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Speech by the Minister of Labour on the occasion of the budget vote 28, delivered in Parliament

by Lloyd Ramutloa last modified 2017-05-24 19:12

24 May 2017

Honourable Chairperson

Honourable Members

Ministers and Deputy Ministers

Senior Officials of the Department

Our Social Partners, Business, Labour and Civil Society

Our people from all corners of South Africa

Distinguished Guests

Ladies and Gentlemen

 

Good Afternoon,

 

It is indeed a privilege for me to stand before you this afternoon to account for the commitments we made and our contribution in moving this country forward.  It is also timely that we present this budget vote during the Workers Month, as it carries both bitter and pleasant memories for our toiling masses. The evolution of our labour relations environment has evolved over many decades, and we are very pleased with the progress we have made so far.

Many people may have forgotten that barely 22 years ago, the South African statute book, was littered with labour laws that were backwards and completely out of sync, with universal human rights.

We know that it takes decades to transform the labour relations landscape in the manner that we did, particularly in a country with a history like ours.  We should not under-estimate what we have achieved in just two decades since the advent of democracy.  There are many countries with democracies that are much older than ours, who are still battling to come even close to where we are.  Most of them, when we meet in various international platforms, keep on asking, how we did it.  Credit for where we are, must truly go to the unwavering vision of the ANC, the commitment of our people, our social partners and most importantly, members of this very house.

We owe the position we occupy internationally, to the teachings of our fore bearers in the early labour movement formations.  We also owe it to the vision of our people who met in Kliptown way back 1955, and crafted a Timeless Blue Print, [“Ezingasoze Zabuna”] in the form of The Freedom Charter.

We also owe our discipline and commitment to do what is right, through visionaries like the ANC President, Oliver Tambo who once said, and I quote;   "It is our responsibility to break down barriers of division and create a country where there will be neither Whites nor Blacks, just South Africans, free and united in diversity.” Close Quote. These are the principles that inform our posture when crafting our policies.

Honourable Members; The aims and objectives of our labour laws have not deviated from, giving expression to the United Nations Universal Declaration of Human Rights of 1948, The Freedom Charter of 1955, the International Labour Organisation (ILO) Core Conventions, Section 23 of our Bill of Rights and most recently, the 2009 and 2014 ANC Manifestos. In many instances our labour laws mirror word for word, the text and spirit of these International Conventions. 

The Bad news is that we are deeply concerned about the slow pace of transformation in the workplace.  The picture in the Employment Equity Report released a few weeks ago, leaves much to be desired.  We are taking steps to address this problem including seeking the promulgation of much more punitive measures against those who continue to undermine the Employment Equity imperatives.

The good news is the successful conclusion of an agreement on the modalities of introducing a national minimum wage in South Africa.  Our task as the Department is to fast track the process of processing the necessary legislative instruments to give effect to this agreement.  Let me thank the President of the country for having assigned us this task, and the Deputy President for his leadership in delivering this milestone achievement.  I also want to extend my deepest gratitude to our social partners for their stamina in navigating what was one of the most difficult policy issues in the labour market since the dawn of democracy.

Honourable Chairperson, in continuing with the good news, let me now turn to a high level presentation of what we have done on various aspects of our mandate. Let me, boldly say that there isn’t a single ambition in the Freedom Charter, and the Country’s Constitution, that has not been fully expressed in our various pieces of labour laws. The Freedom Charter has remained the cornerstone of the ANC’s policies as it is evident in all the labour market policies and legal instruments that we have pursued since the dawn of democracy.  To illustrate the point, let’s take the Freedom Charter under the theme: There shall be Work and Security:

Chapter I, Sub- Section 4 and Chapter III, sub-sections 11 to 63 of the Labour Relations Act, cover, in every detail, how this Freedom Charter demands are given expression in our labour laws.

 

AND

The Basic Conditions of Employment Act, No 75 of 1997, gives effect to these rights and in Section 23 of our Constitution, by establishing and making provision for the regulation of basic conditions of employment; and thereby meet the demands of our people as contained in the Freedom Charter and also comply with the obligations of the Republic as a member-state of the ILO.

 

We know that there were those in this house, who opposed every single effort to do what we have done with our labour laws, yet when the country is showered with accolades internationally, they do not say wait a minute, we did not want this, but they also gladly accept the credit. How Hippocratic can these fellows be, makes one wonder?

 

The ANC government has undeniably achieved what we had set out to do and beyond and we need to celebrate these achievements as they were by no means, easy victories.

 

It is not a small fit that: Before 1994, the influx control legislations, prevented workers from seeking employment wherever they chose unless they had work seekers’ permits. Some of you will know how difficult it was to obtain these permits, let alone the embarrassing and demeaning treatment that workers had to endure.

Through the hard work led by the ANC, our citizens can now seek employment where ever they choose. 

 

Barely 22 years ago, farm workers, domestic workers, cleaning, security workers and workers in the hospitality sectors had no-one to turn to regarding their working conditions in their respective sectors. Through the collective efforts of the ANC Government, workers in these sectors are at the very least, guaranteed minimum wages, which are set by the Minister of Labour through Sectoral Determinations.

  

As you may know that today, over 4.6 million workers are dependent solely on the Ministerial Sectoral Determinations for their minimum working conditions, as they have no union to represent them. Through the tenacity of the ANC leadership, the Unemployment Insurance Fund (UIF) provides benefits that are directly informed by the Freedom Charter and the 2014 ANC Election Manifesto.

Workers who lose their income due to reduced working time will be able to claim for benefits, a provision that was only available to domestic workers, now it has been extended to cover all workers.  The UIF Act makes provisions for a worker to claim illness benefits, if the days of illness are less than seven days. Maternity benefits will be paid at a fixed rate of 66% of earnings, unlike in the past, when these were paid on a sliding scale of 38 to 60%. This means that every maternity claim will be paid at a flat rate of 66% irrespective of how much a person earns.  This will give workers better disposable income when they need it most.

The period for which workers will be able to draw benefits, has also been increased from 238 (which is 8 months) to 365 days (which is one YEAR).  

Workers will be paid benefits regardless of whether or not; they have received benefits within the four year cycle, as long as the worker has credits.  We know that there are a lot of people out there, who goes around offering to assist workers to claim Unemployment Insurance benefits on a fee. 

It is worth celebrating the news that the recent Amendments to the UIF law, now prohibits any agency or a person purporting to be acting on behalf of the applicant, to charge any fee against the applicant. Honourable Members; Our principle in the Unemployment Insurance fund, is that we look for reasons to pay benefits to deserving workers, unlike the norm in some insurance funds where they look for reasons not to pay. In the last financial year alone, the UIF paid out 7.9 billion Rands to deserving workers.

On other hand, the Compensation Fund has put in place an action plan which is beginning to bear fruits. The back log in claims has been reduced to 60 000 cases, which is not for the lack of the ability to pay, but because the claims in question are incomplete as critical documents to determine liability, have either not been provided, or the information provided has discrepancies.

For example, it becomes difficult to accept liability on an invoice that says the worker was treated for injuries on the left arm whilst the report from the employer states that the worker was injured on the right hand side index finger. It is discrepancies of this nature that holds back some of the claims from being processed. The positive take out of this scenario though, is that the Fund has now built capabilities of detecting what could potentially be dubious claims.

So there are both positive and negative dimensions in the current back-log, and I urge you not to focus too much on the negative.

Whilst talking about back-log, let me clarify one issue which creates a lot of confusion among our people.  South Africa has two compensation systems, one governed by the Occupational Diseases in Mines and Works Act (ODMWA) which is administered by the Department of Health; and another governed by the Compensation for Occupational Injuries and Diseases Act (COIDA) which is administered by the Department of labour.  Most miners in South Africa are covered by ODMWA for occupational lung diseases, based on an assessment of whether a mine is 'controlled'. The Act provides compensation for Occupational Lung Diseases in miners and ex-miners only.

As I indicated, the back-log under COIDA is in the region of 60 000 cases, whilst the latest known size of back-log under ODMWA, is approximately plus-minus 500 000 cases.  Let it be known that one of the main reasons why the back log in ODMWA looks so big, and tracing beneficiaries remained so difficult, is that these workers were registered with employee numbers and not with their Names and ID numbers. 

Because of poor record keeping by the mine bosses at the time, trying to match employee numbers to claims, is almost impossible in many instances.  The ANC government has not given up though; it continues to invest energies in finding the rightful owners of the unclaimed benefits.  There are instances where some people lump these back-logs as if they were all COIDA, when that is not the case.  I truly hope that with this explanation, we will all be clear on what we are talking about when making references to back-log in the compensation systems.

The proposed Amendments to COIDA, whilst they are primarily administrative in nature; the only profound amendment will be the extension of its coverage to the estimated 1 million domestic workers.  Whilst it may not be obvious that domestic workers do need COIDA coverage,

Just pose and visualise a domestic worker climbing a step-ladders to clean windows, or, doubling up with gardening chores in some cases.  Just think about the chemicals they use in our kitchens and bathrooms, and the potential health risks exposure therein. Based on these considerations, I am convinced that this amendment is necessary and long overdue.

Honourable Chairperson: The Department of Labour is not a by-stander in the efforts to create employment opportunities for our people and these are, but some of our efforts and contribution in this regard;

The Department has signed 30 MOUs with Technical and Vocational Education and Training (TVETs) Colleges. This is done to train UIF beneficiaries in order to fast track their re-entry back into the Labour market.  The UIF contributes 1.8 Million Rand per TVET College, which include stipends for learners, for this initiative. 

Learners are trained in various skills disciplines, with a special focus on those that carry the promise of absorbing the learners on completion of their courses. Therefore we do not train for the sake of training, but we target those skills where there is a demand in the economy, and where learners have an option of starting their own businesses if they so choose.

Eight TVET Colleges have completed training of thousands of learners, in civil engineering and construction set of skills.

Recently I attended and officiated a graduation ceremony in Hammersdale, where learners obtained their qualifications on various skills.

I also had the opportunity of visiting a house, which these workers built from scratch, using their newly acquired skills. 

I also visited three other projects that the learners worked on including, the Church and the ablution facilities in the area. We also found that most of those who completed their training in plumbing were already running their own businesses in the area.  I am therefore convinced that both the skills training to enhance employability and enterprise development are yielding the results we need.

100 Scuba divers have also completed their training. Forty one (41) of them have already been placed on work integrated learning opportunities within various organisations in the Diving Industry.  A further 15 of them, are awaiting work integrated Learning opportunities within the South African National Defence Force (SANDF), and           Forty are waiting for integration within the South African Police Services (SAPS).

A group of 20 learners, who enrolled on the training programme to become pilots, have less than six months left to complete their training.  The Pilot training school has secured an endorsement from SA Express, to assist these learners to accumulate flying hours that are necessary for them to be employable by commercial air-lines. I also had a chance to visit these young learners, who were bragging about their achievements.

As an aside on how confident these learners are, some went on a flight joy-ride, without permission from the school, and as a result they were expelled from the programme when they got back.

[These learners took R Kelly literally when he sang “I believe I can Fly”, indeed they could fly, Honourable Members].

I also had the opportunity to officially launch a Compensation Fund and the South African Association of Chartered Accountants, (SAICA) partnership to train learners on Medical and Actuarial skills.

The programme targets young people that would ordinarily not qualify for NSFAS nor secure loans from the financial institutions.  These are often referred to as the missing middle. The first intake of 100 learners, have commenced their studies in different skills disciplines as follows;

•           20 Medical doctors

•           20 Nurses

•           35 Occupational Therapists

•           5 Actuaries

•           20 Medical Orthotists & Prosthetics

           

We also intend absorbing most of these learners at the Compensation Fund as these are the skills that we need ourselves. We are making our humble contribution Honourable Members, and we can already see social and developmental dividend.  We are determined to continue with these initiatives and upscale them where necessary.

DOL IS AN IMPORTANT CATALYST IN OUR ECONOMY;

Honourable Chairperson; Let me now turn to the myth that continue to do rounds in the public domain, and that is the Department of Labour and/or, the Funds, are sitting on billions of Rands which are not Invested in the economy.

The Unemployment Insurance Fund has indeed accumulated a surplus of 130 billion Rand, as at the end of February 2017, and, the Compensation Fund has accumulated 57 billion Rand in the same period; [We must congratulate the Funds for the job well done.]

But, let us set the record straight, these two funds are not sitting on this money, and it is not correct that this money is not invested in the economy. All these funds are invested with the Public Investment Corporation (PIC), in its capacity as the Government Funds’ Asset Manager. There is no “BANK VAULT” at the Department of Labour, and/or the Funds where this money is kept.

Let me start with the Unemployment Insurance Fund to illustrate how these monies are invested by the PIC; These monies are spread through various investment instruments including but not limited to; Government and Parastatal bonds, listed equity, money market instruments, listed property equity and socially responsible investments. We have also invested in projects such as, the provision of student accommodation and students loans, and already 10 000 beds for student accommodation have been delivered.

I am therefore inclined to argue that the reason why we do not have load shedding is because a sizeable chunk of this money is invested in assets such as Eskom’s infrastructure development programme including big projects such as Medupi power station.  On balance of probability, on each and every crane that you see at various construction sites, the Monies in the UIF and Compensation has made it possible.

 

 

The Fund’s Investment Portfolio, is dedicated to Developmental investment initiatives mainly focussed on job creation and job retention. Institutions like Productivity South Africa with a mandate to promote employment growth and productivity are part of this universe.

Whilst it is charged with the responsibilities of advocating and inspiring a productive competitive South Africa, it is also responsible for National projects such as the Turnaround Solutions.  The Turn-around solutions has saved over 145 thousand jobs and created more than 600 new job opportunities since its inception.  The Unemployment Insurance Fund also funds the Training Lay Off scheme, a scheme that is designed to prevent job losses in companies in distress.

The funding model for Productivity South Africa has evolved over many years. I am pleased to report that the current funding model has been revised to the satisfaction of all parties and as such, all the challenges of the past have been resolved.  

Broadly speaking, the workers who are contributors to the UIF can rightfully claim that they play a meaningful role in stimulating economic activity in this country, because this is their money in the first place.  We must also not forget that during the 2008 global economic crisis, close to a million workers lost their jobs and, the Unemployment Insurance Fund was the only place they could turn to for the much needed relief.  The Compensation Fund on the other hand, has through the PIC, invested its surplus in various investment instruments, namely; Government and Parastatal bonds, equity, money market instruments, listed property equity and social responsible investments.  A total of 37 billion Rands is invested in Government Bonds and the rest in other investment instruments.

It is worth noting that the Compensation Fund has also participated in a Public; Private; Partnership which built a state of the art health facility in Modderfontein [BUSAMED] which will cater and prioritise workers who get injured on duty.

This is in addition to the Rand Mutual Association and the Compensation Fund habilitation and rehabilitation facility in Welkom, which is fully operational as we speak. I hope that this clarifies and debunk the myth that the department and/or the funds are sitting on billions of Rands. It must also be place on record, that this money, belongs to workers and it is there as an insurance policy to meet our obligations in terms of the Unemployment Insurance Act, likewise the Compensation fund;

Honourable Chairperson; In May 2016 South Africa was nominated and elected unanimously by 187 member States of the international Labour  Organisation as President of the 105th  Session of the International Labour Conference.  The Director General of the Department of Labour was also appointed as the Chairperson of the Credentials Committee of the entire Conference. We need to be proud of this achievement as a country, as this is indeed a vote of confidence and a confirmation that our presence and the impact we bring about on issues of international importance, is recognised.  Members of this house have contributed immensely in shaping our credentials and standing as a country in these internal platforms. We thank you for that. 

Honourable Chairperson: We had a bilateral session with the Minister of Labour from the Government of the Kingdom of Swaziland recently.  This we did in pursuit of the ILO plea that as South Africa, we must work with countries in our continent with a view to share and assist, using our experiences on how to deal with international best practice.

Whilst the bulk of the discussions evolved around adherence to ILO standards, we also discussed other of matters of mutual interests between the two countries. 

The recent United Nations Commission on the Status of Women (CSW) acknowledged that South Africa was ahead of most countries in terms of equality policies and tools.  It also emerged that South Africa was the only known country out of the 119 UN Member States, which has supporting and enabling legislation that promotes equality and equal pay in the labour market. We must truly be proud of this notable recognition.

China will pass on the Chair of BRICS to South Africa when it meets in September 2017.  Whilst this is a privilege, it also entails a lot of work for the country.  We count on your support in making these important events a success.

Honourable Chairperson; Most of our achievements on the operational front, are captured in our Annual Report and our future focus areas are captured in our Strategic Plan and the Annual Performance Plan. Therefore I will not dwell much on the details, but high level on our key priorities going forward;

ü  Improving performance of our operations as captured in our APP

ü  Strengthening Inspection and enforcement efforts, with more emphasis on enforcement;

ü  Promulgating Section 53 and Chapters II and III of the Employment Equity Act to address the stubborn non-compliance.

ü  Submitting the Compensation of Occupational Injuries and Diseases Amendment Bill;

ü  Fast-Tracking the finalisation of the Unemployment Insurance Fund Regulations;

ü  Submitting Amendments to the Basic Conditions of Employment Act and the Labour Relations Act in order to give effect to the National Minimum Wage Agreement;

ü  Focus on SADC and BRICS activities as host.

ü  Upscale our labour Activation Programme with the Compensation Fund coming on stream.

We note that our budget allocation was again reduced in real terms this time around however; we will have to learn to do more with less.

Let me conclude by thanking The Deputy Minister of Labour, Inkosi Advocate Pathekile Holomisa, for his unwavering support; also extend my sincere gratitude to Honourable Chairperson and Honourable Members of the Portfolio Committee of Labour, for your continued support and guidance in executing our work.  Let me also extend my gratitude to our social partners for always being there when we need them and to the Director General of the Department of Labour and his team for their support.

I hereby table the 2017/18 Budget for the Department of Labour for your consideration.

 


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