MOC PORTFOLIO COMMITTEE

OUTLINE

• 2006 Personnel Expenditure Review

• Priorities (recruitment and retention)

• Negotiations and labour relations (post industrial action)

2006 PERSONNEL EXPENDITURE REVIEW

2006 PER OBJECTIVES

• Reflect on the progress made with the implementation of the 1999 PER recommendations;

• Analyse employment and personnel expenditure trends;

• Revise the current Public Service remuneration framework; and

• Submit recommendations to inform the development of a new Public Service remuneration policy framework.

TRENDS• As a percentage of total expenditure (incl.

interest), personnel expenditure decreased from 36.8% in 2001/02 to 32.8% in 2005/06;

• In the period above, there has been a real increase in personnel expenditure, though did not increase by the same magnitude as other expenditure (i.e. capital and social expenditure)

• This was mainly a result of a policy shift to provide more money into social and capital investment.

TRENDS cont.

• From 2001 to 2005 employee numbers in the Public Service increased by 4.65% from 1,060,192 to 1,109,495. Some trends in this regard include:– The largest number of employees, representing 52.93%

(2005 figures) of the total workforce, are situated within the grade level 6 to 8 “Highly Skilled Production”, which showed an increase of 1.44% over the period 2001 to 2005;

– The grade level for Middle Management level (Grades 11-12), including professionals/specialists increased by 27.6%;

– The Senior Management grade level (Grades 13-16) showed an increase of 24.11%; and

– The grade level that showed a negative growth figure of 13.16% is the Lower Skilled (Grades 1-2) category.

FINDINGS – PERSONNEL EXPENDITURE TRENDS

• There is scope for upward movement in personnel expenditure;• The scope for upward movement in personnel expenditure must

factor in the following key issues:

– Increases in remuneration for specific occupational groups as one of the mechanisms in ensuring retention of such skills; and

– Improving critical infrastructure development capacity in all spheres of government

• There are significant shifts in the relative priorities of key economic categories of government expenditure over the past decade;

• In this process, personnel expenditure has declined in relative terms, although it has continued to increase in absolute terms (at rates that exceed inflation). These shifts in expenditure priorities have been relatively more pronounced at provincial level.

RECOMMENDATIONS

• The remuneration of professionals, other specialists and scarce skill occupations should be a priority area;

• Must be a maximum cap on remuneration;• The principle of a total cost to employer remuneration system

should be considered;• Should be underpinned by an appropriate JE system to ensure

the continuation of the key guiding principle of equal pay for work of equal value;

• Establishment of a review panel to review remuneration dispensation applicable to Senior Managers; and

• Remuneration and other elements of careers of DGs and HoDs need to be addressed.

RECOMMENDATION cont.

• Career pathing arrangements – dual career paths for professionals and other specialists should be considered;

• Performance management to be improved with greater emphasis on performance related pay;

• Macro benefits to be maintained and further strengthened where required;

• Allowances should as far as possible be rationalised and where justifiable, incorporated into salary. Allowances retained should be reviewed and adjusted where necessary;

• Affordability is a key consideration;• The policy framework must seek to ensure stable labour

relations; and• The elements of the policy framework must be transparent,

perceived to be fair by employees and easy to administer.

MOC PRIORITIES

RECRUITMENT AND RETENTION

• Develop and implement compensation policies, guidelines and related systems in order to attract, recruit and retain high calibre and skilled employees in the public service;

• Develop, implement and maintain HR management system; and

• Ensure a co-ordinated bargaining process in the Public Service Coordinated Bargaining Council and General Public Service Sectoral Bargaining Council.

STRATEGIC PRIORITIES

STRUCTURE• Remuneration & Job Evaluation:

– ensures that appropriate remuneration and related policies and practices are developed and implemented in the public service, while managing and monitoring the growth of the wage bill.

• Conditions of Service– develops policies on general benefits and macro service benefits, including

absenteeism management.

• Negotiations and Labour Relations – determine labour relations policies for the public service. Engages with

employee representatives to improve appropriate labour relations and facilitate stable relations between the state as an employer and unions representing public servants. It also provides for an appropriate negotiations framework to negotiate on behalf of the state as the employer.

• IFMS/ Special Projects– address the implementation and maintenance of a HR management system as

part of the Integrated Financial Management Services

PRIORITIES

• Remuneration Policy for the public service• Occupational Specific Dispensation • Revised remunerative and compensatory allowances• Review and refinement of the EQUATE JE system• SMS Remuneration Review• Wage bill trends analysis• Review of Deputy Director and Assistant Director

remuneration dispensation• Improved Macro benefits• Revolving Door Policy• Remuneration and other conditions of service

(pensions and medical) for the Single Public Service

REMUNERATION POLICY

• Policy developed and approved by Mandate Committee. Aspects of Policy included in Resolution 1/07

• Currently in the Cabinet process

OCCUPATION SPECIFIC DISPENSATION

• Health professionals (July 2007)– Occupation specific dispensation & translation

measures for Nurses developed. Commenced with negotiations in the PHSDSBC

• Legal professionals (July 2007)– Work commenced– Joint team – NT, DOJ, NPA & LAB

• Educators (Jan 2008)– Work has commenced– Joint team – NT, DOE & dpsa

• Other professionals, e.g. Engineers, architects, artisans, social workers etc. (March 2008)– Work has commenced – ongoing

REVISED REMUNERATIVE AND COMPENSATORY ALLOWANCES

• Post-retirement medical benefits (April 08)– Draft research report is being analysed by MOC.

• Centralised special leave framework (Jan 08)• Special leave policies (obtained through survey)

assessed & gaps identified. – Statistical and cost analysis related to special leave in

progress.– Process to benchmark practices locally and abroad

has commenced (not part of Res 1/2007)

• Revised Foreign Service Dispensation (Dec 07)– Research proposals received from the DFA. Areas

of concern were identified and proposals made for further discussion with DFA.

• Special Daily Allowances Policy for Visits Abroad (March 08)– Research commenced. The process involving meeting with

Dept. of Foreign Affairs was put on hold pending finalisation of Salary Negotiations.

REVISED REMUNERATIVE AND COMPENSATORY ALLOWANCES cont.

REVIEW AND REFINEMENT OF THE EQUATE JE SYSTEM

• Research report on the appropriateness of the EQUATE for certain categories of professions (March 08)

• Tenders were invited. – Only one tender was received.

– A closed bidding process is now in process to obtain additional tenders.

– Tender closed on 31 August 2007

SMS REMUNERATION REVIEW

• The SMS Review Panel has been established and commenced its work.

• A number of workshops and meetings held • A final report due October 2007• Adjustments to the SMS dispensation will be

implemented with effect from 1 January 2008.

WAGE BILL TRENDS ANALYSIS

• Report analysis on wage bill trends – Report finalised– For internal discussion in the DPSA– For discussion at the next Cluster

meeting

REVIEW OF REMUNERATION DISPENSATION: DEPUTY DIRECTOR

ASSISTANT DIRECTOR

• Research on a revised dispensation for DD and ASD has commenced.

• Once policy has been developed, matters of mutual interest will be negotiated in the PSCBC.

• Decision on implementation date for the revised dispensation must still be taken.

IMPLEMENTATION OF IMPROVED MACRO BENEFITS

• Implementation of the salary negotiations (leave benefits, medical subsidy and BCEA provisions) – Current determinations on Medical Assistance, Leave of

Absence & Housing amended to reflect the outcomes of the recent wage negotiations.

– New determinations on Working Time (to give effect to the alignment of the PS to the BCEA) completed.

• Identification of mechanisms to address past discriminatory pension practices (March 08)

Awaiting research outcomes from the actuaries

REVOLVING DOOR POLICY

• Policy and procedure document (Jul 07) – First draft policy developed and currently through

internal discussions in the DPSA.

COST BENEFIT ANALYSIS FOR THE SINGLE PUBLIC SERVICE

• Research report, recommendations on remuneration and conditions of service proposals for the single public service

– Terms of reference developed & consulted with key stakeholders.

– Service providers have been appointed through a tender process

– Finalising the SLA and the project charter– Final report expected 31 March 2008

NEGOTIATIONS AND LABOUR RELATIONS

POST INDUSTRIAL ACTION

COLLECTIVE BARGAINING/ STRIKE ACTION

• Public Service Amendment Act– Technical amendments/clarification of ambiguities – Not intended to deal with collective bargaining process in public

service• Strike Action

– Right to strike recognised – constitutional right– Cannot be limited through policy– Agreement to limit strike action unlikely– Trade unions wish to broaden strike action through minimum

service agreement in respect of essential services

COLLECTIVE BARGAINING/ STRIKE ACTION CONT.

• Conduct during strike action– Picketing and conduct during strike to be agreed in

period before next wage negotiations– Rules to address practical issues (e.g. number of

picketers, distance from entrances, etc.) but also issues of conduct (placards, songs, statements, etc.)

– Expand acts of misconduct to include conduct during strike in terms of placards, songs, statements

COLLECTIVE BARGAINING/ STRIKE ACTION CONT.

• Collective Bargaining– Success of bargaining process dependent on

attitude/approach by bargaining partners– Past negotiations – trade unions not to move from original

position – only late into strike– In future – greater effort into explaining and understanding

positions– Building relationships in period between wage negotiations– Prompt and effective implementation of agreements– Narrowing down of bargaining issues – not wide rage of

issues

COLLECTIVE BARGAINING/ STRIKE ACTION CONT.

• Post-strike engagement– MPSA met presidents and general secretaries of

public service unions to discuss• Management of strike by unions• Minimizing inciting and abusive conduct during

strike action• Union buy-in for rules during strike action

THANK YOU