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Publisher Department of LabourCommunication Chief DirectoratePrivate Bag X117Pretoria0001

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Department of Labour

RP No. RP37/2005

ISBN No. 0-621-35603-4

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PreliminaryPreliminaryAnnual ReportAnnual Report

2004/20052004/2005

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Department of LabourLaboria House

Pretoria31 March 2005

It is my privilege and honour to submit to you the Preliminary Annual Report of theDepartment of Labour for the period 2004/2005

Dr Vanguard MkosanaDirector-General of Labour

Minister MMS Mdladlana, MPMinister of Labour

Minister of Labour

Dr Vanguard Mkosana

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STATUTORY BODIESAdvisory Council for Occupational Health and SafetyCommission for Conciliation Mediation and Arbitration (CCMA)Commission for Employment Equity (CEE)Compensation BoardEmployment Conditions Commission (ECC)National Economic Development and Labour Council (NEDLAC)National Productivity Institute (NPI)National Skills Authority (NSA)Unemployment Insurance Board

Minister of Labour

Employment and SkillsDevelopment Services and Human

Resources DevelopmentCorporate Services

Department of LabourOrganisational Structure

M M S Mdladlana, MP

Director-General

Dr VM Mkosana

Deputy-Director GeneralAP Bird

Deputy-Director GeneralM Xaba

Service Delivery

Acting Deputy-Director GeneralP Mothiba

Labour Policy and Labour MarketProgrammes

Deputy-Director GeneralL Kettledas

Page

Introduction

Chapter 1 – Labour Market Policy

Chapter 2 – Labour Relations

Chapter 3 – Unemployment Insurance Fund

Chapter 4 – Compensation Fund

Chapter 5 – Occupational Health and Safety

Chapter 6 – Service Delivery

Chapter 7 – Employment and Skills Development Services

Chapter 8 – National Skills Fund

Chapter 9 – Financial Management

Chapter 10 – Human Resources Management

Chapter 11 – Information and Communication Technology

Chapter 12 – Communication

Chapter 13 – Internal Audit

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ContentsContents

Vision

The Department will strive for a labour market which is conducive to economic growth,investment and employment creation and which is characterised by rising skills, equity, soundlabour relations, respect for employment standards and worker rights.

Mission

The Department will play a significant role in reducing unemployment, poverty and inequalitythrough a set of policies and programmes developed in consultation with social partners whichare aimed at:● improved economic efficiency and productivity● skills development and employment creation● sound labour relations● eliminating inequality and discrimination in the workplace● alleviating poverty in employment.

Objectives of the Department of Labour

To:● promote economic efficiency and productivity● improve the level of relevant skills in the labour market● promote collective bargaining and stable labour relations● promote equity in employment and eliminate workplace discrimination● ensure reasonable wage levels and prevent the exploitation of labour in line with the level

of development in the country● ensure health and benefits for occupational illness● provide a social safety net for the unemployed.

Legislation administered by the Department of Labour

Occupational Health and Safety Act, 1993Compensation for Occupational Injuries and Diseases Act, 1993Labour Relations Act, 1995, as amendedBasic Conditions of Employment Act, 1997, as amendedEmployment Equity Act, 1998Skills Development Act, 1998 as amendedSkills Development Levies Act, 1999 Unemployment Insurance Act, 2001 as amended

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Vision, Mission, Objectives andVision, Mission, Objectives andLegislationLegislation

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IntroductionIntroduction

Introduction

The 2004/2005 financial year has seen the Labour Market Policy Programme consolidate and align itsactivities in line with the restructuring process undertaken in 2003/2004. The Programme has repositioneditself to be able to respond, in an integrated manner, to the Department’s research, monitoring, andevaluation needs, whilst ensuring that the Department meets its international obligations.

Research, monitoring, and evaluation continue to form the cornerstone of the Department’s programmefor the next five years and in this regard a Five-year Programme on Research, Monitoring andEvaluation – linked to the Minister’s Programme of Action – has been developed. The initial mandateof the Programme - to form the technical basis for the formulation of labour market policies in the post-apartheid era, which would be more attuned to a dynamic economy being integrated into a globaleconomy – is now being realised. Consequently, the programme is now increasingly able to:

● Develop a research programme for all the mandate areas of the Department as evidenced by theFive-year Research, Monitoring and Evaluation Programme

● Develop a labour market information system as evidenced by the web-enabled LMIS toolkit

● Publish periodic and adhoc labour market policy and statistical reports as evidenced by the bi-annualLabour Market Review, annual Industrial Action Report, and quarterly and annual Labour MarketBulletins.

The Programme has also been able to increasingly align and reposition itself to link with keydevelopments taking place in government today, as it is also tasked with facilitating the harmonisationof labour market policies with the overall government policies. These developments, as put in theMinister’s Five-year Programme of Action, acknowledge that the policy context for South Africa’stransformation agenda has been set, and a new set of challenges now faces the country. South Africahas therefore matured from the process of policy formulation and has been grappling with the process ofpolicy implementation. The next period will however have to grapple much more with the notion ofpolicy impact.

The Labour Market Policy Programme consists of three Directorates, namely, Research Policy andPlanning, Labour Market Information and Statistics , and International Relations.

The Research Policy and Planning Directorate is responsible for the following:

● The analysis of labour market information and labour market conditions

● The identification of relevant labour market interventions

● The formulation of labour market policies

● The Research, monitoring, and evaluation of policies affecting the labour market, including thoseemanating from the Department of Labour and elsewhere.

The Labour Market Information and Statistics Directorate is responsible for the following:

● The creation and maintenance of capacity to monitor, analyse and disseminate labour marketinformation and statistics pertaining to trends in the labour market and the impact of labour

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Labour MarkLabour Market Pet PolicyolicyChapter 1

market policies

● The creation and maintenance of linkages with other producers and users of labour marketinformation and statistics with the aim of avoiding duplication and of promoting clear use ofconcepts

● the development of the departmental library as an expanded resource centre on labour issues

● the assistance to other departmental directorates with statistical procedures to develop andmonitor departmental activities.

The International Relations Directorate is responsible for:

● Facilitating the development of strategies that will consolidate South Africa’s presence in theinternational fora

● Monitoring developments in the Southern African region

● Facilitating participation of the Department in bilateral and multilateral organisations in the region

● Discharging South Africa’s obligations to international organisations of which the country is amember

● Facilitating the development of strategies to encourage conformity with international labourstandards in the region.

Legislation

The Programme does not administer any legislation, however, it participates actively in the preparatorywork leading to the formulation of draft legislation, the Department’s five-year plans, and thedevelopment of departmental strategies emanating from legislation.

Staff

From June 2004 up to now, the Programme has filled 11 posts. These include the post of theExecutive Manager of Research Policy and Planning. The present staff compliment of the Programmeis 39 staff members.

Main tasks

Research Policy and Planning

The finalisation and completion of research projects commissioned under the research agenda for2002 to 2004 was the main focus of the Directorate during the financial year. The Directorate alsofinalised the research work commissioned through the European Union (EU) funding on skillsdevelopment issues. The main tasks during the financial year included:

● Finalisation and completion of research projects undertaken on “Casualisation and the changingnature of work”

● Finalisation and completion of research projects undertaken on skills development, especially themonitoring of the National Skills Development Strategy (2001-2005)

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● Ensuring that the Department effectively participate in various fora on labour market issues. Theseincluded inter-governmental structures and local and international conferences

● Monitoring the implementation of the Growth and Development Summit Agreement.

Labour Market Information and Statistics

The main tasks of the Directorate during the financial year included the following:

● The creation and maintenance of capacity to monitor, analyse and disseminate labour marketinformation and statistics pertaining to trends in the labour market and the impact of labourmarket policies

● The creation and maintenance of linkages with other producers and users of labour marketinformation and statistics with the aim of avoiding duplication and promoting clear use ofconcepts

● The maintenance of a resource centre capable of responding rapidly to queries and researchneeds pertaining to the labour market.

International Relations

The Directorate is at the coalface of the Department’s interaction with the world, especiallyinternational organisations relevant to labour relations. It facilitates ratification, monitors and reports oninternational labour conventions and recommendations. The main tasks of the Directorate arecategorised under three broad areas: International Labour Organisation (ILO) and Europe, Africa Deskand Technical Cooperation.

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The ILO Desk of the International Relations Directorate ensures that South Africa benefits from ILO tech-nical cooperation resources.

● ILO and Europe

The ILO Desk ensures that South Africa benefits from ILO technical cooperation resources. It supportsan increased supervision and implementation of core labour standards as well as ensuring that ILOplaces the social dimension of globalisation at the center of its policies. Furthermore, it promotes policycohesion and convergence between the ILO and other multilateral organisations. In the ILO, SouthAfrica continued to take a leadership role as a member of the Governing Body. The Directoratecoordinated bilateral interaction with countries in Europe.

● Africa Desk

The Directorate plays a leading role in ensuring that important issues are placed on the agendaof the Southern African Development Community (SADC) and African Union (AU). It supportedSouth Africa’s participation in both the 2nd Ordinary Session of the AU Labour and Social AffairsCommission in Benin and the AU Extra-Ordinary Summit on Employment and Poverty Alleviationheld in Ouagadougou Burkina Faso.

● Bilaterals

Southern Africa’s member states share a common destiny and are interdependent. The Directoratetherefore promotes regional cooperation as a means of maximising growth and national welfare.The Directorate has taken bilateral cooperation to a higher level by coordinating the signing ofMemoranda of Understanding with Tunisia on employment issues, and Zimbabwe on labourmarket policies, occupational health and safety, social security, employment services, collectivebargaining and social dialogue. The Directorate also hosted a delegation from the People’sRepublic of China as per the Memorandum of Understanding on personnel exchange specifications.

● African Regional Labour Administration Centre (ARLAC)

The Directorate also facilitates the Department’s engagement with counterparts from the SADCregion through interaction within ARLAC. The Department’s participation and inputs to seminarsgo a long way in capacitating regional labour administrators. Capacity building of the officials withinthe Department benefits immensely from the exposure gained through the association with ARLAC.

● NEPAD

It is the intention of the Department to make NEPAD a reality with projects and time frames. TheSubdirectorate is also an important player in the National NEPAD Committee.

● Technical Cooperation

Tasked with the responsibility of mobilising, coordinating and managing technical cooperationactivities within the Department, this Subdirectorate continues to be a major strategic thrust ofthe International Relations Strategy. Changes in the patterns of development flow have resultedin the reduction in Overseas Development Assistance increasing competition in the global marketfor technical assistance. Identification of strategic partners and establishment of mechanisms thatderive benefits from such association has rendered operations in this field crucial.

Achievements


● Four research papers on “Casualisation and the changing nature of work” were completed and a

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synthesis report compiled and finalised. The Minister of Labour referred the synthesis report toNEDLAC constituencies, who agreed on a process of further engagement on this topic

● Eight major research projects and papers were completed on skills development, especiallymonitoring the National Skills Development Strategy (2001-2005). The research projects includedthe National Skills Survey, the Baseline Learnership Evaluation Study, the Skills ForecastingModel and qualitative worker feedback on benefits of training

● A South African position paper was developed in preparation for the African Union Extra-OrdinarySummit on Employment and Poverty Alleviation in Africa in 2004

● Two reports on the implementation of the Growth and Development Summit (GDS) Agreementwere tabled before the Presidential Joint Working Group in July and December 2004. A GDSSteering Committee, consisting of Heads of Departments or their nominees, was established toimprove and ensure regular reporting by government departments

● A Five-year Research, Monitoring and Evaluation Programme guided by the Ministerial Programmeof Action 2004-2009 was developed and finalised

● The Directorate published the second Labour Market Review in 2004 with specific focus onemployment and unemployment trends in the past ten years.


● The 2003 and 2004 Annual Industrial Action Reports were completed

● The Labour Market Information Dashboard System and the Skills Development InformationSystem were merged to form the Labour Market Information System

● Two Quarterly Labour Market Bulletins were completed and circulated within the Department

● The strikes database was maintained

● The work seekers and job placements database was maintained

● Industrial relations and labour disputes were monitored

● The Job Opportunity Index database was maintained

● The library made a major contribution towards key departmental objectives by:

- Contributing more effectively to research and innovation- Providing access to knowledge and information for all who need to use the library’s collection- Improving its already extensive services to business and industry- Building closer links with public libraries, academic libraries and others in such a way that the

overall strength of library provision for research and innovation is sustained and enhanced- Providing access for the general public.


The main achievements of the Directorate during the financial year are categorised under three broadareas: ILO and Europe, Africa Desk and Technical Cooperation.

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ILO and Europe

● A successful Governing Body Session was attended in March 2005, and South Africa remains atitular member of the ILO Governing Body until June 2005.

● The following instruments were tabled in Parliament in 2004:

- Recommendation concerning Safety and Health in Agriculture No. 192 of 2001- Convention revising the Seafarers’ Identity Documents No. 185 of 1958- Recommendation concerning the List of Occupational Diseases and the Recording and

Notification of Occupational Accidents and Diseases No.194 of 2002.

Africa Desk

● Coordinated the input and attendance of the South African delegation to the African UnionExtra-Ordinary Summit on Employment and Poverty Alleviation in Burkina Faso

● Coordinated the input and attendance to ARLAC workshops and seminars

● Successfully coordinated the signing of the Memorandum of Understanding with the LabourMinistry of Zimbabwe, and hosted a delegation from the Labour Ministry of Zimbabwe in January2005, to discuss implementation of the agreement

● Developed a programme dealing with implementation of the Memorandum of Understanding withMozambique.

Technical Cooperation

● A Memorandum of Understanding with the Republic of Tunisia on cooperation in the field ofemployment was concluded and signed

● Effective coordination of donor funded projects was achieved and the bilateral engagements withcountries such as China and Cuba strengthened.

Challenges


● Ensuring a smooth restructuring process to centralise the Department’s research capacity in theDirectorate

● Addressing the capacity constraints, in terms of suitably qualified staff and other resources, inorder to continue implementing the Department’s Research Agenda and provide strategic policyadvice.


● Through the Public Private Partnership agreement with Siemens Business Services, an integratedmanagement information system is being developed by the Department. This initiative is aimed atremedying previous challenges on labour market information systems, which were fragmentedand uncoordinated

● In meeting its users’ needs for access to a comprehensive collection of research materials, the

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library must be responsive to a continually changing environment, which is currently presentingmajor new opportunities, pressures and demands. Among the changes currently affecting thelibrary and its users, and expected to exert a continuing influence over the year are:

- The increasing importance of information and communication technologies. Growing interest in library services for remote users has been fuelled by the rapid expansion of the Internet. Thehigher education sector is developing access to electronic publications, while publishers, telecommunications companies and information providers have joined forces to explore new opportunities

- New departmental objectives. The library wishes to respond appropriately to departmental plans to meet the needs of a wider public.


ILO

● Cooperation from government departments and programmes within the Department regardingILO requests for information or invitations to attend meetings is the major challenge facing theDirectorate.

Africa Desk

● Enhance our stature in influencing policy formulation within the SADC and the AU throughbilateral interaction, that is, joint commissions and other policy formulation forums such as theEmployment and Labour Sector of SADC and Labour and Social Affairs Commission of the AU.

Technical Cooperation

● Working successfully with Programmes in coordinating their international relations activities.

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Introduction

The Labour Relations Programme’s area of work relates to the setting of conditions of employment forvulnerable workers, including children, ensuring equity in the work place and promoting and monitoringcollective bargaining.

Children’s issues were prioritised. A permit system was implemented to protect children younger than15 years who are employed within the performing arts. Collective efforts from the NEDLAC socialpartners ensured improved reporting on employment equity work force policies and other qualitativedata. Time was dedicated to develop an award system and improving substantive compliancemechanisms. Measures were stepped up to root out non-genuine labour organisations. TheStrengthening Civil Society Fund supported capacity building of trade unions and other non-governmental bodies.

Legislation

The Programme continued to administer activities and developments regarding the Labour RelationsAct, 1995 (LRA), the Basic Conditions of Employment Act, 1997, (BCEA) and the Employment EquityAct, 1998 (EEA).

Staff

The Labour Relations Chief Directorate comprises of three directorates and a support services sectionwith a total staff complement of 80. The establishment is as follows:

Employment Standards Directorate 16Employment Equity Directorate 15Collective Bargaining Directorate 29Support Services 10Vacancies 10Total 80

Achievements

Achievements of the Employment Standards Directorate

The Directorate focused mainly on the assessment and completion of applications for variations ofminimum wages and conditions of employment received from employers within the Agricultural Sector.As indicated later in the report, 797 applications were assessed, 457 of these applications werepersonally verified during provincial visits.

Employers active within performing arts are required to apply for permits before they employ childrenyounger than 15 years. The Directorate made huge strides in ensuring that employers and other roleplayers are aware of this new requirement contained in the Sectoral Determination for the Employmentof Children in the Performance of Advertising, Artistic or Cultural Activities. The Directorate granted 639applications for permits since August 2004.

Labour RelationsLabour RelationsChapter 2

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Codes of Good Practice

The Directorate finalised the Code of Good Practice for the Employment of Children in the Performanceof Advertising, Artistic or Cultural Activities. The Code will be published in the Government Gazette

Sectoral Determinations and Amendments to Sectoral Determinations

The following Sectoral Determination was published:

Sectoral Determination 10: Children in the Performance of Advertising, Artistic and Cultural Activities.

Several measures were put in place to ensure adequate protection of children employed in performingarts. Firstly, a Sectoral Determination was published setting out what the conditions of employmentwould be. Secondly, employers are required to apply for permits before they employ children in thissector. This practice allows the Department to monitor the whereabouts of children at all times.Publishing the Code of Good Practice is the last measure. This is in line with the internationalstandards when engaging children in these activities.

The following Sectoral Determination was amended:

Sectoral Determination 1: Contract Cleaning Sector

Investigations into the following Sectoral Determinations were completed:

● Taxi Sector

The Minister of Labour has approved the publication of a Sectoral Determination for the Taxi Sector. Arrangements are underway to launch it in April 2005.

● Forestry Sector

The Director-General’s report has been submitted to the Employment Conditions Commission for

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Employers active within performing arts are required to apply for permits before they employ children younger than 15 years.

their consideration and recommendation.

The following investigation into minimum wages and conditions of employment was announced:

● Welfare Sector

Other Highlights on Sectoral Determinations

● Minimum wages and conditions of employment for farm workers are under review. TheDirectorate is embarking on a public consultation process. A first round of public hearings wascompleted in February 2005. This process has been extended to April 2005 to ensure fullparticipation of all stakeholders, including workers. The main issues under review include thedemarcation of the sector, future wage increases, hours of work, deductions and labour tenancy

● Research has been commissioned to investigate minimum wages and conditions of employmentin the Hospitality Sector. This process will not only amalgamate four existing sectoraldeterminations but it will also address the changing nature of employment in the Sector

● The investigation into the Sheltered Employment Sector continues.

Employment Conditions Commission

The term of the Employment Conditions Commission has expired and new members were appointed.They are:

Prof. Evance Kalula (Chairperson)Kaizer MoyaneEric NwedoBeki NtshalintshaliMduduzi MbongweDebbie BudlenderDr. Haroon Bhorat

Highlights in respect of child labour

A national Child Labour Action Programme (CLAP) was provisionally adopted in September 2003, withthe support of a wide range of government departments and institutions, including those responsiblefor justice, policing, prosecution, social development, education, local and provincial government, waterservices and statistics and the National Treasury. In preparation for the submission later this year ofthe CLAP to Cabinet for noting, the Social and Economic Directors-General Clusters were consulted,and tenders put out to assist with the costing of the policy.

Subsequent to the adoption of the CLAP, the Department facilitated the formulation in 2004 of theProgramme Towards the Elimination of the worst forms of Child Labour (TECL) to assist inimplementation of key action steps of the CLAP. TECL is essentially an executing agency for keyelements of the CLAP, as partner to relevant government departments. The lead department is theDepartment of Labour and TECL is funded through the International Labour Organisation (ILO).

Among the flagship projects of TECL are the running of pilot programs to devise and testmethodologies. Some pilots address the most intolerable forms of child labour, the commercial sexualexploitation of children, child trafficking and children used by adults to commit illegal activities. Anotherset of pilots facilitate the prioritisation of water services to households far from the sources of safewater in order to relieve excessive pressure on children and women (and households generally)carrying water over long distances. The latter project forms part of the government's programme to

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deliver water to all households by 2008. Work on all these projects has commenced and the bulk ofthe initial rapid assessments have been completed.

Variations to the Basic Conditions of Employment Act, 1997

All the applications received from the Agricultural Sector as well as those received from the broaderindustry have been dealt with.

Basic Conditions of Employment Act

Table 2.1Total applications for Ministerial Variations

Table 2.2 Applications for Ministerial Variations Basic Conditions of Employment Act

Table 2.3 Applications granted and workers affected

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Total number received 1 999Total number granted 965Total number refused 398Number withdrawn 16Number not finalised 240

Section/clause

ProvisionsNo of applications

grantedNo of workers

affected9 Ordinary hours of work 1 642

10 Overtime 149 36 51811 Compressed working week 6 4 06812 Averaging of hours of work 21 14 21114 Meal intervals 22 47 70415 Daily and weekly rest periods 60 37 22816 Pay for work on Sundays 10 10 75817 Night work 3 12 57018 Public holidays 4 10 74320 Annual leave 33 6 91721 Pay for annual leave 17 7 00422 Sick leave 21 13 59827 Family responsibility leave 27 17 58632 Payment of remuneration 1 29933 Information about remuneration 1 1 75035 Calculation of remuneration and wages 2 3 39637 Notice of termination of employment 13 1 672

Total number received 848Total number granted 394Total number refused 228Number withdrawn 2Number not finalised 31

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Sectoral Determinations

Sectoral Determination 8: Farm Worker Sector

Table 2.4 Applications for Ministerial Variations


Sectoral Determination 9: Wholesale and Retail Sector

No of applications refused: 8


Sectoral Determination 6: Private Security Sector

No of applications refused: 1


Achievements of the Employment Equity Directorate

The Employment Equity Directorate continues to administer the implementation of the EmploymentEquity Act by employers at their workplaces. The Directorate also monitors the implementation ofemployment equity plans at the workplace through the collection of employment equity reports and theanalysis of data provided by employers. In addition, it supports the Commission for Employment Equity

Clause No of applications granted No of workers affected

2 (Wages) 2 53

Clause No of applications granted No of workers affected3 (Wages) 2 117

Clause No of applications granted No of workers affected2 (Wages) 576 44 0958 (Deduction) 170 15 25913 (Overtime) 18 32219 (Weekly and daily rest periods) 2 22

Total number received 1 151Total number granted 767Total number refused 161Number withdrawn 14Total number outstanding 209

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to fulfil its statutory obligations.

Employment Equity Registry

During the October 2004 reporting period, the Directorate collected employment equity reportsdetailing workforce profiles and qualitative data of 9 364 employers. This is a significant increase fromthe 6 990 reports received in October 2002, when both large and small designated employers wererequired to report.

This improvement may largely be attributed to the cooperation of the social partners at NEDLAC; i.e.organised business, organised labour, community and government, who jointly campaigned throughoutthe country in 2004 to raise the level of awareness of the Employment Equity Act.

The Public Register, listing the employers who reported and the results of an analysis of the datacollected, will be released during the 2004/2005 financial year.

The analysis report and the Public Register for the 1 October 2003 reporting deadline were released.

Development of the Employment Equity Awards System

The Commission for Employment Equity completed the Employment Equity Awards System. The purposeof this System is to identify employers who excel in implementing the Employment Equity Act at theirworkplaces. Participating employers will be expected to go beyond basic compliance in order to beconsidered for excellent achievements. The System will be implemented in the 2005/2006 financial year.

Code on the Integration of Employment Equity into Human Resources Policies and Practices

The Commission for Employment Equity (CEE) completed the draft Code on the Integration ofEmployment Equity into Human Resources Policies and Practices in March 2005. The purpose of thisdraft Code is to provide guidelines on the elimination of unfair discrimination and the implementation ofaffirmative action measures in the context of key human resource areas, as provided for in theEmployment Equity Act. The guidelines in the draft Code will enable employers to ensure that theirhuman resource policies, procedures and practices reflect employment equity principles at thecommencement of employment, during employment and when terminating employment.

Amendments to Employment Equity Regulations

The Commission for Employment Equity (CEE) submitted the draft amendments to the EmploymentEquity Regulations. The main purpose of the draft amendments is to make it easy for employers tocompile their employment equity reports and to tighten the wording in the regulations for operationalrequirements, information gathering and enforcement purposes.

Amendments to the Code of Good Practice on the Handling of Sexual Harassment Cases in theWorkplace

The Commission for Employment Equity also submitted the amendments to the Code of Good Practiceon the Handling of Sexual Harassment Cases in the Workplace in March 2005. The purpose of theamendments is to align the Code to the Employment Equity Act. The amended Code is a product ofconsultation with social partners at NEDLAC.

NEDLAC Growth and Development Summit Employment Equity Task Team

The NEDLAC Growth and Development Summit Employment Equity Task Team, which was establishedin May 2004 conducted Employment Equity awareness Road Shows in seven provinces (Gauteng,

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Limpopo, Free State, Eastern Cape, Western Cape, Northern Cape and Kwazulu-Natal) in 2004. Theprimary objective of these Road Shows was to improve the level of awareness of the EmploymentEquity Act among employers in order to improve reporting. The remarkable improvement in thesubmission of Employment Equity Reports received in October 2004 can be attributed to these RoadShows. The Task Team will continue to deliberate on how best to enhance employment equitycompliance through various advocacy interventions in the 2005/2006 financial year.

Improved monitoring and compliance with the Employment Equity Act

In an effort to implement substantive compliance, a Director-General Review System was developedand a pilot study was conducted to test the validity of the system in the Wholesale and Retail Sector.Once approval has been obtained, the DG Review System will be implemented. As the focus in thelast five years was on basic or procedural compliance, the implementation of this system will, among others, assist the Department in identifying those employers who excel in the implementation of the Actat their work places. It is anticipated that this will result in improved reporting by employers, as theDepartment will be able to recognise the best performers and reward them accordingly. The availabilityof a sectoral comparative analysis should also result in employers competing for a slot amongexcellent performers in the implementation of the Act at their workplaces.

In an effort to strengthen monitoring and enforcement of the implementation of the Act, a NationalRoving Inspectorate Unit was established in 2004 in conjunction with the Service Delivery ChiefDirectorate. The key responsibility of this Unit is to conduct inspections that require expert talent atnational level. To put this Unit to test, the first exercise was conducted in March 2005 targeting HeadOffices of the Public Sector.

Achievements of the Collective Bargaining Directorate

The Directorate continued in its role in doing the following:

● Administering the Labour Relations Act, 1995

The Collective Bargaining Directorate continued to monitor the Commission for Conciliation, Mediationand Arbitration (CCMA) activities, ensuring effective and efficient dispute resolution systems.

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● Registering trade unions, employers’ organisations and bargaining and statutory councils

● Publishing bargaining council agreements for the extension thereof to non-parties

● Promoting and monitoring collective bargaining.

Collective agreements

During the year under review 92 collective agreements of bargaining councils were extended to non-parties covering 620 298 workers. These agreements were main collective agreements on wageincreases and for issues such as council levies, sick-, benefit-, pension- and provident fund benefits.There are two challenges to the power of the Minister to extend collective agreements to non-parties,which have not yet been finalised.

Of the 52 private sector councils, 44 (84,6%) reported on the state of applications for exemptions fromcertain provisions of collective agreements extended to non-parties. Total applications for exemptionswere 7 373 and applications that were from small enterprises were 4 344, which constituted 59% of allapplications. The number of applications, granted, is 5 670 and 3 497 were from small enterprises.This constituted 60% of all applications granted. It is therefore clear that the majority of applications forexemption were from small enterprises. Furthermore the majority of councils indicated that smallenterprises have seats on the council as well as the independent body to hear appeals.

Dispute resolution

The Directorate continued to monitor the Commission for Conciliation Mediation and Arbitration (CCMA)activities, ensuring effective and efficient dispute resolution systems. During 2004/2005 the CCMA wasallocated with R 172 651 000 for all its programmes and activities. During April 2003 to February 2004the CCMA adjudicated over 115 894 cases with an average of 553 cases per day. For the period ofApril 2004 to February 2005 the CCMA was also involved in 169 cases of Section 189A (largeretrenchments) facilitation. The settlement rate of these cases stood at 60%. The CCMA was alsoinvolved in 82 cases of Section 188A Pre-Dismissal Arbitration. A total of 43 674 conciliation/arbitration(con-arb) cases and 476 applications for enforcement of arbitration awards as orders of court werehandled.

The Department representatives, together with NEDLAC constituency representatives were involved inthe following S77 applications to prevent socio-economic protest action:

● SACTWU v City of Cape Town: The matter was not resolved and the union embarked on protestaction

● NUM v Government: The Union was complaining about the strength of the Rand. The partiesdeadlocked

● SACTWU and Cosatu v Retailers: The Union was demanding that the Retailers should buy 95%of their material from local manufacturers. It ended in a deadlock.

Registration of labour organisations

The registration of labour organisations continued earnestly whilst trying to identify non-genuine labourorganisations and commence the process of their deregistration if necessary.

During the year a total of 29 trade unions’ registrations were cancelled in terms of Section 106 of theLabour Relations Act, 1995, for reasons ranging from not submitting audited financial statements over

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a number of years to not being a genuine union as envisaged by the Act. The total number ofregistered trade unions is 341.

Eight registrations from employers’ organisations were cancelled in terms of Section 106 of the LabourRelations Act, 1995. The cancellations were based on the same reasons as of the trade unions. Thereare 229 registered employers’ organisations.

The following is a statistical reflection of registered labour organisations for various sectors:

● Bargaining Councils

Private Sector 52Public Sector 1 + 4 sectoral councilsLocal government bargaining council 1Total : 58

Below is the number of applications received from labour organisations for registration:

● Trade Unions

Approved registrations 14Cancelled registrations 42

● Employers’ Organisations

Approved registrations 5Cancelled registrations 15

Table 2.8 below indicates the current number of registered labour organisations

Table 2.8 The current number of registered labour organisations

Achievements of the Strengthening Civil Society Fund

The Fund was established to assist non-profit organisations involved in the world of work to offer tradeunion education and capacity development training to trade unions. The Fund also supports projectsthat target vulnerable workers, especially in rural areas. An Advisory Committee, consisting of thefollowing members manages the Fund:

Ms. Nerine Kahn, Senior Executive Manager: Labour Relations (Chairperson)Mr. T. Mkalipi, Executive Manager: Collective Bargaining

Year Registered trade unions MembershipRegisteredemployers'

organisations

Bargainingcouncils

2000 464 3 552 113 252 732001 485 3 939 075 265 732002 504 4 069 000 270 622003 369 3 277 685 239 562004 341 3 134 865 229 58

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Mr. Leon Stroh, Manager: FinanceMr. T. Curtis, Executive Manager: Occupational Health and SafetyMr. C. Lengolo, Manager: Compensation FundMr. R. Chauke, Manager: Unemployment Insurance Fund Mr. L. Nevhutalu, Manager: Support Services.

The committee considers proposals received, verifies them against the criteria and makesrecommendations to the Director-General for approval when necessary. The projects approved musthave activities related to the following pieces of legislation:

● Labour Relations Act, 1995

● Basic Conditions of Employment Act, 1997

● Employment Equity Act, 1998

● Unemployment Insurance Act, 2001

● Compensation for Occupational Injuries and Diseases Act, 1993

● Occupational Health and Safety Act, 1993.

Due to a lack of finances only three organisations could be given fund during the year to complete theirthree-year projects on developing implementation capacities of trade unions and raise awareness onbasic conditions of employment especially to unorganised workers.

Table 2.9 Organisations benefiting from the Strengthening of Civil Society Fund

Challenges

Challenges for the Employment Standards Directorate

● Acceding to the greater demands for wider and thorough consultation whilst on the other handmeeting the deadlines for publication of Sectoral Determinations

● Coordinating and ensuring consistent participation of government departments in respect ofimplementing the Child Labour Action Programme

● Raising awareness on all the Sectoral Determinations and ensuring awareness on annualincreases is created

● Supporting provinces and labour centres in respect of the implementation of the Sectoral

Name of organisation

ProjectAmount paid

RProvincial Office

DITSELA General trade union education 10 482 662 GautengWorkers CollegeNatal

Capacity building for unionisedworkers

670 186 KwaZulu-Natal

South AfricanLabour Bulletin

Reconstruction process of theBulletin

255 152 Gauteng

Total 11 408 000

19

Determinations.

Challenges for the Collective Bargaining Directorate

● To cope with increasing numbers of applications by non-genuine labour organisations

● Finding better ways to assist employers’ organisations and trade unions to establish bargainingcouncils

● Extending the collective bargaining system to cover more vulnerable workers

● To ensure the implementation and impact of the Labour Relations Act, 1995, is optimised

● Effectively monitor dispute resolution.

Challenges for the Strengthening of Civil Society Fund

● Increasing the allocation to the Fund to support more projects, especially those targetingvulnerable workers in rural and remote areas

● Marketing the Fund in all provinces

● Continuing support to projects on trade union education for capacity development.

Challenges for the programme as a whole

● To ensure the activities based on all pieces of legislation administered are interlinked andcoordinated

● To meet the changing needs of the South African Labour market as it relates to the legislation

During the year, 92 collective agreements of bargaining councils were extended to non-parties, covering620 298 workers.

administered.

20

21

Introduction

The Unemployment Insurance Fund had a challenging and busy 2004/2005. Firstly, domestic workerscould for the first time in history claim benefits from the Fund. Secondly, the amendments to theUnemployment Insurance Act brought with them the recognition of partial unemployment for domesticworkers and the call centre became fully functional.

Legislation

The Fund continued to administer the Unemployment Insurance Act, 2001 as amended. This Act dealswith the administration of the Fund and the payment of benefits. The Act also makes provision for theCommissioner to maintain a database used to pay benefits to beneficiaries. The South African RevenueServices (SARS) continued to administer the Unemployment Contributions Act, 2002. SARS collectscontributions from all those employers who have workers who pay the PAYE tax. The collection ofcontributions from all other employers is delegated to the Unemployment Insurance Commissioner.

Staff

As at the end of March 2004, the Fund had 305 staff members at its Head Office. This figure increasedto 322 as at the end of February 2005. There are 110 vacant posts and the Fund is busy recruitingsuitable staff to fill the vacancies. With regards to equity, 37,9% of staff members are White, 5,6%Coloured, 1,5% Asian and 55% Black. The Fund has worked hard to improve staff relations, and forthe period under review, there were six grievances from staff members and three staff members werecharged with misconduct. Staff development plays a major role in the Fund and 82 staff membersattended external courses.

Unemployment Insurance FUnemployment Insurance FundundChapter 3

As at the end of March 2004, the Fund had 305 staff members at its Head Office.

22

Main Tasks

The main tasks of the UIF are to:

● Maintain an employer/employee database

● Process claims and pay benefits

● Invest excess funds

● Reduce opportunities for fraud

● Collect contributions.

Achievements

The following were achieved during the financial year:

● The call centre received 296 000 calls and of these 283 002 were answered, resulting in aresponse rate of 95,6%. On average, calls were answered within 13 seconds

● At the end of January 2005, the Fund had collected R5,1 billion in contributions and paidR2,1 billion to 465 580 beneficiaries

● The Fund’s technical reserves as at the end of January 2005 were R8,455 billion

● At the end of January 2005, 27 000 domestic workers had received benefits totalling R6 million

● There are 490 000 domestic workers and 6,1 million commercial workers on the Fund’s database

● The electronic document filing system was installed and as at the end of February 2005,2,1 million pages had been scanned

● The Regional Appeals Committees have been established

● The Teba A-Card was successfully piloted in Limpopo and the Free State. A total of 2 913beneficiaries were paid their benefits through the A-Card amounting R8,7 million

● An electronic funds transfer project was started in Gauteng South with the aim of eliminating cashand cheque payments to beneficiaries

● Four Financial Managers and one Chief Financial Officer were appointed

● A client satisfaction survey was done and strategy implemented to improve the image of the Fund

● The total overpayment, resulting from work and draw, for the period until end of February 2005,amounted to R27,3 million and the Fund was able to recover R8,6 million.

Challenges

The Fund faces the following challenges during the next financial year:

● Implementation of an electronic funds transfer method to pay beneficiaries

● Reduction of claim turnaround time to 4 weeks maximum

● Finalisation of the UIF Corporate Form investigation

● Receive declarations from all employers

● Receive contributions from all registered employers

● Appointment of a Risk Manager

● Implementation of a fraud prevention plan

● Recruiting competent finance staff.

23

At the end of January 2005, 27 000 domestic workers had received benefits totalling R6 million.

25

Introduction

The Compensation Fund is a public entity of the Department of Labour. The main objective of theCompensation Fund is to compensate workers for occupational injuries sustained and diseasescontracted in the course of and as a result of their employment, and to compensate dependants infatal cases. The Fund generates revenue for all its operations from the assessments paid by registeredemployers.

Legislation

The Compensation Fund administers the Compensation for Occupational Injuries and Diseases Act,(Act 130) of 1993, amended by Act 61 of 1997.

Staff

The staff complement in the Fund is 671 with 55 vacancies. The work of the Fund is divided into twodirectorates with just over 350 workers in each. In addition to this, there are also 230 contract workers.

Main Tasks

● Registration of employers

● Obtain employers’ return of earnings annually

● Assessment and collection of assessments from employers

● Registration, processing and payment of claims for injured workers and/or their dependants

● Paying the cost of medical treatment provided to injured workers

● Administration of the pension account and payment of monthly pensions

● Investment of excess funds until required.

Achievements

Development and implementation of new policies

The Fund has developed, published and implemented policies for the compensation of occupationaldiseases, in consultation with other government departments and medical experts appointed by theCompensation Board. The purpose of this was to ensure a uniform approach on the handling ofoccupational diseases in relation to compensation.

Policies completed in 2004/2005:

● Work Aggravated Asthma

● Upper Airways Disorders.

Compensation FCompensation FundundChapter 4

26

These policies will in future assist in addressing the issue of fragmentation of OHS policies by aligningsimilar regulations and policies in the affected government departments of Minerals and Energy, Healthand Labour.

There are other policies still being discussed by the Technical Committee on Occupational Diseasesrelated to Loss of Vision; Pneumoconiosis; and Respiratory Impairment. A draft policy on Needle PrickInjury and HIV and AIDS infection was gazetted for public comments. The comments receivednecessitated a need for public hearings. Stakeholders have been invited to attend these workshops togive their input on the Needle Prick Injury and HIV and AIDS policy. It is envisaged that this new policywill be implemented during the new financial year.

Protecting vulnerable workers

Pension payments from the Compensation Fund are increased every year. From 1 April 2005 theCompensation Fund pensioners will get an increase of 6,8% divided as follows:

● 4,8% will be an annual inflationary increase to all pensioners

● while the extra 2% will be paid to pensioners if their accident occurred before 1 April 1991 with aview to increase their purchasing power to 80% of the Consumer Price Index.

The Fund has also appointed and trained more presiding officers and medical assessors in allprovinces to assist with the hearings on objections against the decisions of the Fund. The legal andmedical professionals were appointed with the approval of the Minister of Labour. This exercise willenable workers to have easy access to the Court, save on transport expenses, and speed up theprocess of hearings.

Processing of claims: April 2004 to February 2005

● Compensation to beneficiaries – R736 million

The Fund’s first Regional Medical Panel was set up as a pilot in the Western Cape.

27

● Cost of medical aid – R939 million

● Pensions – R377 million

● Total claims expenditure – R 2 billion.

Regional medical panels

The first Regional Medical Panel was set up as a pilot in the Western Cape. Additional panels will nowbe rolled out to other provinces, starting with KwaZulu-Natal.

Financial stability

The Fund lived up to the expectations of the Public Finance Management Act in terms of cleangovernance and accountability within the public sector. The Compensation Fund received an unqualifiedaudit report from the Auditor–General for the past financial year. The actuarial valuation report indicatedthat the Fund is in a sound financial situation.

There was an increase in the number of employers registered with the Compensation Fund. As of 31February 2005, 283 732 employers were registered with the Fund as compared to 271 237 in 2004.This increase in employer compliance helped the Fund to raise R2,3 billion for the past financial year.

The Fund has more than R14 billion in assets of which R11,5 billion was invested. The accumulatedfunds consist of more than R6 billion in the Pension Account and R4 billion in the Statutory ReserveFund.

Information technology

As an entity of the Department of Labour, the information systems and the information technologyrequirements of the Compensation Fund are addressed by the Public Private Partnership agreementwith Siemens Business Services (SBS).

The Fund and SBS have embarked on various IT initiatives and projects that have been collectivelybranded as SAfika. This includes the eClaims project, which was the successful migration from aproprietary mainframe environment to an open, more flexible environment that will facilitate integrationwith other systems. Service levels for this system have been negotiated and signed off with SBS.Other initiatives in the SAfika programme include an MIS project, a claims enquiries system and aproposed document management solution.

All old workstations have been upgraded to a minimum level that will enable a “fit for purpose”computing environment for the user, whilst others have been replaced with new machines. Theworkstation operating system and certain business applications have also been upgraded and thecomputing environment has successfully been migrated to the labour.gov.za domain. The benefits ofthis include central data storage and backup, centralised application deployment and improvedsecurity.

Training of users on new and current systems have been given and an IT user group has been formedto provide a forum for users on IT matters. A plasma screen has been installed in the public enquiriessection to inform clients of the Department’s services and the old Compensation Fund website hasbeen incorporated into the new Department of Labour website.

Planned initiatives include the procurement of new infrastructure to improve system response and toprovide a stable computing environment, upgrade of the telecommunications environment,implementation of IT policies and finalisation of the Disaster Recovery Plan.

28

Informing the public

Communication issues

The Compensation Fund has established a communication unit to serve the public and the media. Thisis a breakthrough given the fact that communication was previously the responsibility of line managerswho had other functional responsibilities.

During 2004, the Fund ran a Compensation for Occupational Injuries and Diseases Act (COIDA)advertisement on SABC TV and on all national radio stations in different languages. This elicitedanother big public response. Other public informational and educational campaigns are set to be rolledout shortly, once the IT infrastructure is improved to handle large volumes of enquiries and responsesfrom the public.

To alleviate public concerns about the inaccessibility of the Compensation Fund, the switchboard is inthe process of being upgraded while the Call Centre project that encompasses the whole Departmentof Labour, is expected to be finalised in the next financial year by Head Office.

Return of earnings campaign

The campaign was part of an effort to improve the revenue generation and debt collection strategy forthe Compensation Fund. Through this campaign the Fund reminded employers of their duty to submittheir return of earnings on or before 31 March 2005. The campaign was run on radio stations,television, newspapers and outdoor advertising.

Challenges

● In a quest to improve service delivery and to streamline the business processes, the Fund willembark on a business process re-engineering initiative. This initiative has been approved andwill commence in April 2005

In a quest to improve service delivery and to streamline the business processes, the Fund will embark ona business process re-engineering initiative.

● Finding solutions for delays in processing of claims

● Claims Enquiry system decentralised to provincial offices of the Department to improve clientaccess to the Fund

● To finalise policies that are already under discussion

● Develop strategies to maximise communication with stakeholders.

29

Chapter 5

Occupational Health and SafetyOccupational Health and Safety

31

Introduction

The Occupational Health and Safety (OHS) programme’s focus for 2004/2005 was on enhancing OHSawareness, promoting stakeholders’ participation, implementing a preventative strategy and updatingOHS Regulations for better service delivery.

The occupational health and safety legislative framework consists of the Occupational Health andSafety Act, 1993 and 20 sets of Regulations. Ensuring compliance with legislation is the responsibilityof the Department’s inspectorate in the 10 provincial offices. This is accomplished by conductinginspections and investigations, providing advocacy and statutory services.

Legislation

Responsibility for occupational health and safety, and workers’ compensation in South Africa currentlyresides in three government departments. They are:

● The Department of Labour is responsible for workers’ compensation in terms of the Compensationfor Occupational Injuries and Diseases Act and for occupational health and safety (in workplacesother than a mine, mining area and works as defined in the Minerals Act or a ship, boat or cranein terms of the Merchant Shipping Act) in terms of the Occupational Health and Safety Act

● The Department of Minerals and Energy is responsible for occupational health and safety in mines,mining areas and works (as defined in the Minerals Act) in terms of the Mine Health and Safety Act

● The Department of Health is responsible for the compensation of mine workers in terms of theOccupational Diseases in Mines and Works Act.

These three Departments have, with the assistance of a legal consultant who did the original researchregarding the integration of occupational health and safety agencies and legislation, developed andfinalised the Draft National Occupational Health and Safety Policy (DNOHS Policy) and the National

During the year, the Occupational Health and Safety Chief Inspector concentrated much of hiseffort to the elimination of Silicosis.

32

Occupational Health and Safety Bill (NOHS Bill).

Staff

The provision of service to the country’s workforce is guided by policies and legislation developed atHead Office by 11 technical staff, supported by five administrative officials totalling 16.

Main tasks

The Chief Directorate is responsible for the Occupational Health and Safety Act and the followingRegulations:

● Vessels Under Pressure Regulations

● Electrical Installation Regulations

● Driven Machinery Regulation

● Electrical Machinery Regulations

● General Machinery Regulations

● Certificate of Competency Regulations

● Lift, Escalator and Passenger Conveyor Regulations

● General Safety Regulations

● General Administrative Regulations

● Hazardous Chemical Substances Regulations

● Noise Induced Hearing Loss Regulations

● Regulations for Hazardous Biological Agents

● Explosive Regulations

● Construction Regulations

● Asbestos Regulations

● Diving Regulations

● Lead Regulations

● Major Hazard Installation Regulations

● Environmental Regulations for Workplaces

● Facilities Regulations.

The following occupational health and safety Regulations were amended or promulgated during

33

2004/2005:

● The amended Facilities Regulations were promulgated on 3 August 2004

● The final draft of the Electrical Installation Regulations where presented to the Advisory Councilon Occupational Health and Safety (ACOHS) for their permission to promulgate

● Electrical Machinery Regulations were approved to publish the draft regulations for publiccomments. The closing date for public comments is June 2005

● The Lift, Escalator and Passenger Conveyers Regulations were published for public commentand the closing date was September 2004. At the moment the Department is busy consolidatingcomments

● The Pressure Equipment Regulations were published for public comments and the closing datewas September 2004. At the moment the Department is busy consolidating comments

● The National Code of Practice for the Driven Machinery Regulations was gazetted.

Achievements

Elimination of Silicosis

During the financial year 2004/2005 the Chief Inspector of Occupational Health and Safety concentratedmuch of his effort to the elimination of Silicosis. Amongst others a National Programme for the Eliminationof Silicosis was developed that was launched by the Minister of Labour on 28 June 2004. Since the 10provincial working groups had been formed in each province, they will compile their provincial riskassessment or provincial profile respectively, which will be used to compile a national profile.

Twenty occupational health and safety focused inspectors were trained at the University of Cape Townon the recognition, identification, evaluation and control of silica dust in workplaces. These inspectors

Minister Mdladlana laying a wreath at the memorial site of the Injaka Bridge Disaster.

will have to use the knowledge they gained to train other inspectors.Diving

Eight Codes of Practice were developed so as to cater for each diving sector, these codes will formpart of the new regulations that will be promulgated next year.

World Day for Safety and Health

The World Day for Safety and Health was commemorated at the Inyaka Bridge where one of the mosttragic occupational incidents in South Africa took place.

Agriculture project

The Department has developed a project to implement ways to ensure a working relationship betweengovernment, agricultural workers and farmers that will increase compliance with the OHS Act andensure social protection and skills development of workers. The project aims to:

● prevent fatal incidents and injuries arising out of, linked with, or occurring in the course of work,by eliminating or controlling hazards in the agricultural working environment

● promote co-regulations in agriculture to ensure that workers are involved in decision-making onissues relating to their health and safety, thus increasing skills

● ensure full compliance with the Occupational Health and Safety Act, 1993 and other relevanthealth and safety standards

● Increase a strong working relationship between government and its agricultural stakeholders.

Approvals granted and registrations done

Table 5.1. Approvals granted 2001/2002 – 2004/2005

Table 5.2. Registrations 2001/2002 – 2004/2005

34

Type 2001/2002 2002/2003 2003/2004 2004/2005First-aid training organisations 36 26 33 31Diving schools 0 3 0 0Audiometrists 50 40 12 0Approved Inspection Authorities (OHS) 3 3 5 8

Type 2001/2002 2002/2003 2003/2004 2004/2005Learner divers 601 303 604 293Divers 591 239 739 373Supervisors 88 81 93 55Diving medical practitioners 1 10 12 8Asbestos contractors 0 61 45 76

Table 5.3 Engineering Certificate of Competency 2002/2003 – 2004/2005

Table 5.4 Certificate of Registration issued to Accredited People 2002/2003 – 2004/2005

Table 5.5 Approvals and registration for Explosives Workplaces 2004/2005

35

Licences issued 956Explosive workplaces 7Drawings approvals 52 Schedule II licences 201Schedule III licences 127Schedule I licences 812Mines 0Special rule approved 1Factories closed 0

Electrical Installation Licence 2002/2003 2003/2004 2004/2005Single Phase Tester 133 212 292Installation Electricians 472 423 388Masters Installation Electricians 143 99 95

Certificates of Competency 2002/2003 2003/2004 2004/2005Mechanical 36 65 29Electrical 48 37 15

37

Introduction

The purpose of service delivery is to ensure the implementation of Department of Labour’s policies inan integrated manner through the provision of inspection and enforcement services, employment andskills development services, beneficiary services, labour market information and statistics and planningservices, and management support and monitoring services.

The service delivery operations of the Department are structured into five Business Units to ensureeffective implementation of policies and programmes:

● Inspection and Enforcement Services (IES)

● Employment and Skills Development Services (ESDS)

● Integrated Beneficiary Services (IBS)

● Labour Market Information and Statistics and Planning Services (LMIS + P)

● Management Support Services (MSS).

The functions to be performed are extremely focused on inspection and enforcement, employment andskills development, unemployment and compensation benefits, and labour market information andstatistics. These functions are performed in the 10 provincial offices (two in Gauteng) through 125labour centres that deal directly with the clients of the Department.

Service DeliveryService DeliveryChapter 6

The ESDS Business Unit facilitates the implementation of the National Skills DevelopmentStrategy by providing employment and skills development services for unemployed.

38

Main Tasks

Inspection and Enforcement Services

The Department has an integrated inspection and enforcement unit whose role is to advocate, inspectand enforce labour legislation. The IES Business Unit plays a central role in the implementation andenforcement of the following legislation:




● Occupational Health and Safety Act, 1993

● Skills Development Act, 1998

● Skills Development Levies Act, 1999

● Unemployment Insurance Act, 2001

● Compensation for Occupational Injuries and Diseases Act, 1993.

Integrated Beneficiary Services (IBS)

This is the implementation arm of the Social Insurance Programme, which consists of two sub-programmes in the provinces, namely, the Unemployment Insurance Fund and the CompensationFund. The IBS Business Units administer the services of the two Funds in their respective provinces,which amongst other things provide for the payment of unemployment benefits and compensation forinjuries and diseases contracted in workplaces.

Labour Market Information and Statistics and Planning Services (LMIS + P)

The aim of the LMIS + P Business Unit is to undertake labour market research and to collect, analyseand disseminate labour market statistics and information, in order to evaluate, monitor and informplanning and policy within the Department.

Employment and Skills Development Services (ESDS)

The ESDS Business Unit facilitates the implementation of the National Skills Development Strategy byproviding employment and skills development services for unemployed people to be able to accessemployment opportunities in the formal and informal sectors of self employment. The Unit also coordinatesactivities in the delivery of social plan services.

Achievements

Inspection and Enforcement Services

● During the reporting period, 184 070 inspections were carried out by inspectors to ensure thatemployers are complying with labour legislation. A compliance level of 79% (145 415) wasachieved in all inspections conducted within 60 days. Inspectors successfully resolved 70 492(72%) of 97 483 cases lodged by workers within 60 days of receipt. The number of inspections

39

conducted exceeded the target set for the financial year by 31 574 (20%)

● Focused and targeted advocacy and blitz inspection campaigns were undertaken, targetingsectors/industries with high incidents and accident rates to enforce sectoral determinations andother regulations:

Targeted InspectionsDomestic 6 576Agriculture 1 247Employment Equity 2 280Noise Induced Hearing Loss 971Silicosis 1 845

These focused interventions highlighted the problems that are still prevalent with regard to specificpieces of legislation. They also highlighted the need for further advocacy in some sectors to ensuregreater compliance.

Table 6.1Inspection and Enforcement Services 1 April – 31 December 2004

ProvincialOffice

No. ofInspectors

Targetinspections

TotalInspections

Under-takings

NoticesCompliance

ordersImprove-ment

Contra-vention

Prohi-bition

Mpumalanga 42 9 072 10 875 2 501 274 721 53 207Limpopo 69 14 904 14 283 1 714 560 351 15 49Gauteng North 49 10 584 14 964 1 617 1 050 421 55 66Gauteng South 110 23 760 35 139 1 995 385 1 269 148 493Free State 58 12 528 12 357 1 531 1 022 705 138 84KwaZulu-Natal 133 28 728 34 981 5 079 674 2 501 185 498

Northern Cape 33 7 128 4 882 877 53 510 22 49

Western Cape 95 20 520 28 798 3 134 158 646 6 78North West 53 11 448 11 807 1 135 222 483 34 130Eastern Cape 64 13 824 15 984 1 782 897 414 20 587Total 706 152 496 184 070 21 365 5 295 8 021 676 2 241

40

Table 6.2Inspection and Enforcement Services 1 April – 31 December 2004

Integrated Beneficiary Services

● 85% of the applications for unemployment insurance benefits are settled within 6 weeks and15% take longer than 6 weeks because of problems of non-compliance by some employers. Atotal of 70% of Unemployment Insurance Fund defaulting employers inspected are nowcomplying and 69% of Compensation Fund defaulting employers inspected are registered andcomplying with payment of contributions.

Table 6.3Unemployment Insurance Fund and Compensation Fund Benefits Applications 1 April 2004 – 31 December 2004

Labour Market Information Statistics and Planning Services

● A Client Satisfaction Survey was conducted at the end of the year and the results are currently

Provincial Office

Unemployment Insurance Fund Compensation Fund

Received Approved Refused% Settlement

RateMonetary Value

R

Lodged inCentresLabour

Mpumalanga 38 060 27 764 10 296 73 116 052 945,51 741Limpopo 21 883 20 085 4 162 100 57 161 841,00 1 609Gauteng North 40 593 27 494 13 099 68 143 779 09,60 1 083Gauteng South 88 227 79 639 15 507 90 622 107 382,70 1 274Free State 37 558 36 814 744 98 100 347 914,00 426KwaZulu-Natal 101 333 87 513 13 820 86 372 238 481,30 2 279Northern Cape 12 973 11 152 2 732 86 37 716 917,22 104

Western Cape 76 971 68 583 49 551 89 311 772 842,33 1 022North West 32 953 22 411 10 542 68 67 426 107,25 2 504Eastern Cape 50 523 47 706 10 436 94 175 288 003,02 1 565Total 501 074 429 161 130 889 85 2 003 891 524,93 12 607

Provincial OfficeComplaints Investigations

ReceivedSettled by CSO

ReceivedSettled by inspectors

No. % No. %Mpumalanga 12 740 10 644 84 10 003 5 507 55Limpopo 16 126 14 736 91 3 590 2 441 68Gauteng North 10 185 3 640 36 11 806 8 060 68Gauteng South 29 900 24 313 81 21 128 23 996 114Free State 6 118 4 343 71 3 678 2 510 68KwaZulu-Natal 17 115 11 344 66 18 608 12 490 67Northern Cape 2 103 1 025 49 1 148 881 77

Western Cape 21 313 14 631 69 14 299 8 976 63North West 4 058 804 20 3 116 2 268 73Eastern Cape 12 406 5 856 54 10 107 3 363 46Total 132 064 91 336 68 97 483 70 492 72

41

being analysed. Earlier studies revealed a need for further decentralisation of services to remoteareas. As a result of this study, 20 mobile units are in the process of being rolled out to labourcentres for use in reaching out to beneficiaries in remote rural areas. Additional resourcesincluding human resources will be deployed for this new service.

Employment and Skills Development Services

● All provincial offices participate in the development of the Provincial Growth and DevelopmentStrategies (PGDS), Integrated Development Plans (IDPs) and Local Economic Development(LED) Strategies in order to align their Provincial Skills Development Implementation Plans withLocal Economic Growth and Development

● In order to focus their contribution in terms of general government priorities, provincial officesallocated R 201 857 767 of the Social Development Funding Window (SDFW) towards trainingof 31 469 people (including those in Expanded Public Works Programmes [EPWP] and in NodalAreas). All trainees were placed in income generating initiatives

● Provincial partnerships have been created between the Department of Labour and theDepartments of Transport, Education, Local Government and Housing, Public Works, Agriculture,Social Development, Correctional Services, Trade and Industry, and Land Affairs through theRegional Land Claims Commission (RLCC) for beneficiaries of land claims, land resettlementand land redistribution

● In order to contribute directly to accelerating delivery on Section 18(2) of the Skills DevelopmentAct and on learnerships in line with the National Skills Development Strategy equity targets, theprovincial offices have absorbed 454 section 18(2) learners into learnerships, 65% of whom areto be absorbed in the vacant posts in Labour Centres

● 80% of the Social Development Funding window was spent on Broad Based Black EconomicEmpowerment, 50% of this being in support of emerging training providers.

The purpose of service delivery is to ensure the implementation of Department of Labour’s policies in anintegrated manner.

Challenges

● Lack of commitment and recognition of Department of Labour Provincial Offices

● Lack of integration and planning towards implementation of Social Development projects inprovinces and local municipalities (including Nodes)

● Shortage of accredited Training Providers particularly in the North West Province

● Increase in demand for services at Labour Centres in relation to available resources

● Unrealistic demands on Client Service Officers in relation to remuneration, resulting in highturnover rate and poor case management

● Inability to attract qualified, specialist inspectors

● Fragmented and unstable IT system

● Incomplete claims documents from stakeholders

● MPCC lease agreements with the necessary municipalities not in place

● Inadequate start up support for emerging small businesses and community projects.

42

Employment and Skills DevelopmentEmployment and Skills DevelopmentServicesServices

Chapter 7

43

Introduction

The Employment and Skills Development Services and Human Resources Development (ESDS andHRD) Branch of the Department of Labour oversees the implementation of the National SkillsDevelopment Strategy (NSDS). The first NSDS 2001-2005 was launched by the Minister of Labour inFebruary 2001 and ended on 31 March 2005. The strategy consisted of five strategic objectives,twelve success indicators and three equity targets, which are listed in Table 7.1 .

Table 7.1National Skills Development Strategy 2001 - 2005

Objective Success Indicator

1. Developing a culture ofhigh quality lifelonglearning.

1.1. By March 2005, 70 % of workers have at least a level one qualification on the NationalQualification Framework.

1.2. By March 2005, a minimum of 15 % of workers to have embarked on a structuredlearning programme, of whom at least 50 % have completed their programmesatisfactorily.

1.3. By March 2005, an average of 20 enterprises per sector, (to include large, medium andsmall enterprises), and at least five national government departments, to be committedto, or have achieved, an agreed national standard for enterprise-based peopledevelopment.

2. Fostering skillsdevelopment in the formaleconomy for productivityand employment growth.

2.1. By March 2005, at least 75 % of enterprises with more than 150 workers are receivingskills development grants and the contributions towards productivity and employer andworker benefits are measured.

2.2. By March 2005, at least 40 % of enterprises employing between 50 and 150 workers arereceiving skills development grants and the contributions towards productivity andemployer and worker benefits are measured.

2.3. By March 2005, learnerships are available to workers in every sector. (Precise targetswill be agreed with each Sector Education and Training Authority).

2.4. By March 2005, all government departments assess and report on budgetedexpenditure for skills development relevant to the Public Service Sector anddepartmental priorities.

3. Stimulating and supportingskills development in smallbusinesses.

3.1. By March 2005, at least 20 % of new and existing registered small businesses to besupported in skills development initiatives and the impact of such support to bemeasured.

4. Promoting skillsdevelopment foremployability andsustainable livelihoodsthrough socialdevelopment initiatives.

4.1. By March 2003, 100% of the National Skills Fund apportionment to social developmentis spent on viable development projects.

4.2. By March 2005, the impact of the National Skills Fund is measured by project type andduration, including details of placement rates, which shall be at least 70%.

5. Assisting new entrants intoemployment.

5.1. By March 2005, a minimum of 80 000 people under the age of 30 have enteredlearnerships.

5.2. By March 2005, a minimum of 50% of those who have completed learnerships, withinsix months of completion are employed (e.g. have a job or are self-employed), in full-time study or further training, or are in a social development programme.

The equity targets span across all five objectives and state that the beneficiaries of the strategyshould be 85% Black, 54% female and 4% people with disabilities.

All officials working within the ESDS and HRD Branch, agencies established in terms of the SkillsDevelopment Act such as the 25 SETAs and the National Skills Authority, and projects funded theNational Skills Fund contribute directly or indirectly towards the achievement of the NSDS objectivesand targets.

The Department has prepared annual reports on the implementation of the NSDS 2001–2005 sincethe Strategy was launched in 2001. The latest NSDS Implementation Report containing allachievements, challenges and reliable data for the 2003/2004 financial year, was introduced by theDirector-General: Labour, during the National Skills Conference held on 3 to 4 March 2005. The lastand fourth of the series NSDS 2001–2005 Implementation Reports, including the impact of the firstphase of the strategy on the labour market will be completed during August 2005.

Table 7.2 provides information on the progress made on the implementation of the NSDS 2001–2005until the end of December 2004. The report was generated from un-audited Quarterly MonitoringReports submitted by SETAs, the Department of Labour Provincial Offices responsible for the variousNSF projects and other organisations and institutions funded under the NSF.

44

Members of the youth received an opportunity to apply for learnerships and visit the National Skills Fundexhibition during the National Skills Conference.

Table 7.2. NSDS Implementation Progress 31 March 2004 to 31 December 2004

An adjusted National Skills Development Strategy 2005–2010 was also unveiled by the Minister ofLabour at the National Skills Conference. The Strategy represents debates that occurred within theNational Skills Authority. It was informed by extensive research, critical review of the implementation ofthe first phase of the strategy, and represents consensus of the social partners under the NationalSkills Authority namely, organised business, organised labour, organised community constituencies,

45

Indicator Progress as at March 2003 Interim progress as at December 2003

1. Developing a culture of high quality life-long learning.

1.1922 080 workers participated in the qualification433 437 workers completed the qualification.

1 477 600 workers participated in the qualification825 673 workers had completed NQF level 1 programmes.

1.23 041 753 participating in structured learningprogrammes, 2 147 040 completed.

5 562 174 workers have embarked on structured learningprogrammes and 4 641 810 have already successfullycompleted these programmes.

1.3

304 organisations participating in the IIP standardand 57 achieved the standard. SAQA achieved thestandard.

582 organisations have committed to the Investors in Peoplestandard and83 organisations have gained recognition for the standard.

2. Fostering skills development in the formal economy for productivity and employment growth.

2.167% of enterprises receiving skills developmentgrants.

32% of large enterprises were receiving skills development grants during the period October – December 2004 (Most toget final grant in last quarter).

2.253% of enterprises employing between 50 and 150workers receiving skills development grants.

24% of medium sized enterprises are receiving skills development grants (Most to get final grant in last quarter).

2.3666 learnerships registered and 335 active.

763 learnerships have been registered across all sectors of which 383 are active.

2.4

R3.9 billion spent on training103 government departments (including nationaland provincial) were reported to have submittedWorkplace Skills Plans by March 2004

Total spent on training will only be made available as soon as financial statements are completed101 government departments (including national and provincial) were reported to have submitted Workplace SkillsPlans by December 2004. Report to National Treasury to befinalised at end of Financial Year.

3. Fostering skills development in the formal economy for productivity and employment growth.

3.137% of new and existing registered smallbusinesses claiming grants from their SETAs.

4% of levy paying small businesses received skillsdevelopment grants (most will get final grant in last quarter)benefiting 12 994 SMMEs.

4. Promoting skills development for employability and sustainable livelihoods through social developmentinitiatives.

4.195% NSF funds allocated83% of the 100% spent.

83% of funds allocated. 80% utilised

4.2131 781 trained70% placed.

An impact study found a placement rate of 75%.

5. Assisting new entrants into employment.

5.169 306 learners below the age of 35 were registeredin 18.2 learnerships and apprenticeship programmes(i.e. 49 355 learnerships and 19 951apprentices)

A total of 98 447 unemployed learners below the age of 35entered learnerships and apprenticeships as at the end ofDecember 2004 (i.e. 76 145 learnerships and 22 302apprentices). The figure exclude 38 745 [18.1.] alreadyemployed learners registered in learnerships.

5.2 A report from Tourism Learnership Project available.A pilot learnership evaluation study had been completed anda major study to evaluate learnerships is to start in 2005.

government departments and education and training providers.

Legislation

The ESDS and HRD Branch has key responsibility in ensuring the implementation of the followinglegislations:

● The Skills Development Act, 1998 as amended

● The Manpower Training Act, 1981 provisions that are still in force

● Working closely with the National Treasury/SARS in implementing the Skills Development LeviesAct, 1999 as amended

● Working closely with the Department of Education in implementing the South African QualificationsAuthority Act, 1995.

Each of these areas are briefly discussed below:

Skills Development Act, 1998 as amended

No further amendments were introduced to the Skills Development Act during the 2004/2005 financialyear.

The following regulations, arising from the Amendments, were gazetted during 2004/2005:

● Amendments to Learnership Regulations to enable 21 employment and skills development leademployers to facilitate the intake and training of 18.2 learners in learnership programmes

● SETA Grant Regulations were amended in accordance with the Skills Development AmendmentAct and the requirements of the NSDS 2005–2010

● New Department of Labour/SETA Service Level Agreement Regulations were introduced

● A guideline on the National Skills Fund (NSF) allocations and procedure manual was developed

● Regulations regarding private employment agencies are available and in a process of beingreviewed

● A Learnership Sectoral Determination issued under the Basic Conditions Employment Act is alsoavailable.

The Manpower Training Act, 1981

Sections 13 to 29 of the Manpower Training Act of 1981, dealing with apprenticeships, remains in forceto govern the training of apprentices in the country. Indlela continues to conduct trade test assessmentservices for most apprentices that are trained throughout the country under this Act. The Department isalso responsible for the issuing of trade test certificates, including maintenance of records issued since1924. Conditions of employment, including disputes are managed in accordance with the ManpowerTraining Act Regulations by SETAs. The Minister continues to annually amend allowances paid toapprentices under this Act.

46

The Skills Development Levies Act, 1999

No new amendments were introduced to the Skills Development Levies Act, 1999, that is used tocollect levies from employers to sustain and implement the skills development initiatives under theNSDS 2001–2005. SARS is projecting to collect an amount of R 4,3 billion by the end of May for the2004/2005 financial year. Eighty percent of the levies collected are transferred to SETAs, based ontheir scope of coverage, who in turn use 10% towards their administration, 60% towards grants toemployers, and 10% plus all unclaimed funds by a certain date determined by a SETA towardsdiscretionary projects aimed at benefiting the economic sector in which the SETA is active. Twentypercent is allocated towards the National Skills Fund (NSF), who in turn pays up to 2% of the totallevies collected to SARS and uses 2% of the total NSF allocation towards the administration of theNational Skills Fund Programme.

South African Qualifications Authority (SAQA) Act, 1995

The Minister of Labour jointly administers this Act with the Minister of Education, through whosedepartment funds for the agency are disbursed. Both Ministers appointed new members of the SouthAfrican Qualifications Authority (SAQA) during the 2004/2005 financial year to oversee and guide theSAQA office in the development and implementation of an integrated national framework of qualityassured learning achievement that would:

● Facilitate access, mobility and progression within education, training and employment

● Enhance the quality of education and training

● Accelerate redress of educational and job opportunities

● Advance personal, social and economic development.

Both Ministers are considering a final policy statement with regard to the future of SAQA following theNational Qualifications Framework (NQF) review that commenced in 2001, the publication of the NQFreview document and the subsequent report on “An Interdependent National Qualification FrameworkConsultative Document” produced in July 2003.

Staff

The Branch has two pillars on which the NSDS is anchored and two Directorates that report directly tothe ESDS and HRD Deputy Director-General:

● The Directorate: Strategic Management Unit, straddling across the two Programmes andresponsible for the consolidation of plans and reports

● The Directorate: National Skills Authority, also straddling across the two programmes andresponsible for providing secretariat services to the National Skills Authority

● The SETA Coordination Programme, responsible for the performance management and supportto the 25 Sector Education and Training Authorities (SETAs). SETA Coordination is headed by aSenior Executive Manager and has three Executive Managers responsible for SETA Support,SETA Performance Management and INDLELA

● The National Skills Fund Programme, responsible for all NSF-funded projects and initiatives. It isalso headed by a Senior Executive Manager and has two Executive Managers responsible forNSF Strategic Projects and NSF Skills Support Programmes.

47

The Branch is now inextricably linked to the other three Branches within the Department, who in turnprovide support to the Branch and the implementation of the NSDS. Out of 66 vacant posts (belowExecutive Management level) that resulted out of the restructuring, 48 were filled during the2004/2005 financial, 11 have been advertised and seven resignations were received.

Main tasks and achievements

Office of the ESDS and HRD Deputy Director-General

The office of the ESDS and HRD Deputy Director-General is supported by the Directorate: StrategicManagement Unit to fulfill its functions. During the year under review the office focused on thefollowing main tasks:

● The supervision of the Branch to ensure the achievements of the NSDS 2001–2005 targets for2004/2005 and to meet other departmental obligations

● The review of the National Qualifications Framework (NQF)

● Review of the NSDS 2001–2005 and formulation of the NSDS 2005-2010

● Coordination of human resources development initiatives, jointly with the Department ofEducation and other government departments participating in the inter-departmental HumanResources Development (HRD) Coordinating Committee

● Contribution and reporting on the work associated with the Growth and Development Summit,held in June 2003, and the implementation of a number of key programmes such as theExpanded Public Works Programme

● Representing the Branch in departmental internal management meetings and external agencies,institutions and committees such as SAQA, the NSA, NEDLAC Labour Market Chamber,National Productivity Institute (NPI), Government’s Economic Cluster, etc.

The National Skills Authority (NSA)

The NSA is an advisory body established in terms of Section 5 of the Skills Development Act to advisethe Minister on the NSDS, its implementation and other relevant matters. The NSA consists of socialpartners nominated through NEDLAC namely, five organised business representatives, five organisedlabour representatives and five organised community organisations representatives. It has fiveeducation and training providers representatives, five government departments representatives, twoemployment services representatives, SAQA representatives, two discretionary ministerial appointeesand a Chairperson.

The NSA Directorate was responsible for arranging meetings, travel and accommodation of NSAmembers, payment of attendance allowances and compilation and distribution of meetingdocumentation.

During the year under review the NSA focussed and advised the Minister on the following:

● The implementation review of the NSDS 2001–2005 during its first three years of implementationthrough constituency workshops

● The adjusted National Skills Development Strategy 2005–2010

48

● Priority projects to be funded under the National Skills Fund for the 2004/2005 financial year

● The review of the current SETA landscape and recommendations on the new SETA landscape tobe established for the next 60 months

● Draft Regulations relating to the proposed amendments to SETA Establishment Regulations,proposed amendments to Learnership Regulations, proposed SETA Grants Regulations alignedto the Skills Development Amendment Act, 2003 and the NSDS 2005-2010 and proposed SETAService Level Agreement Regulations

● A draft guide on the NSF Funding Windows for the NSDS 2005–2010, including targetbeneficiaries, organisations that may apply and the access criteria.

The NSA played an important role in the planning, organisation and chairing of the National SkillsConference held in Midrand on 3 to 4 March 2005.

SETA Coordination Programme

The SETA Coordination Programme is mainly responsible for the implementation of the NSDS atsectoral level and to:

● Manage Skills Development Strategy policy and ensure alignment with the SAQA framework andother education and training policies

● Oversee and coordinate activities of the SETA Coordination Chief Directorate

● Design and implement systems and processes to monitor the use of Skills Development LevyGrants, evaluate the impact and contribution of skills development in enhancing productivity andemployment and the number of skilled people in South Africa

● Oversee SETA contributions towards the objectives and targets of the National Skills

49

Director-General of Labour, Dr Vanguard Mkosana addresses delegates during the National SkillsConference.

Development Strategy and the Human Resource Development Strategy

● Facilitate the working relationship between SETAs, Indlela and provincial offices

● Ensure the provision of relevant analysis to enable the NSA, Director-General and the Minister tomake strategic policy decisions with regard to skills development implementation

● Facilitate financial skills development levies collection, transfers to SETAs, disbursements toemployers, and accountability of all stakeholders in the use of funds

● Ensure increased access to and relevance of work-based learning and qualifications, providesupport and moderation to learning and assessment initiatives and delivery of training servicesby the restructured Indlela.

The SETA Coordination Programme has three Directorates that focused on different aspects of theseobjectives during the year under review.

SETA Performance Management

SETA Performance Management managed to:

● Ensure that all SETAs concluded Memoranda of Understanding with the Department for the2004/2005 financial year

● Develop and implement a formal performance assessment system that produced interim resultsfor each SETA. The Minister used the results during June 2004 to identify six averageperforming SETAs and two under-performing SETAs

● Secure R2 million under the NSF for the capacity development of SETA board members througha formal structured programme on finances and corporate governance matters. A tender wasissued and closed on 11 March 2005

● Clean up historical reporting inaccuracies by SETAs and capturing of data within the Department.This resulted in considerable improvement in SETA performance. SETAs performed as follows:- 4 SETAs were ranked as excellent performers, namely BANKSETA, CHIETA, HWSETA and

FOODBEV- 12 SETAs were ranked as over performers, namely MQA, MAPPP, FASSET, CTFLSETA,

TETA, ESETA, ISETT, MERSETA, SERVICES, POSLEC, CETA and INSETA- 7 SETAs were ranked as average performers, namely FIETA, W&RSETA, ETDPSETA,

SETASA, THETA, DIDTETA, PAETA- 1 SETA was ranked as an under performer, namely LGWSETA- PSETA was not evaluated using the assessment tool as most elements are not applicable to them.

SETAs are responsible for eight of the 12 success indicators of the National Skills DevelopmentStrategy 2001–2005. Most SETAs performed excellently across five of the eight success indicatorswith a major weakness evident on success indicator 1.3. Table 7.3 indicates the success percentagesof the SETAs against each of the relevant indicators.

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Table 7.3 Analysis of SETA Performance by NSDS 2001 – 2005 Success Indicator

51

NSDS 2001 - 2005 SuccessIndicator

Percentage ofSETAs thatachievedExcellent

Performance

Percentageof SETAs

thatachieved

OverPerformance

Percentageof SETAs

thatachievedAverage

Performance

Percentageof SETAs

that achievedUnder

Performance

Percentageof SETAs

thatachieved

PoorPerformance

1.1 By March 2005, 70% ofworkers have at least a LevelOne qualification on the NQ

74% - 17% - 9%

1.2 By March 2005, aminimum of 15% of workersto have embarked on astructured learningprogramme, of which at least50% have completed theirprogramme.

57% 35% 4% - 4%

1.3 By March 2005, anaverage of 20 enterprises per sector and at least fivenational departments to becommitted to or have achievedan agreed national standardfor people development

19% 6% 6% 6% 63%

2.1 By March at least 75% ofenterprises with more than150 workers are receivingskills development grants.

45% 32% 14% 9% -

2.2 By March at least 75% ofenterprises with between 50and 150 workers are receivingskills development grants

52% 20% 12% 16% -

2.3 By March 2005learnerships are available toworkers in every sector

72% 20% 4% - 4%

3.1 By March 2005, at least20% of new and existingsmall business are supportedin skills development

13% 29% 21% 21% 16%

5.1 By March a minimum of80 000 people under the ageof 30 have enteredlearnerships.

38% 21% 12% 12% 17%

INDLELA

During the year under review, INDLELA managed to:

● Process 6 957 applications for apprenticeship trade tests by end of December 2004. A total of878 candidates were absent but did undertake their trade tests and 135 candidates withdrew. Atotal of 5 774 candidates were assessed and 2 972 passed their trade tests. The pass rate was52%

● Secure the registration of the Master Artisan Learnership to be offered at the institutionregistered on the National Qualifications Framework

● Perform apprenticeship trade test moderation in assessment providers in Kwazulu-Natal andMpumalanga

● Conduct various training pilot programmes as part of its future repositioning in the electrical,building construction and motor trades.

SETA Support

During the year under review SETA support managed to:

● Transfer the Skills Development Levies collected by SARS under the Skills Development LeviesAct to SETAs and the NSF within 30 days of each second month. The amounts represent 1 % ofthe employer’s payroll at the current compliance level of 70%. Table 7.4 illustrates the totalamount collected and transferred to SETAs and the NSF by end of December 2005

Table 7.4 Levy transfer and dates of transfer to SETAs and the NSF

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Levy year Month collectedTotal amount

collected

Cummulativeamount

transferred toSETAs duringthe levy year

Cumulativeamount

transferred toNSF during the

levy year

2001\2002 April 2001 to March 2002 2 678 544 338 2 147 844 686 530 699 6522002\2003 April 2002 to March 2003 3 396 865 951 2 716 429 556 680 436 3952003\2004 April 2003 to March 2004 3 891 652 707 3 113 295 738 778 356 969

2004\2005 (Qrt 1) April 2004 to June 2004 1 024 720 961 819 776 764 204 944 197

2004\2005 (Qrt 2) July 2004 to September 2004 1 082 934 394 866 347 516 216 586 877

2004\2005 (Qrt 3)October 2004 to December 2004

1 138 349 012 910 679 204 227 669 808

Grand Total 13 213 067 363 10 574 373 464 2 638 693 898

Table 7.5Number of grants disbursed by employer size categories, levy year andgrant type October – December 2004

● Register 763 registered learnerships programmes of which 383 are active

● Secure commitment from 582 organisations, business units of organisations and 11 nationalgovernment departments to achieving the Investors in People Standard being piloted by theDepartment. A total of 83 companies have already gained recognition against the standard

● Pilot the concept of an Employment and Skills Development Lead Employer to recruit and placelearners in learnerships by small employers through 21 agencies funded by SETAs and the NSFrespectively.

National Skills Fund

A detailed report on the achievements, challenges and programme of action for the NSF is providedseparately in Chapter 8.

ESDS and HRD Programme of Action for 2005/2006

The ESDS and HRD Branch will focus on the implementation of the NSDS 2005 – 2010 during thenext five years. Annual targets to be achieved were developed and incorporated in the Department ofLabour’s integrated workplan. The projected levy income of R4,5 billion during the 2005/2006 financialyear will be used to achieve targets under the following objectives derived from the NSDS 2005–2010:

● Ensuring that the NSDS 2001-2005 targets are achieved, reported and the impact of the firststrategy is evaluated and presented by end of September 2005

● Ensuring that the NSA provide advice to the Minister of Labour on the implementation of theNSDS 2005 -2010 and related matters

● Prioritising and communicating critical skills list

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Levyyear

Grant type

Number of employers and value of grants disbursed by employment size

0 - 49 50 - 149 150 + Unspecified Totals

No Value No Value No Value No Value No Value

2003 WSP 95 119 142 29 177 068 26 614 759 33 0 183 910 969

Discretionary 101 185 258 24 3 839 30 707 884 24 0 179 896 981

Implement 3 38 258 2 3 839 4 255 744 0 0 9 297 841

2004 WSP 528 312 800 63 376 824 69 2 887 665 74 11 993 734 3 589 282

Discretionary 640 3 140 903 109 2 408 752 116 11 445 981 63 45 572 928 17 041 208

Implement 21 216 258 6 10 329 13 772 813 0 0 40 999 400

2005 WSP 5 357 1 915 293 1 150 1 763 547 971 34 455 476 81 4 571 666 6 813 42 705 982

Discretionary 1 940 431 381 610 557 214 395 792 618 855 644 720 359 283 746 373 3 652 1 785 168 495

Implement 932 2 777 870 218 1 365 100 178 0 31 961 490 1 359 5 104 460

● Promoting and accelerating quality training in all workplaces

● Promoting employability and sustainable livelihoods through skills development

● Assisting designated groups, including new entrants, to participate in accredited learning andwork-based programmes to acquire critical skills to enter the labour market and self-employment

● Improving quality and relevance of provision.

Stakeholders have committed themselves to ensure that beneficiaries supported by the NSDS 2005 -2010 will remain 85 % Black, 54% women and 4% people with disabilities, including youth.

Challenges

National Skills Authority

Amongst the challenges relating to the National Skills Authority are the following:

● The clarification of roles, and responsibilities, and working relations between the NSA with theDepartment of Labour (ESDS and HRD Branch) in overseeing the implementation of the NSDS2005-2010

● The appointment of a new NSA to replace the current Authority, as its term of office expires atthe end of September 2005.

SETA Coordination Programme

SETA Performance Management has identified the following challenges:● The need to phase out the current reporting system after the production of the fourth NSDS

2001–2005 implementation report and design and introduction of a new reporting system for theNSDS 2005–2010 implementation report for SETA contributions

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SETA Performance Management developed and implemented a formal performanceassessment system that produced interim results for each SETA. The Minister used theresults during June 2004 to identify six average performing SETAs and two under-performing SETAs.

● Conclusion of negotiations with individual SETAs on their NSDS 2005–2010 obligations andimplementation of signing of Service Level Agreements by each SETA for the 2005/2006financial year by 31 May 2005

● Appointment of a credible provider that can conduct performance evaluations and develop asustainable programme offered through a HET institution for SETA boards and staff members.

The challenges facing INDLELA relate to:

● The need to standardize the assessment services of apprentices across the country and thequality assurance thereof

● Securing accreditation from the various SETAs to provide specialized new training services forassessors, Master Artisans; the training of learners in identified scarce skills areas includingmaking Indlela accessible to local communities.

The challenges facing SETA Support relate to:

● The need for efficient communication with SAQA to address systemic blockages to thelearnerships programme delivery

● Review of the impact of the Employment and Skills Development Lead Employer (ESDLE) pilotprogramme and the development of the necessary policy to roll-out the Employment and SkillsDevelopment Agency programme to enable SMEs to take on learners in learnershipprogrammes

● Review of the impact of the Investors in People Project and the development and implementationof a policy on a national standard for people development in South Africa

● Facilitating collaboration between public institutions and SETAs in learning delivery to achievethe NSDS 2005–2010 targets.

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Introduction

The National Skills Fund (NSF) was established after the promulgation of the Skills Development Act in1999. The NSF has received 20% of the skills levy since the introduction of the levy in 2000.

The work of the National Skills Fund was given credence when the Minister of Labour announced newFunding Windows of the NSF at the first National Skills Conference in February 2001. The new fundingwindows were aligned to both the thrust and objectives of the National Skills Development Strategy.The NSF was also commissioned to take further responsibility when the 2002-2003 NSDS ImplementationReport revealed that meeting the targets for learnerships in the NSDS were slow. The LearnershipsFunding Window was added and subsequent agreements for unemployed learners at the Growth andDevelopment Summit (GDS) introduced further targets to be achieved by March 2004.

NSF Funding windows aligned to the NSDS 2000-2005

Herewith follows a brief description of each of the current funding windows:

● Social Development Initiatives Funding Window

In the case of the Social Development Initiatives Funding Window, the Department of Labour’s provincial offices are the disbursing agents. They have an established delivery model based on evaluating project-linked training applications against set criteria. The said criteria include considerations around whether the proposed project, for which the training is intended, is part of the Provincial Skills Plan, Integrated Rural Development Strategy, Urban Renewal Strategy, Local Economic Development Strategy and whether the beneficiaries will be placed in such projects once training is complete.

● Strategic Projects

SETAs are the disbursing agents in the case of the Strategic Projects Window. Allocations from the NSF to SETAs has been based on strategic sector choices where training is in support of sectoral growth strategies which reference the following funding areas:

- Development and Piloting of Skills Programmes- Learnerships and ETD Practitioner Development- Small Business Development- Strategic Occupations - Education Skills (including Adult Basic Education and Training).

In formulating proposals for funding from this Funding Window, SETAs were expected to reference one of government’s priority growth strategies for the achievement of national goals. At the time when the framework for the Strategic Projects was developed, these were:

- The Economic Cluster’s Integrated Action Plan for Economic and Employment Growth (subsequently the Integrated Manufacturing Strategy)

- The Social Cluster’s Strategy for Social Development- The Human Resources Development Strategy- The National Skills Development Strategy.

SETAs submitted substantial strategic projects that have contributed towards the achievement of

National Skills FundChapter 8

57

one or more of the goals of these strategies.

● Bursaries Window

One of the priority areas identified in government’s Human Resources Development (HRD) Strategy is addressing scarce skills. This Window of the NSF aims to contribute towards the achievement of the targets set in the HRD Strategy through the allocation of bursaries (undergraduate and post-graduate) in identified areas of scarce skills. The Department has entered into agreements with the National Student Financial Aid Scheme (NSFAS) and the National Research Foundation (NRF) to administer the funding of undergraduate and post-graduate bursaries respectively.

● Innovation and Research Window

The objective of this Window of the NSF is to fund projects that will:

- Generate new or improved knowledge about skills development through research- Enhance innovation in relation to:-Implementation of the National Skills Development Strategy, Skills Development Act and Skills

Development Levies Act- The generation and distribution of career/labour market information to learners, providers and

other users- Skills development policy and implementation strategies.

● Skills Support Programme

The Skills Support Programme (SSP) is linked to the Department of Trade and Industry’s Small-and Medium Enterprise Development Programme (SMEDP) and Strategic Industrial Programme (SIP), which are designed to encourage new investments and major expansions.

The SSP has three funding elements:- Training grant- Development grant- Capital grant.

● Capacity building of stakeholders

The Department is dependent on the various stakeholders in the area of skills development, for the successful implementation of the National Skills Development Strategy. The beneficiaries include:

- SETA boards and staff- Trade union federations- Organised business- Education and training providers- Designated community groups:- Disabled People South Africa (DPSA)- South African National Civic Organisation (SANCO)- South African Youth Council (SAYCO)- Women’s National Coalition (WNC).

● Promotion of the NSDS

The objective of this window of the NSF is to fund, inter alia, the communication, marketing and advocacy of the objectives of the NSDS, printing of NSDS related promotional material/ publications,

58

marketing of projects funded by the NSF and the hosting of the annual skills conference.

● Learnerships

The objective of this window of the NSF is to fund the implementation of learnerships for unemployedlearners, thereby contributing towards achieving the targets of the Growth and Development Summit of June 2003. Learnerships are established by the Skills Development Act and are programmes that combine institutionalised and workplace learning leading to nationally recognised qualifications.

It should be noted that the Minister of Labour has launched the NSDS 2005–2010 during theMarch 2005 National Skills Conference and therefore the NSF funding windows will be re-aligned to the Strategy.

Primary objectives of the NSF

The Skills Development Act (SDA) stipulates that the money in the NSF may be used only for the projects identified in the National Skills Development Strategy (NSDS) as national priorities or for such other projects related to the achievement of the purposes of the Act as the Director-General of the Department of Labour determines. Given the commitment of government to act in a more concerted fashion, the flexibility given to the Director-General in the latter part of the aforementioned clause of the Act, allows the Department to take into account other government policy/priority imperatives in the allocation of these funds. These might include the HRD Strategy, growth, employment and investment strategies and social development priorities.

Legislation

The National Skills Fund (NSF) was established in 1999 in terms of the Skills Development Act, 1998.The revenue sources for the NSF are:

● 20% of the skills development levies as contemplated in the Skills Development Levies Act

● the skills development levies collected and transferred to the Fund, in terms of the SkillsDevelopment Levies Act, in respect of those employers or sectors for which there are no SETAs

● money appropriated by Parliament for the Fund

● interest earned on investments

● donations to the Fund

● money received from any other source.

The Minister of Labour decides on the allocation of subsidies from the NSF after receiving advice fromthe National Skills Authority (NSA) as set out in the Act.

The Director-General of Labour is the accounting officer of the Fund in terms of the Public FinanceManagement Act and must:

● Control the Fund

● Keep a proper record of all financial transactions, assets and liabilities of the Fund

● As soon as possible after the end of each financial year, ending on the prescribed date, prepare

59

accounts of the income and expenditure of the Fund for the year and a balance sheet of itsassets and liabilities as at the end of that year.

The Director-General is thus ultimately responsible and accountable to the Minister and Parliament formoney spent from the NSF. Within the framework of the Director-General’s delegation of authority, theday to day operations of the NSF are managed by the Senior Executive Manager: National Skills Fund.

Staff

The NSF has a total staff complement of 47 already included under Chapter 7, under the ESDS andHRD Branch.

Main tasks

The main tasks of the NSF includes the following:

● Devise and recommend policy for the implementation of the NSF

● Establish systems and procedures for the disbursement of grants in accordance with NSF policy

● Design and implement systems and processes to monitor the use of the NSF funds

● Contribute to the design and corporate management of the NSDS- and HRD Strategies

● Identification of funding windows and apportioning of funds to the respective windows

● Liaison with social partners in the design and development of NSF funding windows andallocation of funds.

Achievements

Social Development Funding Window

The Directorate: Employment Services of the Service Delivery Branch coordinates the implementationof these projects with the 10 provincial offices and labour centres of the Department of Labour.

The actual amount spent on the training programmes conducted under the Social DevelopmentFunding Window during 2004/2005 up to the end of February 2005 amount to R103 908 282.

The total number of unemployed people who benefited from the social development projects byprovince, age group, population group and gender during the reporting period are indicated in Table 8.1 .

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Table 8.1 Number of unemployed people who benefited from the social developmentprojects 1 April 2004 to 31 December 2004

Strategic Projects

In May 2002, the Minister of Labour launched the strategic projects. The projects are in their lastperiod of implementation. The year under review has seen a consolidation of progress made since2002 in the contribution towards the broad goals of the National Skills Development Strategy. To datean amount of R883 million or (74% of the initial R1,1 billion) has been disbursed. Against thesedisbursements the projects have contributed the following to the Strategy:

● 44 838 learners have benefited from ABET and other programmes at NQF Level 1

● 35 943 people received additional skills from structured learning programmes

● A total of 21 107 SMMEs received skills and other interventions including mentoring

● 9 332 learners will receive nationally recognised learnership qualifications.

● The 17 projects have collectively achieved a learners profile that is 95% Black, 55% women and0.05% people with disabilities.

Strategic projects have been largely implemented on a national scale allowing for deeper impact in theselected sectors. We note the following highlights of achievements from the projects -

● The Domestic Worker Project of the Services SETA

The Domestic Workers Project of the Services SETA is an initiative to provide high quality learning and relevant Recognition of Prior Learning opportunities and training to the domestic workers. The project aims to achieve the following objectives:

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Provincialoffice

TotalAge groups Population groups Gender People with

disabilities<35 >35 Black White Male Female

Western Cape 967 593 374 966 1 343 624 13

Eastern Cape 6 638 3 269 3 369 6 632 6 2 441 4 197 83

Northern Cape 1 891 1 040 851 1 891 0 730 1 161 17

Free State 3 996 2 485 1 511 3 990 6 1 602 2 394 12

KwaZulu-Natal 2 173 1 187 986 2 173 0 702 1 471 0

North West 4 558 3 235 1 323 4 558 0 1 972 2 586 222

Gauteng South 2 642 1 792 850 2 609 33 1 227 1 415 99

Gauteng North 3 302 2 218 1 084 3 270 32 1 504 1 798 37

Mpumalanga 1 935 804 1 131 1 916 19 1 056 879 65

Limpopo 3 367 1 875 1 492 3 367 0 935 2 432 77

Total 31 469 18 498 12 971 31 372 97 12 512 18 957 625

Percentages (%) 58,78 99,6 60,24 1,99

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- Developing appropriate and high quality learning frameworks for the sector - Piloting framework to improve training provision with 434 providers/mentors/assessors- Learnership and skills programmes for 12 500 learners.

Table 8.2Summary of statistics

Project Highlights

The domestic workers project has received overwhelming support from employers who were keen tosend their domestic workers for improved training. Demand for the programmes has led to over-subscription of both the learnerships and skills programmes. For the year under review 2 428 learnersare completing a learnership while 12 877 have completed skills programmes. The project has alsoincreased the skills of 132 assessors.

● Micro Finance Skills Transfer Project (BANKSETA)

The Micro Finance Skills Transfer Project aims to implement skills development initiatives to equip SMME micro lenders with skills and to provide support systems to ensure viable businesses and professional service to borrowers:

- Improve the skills of 1 200 SMME micro lenders - Improve the skills for 1 200 SMME borrower enterprises- Skills development initiatives for 6 000 individual borrowers/consumers- Building the capacity of providers in the micro lending industry- Develop support systems for Micro finance institutions and borrowers.


Project Highlights

The project consolidated gains made since its inception. It formally completed its training activities inDecember 2004. The following were achieved during the year under review:

- 1 042 Micro Finance Institutions and 1 082 SMME borrower institutions improved business skills

Total amount committed R 115 349 329

Amount committed for 2004/2005 R 74 717 275

Amount disbursed in 2004/2005 R 74 717 275

Targeted12 500 domestic workers

454 providers/mentors/assessors




Target 8 640 beneficiaries

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through a variety of skills programmes - Provided Business Development Support to 61 Micro Financing Institutions and 310 SMMEs - 5 009 individual borrowers have gained skills related to managing personal loans and debt.

● Hlumani Project (FOODBEV)

The Hlumani Project aims to provide skills initiatives that will contribute and facilitate competitivenessin the global markets in addition to supporting the establishment of SMMEs and developing and growing existing SMMEs.


Project Highlights

A significant milestone has been achieved in the implementation of this project. For the year underreview project Hlumani could account for 2 430 beneficiaries. These included 1 099 learners benefitingfrom NQF level 1 ABET, whilst 47 SMME’s have benefited from support programmes. A total of 1 224learners are currently completing learnerships while bursaries and internships benefited 107 people.

● TETA (Transport SETA)

The TETA project aims to enhance the sustainability and increase growth prospects of small businesses in the Taxi and Maritime Industries. The primary objectives of the project were to:

- Improve productivity of the Small Boat Fishing Industry through skills programmes- Provide skills training programme for Taxi owners and drivers- Undertake research in the Taxi and Small Boat Fishing Industry.


Project Highlights

Despite challenges experienced in the Taxi Industry in terms of smooth rollout of the project, the yearunder review has seen accelerated delivery of learning programmes in this project. The project hasprovided a variety of skills ranging from professional driving to customer care to 1 260 people in theTaxi Industry. This included a further business support to 900 Taxi owners. A total of 4 500 small boat







Target1 750 taxi owners

3 118 fishers

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fishers benefited from a variety of skills programmes.

● SETASA

The SETASA NSF Project aims to facilitate change in the Agricultural Sector in addition to sustainingSMME growth and development in the Sector. The project aimed to achieve the following:

- Provide learners with skills to develop export skills- Provide training in SMME support- Provide cross-functional skills for the unemployed and new entrants into the labour market- Provide bursaries for scarce skills training in the Sector- Provide ABET Training for learners.


Project Highlights

For the period under review the project has recorded the following progress:

- A total of 92 people are currently completing a learnership on export readiness- A further 1 041 people completed skills programmes in export readiness- The SMME Support Programme has benefited 200 people, while 150 learners were engaged in various

cross-functional skills - Bursaries were awarded to 152 beneficiaries allowing them to complete scarce skills in the Sector - A total of 923 benefited from ABET programmes.

Learnership funding (unemployed)

The learnerships projects funded through the National Skills Fund were in support of the Growth andDevelopment Summit of 2003.The broad goals and agreements reached by social partners at thisSummit was to accelerate the uptake of unemployed people by learnerships. The projects were slow tostart, with the result that the financial year 2004/2005 began with a healthy budget of R700 million.This budget included a special allocation of R90 million to support a pilot project for Employment andSkills Development Lead Employers (ESDLEs). For the year under review the following progress canbe reported:

● A total of R600 million has been allocated to projects implemented by both SETAs and ESDLEs

● A total of 10 SETAs and 11 ESDLEs are implementing projects covering a wide variety oflearnerships across sectors

● The total approved projects will allow 23 000 learners to obtain nationally recognised learnershipqualifications.




Target 4 725 learners

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A sample of the projects are highlighted:

● CTFL Learnerships Project

The objective of this project is to put 1 200 unemployed learners into 49 learnership programmes so that they can gain skills and nationally recognised qualifications in clothing, textiles and footwear and leather works.


Project Highlights

A total of 1 181 are already registered for the various learnerships offered in this Sector. Learners wererecruited across the country although the project is located in KwaZulu-Natal, due to the nature of theIndustry. The project is due for completion in June 2005.

● BANKSETA Letsema Learnership Project

The Letsema Project aims to accelerate learnership initiatives by assisting 800 unemployed learners to enter into learnership programmes to provide them with opportunities to acquire quality training, workplace experience and possibilities for job opportunities.


Projects Highlights

The learnership programme for Letsema 1 was completed on time. A graduation ceremony for the 794learners was held on 19 March 2005. From the total learners targeted and recruited the projectachieved a 99% completion rate.

Current prospects suggest that up to 55% of Letsema 1 learners will be placed in permanentemployment. This will range from the formal financial sector, such as in the Banking Industry or withemployers providing similar financial services.

Bursaries

For 2004/2005, R 26 805 000 was allocated through the National Research Foundation (NRF), funding



Targeted 1 200 learners



Targeted 800 beneficiaries

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693 post-graduate bursaries in areas of scarce skills, covering from Honours to Post-Doctoral studies.For the undergraduate bursaries, the National Student Financial Aid Scheme (NSFAS) disbursed anamount of R 46 027 516 covering 6 195 undergraduate bursaries.

The scarce skills categories as per the State of Skills in South Africa 2003 document, are broadly thefollowing: accounting, actuarial science, auditing, bio-informatics, bio-technology, chemistry, computerscience, demography, earth science, engineering, financial management, information systems,management studies, mathematical sciences, microbiology, physics, tourism and transportationstudies.

The NSF has also taken a further step to consolidate its bursary scheme in that bursaries for peoplewith disabilities will as from the 2004 academic year also be managed through the NSFAS and NRF.The two institutions disbursed R13 096 200 and 441 students with disabilities benefited from bursaryawards and/or assistance devices.

The NSF is busy processing the transfer of the funds to NSFAS and NRF for the 2005 academic yearfor the awarding of bursaries to students continuing their studies from the previous year. This amountwill be approximately R75 million.

Innovation and Research

The Director-General: Labour approved 9 projects during 2003. The total amount committed for theseprojects amounted to R 6,9 million for 2003/2004 and R 6,2 million for 2004/2005. The actualpayments made for these projects during 2004/2005 were R 3 149 153. Two of the projects arescheduled to come to a close during 2005/2006.

The approved projects have been outsourced to the relevant organisations/ institutions. Herewithfollows a couple of examples of the aforementioned projects:

● Manstrat Development Strategies

Project objective/s:

- To undertake research that will generate new and improved knowledge of the specific needs and requirements for skills development in the formal sector

- To develop and pilot innovative learning and skills development approaches specifically designed to the needs and requirements of the informal sector

- Based on the successes obtained in the pilot project(s), make recommendations and proposals that will enhance policy and implementation strategies aimed at informal sector training.

The project has been completed and the results are being analysed to decide on the way forward.

● Naledi 3D Factory

Project objective:

- Development of a virtual reality application to provide training for lathe and milling machine operators. The pilot of this application has been successful, and the project manager feels confidentthat this product can have a very significant impact on increasing skills of students aiming for employment in the manufacturing sector.

The project has been completed and the results are being analysed to decide on the way forward.

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● Siyavuka Lateral Improvement Foundation (SLIF)

Project objective:

- To equip unemployed and disadvantaged youth with the skills they require to enable them to find employment or to start their own micro businesses.

This project will be completed by end March 2005 and itss evaluation the results analysed to decide on the way forward.

● Southern Hemisphere

Project objectives:

- To generate new or improved knowledge about skills development through research- To enhance innovation in relation to the implementation of the National Skills Development Strategy;

Skills Development Act and the Skills Development Levies Act- To enhance innovation in relation to the generation and distribution of career/labour market

information to learners, providers and other users.

The project has been completed recently and the results are being analysed to decide on the way forward.

● University of Natal

Project objectives:

- To examine how to neutralise the limiting role played by work organisation and job grading systemsin the implementation of the skills development system

- To examine innovation and best practice with regards to work organisation, job grading systems andskills development and propose models or mechanisms for the implementation of these.

The learnerships projects funded through the National Skills Fund were in support of the Growthand Development Summit of 2003.

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The project has been completed recently and the results are being analysed to decide on the way forward.

Skills Support Programme (SSP)

The training grant incentives are mainly approved for a period of up to three years. The amountscommitted with regard to the approved SSP applications are as follows:

● 2003/2004 - R 22,3 million was committed and R15,8 million were paid

● 2004/2005 - R 41,7 million was committed and to date R13,1 million have been paid out

● 2005/2006 - R33,9 million has been committed.

To date 3 216 new workers have received training of which 2 991 are Africans (93%) and 2 283 (71%)are females.

SSP success stories include the following:

● Rainbow Hut Colour Corporation CC – Port Elizabeth (Eastern Cape)

In 1999 Ms Louise Greyling, a schoolteacher, experimented with children’s paint to use for artprojects, which was based on the functionality of a roll-on deodorant.

Ms Greyling patented the product as Rollit. By the end of 1999 she had 90 agents around SouthAfrica distributing the product. By 2001 the first export order was received. To cope with theincreased volume she had to recruit new staff and applied for a SSP incentive to fund thetraining required by the new recruits.

Today the company that started with two people working from a church, employs 26 people andexports 80% of its products to countries such as Canada, Portugal, Sweden, Norway andAustralia. The SSP application was approved on 21 October 2004, with an incentive claim periodextending from 1 March 2003 to 28 February 2006 and for a total incentive amount of R793 455.

● Tradestorm CC - Mitchells Plain, Cape Town

Mrs Williams, a Coloured woman, established this Black Economic Empowerment (BEE)company after a clothing company for which she worked informed the workers one Fridayafternoon in May 2002 that the firm has closed down and they need not return for work thefollowing Monday.

Mrs Williams and her husband decided that they do not want to be dependent on other people toprovide jobs for them and set out to establish their own company using their expertise in theClothing Industry and their knowledge of the local clothing market. They started their company inJuly 2002 with 35 workers (all from the firm where they lost their jobs) and are now providingjobs for 85 workers.

At present, Tradestorm is providing garments on a CMT basis to, inter alia, Truworths, Foschiniand Mr Price in the Western Cape region.

The SSP application of Tradestorm was approved on 25 September 2003 with a total traininggrant of R 485 676 for the training in clothing manufacturing related courses of 138 of the newworkers and have been paid out by the National Skills Fund.

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The programme has been so successful that the company has applied for expansion to the SSPto include new activities in the business. The application for expansion is currently underconsideration.

● Karoo Taxidermy CC (Graaff-Reinet, Eastern Cape)

The company was established in the late 1990s. The staff compliment has grown from fourworkers to 40. The company is internationally recognised for producing quality hunting trophies.The aim of the company is to provide hunters with a complete personalised taxidermy servicethat includes mounting of all game animals, birds and reptiles to reflect their appearance in thewild. This is accomplished through the processes of skinning, tanning, casting of manikins,mounting, modelling and crating for export purposes.

Currently 66% of their products are exported to the USA and 21% is exported to the EuropeanUnion. Since the company is located in a rural area the jobs provided has had a profound impacton the community of Graff-Reinet.

The SSP was approved on 24 February 2005, with an incentive claim period extending from 1March 2004 to 28 February 2007 and for a total SSP training grant to the value of R1 017 052.

Promotion of NSDS objectives

The promotion of the NSDS was planned, coordinated and implemented by the Communication ChiefDirectorate.

The total costs up to the end of February 2005 amounted to R 13 166 963. This amount excludesexpenses of the National Skills Conference held in March 2005, because these expenses are stillbeing processed.

Capacity building of stakeholders

The consultation process with the NSA stakeholders with regard to the National Skills DevelopmentStrategy 2005–2010 continued during 2004/05. The total amount expended on the consultationprocess is R 6 274 240.

SARS Collection costs

The Skills Development Levies Act determines that the cost of collection incurred by the South AfricanRevenue Service (SARS) for the collection of the skills development levies, interest and penalties mustbe refunded from the National Skills Fund to SARS. The amount claimable by SARS may however notexceed 2% of the total amount of skills development levies so collected. In 2004/2005 the amount paidto SARS amounted to R55,4 million.

Challenges

The National Skills Fund faces the following challenges:

● Ensure smooth transition between the NSDS 2001-2005 and NSDS 2005-2010

● Streamline/review policies, procedures and criteria for NSF funding to ensure alignment withNSDS 2005-2010

● Implement rigorous monitoring and quality control systems for all funded projects

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● Review /strengthen management capacity of the NSF to ensure the effective and efficientfunctioning of the NSF

● Development of NSF Management Information System (MIS) to enhance businessprocesses/information flow processes.

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Chapter 9

Financial ManagementFinancial ManagementThe Financial Management Chief Directorates consists of three Directorates namely FinancialManagement, Financial Liaison with Public Entities as well as the Administration Directorate (SupplyChain Management and Office Administration). These structures are aligned with the requirements ofthe National Treasury.

Financial Management Directorate

Introduction

The Financial Management Directorate strives to ensure sound financial administration and establishaccountability for public funds allocated to the Department by Parliament.

The Directorate of coordinates the compilation of the budget, monitor and control expenditure andadministers salaries in compliance with the Public Finance Management Act (PFMA). In additiontraining is provided to develop managers and staff directly involved in financial administration.

Financial management is based on a system of monitoring actual expenditure against the funds allocatedin terms of the main division of the Vote and the remuneration of staff members. This is done with theaid of computerised transversal accounting systems, the Basic Accounting System (BAS) and PERSALrespectively.

The actual expenditure in respect of the Department of Labour for the 2004/2005 financial year amountedto R1 101 488 000 which represents a saving of R127 240 000 or 10,36% of the Vote. Of the saving,R53 857 000 is in respect of buildings and other fixed structures and R40 052 000 is in respect ofCompensation of workers. The Department will approach the National Treasury for authorisation to rollover an amount of R21 000 000.

Had the expenditure of R21 000 000 taken place during the financial year, the saving would have beenreduced to R32 857 000 or 8,65% of the Vote.

Legislation

This Directorate functions in accordance with the Public Finance Management Act (PFMA), 1999,Treasury Regulations and the Auditor-General Act No. 12 of 1995.

Achievements

The following achievements can be reported:

● The Medium Term Expenditure Framework (MTEF) budget submission was completed andsubmitted to the National Treasury within the target date

● The Adjustment Estimate was completed and submitted to the National Treasury within the targetdate

● The 2003 Estimate of National Expenditure was completed and submitted to the NationalTreasury within the target date

● This Department has no more than one open month on BAS at any given time

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● This Department was the first national department to succeed in closing its accounts for the2003/2004 financial year within three working days of year-end

● The Monthly Reports on Actual and Projected Revenue and Expenditure, as stipulated in Section40 of the PFMA, is submitted in the prescribed format, timeously to the National Treasury

● Financial training is provided to all staff relating to the prescripts of the PFMA and other financialmatters

● The successful implementation of the new chart of accounts to enable proper and accuratemonthly financial reporting in accordance with the new Government Financial System (GFS) wassuccessfully implemented.

Challenges

The Directorate will deal with the following challenges:

● Alignment of the budget to the strategic plan of the Department and the implementation of financialreporting in terms of strategic objectives

● To identify and address training requirements of financial functionaries within the Department.

Financial Liaison with Public Entities Directorate

Introduction

This Directorate is responsible for liasing with public entities, as defined in the PFMA, assisting,supporting and reviewing issues relating to corporate compliance, investments, disbursement andperformance analysis, concerning the quality of financial management of entities reporting to theMinister of Labour. The emphasis entails proper financial management systems, appropriation controland the accountability arrangements for the management of budgets and general oversightresponsibilities over 31entities reporting to the Department.

Legislation

This Directorate functions in accordance with the Public Finance Management Act, specifically Chapter 6, and with regard to the provisions of enabling legislation governing the respective entities.

Achievements

The following achievements can be reported:

● The Annual Financial Statements of the National Skills Fund (NSF), Commission for Conciliation,Mediation and Arbitration (CCMA), National Productivity Institute (NPI) and National EconomicDevelopment and Labour Council (NEDLAC), required in terms of the PFMA, were completedand submitted timeously to the Auditor-General and the National Treasury. This included theannual budgets and corporate plans relating to the SETAs, being submitted to the NationalTreasury

● A uniform set of Annual Financial Statements were developed for SETAs and implemented

● New control measures were implemented to ensure compliance with Chapter 6 of the PFMA andalso aimed at averting possible audit qualifications. To this end the following internal policies

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were developed and issued:

- Materiality frame work- Procurement directive- Directive in respect of effective revenue collection: Section 51(1)(b)- Directive on the utilisation of accumulated surplus funds- Directive on collection and distribution of SARS levies- Directive in respect of the treatment of banking accounts

● Only three Public Entities received a qualified audit opinion for the year under review, asopposed to seven during the previous year of assessment

● The Estimate of National Expenditure (ENE) input relating to all Public Entities was completedand submitted to the National Treasury in the required format and on time

● A new quarterly reporting format on Actual and Projected Revenue and Expenditure has beendeveloped, which conforms to the New Economic Reporting format and will ultimately populateinto the Annual Financial Statements of entities reporting to the Minister of Labour.

Challenges

The Directorate will deal with the following challenges:

● Conformance with quarterly and annual reporting requirements by all Public Entities as prescribedby Chapter 6 of the PFMA

● Devise standardised formats of reporting by all Public Entities

● Further reduction in Qualifications of Annual Financial Statements of Public Entities

The Supply Chain Management Subdirectorate enables staff of the Department to provide services to thepublic, by facilitating the procurement of furniture and equipment.

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● Attending Board and Audit Committee meetings, to establish working relationships with all publicentities, with the aim of enhancing conformance with government requirements, and also toidentify needs and performance gaps, at an early stage

● The implementation of financial management quality controls, in the form of assisting, supportingand reviewing issues relating to corporate compliance, investments, disbursement andperformance analysis

● Creating and maintaining an Internet based information system, with a view to assist publicentities with financial management and accountability issues and reporting requirements to theNational Treasury

● Timeous submission of all financial information, in accordance with the stipulations of the PFMA.

Administration Di rectorate

The Directorate consists of two Subdirectorates, namely Supply Chain Management and OfficeAdministration

Supply Chain Management

Introduction

The recently passed Regulations in terms of the PFMA gave effect to the Framework for Supply ChainManagement (SCM) issued by National Treasury on 5 December 2003. The Subdirectorate SCMcomprises of two divisions, namely:

● Acquisition and demand management (Tenders, orders and payments)

● Disposal and asset management (Transit, warehouse, Logis and asset management).

The overall responsibility of SCM is the management of purchases and procurement through thetender procedures/ Logis system and control of moveable assets (furniture and equipment) of theDepartment through the asset management system, Ezecat.

Legislation

This component does not administer any legislation but is bound to comply with government’sprocurement policies, such as the Framework for Supply Chain Management, PPPFA, PFMA andBroad Based Black Economic Empowerment Act.

Achievements

The following achievements are noted:

● Road shows were conducted to launch SCM at provincial offices and at Head Office

● A training workshop was conducted involving provincial offices regarding the PreferentialProcurement Policy Framework Act (PPPFA), PFMA and SCM Framework; and Asset Management

● Implemented Bar coding of assets through the Ezecat system

● Drafted Black Economic Empowerment (BEE) Policy.

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Challenges

The following are the challenges for the 2005/2006 financial year:

● To monitor procurement of BEE companies through the departmental suppliers database

● The development of a procurement policy in line with the Preferential Procurement FrameworkAct (PPFA), Black Economic Empowerment (BEE) and Supply Chain Management (SCM)

● The provision of training to create awareness of the PPPFA, BEE, SCM and Asset Management

● Re-structuring of the SCM components at Head Office and provincial offices

● To monitor and control the assets of the Department through the Ezecat system.

Office Administration

Introduction

This Subdirectorate has three Divisions, namely: Archives and Records Management Service,Accommodation and Maintenance and Transport.

Legislation

● This component functions in accordance with:

● The Public Finance Management Act (PFMA), 1999

● The Constitution, 1996 (Act 108 of 1996) with specific reference to section 195

● The Promotion of Access to Information Act (Act No 2 of 2000)

● The national Archives and Records Service of South Africa Act (Act No 43 of 1996 as amended)

● National Archives and Records Service of South Africa Regulations (R158 of 20 November 2002)

● The Promotion of Administrative Justice Act (Act No 3 of 2000)

● Electronic Communications and Transactions Act, 2002.

Archives and Records Management Services

Achievements

● Obtained approval for the ministerial and parliamentary file plan

● Implemented ministerial and parliamentary file with effect from January 2005

● formulated policy recommendations formulated with the help of the provincial offices regardingthe disposal of the “D” records for provincial offices filing system

● Provided functional training to the departmental officials in records management

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● Provided designated the departmental Records Manager has been in terms of the provisions ofthe National Archives and Records Service Act 43 of 1996.

Challenges

● Restructuring and capacitating the division so as to enforce compliance with the requirements ofthe National Archives and Records Service Act 43 of 1996

● Development and updating of file plans for all the Programmes/Directorates and provincial offices

● Development of policies and procedure manuals

● Termination and opening of files on approval of new file plans

● Development of disposal authorities for the current file plans

● Availability of suitable and equipped storage facilities for archiving of records.

Accommodation and Maintenance

Achievements


● All repairs and maintenance programmes, which were established with the Department of PublicWorks for the repair and maintenance of buildings, are in maintenance phase and the contractsthat will be expiring in 2005 will be reviewed

● 43 buildings have already been upgraded

● Corporate image implemented at 32 departmental offices and 47 buildings have been identifiedfor the implementation of the corporate image

● Training and guidance provided to the departmental officials relating to accommodation andmaintenance.

Challenges

The following are challenges for the 2005/2006 financial year:

● The implementation of the new labour centre model/corporate image in order to improve theimage of the Department

● Refurbishments of the departmental offices in order to improve the working conditions for thedepartmental staff and the clients

● Development and enforcement of accommodation and maintenance policy, procedure manualand norms

● Provinces assuming full responsibility for the delegated powers relating to the implementation ofthe corporate image, maintenance and repairs

● Forging of close working relationship with service providers.

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Transport

Achievements

● There are 699 vehicles allocated to staff under the subsidised motor transport scheme

● Provincial staff have been trained in the administration and conditions governing the Wesbankscheme, insurance, maintenance, and payments of allowances regarding the subsidised motortransport scheme

● Training was also provided on the management of official fleet and air transport

● Stringent measures are being taken against staff who abuse/misuse official vehicles

● Cost containment by coordinating trips

● Appointment of departmental Advisory Committee on transport matters

● Implemented stricter control systems with regards to control measures for official transport andmanagement of accounts

● Ensuring that credits are awarded for incidents on official transport.

Challenges

● Improving on effective and efficient monitoring and control over subsidised motor transport

● Decision making regarding the 70/30 utilisation principle on subsidised vehicles

● Development of policies and procedure manuals

● Managing of accidents and enforcement of compliance by officials to timeously submit thenecessary documentation

● Elimination and reduction of audit queries

● Reducing the number of under-utilised subsidised vehicles

● Development of specifications and evaluation of air transport tender

● Managing the lead-out plan of the IFS contract when it expires in June 2005

● Implementation of the envisaged PPP contract on the provision of official vehicles

● Managing of timeous response/reaction time to whistle blowers regarding alleged misuse/abuseof official vehicles

● Obtaining cooperation from Programmes regarding referred cases of alleged abuse/misuse

● Ensuring effective and efficient finalisation of cases of alleged misuse/abuse of official transport.

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Chapter 10

Human Resources ManagementHuman Resources ManagementIntroduction

The Human Resources Managements Chief Directorates mission is to facilitate the development ofstaff, ensure effective and efficient utilisation of the human capital and to render legal services to theDepartment of Labour. Three functional areas are covered in the programme, namely: managementadvisory services, human resources management and legal services. Its purpose is to providemanagement with advisory services on strategic management, restructuring, performance management,organisational development and skills development, and at the same time ensure efficient humanresources services that promote representativity in line with the Employment Equity Act, sound labourrelations and timeous processing of staff benefits as well as to provide a legal advisory service tomanagement and stakeholders in order to protect and further the interests of the Department in linewith its strategies. The Chief Directorateis also the principal organ within the Department on broadlegal matters including procedures and implications of Court Orders, the collection of debts andrecommendations on the writing off of losses.

Main tasks

The main tasks of the Chief Directorate are the following:

● To ensure successful recruitment and placement of staff in line with the Department’sEmployment Equity Plan/Recruitment and Selection/Career Management and Retention Policies

● To facilitate the development and implementation of the performance management policy, whichincludes performance agreements on all occupational levels

● To ensure adequate information systems on staff inventory and succession planning

● To ensure timeous processing and payment of service benefits claims

● To promote the smooth functioning of the GPSSBC Departmental Chamber

● To ensure prompt and effective handling of grievances and disciplinary issues

● To promote an integrated skills-development system and facilitate the implementation of the newstrategic plan for 2004-2009

● To facilitate the successful restructuring of the Department in line with the Strategic Plan

● To ensure an adequate organisational structure and establishment

● To conduct job evaluation of posts

● To participate actively in the drafting, amending, and editing of all legislation administered by theDepartment

● To ensure the correct interpretation of all the statutes, contracts and the law in general

● To ensure collection of debts

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● To recommend on the writing off of losses.

Legislation

The Chief Directorate executes its functions in terms of the following legislation/directives:

● Amended Public Service Act, 1994


● Government Service Pension Act, 1973

● Temporary Employees Pension Fund Act, 1979

● Public Service Regulations, 2001



● Skills Development Act, 1998

● Skills Development Levies Act, 1999

● Promotion of Access to Information Act, 2000

● Promotion of Administrative Justice Act, 2000

● Public Service Coordinating Bargaining Council Resolutions

● The Public Finance Management Act, 1999

● The Preferential Procurement Policy Framework Act, 2000

● The Treasury Regulations issued in terms of the Public Finance Management Act, 1999 (asamended).

Staff

The Chief Directorate has an approved establishment of 100 posts of which 85 posts are currentlyfilled.

Achievements

The following constitute achievements for 2004/2005:

● Alignment of human resources management (HRM) policies with the relevant legislativeframework:

- The policy on Death of a staff member was developed and implemented- The following human resources management (HRM) policies were developed/revised and are in

the process of approval whereafter they will be forwarded to the GPSSBC Departmental Chamber

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for adoption and ratification by the GPSSBC:- Language Policy

- Sexual Harassment Policy- Resettlement Policy- Recruitment and Selection Policy- HRD Financial Assistance Policy

● Prompt handling of misconduct cases, appeals, grievances and conciliation and arbitration cases:

- 82 cases of misconduct were dealt with in 2004/2005- 2 cases were withdrawn- 5 sanctions of written warnings- 8 sanctions of final written warnings- 19 sanctions of dismissal- 22 other cases for e.g. sanctions short of dismissal, resignations and cases referred back to

the provincial offices to implement progressive discipline- 26 current cases

- 36 appeals considered- 32 appeals dismissed- 3 appeals upheld- 1 appeal referred back

- 65 grievances dealt with- 59 cases finalised- 18 cases referred to Public Service Commission- 6 current cases

- 38 conciliation and arbitrations cases dealt with- 16 cases ruled in favour of the Department- 3 cases settled- 3 cases ruled against the Department- 16 cases referred

● Proper coordination of labour relations institutions in the Department:

- appointment of 6 employer representatives to the Chamber- 28 Policies/Collective Agreements sent to the Council for ratification- 1 policy adopted by the Chamber (Death of a staff member)- 1 policy introduced to the Chamber (HRD Financial Assistance Policy)- deliberations on the constitution of the GPSSBC Chamber in progress- 3 Chamber meetings held and all minutes of Chamber meetings were sent to the Council as

prescribed by the constitution of the Council

● The PMA Consulting project exit report was received with future recommendations for EAPprogramme management. Developed and sent out memorandum of agreement to external EAPservice providers in the PMA consulting database to retain their services

● Appointed 91 HIV and AIDS peer educators to strengthen delivery of the departmental HIV andAIDS strategy at grassroots level and across cultural, race and gender divides

● An audit on root causes of work related stress, depression and absenteeism was conducted andfrom the results of the audit, guidelines on addressing Workplace Violence and Bullying and

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managing occupational stress were developed

● EAP and HIV and AIDS information sessions for newly appointed staff have been conducted.

● The 16 days of activism against violence on women and children including World Aids Day andthe International Day for the Disabled as well as all other commemoration days on the HIV andAIDS calendar were commemorated

● In terms of the monitoring of implementation of the Employment Equity Plan the following wereachieved:

- Progress with the implementation of the local and national Employment Equity Plan is monitoredon a quarterly basis during meetings of the National Employment Equity Consultative Forum (NEECF)

- A progress report was submitted to the Registrar of Employment Equity- Demand driven training, fair procedures during interviews and the granting of tenders to BEE

companies are monitored by the Local Employment Equity Consultative Forums- Progress on achieving the numerical goals (per race, gender and disability that were set in line

with the demographics of the RSA) is monitored on a monthly basis a strategic points throughout the Department to keep staff informed and distributed to all Programmes/Provinces for displaying on notice boards to keep all departmental staff informed about progress and to identify the target group during recruitment and selection

- Posters with a summary of the Employment Equity Act as well as the Code of Good Practice on the Employment of People with Disabilities were displayed in all offices of the Department

- A total of 142 wheelchairs were purchased on behalf of all provincial offices/labour centres for utilisationby clients of the Department when they visit the offices of the Department

- The Department has embarked on an intensive recruitment exercise to recruit people with disabilities. Copies of internal advertisements are distributed to organisations representing people with disabilities and relationships with these organisations were established in order to assist in the recruitment of people with disabilities

- Most posts at SR 12 level and lower are first advertised internally in order to enhance internal promotions

One of the objectives of the Human Resources Management Chief Directorate is to ensure successfulrecruitment and placement of staff in line with the Department’s Employment Equity Plan.

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- A database of Black Economic Empowerment recruitment companies was compiled and distributedto all programmes/provinces to assist in the recruitment of temporary staff

- Staff have been trained on sign language to assist clients- An equal distribution of incentives was monitored by the National Performance Management Review Board

- All buildings occupied by the Department were assessed to ascertain compliance with the Code of Good Practice on the Employment of People with Disabilities and the Occupational Health and Safety Act. Some buildings have already been renovated to make them compliant and to improve working conditions

- Continuous HIV and AIDS awareness campaigns were conducted and peer coordinators were trained to assist with basic counseling

● A Workplace Skills Plan for 2004/05 was developed and implemented:

- The University of Free State was appointed as a service provider for online education (E-Degree) to provide staff of the Department with tuition for the Bachelor in Management Leadership course, which is structured in Certificate, Diploma and Degree exit levels. A total of 18 students are proceeding to the diploma level

- Seven interns were appointed within the Chief Directorate of Human Resources Management and all have since exited on 28 February 2005

- The Department has implemented three learnerships as follows : (i) National Certificate in Employmentand Skills Development Practices with 238 learners in all 10 provinces which will be completed on 31 May 2005, (ii) National Certificate in Inspections and Enforcement Services with 227 learners in all 10 provinces which will be completed on 31 October 2005, (iii) Contact Centre Management with 32 learners at the Unemployment Insurance Fund and Compensation Fund which will be completed on 31 May 2005

- 10 pupil inspectors were funded and one of them has completed the course- 29 staff members were awarded bursaries to pursue undergraduate (22) and post graduate

studies (5 Honours’ and 2 Masters’ degrees)- 19 managers attended the Presidential Statute Leadership Programme conducted by SAMDI- 85 inspectors and client services officers completed the Technikon SA Foundation Training- 4 141 staff members from all levels within the Department attended Skills Programmes

● 91 job profiles were developed and verified

● 53 posts were evaluated and ratified

● 15 establishment investigations were undertaken and finalised

● Maintaining of the performance management system:

- performance incentives were paid out to qualifying staff members as per the following breakdown- Category A Merit Awards 728- Category B Merit Awards 1 900- Category C Merit awards 1 520

- 1% pay progression captured 4 675

● The implementation of the Strategic Plan that was developed for the period 2004 – 2009 wasmonitored:

- Work Plans for year one of the Strategic Plan were developed, implemented and monitored

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● The absorption of staff in line with the Public Service Restructuring and Transformation initiative:

- the Department started with 51 excess staff after restructuring- 16 excess staff opted for severance packages- 21 excess staff have been successfully re-deployed and trained in their new environment- 11 excess staff opted for early retirement- 2 excess staff have not been re-deployed yet- 1 excess staff member was dismissed from the Public Service

A Social Plan was developed to assist excess staff and training/counseling was provided to affectedformer staff members

● Legal Services Tasks 2004/2005:

- worked in a Task Team including officials from the Unemployment Insurance Fund, the Compensation Fund, Employment Standards, International Relations, the CCMA and the Department of Foreign Affairs on a Policy on Labour Disputes between South African Nationals and Foreign States

- worked in a Task Team including officials from Labour Relations, the Department of Public Serviceand Administration and SALGA regarding the effect of the Supreme Court of Appeal decision in the Telkom versus Blom case on the Labour Relations Act, 1995 and the Pension Fund Act, 1956

- conducted training on the Promotion of Access to Information Act, 2000 and the Promotion of Administrative Justice Act, 2000 to officials in the Eastern Cape, Western Cape, Limpopo, Mpumalanga, KwaZulu–Natal, Free State and Gauteng. A total of 389 officials were trained on the two statutes

- trained 60 officials on Labour Court procedures- facilitated training for officials from Legal Services and Labour Relations on the Promotion of

Equality and Prevention of Unfair Discrimination Act, 2000 by the University of Pretoria at the Department of Labour.

Received Finalised PendingContracts 62 54 8Legal opinions 136 107 29Losses written off 2 2 0 Motion applications 52 14 38Legislation 45 24 21

Litigation 11 6 5

Debt collection 24 6 18

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Chapter 11

Information and CommunicationInformation and CommunicationTTechnologyechnologyIntroduction

The Department of Labour is committed to using technologies to improve service delivery. This intent isfully reflected in the Department’s policies and strategies which reflects the recognition of the contributionsthat technology can make to the Department’s internal operations as well as to its services to business,labour and the public. It is envisaged that the application of technologies will have a major impact on theway the Department conducts its business.

Through digital information flow processes, it will become possible to achieve:

● digital linking of information systems with operational systems

● self-service digital transactions between the Department and its clients

● the shifting of human involvement in routine, low value tasks to high value personal consultancyon important issues

● turning staff into knowledge workers and providing them with digital tools to manage information

● the provision of access to appropriate and real-time knowledge and information, with a few simplecommands.

To enable access to labour market information and the Department’s services, use will be made ofmultiple service channels i.e. cellular phones, call centre services, information kiosks, direct Internetaccess, etc. This will enable the reach of the Department’s services to be extended and to providenumerous choices for the varying segments of the population.

The Department has chosen to meet these challenges by entering into a partnership arrangement withthe private sector.

Public Private Partnership

The Department entered into a Public Private Partnership (PPP) agreement over a 10-year period withSiemens Business Services (SBS) on 1 December 2002. The PPP supports an integrated approach toservice delivery, enhance the utilisation of information as a strategic resource, integrate the Department‘sIT systems more effectively and ensure that the relevant information is digitalised.

The common goal of the partnership is to satisfy the IT needs and requirements of the Department. Theprivate partner assumes full responsibility and the risk associated with the design, build, operation andmaintenance of the Department’s IT systems. The private partner also provides strategic direction onnew information technologies in relation to labour market trends and systems worldwide.

The contractual framework of the PPP provides for the establishment of governance structures necessaryfor allocating risks appropriately, establishing clearly defined quality of service and value for moneymechanisms. The PPP agreement also allows for change management procedures which caters for theincorporation of a changing business environment. The emphasis is on partnership and these governancestructures, which are now fully operational, forms the foundation for open debate and a trusting relationship.

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Legislation

The Information and Communication Technology Chief Directorate does not administer any legislation.However, it needs to comply with the SITA Act as well as the Electronic Communications and TransactionsAct.

Staff

The Office of the Chief Information Officer comprises of the Chief Information Officer as well as threeExecutive Managers. Siemens Business Services provides management and technical staff, through thePPP, needed for rendering the full spectrum of IT services.

Main tasks

The main tasks of the component are to:

● Provide IT services in support of executives, managers and functional staff in achieving theirstrategic and operational objectives

● Manage the Public Private Partnership Agreement between the Department and SiemensBusiness Services.

Achievements


● Establishment of effective governance structures to manage and capitalise on the benefits of thePPP arrangement. The PPP Agreement sets out the key roles and responsibilities of the Departmentand Siemens Business Services, necessary to manage the agreement between the two parties.The contract provides for four committees, each with specific terms of reference, and user groups,

One of the main tasks of the component is to provide IT services in support of executives, man-agers and functional staff in achieving their strategic and operational objectives.

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catering for users with common needs. The Executive Committee, the highest decision makingbody, brings together the top echelons of both parties, facilitating the process in terms of whichsenior management is in a position to articulate the goals and the objectives of the partnershipand to communicate how the partnership will benefit the respective organisations. The othercommittees are the Steering Committee, the Service Management Committee and the ChangeManagement Committee. These committees met and discharged of their responsibilities inaccordance with the PPP Agreement

● Implementation of e-Claims on 1 December 2004. This is the first phase of Safika, which is a projectthat will deliver an environment that will enable integration with all IT systems utilised by theCompensation Fund (CF)

● Development of Siyaya, a system that endeavours to ensure alignment between business and ITsystems that support the Registration, Declaration, Claims Management and Case Managementprocesses at the Unemployment Insurance Fund (UIF). Siyaya is currently being piloted and willgo live in the first quarter of 2005

● A new website was launched on 22 October 2004. The website promotes and enhances the imageof the Ministry as well as the Department. The website serves as a tool to enable the variousprogrammes to provide an improved service to the public. A content management tool automatesthe provision and updating of content by the Communication Chief Directorate. The metrics andstatistics of citizens interacting with the site allows for the tailoring of the content according to theneeds of those visiting the Department’s website

● Development of the employment equity system that enables the registration of employers and thecapturing of Employment Equity Reports that is submitted on an annual or bi-annual basis. Throughthe importing of scanned images of the EE reports, the provision of information to the public isfacilitated. The statistics provided by the EE system informs the annual EE analysis compiled bythe Employment Equity Directorate

● Provision of an IT Call Centre as a single point of contact for all users to log IT-related calls,problems, queries and requests

● Establishment of a data centre at the UIF-building that serves as the nerve centre of all IT-relatedservices

● Transformation of the Department’s IT and telecommunication systems in alignment with its businessprocesses has gained significant momentum

● The convergence of information and communication technology within the Department is currentlythe subject of a feasibility study. The feasibility study will provide clarity on, inter alia, theaffordability, risks and value for money associated with convergence

● The upgrading of the Department’s network infrastructure and desktop devices, necessary foroptimising the utilisation of IT as a business enabler, has been a focus area during the reportingperiod. The task is scheduled to be completed by September 2005.

Challenges

The following are the challenges for the 2005/06 financial year:

● To continue developing IT solutions in such a way that it will ensure that the clients of the Departmentare able to access the services of the Department at any time, from any location and through multiple

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service delivery channels● To train and recruit staff for fulfilling strategic leadership and contract management roles necessary

to manage the PPP Agreement and to ensure alignment between the Department’s IT systemsand business processes

● To institute sound change management processes necessary to prepare users to appreciate thebenefits arising from ICT as a business enabler

● To continue to first map, and if necessary re-engineer, business processes prior to IT-enabling theseprocesses.

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Chapter 12

CommunicationCommunicationIntroduction

As in the previous financial year when its peers and the media awarded the Communications ChiefDirectorate the highest compliment in the form of an award, the programme continued in the 2004/2005 financial year with the development and implementation of cutting edge integrated marketingcommunication tactics and interventions to support the effective implementation of the Ministerial andDepartmental priorities.

Legislation

The Communication Chief Directorate does not administer any legislation. It is however, responsiblefor creating awareness of and popularising all labour laws administered by the Department as well asensuring that the beneficiaries of and parties affected by the labour laws can access such laws.

Staff

The Communication Chief Directorate has a staff complement of 31, of which 22 are filled and 9 arevacant.

Main Tasks

The integrated marketing communications activities of the Chief Directorate can be divided into thefollowing 3 categories, namely:

The Media Production Subdirectorate, which is responsible for the following:

● To develop and undertake the layout and design of all publications as well as advertisements tobe published in newspapers

● Ensuring the Department complies with government corporate identity norms and standards

● The distribution of reports, posters, pamphlets, banners and exhibition material to inform theDepartment’s clients of its services

● The management and maintenance of the Department’s website and intranet, including publicenquiries coming via the website

● The procurement and distribution of corporate promotional materials and gifts such as golf shirts,caps, lanyards, etc to promote the corporate image of the Department

● The development and production of photographic and videographic material to keepstakeholders and clients informed of the latest developments.

The Media Liaison and Advertising Subdirectorate, which is responsible for the management of thecommunication environment through:

● effective media relations and liaison,which incoporates managing media inquiries, mediastatements, media conferences, opinion pieces, etc

● marketing

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● advertising, which includes advertising campaign conceptualisation, GCIS liaision, placementcosting, etc

● media research, surveillance and analysis which entails analysis of media exposure, mediatactical intervention recommendation, communication environment analysis, etc and specialprojects

● switchboard operations for effective departmental/public interaction.

The Stakeholder Relations Subdirectorate is responsible for the management of the communicationenvironment to ensure mutual understanding between the Department and various public (internal andexternal) through:

● effective stakeholder interaction, which incorporates indentification of stakeholder activities andopportunities, and leveraging opportunities

● provincial liaison, which encompasses amongs other, support to provincial communications,provincial traning. etc

● events management

● exhibitions

● stakeholder analysis and research special projects, and internal communication.

Achievements

The Media Production Subdirectorate’s achievements include the development, production anddistribution of the following:

● The Annual Report for the Department, Unemployment Insurance Fund and Compensation Fundas well as a Preliminary Annual Report for the Department

● 21 pamphlets or booklets, 27 posters and 10 banners

● Seven ad hoc reports i.e: National Skills Development Strategy Implementation Report,Commission for Employment Equity Annual Report, Employment Conditions Commission AnnualReport, Industrial Action Report, Strategic Plan, Ministerial Programme of Action and LabourMarket Review

● The internal newsletter, Staff Communiqué, on a monthly basis

● 313 business cards

● 10 adverts and editorial adverts and more than 55 advertisements of posts in the Sunday Times,City Press and Rapport

● All branding implementation of the new Coat of Arms ensuring compliance with goverment standards

● The development and launch of the new website of the Department on 22 October 2004. For thispurpose:

- 162 Basic Guides and 22 “How To” were written and 9 Acts combined with their Amendments

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and re-formatted- Formatted and placed 123 forms and sample documents, 7 Codes of Good Practice, 22

Regulations and Notices, 35 useful documents and 7 Sectoral Determinations- For the Media Desk, 316 media statements and 61 speeches were reformatted and placed- Researched and placed the contact details of 12 CCMA offices, 10 provincial offices and 123

labour centres, 50 bargaining councils, 50 employers organisations, 25 SETAs, 50 trade unions as well as the Unemployment Insurance Fund and Compensation Fund

● After the launch of the new website the number of visitors per day have increased from an averageof 4 200 per weekday in March 2004 to 5 900 per day in March 2005 – an increase of 40%

● The number of complaints received via the website decreased by 44% after the launch of thewebsite – from 230 in November 2003 to 129 in November 2004, indicating that clients arefinding the information they need from the website

● A total of 1 504 website enquiries were answered during the reporting period, within 3 days ofreceiving them

● 30 videos were produced for the National Skills Conference.

The Media Liaison and Advertising Subdirectorate’s achievements include the following:

● Enabling journalists and other media representatives to play an important role in the democraticprocesses of the country by providing the public with news and information about the Department,and reporting on the public's views and opinions of the Department

● The Department cultivated proactive relations with the media to promote public awareness andunderstanding of its policies, programmes, services and initiatives

● The Department operated and responded effectively in a 24-hour media environment, enabling,on short notice, to reach and inform the media on issues of importance to decision-makers andthe public

● Engaged the media using a variety of communication tools, including news conferences, briefings,news releases, off-the-record and informal media briefing opportunities

● Continued to advise the media on topical, relevant issues, providing media materials thatresulted in positive and consistent coverage

● Successfully spearheaded editorial media campaigns focusing on:

- Inspection and enforcement services (such as employment equity, Construction Industry and Wholesale and Retail Sector blitz inspections)

- The Farm Workers Sectoral Determination minimum wage increases- The Wholesale and Retail Sectoral Determination’s minimum wage increases- Learnership campaigns and the popularisation of SETAs - Employment Equity Awareness Campaign- Implementation of the Employment Skills Development Lead Employer Pilot Project (ESDLE)- SETA learnership launches and graduations- National Skills Development Strategy draft process- Re-certification of SETAs and the new SETA Landscape- The Domestic Worker Sectoral Determination’s minimum wage increases- The Minister's imbizo programme

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- Provided comprehensive media support on an issue and event basis

● The Department successfully presented and promoted departmental policies, priorities anddecisions to the public, thereby setting the agenda for the media on issues relating to labourrelations, basic conditions of employment, employment equity, occupational health and safety,compensation for injury on duty, most aspects of skills development as well as unemploymentinsurance, etc

● The implementation of media surveillance, analysis and research programmes also enhancedthe Department's approaches in dealing with the media

Table 12.1Adverts produced by the Subdirectorate of Media Liaison and Advertising

The Stakeholder Relations Subdirectorates achievements include the following:

● Worked with provincial communication officials to coordinate the following provincial activities:

- Four Communication Forums with Provincial Communication Officers and SETA Marketing

Advert Platform DateDepartmental corporate image building campaign TV, Radio March 2005UIF public awareness campaign Print, Radio, TV February 2005Compensation Fund Return of Earnings Campaign Print, TV, Radio, Outdoor March 2005

Learnership Campaign Radio, PrintJuly –October2004

Celebrating ten years of democracy: ServiceDelivery in Provinces

PrintApril – May 2004

Workers’ rights and labour market stability: tenyears of democracy

Print July 2005

Popularising the National Skills DevelopmentExhibition

Radio March 2005

May Day News clock TV25 April – 1 May 2004

Women’s Day celebration Print August 2004

Popularising Skills Development Strategy PrintJuly – September2004

SETA Landscape and Skills Development Feature Print March 2005National Skills Development Strategy Print June 2004NSF – Fasset, Thuthuka Print October 2004Farm Workers Sectoral Determination PublicHearing Announcements

Radio March 2005

Equity Deadline Print September 2004Employment Equity Human Resources CodeHearings

Print October 2004

Construction Regulations Inputs Print February 2005OHS Notice Print March 2005

Vacancies in the Department PrintApril 2004 –March 2005

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Managers - The Minister’s imbizo in Limpopo, Northern Cape and Free State

● Provided comprehensive events management support for the following:

- Occupational Health and Safety Commemoration where the Minister addressed stakeholders at theInjaka Bridge in Mpumalanga

- SETA Learnership Launches and Graduations- National Youth Day Celebration in North West Province - National Skills Development Consultative forums in Mpumalanga, KwaZulu-Natal, North West

Province, Northern Cape and Limpopo- May Day celebration rally in Northern Cape- Labour Law Conference- Launch of the National Programme for the Elimination of Silicosis- Employment and Skills Development Leader Employer Pilot Project Launch - Employment Equity road show launch nationally and provincially- Public hearings on the Contract Cleaning Sectoral Determination in the Western Cape, Free State

Northern Cape, Limpopo, Gauteng, and Eastern Cape- Children In Performing Arts Sectoral Determination Launch- Organised National Productivity Institute Launch at the Johannesburg Station where Minister addressed

stakeholders- Visit by the Chinese Delegation to South Africa- Launch of the new website of the Department- Opening of the Commission for Conciliation Mediation and Arbitration (CCMA) Pretoria Offices- Natioanl Emeregent Red Meat Producers’ Organisation (NERPO) Launch- Umsobomvu Further Education and Training Launch in Lovedale, Eastern Cape- Departments of Labour and Public Service and Administration Presidential fundraising golf day

challenge

● Facilitated protocol issues during events and campaigns for the Ministry and the Department ofLabour

The Chief Directorate is responsible for the production of exhibition material as well as facilitating andcoordinating exhibitions, such as the Pretoria Show.

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● Facilitated and coordinated specialised exhibitions

- Exhibition at the NEDLAC Summit - NOSCHCON - National Youth Day - Human Resource Development Africa (HRDA) Exhibition - Pretoria Show- International Fashion Show and Exhibition - South African Women in Dialogue (SAWID) - Rand Show - Public Service Day - Cosatu Congress Exhibition

● The management and successful implementation of stakeholder interaction programme relatingto the following:

- The Minister’s meeting with Wits university students- Partnership Campaign with Cosatu in Carletonville- The Director-General’s address at the Mpumalanga (Loskopdam) Growth and

Development Summit- Programme Managers’ presentations to the SANTADA Annual Meeting

● The implementation of internal communication programme and intergovernmental liaison to raiselabour laws awareness, which included the following:

- Coordination, compilation of, and distribution of, the weekly diary via exchange postmaster - Organised the Women’s Day Celebration where the Minister addressed staff at Head Office - Coordination of Internal Casual Day Celebration- Compilation of the Department’s programme of events on a monthly basis and liaison with

Government Communication and Information System (GCIS) in this regards- Display of publicity material internally (in the lifts and on notice boards) - Coordination of internal briefing session on the Commemoration of World Aids Day

● The implementation of stakeholder analysis and research programmes also enhanced theDepartment's approaches in dealing with stakeholders.

Challenges

The following challenges can be noted:

● Ensuring the effective flow of information, coordination and planning of communication activities

● Whilst the Chief Directorate recorded a very successful year, capacity remains a challenge.

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Chapter 13

Introduction

The purpose of the Directorate of Internal Audit is two fold, namely:

● To provide assurance services by evaluating the adequacy and effectiveness of all controlmeasures implemented by management towards ensuring that the risks faced by variousprogrammes comply with the Department’s mandate and are mitigated

● To provide consulting services in consultation with relevant management of the Department toensure that operations are improved.

This ensures that the Directorate adds value and improves the Department’s operations. It helps theDepartment accomplish its objectives by bringing a systematic, disciplined approach to evaluate andimprove the effectiveness of risk management, control and governance processes.

The Department of Labour, Sheltered Employment Factories, the National Skills Fund, CompensationFund and Unemployment Insurance Fund make use of the services of this single audit component.

Legislation

This Directorate functions in terms of the Public Finance Management Act, 1999.

Staff

The Directorate has an establishment of 33, of which 17 posts are filled as at 31 March 2005.

Main tasks

The Directorate is responsible for the following main activities:

● Facilitate risk assessment workshops for the Department, Sheltered Employment Factories,Unemployment Insurance Fund, Compensation Fund and the National Skills Fund

● Compilation of rolling three-year strategic audit plans and annual audit plans for the Department,Sheltered Employment Factories, Unemployment Insurance Fund, Compensation Fund and theNational Skills Fund

● Performing and reporting on the findings of the audits performed in accordance with the annualaudit plans

● Providing consulting services such as guidance on the contents of policies and procedures,standard operating procedures, risk management practices and good governance.

Achievements


● The Directorate made use of co-sourcing agreements to deliver internal audit services to theDepartment of Labour, Sheltered Employment Factories, Unemployment Insurance Fund,

Internal AuditInternal Audit

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Compensation Fund and the National Skills Fund. The co-sourced service providers assistedwith the facilitation of risk assessment workshops and finalised the rolling three-year strategicaudit plans and the annual audit plans. Audits were performed in accordance with the annualaudit plans

● The Audit Committee of the Department of Labour, Unemployment Insurance Fund andCompensation Fund held regular meetings, assisted by the Directorate of Internal Audit, inproviding secretarial services to the audit committee of the Compensation Fund

● Internal Audit Steering Committees established at Unemployment Insurance Fund and CompensationFund during the 2003/2004 financial year, held regular meetings during 2004/2005 to ensuremanagement actions pertaining to recommendations are implemented

● The establishment of an audit steering committee for the Department and the National SkillsFund is in process

● Audit software was obtained by means of the co-source agreement reached with the consortiumproviding internal audit services to the Department

● Awareness workshops were held regarding the amended Good Governance Strategy of theDepartment.

Challenges

The following are challenges for the 2005/2006 financial year:

● Recruitment, capacity building, and training of staff regarding specialised areas such asperformance, forensic and information technology audits

Director-General, Dr Vanguard Mkosana and the Deputy Director-General of Corporate Services,Masodi Xaba accept the Audited Financial Statements from the Executive Manager of NationalDepartments, Alice Muller.

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● Efficient and effective use of internal audit software

● Creating awareness of the Good Governance Strategy of the Department.