PRESENTATION TO PRESENTATION TO THE SELECT COMMITTEE ON LABOUR AND PUBLIC ENTERPRISES THE SELECT COMMITTEE ON LABOUR AND PUBLIC ENTERPRISES

23 MAY 201223 MAY 2012

COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION

1

PRESENTATION OUTLINE

CCMA Vision, Mission, Values and Functional Purpose

Corporate Governance

Siyaphambili Strategy and Scorecard Review for 201/2011 Financial Year

Highlights from Operations 2010/2011

Annual Financial Report

Highlights and Challenges for the year under Review

2

3

VISION, MISSION and VALUES

4

4

FUNCTIONAL PURPOSE

Conciliate Workplace DisputesArbitrate disputes that remain unresolved after conciliationFacilitate the establishment of workplace forums and statutory councilsCompile and publish information and statistics about its activitiesConsider applications for accreditation and subsidy from Bargaining Councils and private agencies Supervise ballots for unions and employer organizationsProvide training and advice on the establishment of collective bargaining structures, workplace restructuring, consultation processes, termination of employment, employment equity programmes and dispute prevention.

5

6

CORPORATE GOVERNANCE

The Commission for Conciliation, Mediation and Arbitration (CCMA) is a statutory body established in terms of section 112 of the Labour Relations Act of 1995 (LRA), as amended

The CCMA is governed by the Governing Body (GB) in terms of section 116 of the LRA

The GB is made up of an independent Chairperson and representatives from Government, Organised Labour and Organised Business. The members of the GB are appointed through a process managed by NEDLAC by the Minister of Labour.

The GB is the Accounting Authority in terms of the PFMA. The Governing Body Charter clearly and concisely sets out the roles, duties and responsibilities of the GB as well as salient corporate governance principles.

7

CORPORATE GOVERNANCE (contd)

The GB appoints a Director, in terms of section 118 (1) of the LRA. The Director fulfils the functions of a Chief Executive Officer.

The LRA specifically tasks the GB with appointing Commissioners and determining their conditions of service (S117), the GB may not delegate appointment of Director, appoint / remove Commissioners, deposit or invest surplus money, accreditation and subsidy functions.

The LRA at section 122, enjoins the GB to establish committees to assist the CCMA and contract any person or agency to do work or perform any function of CCMA (section 124); accredit Bargaining Councils and Private Agencies

8

CCMA GOVERNING BODY

CHAIRPERSON

GOVERNMENT REPRESENTATIVES

ORGANISED LABOUR REPRESENTATIVES

ORGANISED BUSINESS REPRESENTATIVES

Ms Tanya Cohen

Mr Narius Moloto

Mr Bheki Ntshalintshali Mr Elias Monage Mr Thembinkosi Mkalipi

Ms Ntsoaki Mamamshela

Mr Ian Macun

DIRECTOR

Ms Nerine Kahn

Mr Kaizer Moyane

Ms Mary Malete Mr Dave Carson

9

ORGANISATIONAL STRUCTURE10

Executive AuthorityMinister of Labour

Parliament

Organised BusinessOrganised Labour

Director

Finance & Risk Subcommittee

GovernanceCommittee

Governing Body

Human Resourcesand Remuneration

Subcommittee

Audit Committee

Commissioners andStaff

Essential ServicesCommittee

Accreditation & SubsidySubcommittee

11

CORPORATE GOVERNANCE (contd)

The Governing Body retains full and effective control over the governance of the CCMA.

The Governing Body has established committees that assist with the fiduciary responsibilities of the CCMA.

The Director implements and oversees the GB strategy and manages and directs the activities of the Commission.

12

13

SIYAPHAMBILI = ‘We are moving Forward’

The Siyaphambili strategic plan was developed from previous plans, ensuring business continuity, and includes input from all key stakeholder groups (internal and external).

The plan sets out the Goals and Strategic Objectives, Key Performance Areas & Measurable Outcomes for the organisation for the next period 2011 - 2015.

The strategic plan determines the allocation of resources and will drive the performance management system of the CCMA.

The plan outlines the strategy for the organisation as an entity and forms the basis for each team within the organisation to determine their priorities in order that the overall organisational goals may be achieved.

14

GOALS15

STRATEGIC OBJECTIVES16

MONITORING & EVALUATION

The CCMA has established a system that enables it to monitor and evaluate the impact of its offerings on the economy in terms of its goals of fair democratisation of the workplace, equity and economic development. It is presented quarterly for review to the Governing Body.

To support this a Scorecard has been developed to monitor and track progress of the Siyaphambili strategy

17

18

SCORECARD SYNOPSIS19

20

OPERATING EFFICIENCIES21

22

CASELOAD

154, 279 cases per annum as at 31 March 2011

12,857 cases per month, or

2, 967 cases per week, or

591 cases each working day

25% increase over the last 5 years

Indicator of economic conditions

Budgetary challenges

23

GEOGRAPHIC ACCESSIBILITY

12 Regional Offices

6 Satellite offices

Over 480 on-site Hearing rooms

Over 250 off-site Hearing venues

Access via Department of Labour offices

24

PROMOTING INDUSTRIAL PEACE

Maintained relative industrial peace in the run up to and during the 2010 Fifa World Cup by the implementing a structure, process and monitoring mechanism to rapidly deal withdisputes that had potential to impact adversely on the event.

Successfully intervened in major national interest disputes including: EskomTransnet MetrorailMotor IndustryRoad Freight Industry

25

JOB SAVING STRATEGY

An important development over the past year has been the further conceptualisation, development and implementation of the CCMA’s holistic, integrated approach to addressing business distress and job insecurity. This has evolved into an overall job saving strategy.

Entails a multi-faceted process aimed at dealing with the factors at play in a potential or actual job insecurity situation.

The overall objective is to leave no stone unturned in pursuing the quest for business health and job security.

Where this is not possible, to not let any retrenched worker ‘walk into the sunset’ without facilitating the provision of survival and support mechanisms.

26

JOB SAVING STATISTICS27

28

The Auditor General raised few matters of emphasis:

The CCMA is a defendant in a legal case instituted against the entity in 2007. At the date of this report the outcome of this case is unknown and as a result no provision was made in the financial statements. A contingent liability of R3.54 million was calculated by the CCMA. As disclosed in note 23 to the financial statements

The CCMA could be held liable by the South African Revenue Services (SARS) for taxation as per statutory tax rates applicable to individuals and possible interest and penalties thereon for periods ending 28 February 2007 and 28 February 2008. The amount of the obligation cannot be measured with sufficient reliability. As disclosed in note 23 to the financial statements.

The corresponding figures were restated due to prior period errors relating to fixed assets amounting to R1.14 million, receivables amounting to R0.38 million and payables amounting to R0.44 million. As disclosed in note 29 to the financial statements

The Auditor General has commended the CCMA on the implementation of the recommendations of 2009/10 regularity audit.

AUDITOR GENERAL REPORT29

The Auditor General conducted a special investigation in the 2009/10 financial year and in total 18 findings were raised with recommendations.

Management has implemented a IBTC tool to track progress on the implementation of the Auditor General recommendations.

The CCMA has closed successfully closed 16 findings and a report to that effect was submitted to the office of the Committee Chairperson.

The 2 outstanding findings relate to:Overpayment to a service provider, where the legal process of recovery is under way.The SARS penalty paid and IT3a certificates issued for the tax years of 2003 to 2007.

AUDITOR GENERAL REPORT30

STATEMENT OF FINANCIAL POSITION

2011 2010 2009 2008 2007R'000 R'000 R'000 R'000 R'000

Capital and reserves (14,499) (46,378) (32,336) (1,543) 7,780 Non-current liabilities 9,293 8,106 6,690 27,509 9,814 Current liabilities 67,320 72,640 64,114 57,566 61,694 Equity and liabilities 62,114 34,368 38,468 83,532 79,288

Fixtures, equipments and intangible assets 23,272 21,309 24,187 17,835 18,947 Cash and cash equivalents 35,191 11,531 9,768 64,689 58,318 Current assets 3,651 1,528 4,513 1,008 2,023 Total assets 62,114 34,368 38,468 83,532 79,288

31

STATEMENT OF COMPREHENSIVE INCOME

2011 2010 2009 2008 2007R'000 R'000 R'000 R'000 R'000

Turnover (407,654) (361,892) (283,495) (260,448) (235,235)Grant income (403,523) (359,578) (283,407) (259,939) (234,582)Other income (4,131) (2,314) (88) (509) (653)

Total Revenue (407,654) (361,892) (283,495) (260,448) (235,235)

ExpenditureOperating expenditure 381,346 380,419 327,659 268,198 239,482 Administrative expenses 81,973 72,813 64,370 46,291 44,494 Staff costs and benefits 130,867 123,250 97,752 114,878 96,387 Subsidies paid out 5,025 4,483 4,660 2,711 3,773 Other operating expenses 162,865 173,737 153,984 97,493 90,848 Depreciation 616 6,136 6,893 6,825 3,980

Operating income (26,308) 18,527 44,164 7,750 4,247

Net Financing costs (5,571) (3,287) (7,214) (9,488) (4,656)Gains on sale of non current assets (118) 398 38 (391) (64)Interest paid - - - - -Interest received (5,453) (3,685) (7,252) (9,097) (4,592)

Retained Income (31,879) 15,240 36,950 (1,738) (409)

32

STATEMENT OF CASH FLOWS

2011 2010 2009 2008 2007R'000 R'000 R'000 R'000 R'000

Cash flows from operating activitiesReceipts 413,225 367,437 268,109 280,450 253,042 Payments (386,059) (359,579) (313,251) (268,736) (223,973)Net cash flows from operating activities 27,166 7,858 (45,142) 11,714 29,069

Cash flows from investing activitiesProceeds from disposals of non current assets 286 333 - 391 64Net cash outflow from investing (3,792) (2,846) (13,361) (5,734) (8,904)Net cash inflow from financing - - - - -Net cash from investing activities (3,506) (2,513) (13,361) (5,343) (8,840)

Net increase (decrease) in cash and cash equivalents 23,660 5,345 (58,503) 6,371 20,229

Cash and cash equivalents at beginning of year 11,531 6,186 64,689 58,318 38,089

Cash and cash equivalents at end of year 35,191 11,531 6,186 64,689 58,318

33

STATEMENT OF CHANGES IN ASSETS

RestatedAccumulated

surplus/(deficit)R'000

Balance at 31 March 2009 (32,336)

Prior year restatements (as per AFS note.29) 1,198

Deficit for the year as previously reported (15,240)

Balance at 31 March 2010 (46,378)

Deficit for the year 31,879

Balance at 31 March 2011 (14,499)

34

VALUE ADDED STATEMENT

2010 2011

Salaries and benefits 123,250 130,867

Subsidy pay out 4,483 5,025

Case disbursements 154,252 144,259

Reinvestment to develop operations 97,640 101,195

35

STATISTICS

2011 2010 2009 2008 2007Case ManagementAverage cost per case referred 2,485 2,476 2,334 2,020 1,938 Average cost per settlement 5,430 5,842 5,738 5,469 5,557 Cases referred as % of grant income 38% 43% 50% 51% 53%Settlements as % of grant income 17% 18% 20% 19% 18%

Total part time commissioners utilised 445 445 425 398 367 Total full time commissioners utilised 112 105 115 107 72 Case disbursement costs 144,259 154,252 134,833 77,627 74,627

Operating efficiencyStaff costs (Rands) 130,867 123,250 97,752 114,878 96,387 Number of employees 489 478 464 452 400 Grant income per employee 825,200 752,255 610,791 575,086 586,455

Staff costs as % of grant income 32% 34% 34% 44% 41%Case disbursements as % of grant income 36% 43% 48% 30% 32%Total costs as % of grant income 95% 106% 116% 103% 102%

Liquidity measuresCurrent ratio 0.58 0.18 0.16 1.41 0.98

36

RECOGNITION FOR EXCELLENCE

CCMA nominated as one of the top three organisations in the Legal Sector by the citizens of South Africa

Received awards for Public Sector Excellence in the category ‘Best Reputation: Legal Sector’ three years in a row.

The Awards are a significant indicator of recognition of the work and the role the CCMA plays in South Africa.

37

RevolutionisingRevolutionising Workplace RelationsWorkplace Relations

38