENT OF DEFENCE

April 2005


1. Attached herewith find a progress report on the implementation of the DOD Human Resource Strategy 2010 with particular reference to personnel flow in the DOD.


2. The Department is looking forward to deliver the presentation to the Portfolio Committee on Defence on 12 April 2005.


Yours faithfully

(J.B. MASILELA)


SECRETARY
FOR DEFENCE: DIRECTOR GENERAL

Enclosure: Progress Report and Presentation on the DOD Human Resource Strategy 2010: Personnel Flow of the Full-Time Component


April 2005

PROGRESS REPORT ON THE IMPLEMENTATION OF THE DEPARTMEMT OF DEFENCE HUMAN RESOURCE STRATEGY 2010 WITH PARTICULAR REFERENCE TO PERSONNEL FLOW OF THE FULL-TIME COMPONENT


INTRODUCTION

1. The Department of Defence (DOD) Human Resource Strategy 2010 was developed with the aim to attain improved effectiveness, efficiency and economy in the DOD. This is to be achieved by ensuring, as far as is practically possible, that the right person is developed for and appointed in the right post at the right time. In essence, the strategy addresses the qualitative and quantitative aspects of the DOD's human resource composition. The military is intrinsically a hierarchical and rank-driven organisation, with different levels of command, functional and management responsibilities being closely related to the rank hierarchy. The extent of mission-readiness of the military therefore depends on having the right person developed for and appointed in the right post at the right time at each rank level.


2. Issues pertaining to personnel flow are at the core of the execution of HR Strategy 2010, for the very reason that the SA National Defence Force (SANDF) comprises 80 % of the total DOD full-time human resource composition. The SANDF is utterly dependent or a continuous, balanced and healthy personnel inflow and outflow to ensure that the right person is developed for and appointed in the right post at the right time.


3. The way that the personnel flow is managed, ie the tempo of inflows and outflows of members at all rank levels, determines the extent to which there is rejuvenation or ageing career mobility or stagnation, employment equity or inequity, the retention of expertise of the loss of expertise, high morale or low morale and mission readiness or non-readiness Ultimately, the management of the personnel flow determines the service deliver) capability and capacity of the DOD. Proper management of personnel flow is at the core of ensuring that the DOD's mission can be executed in the most effective, efficient and economical way.


4. The core objectives of HR Strategy 2010, namely rejuvenation composition, the implementation of the SANDF's new service system optimal representivity and the retention of scarce expertise all impact on the personnel flow in the DOD


5. Currently, the DOD is at a stage where various initiatives have already been engaged to give effect to a more effective, efficient and economical human resource composition particularly as far as rejuvenation and youth development at the lower rank levels concerned. A myriad of external and internal factors are, however, constraining the DOD from initiating a strategic personnel flow plan which will lead to the more robust achievement of the HR Strategy 2010 goals in a scheduled way. These include, most prominently, unresolved matters pertaining to options for rightsizing and rationalisation and the absence of a mobility/exit mechanism for SANDF members.


AIM

6. The aim of this report is to brief the Portfolio Committee on Defence on the implementation of the DOD HR Strategy 2010, with particular reference to the management of personnel flow of the DOD full-time HR component.


SCOPE

7. The following aspects are addressed:

a. Macro personnel strength evolution.

b. SANDF service systems evolution.

c. Personnel budget evolution.

d. Military Skills Development System progress.

e. DOD Youth Foundation Training Programme progress.

f. Post establishment considerations.

g. Age and stagnation in the ranks.

h. Rightsizing/rationalisation principles.

i. Interim Mobility/Exit Mechanism.

j. Conclusion: the way foulard.


MACRO
PERSONNEL STRENGTH EVOLUTION


8. Due to the integration of the five former Statutory and two former Non-Statutory Forces, the size of the DOD rapidly expanded from 1994, peaking at 101 353 full-time personnel as at 1 April 1996.


9. Since the promulgation of the Defence Review in 1998, the DOD has been led by the Defence Review guideline (Chapter 10, par 39.5) that 70 000 full-time personnel (inclusive of Defence Act members and Public Service Act employees) constitutes an appropriate size. The Defence Review deemed that a 70 000 full-time size, appropriately packaged into the various service systems, could lead to reduced personnel expenditure (40 % of the Defence Budget) and increased operating expenditure (30 % of the Defence Budget).


10. In downsizing towards the 70 000 target, the DOD has never entertained compulsory employer-initiated retrenchments, despite the provision in the Defence Review (Chapter 10, par 46) that the phases of integration and consolidation would be followed by employer-initiated retrenchments/rationalisation. The DOD has rather retied on natural attrition, mainly in the form of retirements, resignations and voluntary severance packages that were initiated by the Department of Public Service and Administration in 1996. Until the phasing in of the Military Skills Development System (MSDS) in 2003, such natural attrition was accompanied by strict control over new personnel inflows, resulting in reduced intakes for the uniformed component. The unsatisfactory state of rejuvenation in the SANDF has, however, led to an increase in MSDS recruiting since 2003, albeit in a controlled way. Since 1994, the Department has already downsized human resources numbers from 101 353 (1996) to the current (15 March 2005) full-time strength of 77 068 (62 013 Defence Act members and 15 055 Public Service Act employees), amounting to a

reduction of 23,9%.


11. Macro Personnel Attrition. Macro personnel attrition figures for the DOD, which takes account of all mustering/corps groupings and occupational classes indicate a stable and constant outflow of members. The average macro personnel attrition rate per year for the three calendar years 1998, 1999 and 2000 and the four calendar years 2001, 2002, 2003 and 2004 was 5 228 and 2 600 respectively. Therefore the attrition tendencies are respectively 5.9% and 3.38% based on the average strength over the period. The period 2001 to 2004 is a more true reflection of the macro personnel attrition rate of the Department as opposed to the average rate of personnel attrition for the calendar years 1998 to 2000. The reason being that the DOD introduced voluntary severance (ie VSP and EIP), which thus accounts for the higher than normal personnel attrition over the 1998

to 2000 period.


12. Scarce Skills Musterings Personnel Attrition. The retention of scarce skills is managed as a strategic issue in the DOD. In managing and addressing this strategic issue the Air Space Control, Aircrew, Naval Combat Personnel, Engineers, Health Professionals and Technical Personnel musterings were declared as scarce skills musterings. The total scarce skills personnel attrition for the period 1998 to 2004 is 4 756.


The average turn over rate over the same period constitutes 653, or 6.4% per annum for the period. Since 2002 various incentive schemes were implemented with the intention to curb the exodus of members in these musterings. These actions already proved positive results due to the fact that the resignation rate for these musterings decreased with 48%, if the 1998 attrition figure is compared with the 2004 attrition figure.


SANDF
SERVICE SYSTEMS EVOLUTION

13. When originally implemented in 1995, the SANDF's Flexible Term Service System (employment system) were planned to be structured in such a way that 30 % of members would serve in terms of two-year Short Term Service (STS) contracts up to a maximum of three two-year terms. Appropriate selection would thereafter channel the best performing members into Medium Term Service (MTS) contracts of various durations (typically 5-10 years), allowing for potential contract renewal. The intention was that only the best performing members would be allocated a Long Term Service (LTS) contract up to the age of 60 years after having progressed through the various service system components. STS and MTS members who did not receive LTS contracts, or who voluntarily exited the Regular Force upon contract expiration, would feed the Reserve Force, thereby also ensuring the feeding and rejuvenation of the Reserve Force.


14. Thus, the make-up of the Regular Force was supposed to be 40 % STS, 30 % MTS and 30 % LTS. This implementation of the system as designed would have ensured regular inflows and outflows of young and fit members at the bottom (in the STS) with various career selection "gates" regulating the number and quality of members moving progressively upwards and onwards in the Regular Force. This would have resulted in a regular throughput and the curbing of ageing in rank and stagnation.


15. However, during the integration process, a moratorium was placed on the lapsing of Short Term Service contracts. In addition, many STS members have also been translated to the MTS and the LTS in order to ensure a more equitable distribution of all former forces in the service systems. This has unfortunately led to the service system composition of the SANDF having become progressively skewed over time. The above situation has resulted in major constraints for personnel flow and hence for rejuvenation, career management, mobility, and the defence budget.


16. Whereas in 1996, 27,4 % of the DOD' full-time component comprised STS members (mostly young and fit members ideally suitable for rigorous training and deployment purposes), the situation described in par 16 above has led to a significant decline in the size of the STS component, down to 15,5 % in 1999. With more STS members having been translated to the more expensive MTS and LTS, there was less money to recruit for the STS. Despite the introduction of the Military Skills Development System in 2003, the net result of the above situation has been that as at 15 March 2005, only 7 943 members (10,3 % of the DOD's full-time component) falls into the first tiers of the SANDF's service system (6 222 or 8 % MSDS and 1 721 or 2,2 % STS).


PERSONNEL
BUDGET EVOLUTION

17. In Financial Year 1994/95, the Item 10 personnel expenditure of the DOD comprised only 35,14 % of total DOD expenditure (excluding the Special Defence Account). By Financial Year 2003/04, Item 10 personnel expenditure has escalated to 52 % of total DOD expenditure (excluding the Special Defence Account). When the Special Defence Account is included, Item 10 expenditure does, however, constitute 36 % of total DOD expenditure.


18. The guideline of a possible reduction in Item 10 expenditure to 40 % of total DOD expenditure (excluding the Special Defence Account) has been premised on the large- scale rationalisation of the DOD following the integration and consolidation phases, as described in the Defence Review. The 40 % guideline will not be able to be attained and may, in retrospect, seem not to be a realistically attainable guideline any more.


19. The DOD is endeavouring to curb personnel expenditure, such as through the introduction of the more affordable per capita expenditure for MSDS members when compared with similarly ranked members in other service systems. The average annual Item 10 cost for a MSDS Private, for example, amounts to R21 634 (plus R18 000 bonus paid at the end of the second year) compared with R59 869 for a Private serving in the LTS.


20. It should be taken into account, however, that the configuration of the DOD's service systems holds significant potential for flexible implementation. Coupled to a decision on rightsizing or rationalisation to create more capacity for rejuvenation and improved personnel flow, the service systems can be configured over time in such a way that significant savings may result on personnel expenditure, without compromising effectiveness, efficiency or employment equity. Thus, the current LTS component may be able to be reduced through rationalisation, thereby liberating funds for an increased MTS/CSS component and a significantly increased and "cheap" MSDS. Depending on which configuration model is decided upon, it may be possible to save approximately 2,9 billion Rand per annum on personnel expenses in a model which, for example, comprises 16 % LTS, 40 % MTS/CSS, 24 % MSDS and 20 % Public Service Act personnel. Such

savings could be re-allocated to the DOD's operating budget.


MILITARY
SKILLS DEVELOPMENT SYSTEM PROGRESS

21. The two-year service Military Skills Development System (MSDS) was introduced in January 2003 with various intakes having occurred in 2003, 2004 and 2005. The goals of the MSDS are to induct selected youthful applicants (18-23 years of age in the case of school leavers and 26 years in the case of graduates) into the SANDF, to equip them with the required military and functional training and life skills and to ensure the feeding and rejuvenation of the Regulars and the Reserve Force with young, fit and healthy members, thereby increasing the mission-readiness of the SANDF.


22. The most obvious strategic human resource progress over the past quarter has been the increase in the rejuvenation tempo of the SANDF. The largest intake in the SANDF's history occurred in January 2005 with 3 927 young MSDS members having reported (2 963 in the SA Army, 189 in the SA Air Force, 631 in the SA Navy and 144 in the SA Military Heath Service). The period also witnessed the graduation of the first batch of 146 young MSDS Officers with a Certificate in Military Studies from the Military Academy. The MSDS has now grown to 6 222 members and makes up 10 % of the Regular Force, giving a substantive boost to the SANDF's rejuvenation and mission readiness. The current MSDS comprises 3 871 members serving in the SA Army, 688 serving in the SA Air Force, 1 146 serving in the SA Navy, 320 serving in the SA Military Health Service and 197 serving in the Divisions. The MSDS furthermore reflects a balanced composition with regard to race and gender. Out of the total MSDS, 77,2 % members are African, 11,8 % are Coloured, 0,8 % are Indian and 10 % are White. This can be compared with the total DOD race composition which is currently 63 % African, 12,6 % Coloured, 1,3 % Indian and 23 % White. There are 69,7 % males and 30,2 % females in the MSDS. This compares favourably with the total DOD gender composition of 77,5 % males and 22,5 % females.


23. Through the MSDS, the DOD has managed to improve the age distribution in the lower rank levels. At 15 December 2002, prior to the introduction of the MSDS, Privates/Airmen/Seamen aged 18 to 24 comprised only 7,1 % of all Privates/Airmen/Seamen in the SANDF Regular Force. Currently, Privates/Airmen/Seamen aged 18 to 24 comprise 34,5 % of all Privates/Airmen/Seamen in the SANDF Regular Force. This amounts to a 27,4 % improvement in the required age bracket for Privates/Airmen/Seamen in just over 2 years.


24. The MSDS receives favourable publicity as a youth empowerment vehicle, which instills leadership, life skills, discipline and learning with practical application to a variety of military and functional skills amongst the youth. In addition, MSDS training enhances the marketability of members in the broad labour market upon completion of their MSDS service. Other State Departments are also linking up with the DOD's MSDS. During 2004, the Department of Public Works (DPW) sponsored 57 built environment candidates to complete an abridged one-year MSDS training programme in the SA Navy, while 17 DPW candidates are completing a similar programme in the SA Navy in 2005.


25. The ideal would be for the SANDF to entertain annual MSDS intakes of approximately 7 000. This is, however, not currently possible due to the inability to increase the throughput in the military service system by means of the separation of those uniformed members who are no longer effectively, efficiently and economically in service and who therefore "block" the entry of larger numbers of young and fit members. In fact, the SA Army specifically is already starting to encounter capacity problems to manage its current MSDS component given that at Battalion level, most of the lower ranking posts (rank group Private to Corporal) are occupied by members who are no longer effectively, efficiently and economically in service. Hence, there is little "space" to formally appoint young MSDS soldiers into production posts once they have completed their functional training. Yet, the SA Army must continue to rejuvenate for operational reasons.


26. Despite the above challenges, the DOD will continue to enhance the rejuvenation of the SANDF through annual intakes based upon the available capacity and resources, although the rejuvenation tempo may tend to taper off after its current boost, should the constraints described above not be able to be addressed. In case of the latter, the rejuvenation tempo will mainly be determined by the need to effect replacements resulting from the natural attrition tempo in the lower ranks.

27. It is planned that the January 2006 MSDS intake will consist of 4 097 members, comprising 3 000 members for the SA Army, 187 for the SA Air Force, 600 for the SA Navy, 310 for the SA Military Health Service and 337 for the Divisions.


28. The availability of an approved Mobility/Exit Mechanism should mitigate the capacity challenge to rejuvenate the SANDF.


DOD
YOUTH FOUNDATION TRAINING PROGRAMME PROGRESS

29. In 2001, the DOD launched its Youth Foundation Training Programme (YFTP) as an initiative to grant Black learners the opportunity to improve their Grade 12 results in subjects such as Mathematics, Science and Accountancy with a view towards appointment in the scarce combat, technical and statutory-professional occupational classes in the DOD (pilots, naval combat officers, finance functionaries, medical doctors etc). Since 2001, there have been 4 annual YFTP intakes, with 876 learners having participated the programme. Of these, 708 learners have been appointed in the DOD.


30. Pass rates for the various subjects being presented continue to improve. The pass rate for Mathematics has increased from 64 % in 2001 to 98 %, that for Physical Science from 72 % to 99 % and that for Biology from 84 % to 100 %. The Accountancy pass rate during 2004 was 100 %. During the 2004 final examinations, 60 % of learners who took Accountancy earned a distinction (A symbol), 12,5 % of learners who took Mathematics earned a distinction and 4,4 % of learners who took Physical Science earned a distinction.


31. During the 2004 final examinations the overall improvement in marks compared to learners' marks upon entering the programme was 14,4 % in Mathematics, 17,5 % in Physical Science, 9,6 % in Biology and 12,2 % in Accountancy.


32. Through the DOD YFTP, strides continue to be made to resolve representivity imbalances at entry level in the DOD's highly specialised occupational classes. The DOD YFTP presents an excellent return on investment for the DOD in nurturing youthful expertise. The 2005 YFTP intake is again providing a learning opportunity for 250 new learners.


POST
ESTABLISHMENT CONSIDERATIONS

33. As on 15 March 2005, there were 95 403 posts on the DOD's post establishment table of which 4 039 posts were training posts. Of the above posts, 71 773 were Defence Act Personnel posts (including 3 927 training posts) and 23 630 Public Service Act personnel posts (including 112 training posts). Compared to the number of posts, there were 77 068 full-time personnel, comprising 62 013 Defence Act members and 15 055 Public Service Act employees.


34. It should be noted that the DOD's current post establishment is much larger than the affordable number of personnel and constitutes the primary reason for the gap between the current number of approved posts and the affordable number of personnel as stated in the Defence Review. The mere existence of vacant posts does therefore not constitute an imperative for staffing all such posts; as such a practice will be beyond the affordability of the DOD. Neither would such practice contribute toward better effectiveness, efficiency and economy.


35. While the post establishment is being re-aligned through a process, which is complicated, and time consuming, the Department must still continue to provide the outputs expected by Government. Hence, the focus is on rejuvenating the military component to ensure that the DOD can answer to the service delivery imperatives that Government requires from Defence, with particular reference to the availability of sufficient numbers of troops with appropriate profiles to meet current and envisaged Peace Support Operations needs.


AGEING
AND STAGNATION IN THE RANKS

36. Within the context of HR Strategy 2010, the SANDF's personnel flow challenge is closely related to the ageing problem in the SANDF and the associated fitness and deployment-availability problems that accompany an ageing military. In the available documentation, such as HR Strategy 2010 and the Interim Mobility/Exit Mechanism motivations, specific reference is made to the large number of rank-age non-compliant Privates and junior NCOs in Army uniform and the effect that this situation has on the mission readiness of the SANDF. In short, rejuvenation is understood to refer to the necessity to correct the rank-age discrepancies in the SANDF through larger MSDS intakes, for which purpose rank-age non-compliant members should leave the Regular Force in order to create capacity for larger intakes. Strictly speaking, therefore, a member's compliance with the DOD Policy on Inherent Rank-Age Requirements for the SANDF ought to be one of the fundamental criteria to consider in any "pure" rejuvenation effort.


37. If other criteria, over and above rank-age compliance, are to be considered for the rejuvenation of the SANDF, then the SANDF will no longer just be addressing its rejuvenation problem, but the broader qualitative dimension of its HR composition, in fact amounting to a broad-based HR rightsizing initiative. Should this be the case and criteria such as a member's disciplinary record (with specific reference to serious offences or repeat offences), performance record (as evidenced by performance assessments, confidential reports and course results) and willingness and position to be deployed and utilised as required by the SANDF (with specific reference to the acceptance of appointments and area-boundness) also be considered, then a broader HR rightsizing initiative is in the offing. In this case, what was originally envisaged as only a "rejuvenation" initiative will then be expanded to become a HR rightsizing initiative.


38. The link between age and years in rank and the cumulative rejuvenation/stagnation problem currently faced by the SANDF in the different ranks will be illustrated during the presentation. Thus, for example, it is apparent that 5 726 out of 18 397 Privates/Airmen/Seamen (31 %) are serving in the their rank for 10 years or longer, a stagnant situation which without doubt contributes to low morale amongst the affected members. These members could, for various reasons, not be promoted. Regarding age, 10631 out of 18 397 Privates/Airmen/Seamen (57,7 %) are aged 30 years and older. In fact, there are 1 533 Privates/Airmen/Seamen older than age 40. It should be considered that the approved DOD policy for inherent rank-age requirements for the SANDF determines that 28 years should be the maximum age for Privates/Airmen/Seamen. The above situation therefore, has a negative affect especially on personnel flow, as the rank- age non-compliant members occupy production posts (albeit ineffectively and inefficiently in many cases) that could be filled by more capable and younger MSDS members.


39. Promotion Rate (1 February 2004 to 1 February 2005). However, juxtaposing the report thus far (par 36 to 38), the DOD has managed to positively address mobility in its ranks/salary levels. The total DAP promotions for the period were 5 873. As such, the total number of NCOs promoted is 4 514 (or 76%) and Officers promoted is 1 359 (or 23%) over the period. The total promotions of PSAP's over the same period constitute 488.


40. It is particularly important that cognisance is taken as regards the significant in-roads the DOD has made to structure continuous mobility within the Department. The promotion rate for the period is described below:

a. In the Officers Rank groups (Maj, Capt & LT) a total of 997 members were promoted that constitutes 73% of all Officers' promotions. In the corresponding PSAP salary levels, a total of 33 employees were promoted that constitutes 7% of all PSAP promotions.

b. In the Junior and Senior NCO rank groups (Sgt, Cpl and L/Cpl) a total of 3 318 members were promoted that constitutes 73% of all Junior and Senior NCO promotions. In the corresponding PSAP salary levels, a total of 270 employees were promoted that constitutes 55% of all promotions over the period.


41. Thus, given the constraints with respect to stagnation and ageing in the ranks, the DOD was able to elevate, especially in the lower rank levels, the bottleneck as regards members' mobility.


RIGHTSIZING/RATIONALISATION
PRINCIPLES

42. Should the DOD in future embark in an organisation-initiated rightsizing/rationalisation exercise, for example to expedite the creation of capacity for rejuvenation, the following principles are to be adhered to:

a. There should be an approved force design, force structure, post establishment and post profiles to guide the rightsizing/rationalisation process.

b. There should be an approved mobility/exit mechanism, incorporating the provision of re-skilling benefits.

c. Rightsizing/rationalisation should not be allowed to have a detrimental effect on operational readiness. It is accepted that a percentage of expertise will be lost during a rationalisation process, but measures should be implemented to compensate for this loss.

d. Rightsizing/rationalisation should actively promote legitimacy through leading to improved representivity in those areas where there are imbalances.

e. The rightsizing/rationalisation programme should be transparent and conducted in a fair anner, with due consideration to the audi alteram partem rule. Members likely to be affected by rightsizing/rationalisation should be afforded the opportunity to submit their case and to appeal against decisions made if they are not satisfied.

f. The rightsizing/rationalisation programme should be timeously communicated to all personnel concerned. Members are to have sufficient time to prepare themselves for rationalisation, to search for alternative employment and to undergo re-skilling through the Service Corps or a potential Redeployment Agent, if they so desire.

g. The right to identify and rationalise personnel should remain the prerogative of the DOD and should be based on the legal criteria of organisational effectiveness, efficiency and economy and the service delivery and military security imperatives of the State.

h. The interests of both the DOD and the individual member are to be considered in the pursuance of the principles of common law and fair labour practice.

i. Notwithstanding the command and managerial independence of the Level 2 Incumbents (Service and Divisional Chiefs), there should be DOD-wide consistency in the application of the rightsizing/rationalisation process.

j. Employer-initiated rationalisation should commence only after other options such as the voluntary acceptance of a mobility/exit package, transfers and contract expirations (where applicable), have been exhausted within a reasonable time.


INTERIM
MOBILITY/EXIT MECHANISM (IMEM)

43. As discussed above, the availability of an approved mobility/exit mechanism constitutes a sine qua non for furthering rightsizing/rationalisation/rejuvenation/personnel flow improvement in the DOD.


44. Intent with the IMEM. The intent with the IMEM is to enable the DOD to make tangible progress in rightsizing its HR composition through a process of realistic succession planning, but at the same time to guard against an exodus of scarce skills and expertise. The process intends to advise SANDF members of their future career prospects as informed by transformation and restructuring imperatives and as guided by the DOD Policy on Inherent Rank-Age Requirements. Members who have thus been informed of their career prospects will be offered a choice to accept any limitations thereto or to avail them of the IMEM option.


45. The initiative with respect to application of the IMEM measures lies primarily with the Services and Divisions who shall conduct realistic succession planning in collaboration with the Career Managers. At the same time, members who are not contractually bound with regard to their service in the SANDF and who perceive that they have reached a plateau in their military career may indicate their interest in the IMEM option to their Career Managers and/or Service or Division Chiefs.


46. IMEM Benefits. Individual members may receive the following IMEM benefits:


a. Pension Benefits. Stated benefits in respect of the rules of the Government Employees Pension Law (1996), which provides for a combination of actuarial interest or normal retirement benefits for members 55 years and older and actuarial interest for members younger than 55 years old.


b. Departmental Benefits. Departmental benefits are payable in terms of the conditions of the IMEM, which includes exit pay, leave pay, resettlement, medical benefits, pro rate service bonus and the release from contractual obligations (where applicable).


47. Plan of Action. The current plan for the implementation of the IMEM entails a voluntary approach. Members will be allowed to exercise a choice to either accept or not to accept the offers. Should the voluntary approach not succeed to substantively address the SANDF's rightsizing within a reasonable timeframe, the DOD may consider implementing the IMEM in a compulsory mode.


48. Identification of Members per Service. A final list of identified members must still be compiled. The Services and Divisions have, however, done a first round estimate based upon members who have indicated that they will avail themselves to accept an IMEM. Current indications are that a total of 712 members will consider exiting the DOD under the IMEM provisions.


49. Current Status of the IMEM. The DOD has, since June 2004, engaged the Military Bargaining Council with the expressed purpose to negotiate and workshop the implementation of the IMEM. However, no significant progress was forthcoming to date. As a means to expedite the implementation of the IMEM and as a result of the delay to conclude negotiations, the DOD, as employer, requested the Chairperson of the Military Bargaining Council on 18 February 2005 to prioritise the IMEM as a matter of urgency on the agenda of the Military Bargaining Council. The Chairperson of the Military Bargaining Council issued a certificate of dispute indicating that the Council is unable to resolve the matter. Upon this certification, the DOD, as employer, referred the matter to the Military Arbitration Board as a matter of urgency and it has since lodged legal documents/arguments with the Military Arbitration Board for consideration. Should the Military Arbitration Board rule in favour of the DOD; the Minister of Defence shall request the Minister of Finance to amend the Government Employees Pension Fund rules in order for the DOD to implement the IMEM provision forthwith.


CONCLUSION:
THE WAY FORWARD

50. This report emphasised the cardinal requirement for, and the role played by, personnel flow within the military component of the DOD. The appropriateness of the personnel flow determines the extent to which there is rejuvenation or ageing, career stagnation or career mobility, high morale or low morale and mission readiness or non- readiness in the SANDF.


51. The DOD faces a challenge in bringing about an appropriate personnel flow in the SANDF, as it inevitably entails decisions on the future utilisation of serving Regular Force members.


52. Until now, the DOD has relied on natural attrition to dictate the nature of the SANDF's personnel flow, with unsatisfactory results. Although the DOD has managed to downsize over the years, it has not been able to rightsize in compliance with the legal requirement for an effective, efficient and economical organisation.


53. Rightsizing to restore the personnel flow to an appropriate state will only be able to be effected through appropriate personnel exits. Current planning calls for the making of offers to identified SANDF members on a voluntary acceptance basis, once the Interim Mobility Mechanism has been approved for implementation. Depending on the progress being made through a voluntary approach, it may be necessary to consider a compulsory severance approach at a later stage.


(ML .L. LEDWABA)

:F DIRECTOR HR POLICY AND PLANNING: DR

By Secretary for Defence

This report is approved for submitting to the Portfolio Committee on Defence


(J.B.MASILELA)

SECRETARY FOR DEFENCE: DIRECTOR GENERAL

By Minister of Defence

This report is approved for submitting to the Portfolio Committee on Defence


(M.G.P. LEKOTA)

MINISTER OF DEFENCE