Auditor-General showers accolades to Department of Labour and its entities

THE office of the Auditor-General (AG) has congratulated the Department of Labour and four of its public entities for receiving clean audit opinion in the 2010/11 financial year.

This followed the presentation to the Portfolio Committee on Labour by the department and its agencies in Parliament, Cape Town today (Tuesday).

The blemish from this sterling work went to the Compensation Fund (Fund) as well as Sheltered Employment Factories (SEF), which obtained qualified audits. The former provides compensation for employees in case of injuries or diseases sustained during the course of their employment, while the latter provides employment for those employees due to their mental or physical condition cannot hold a job in the market place. With regard to CF the AG said management of the entity was already dealing with the problems which pertain to records management, skills upliftment and tightening financial management controls.

The AG said SEF needed to jerk up their supply chain management processes, and strengthen the financial unit. 

The entities cited for their good work are National Economic Development and Labour Council (Nedlac), the Commission for Conciliation Mediation and Arbitration (CCMA), the Unemployment Insurance Fund (UIF) as well as Productivity SA. The AG praised department’s entities saying ‘employees take their work seriously’ and needed to maintain and sustain their good work.

Chairman of Portfolio Committee on Labour Alec Nchabeleng, said he was impressed to see the department receiving the clean audit for the first time in six years.

“This proves their honesty and determination in promising Parliament to produce a clean audit in this financial year. All I urge you to do is to sustain the good work,” Nchabeleng said.

Department of Labour Director-General, Nkosinathi Nhleko, told the Committee that: “The department has made strides over the past year and the clearing of the qualified audit opinion which has haunted the department for the past years, puts the department in a favourable position in that it can now concentrate on improving all aspects of internal controls at its provincial and head office operations”.

Nhleko said the ‘clean bill of health’ means that aspects such as the measurable objectives and the reporting of achievements against these objectives will now receive the necessary attention. He further said that with improved confidence of staff within the department no task was insurmountable given good leadership and direction.

The Director-General said to contribute further to the strategic priorities of government, over the next three years, the department will focus on a number of service delivery outcomes and strategic objectives which include: contribution to decent employment creation, protecting vulnerable workers, promote equity in the labour market, strengthening social protection, promoting sound labour relations, monitoring the impact of legislation, strengthening multilateral and bilateral relations and strengthening the institutional capacity of the department.

In the department’s 2010/11 annual report just released Nhleko said Department of Labour prides itself on contributing indirectly to employment through the Unemployment Insurance Fund (UIF) and CF reserves investment in commercial social responsible investment portfolio with the Public Investment Corporation (PIC).

The UIF invested R35-billion and the CF-R27 billion in commercial social responsible investment portfolio that includes Central Government, Municipals and Parastatal bonds and money market instruments. These instruments support infrastructure projects that create and sustain jobs.

In addition, the department had provided support to companies facing possible closures and through it public entity; the UIF had allocated an amount of R48.5 million to Productivity South Africa, to intervene in supporting companies facing possible closure through the establishment of turn around strategies and social plan.

As of end of March 2011, R34 million was spent in 130 companies and 15 000 jobs were saved through turn around strategies in Agriculture, Steel and Manufacturing sectors, Construction, Printing. During 2011/12, Productivity SA intends saving 20 000 jobs.

Furthermore, the department seeks to strengthen its services support to employers and work-seekers which provides free employment services support such as opportunity registration, job-seeker registration, matching services, career counselling and information, referrals for placements. As of end of March 2011, 652 611 job seekers were registered, of the 15 009 assessed on its system 2 412 were successfully placed in scarce skills employment and 12 708 were placed in other jobs; 25 814 were referred to placement opportunities, 65 347 were provided with career counseling, 451 950 were referred to UIF for benefits payment, 8 732 to Compensation Fund benefits and 7 217 to Department of Higher Education and Training for further training.

As part of a drive to ensure decent work the department would stick with its target to conduct inspections of some 200 000 work places and ensure 80% compliance with all Labour legislation. These would take the form of both blitz and routine inspections.

On the labour market front the department said the increase in atypical forms of employment since the mid-1990s has contributed to instability in the labour market and a potential increase in violation of labour standards and fair labour practices.

It has been estimated that 28 percent of total employment is made up of atypical work, that is, employees contracted directly to companies on fixed-term contracts, sub-contractors and employees employed through employment agencies.

During 2010, there was also a dramatic increase in the number of workdays lost due to strike action. A number of these strikes occurred in parastatal organisations and in the public sector indicating new challenges for labour relations.

The report said some of the more pertinent challenges facing the delivery environment of the department include the following: The problem that relates to an economy still revealing distinct characteristics - on the one hand it is characterised by an advanced, industrialised sector which is well developed, and the informal or second economy is characterised by high levels of poverty:

  • the challenge of unemployment
  • the entrenched inequalities and unfair discrimination in the workplace
  • the changing nature of work - that manifest through propensity amongst employers to switch away from permanent and full time employment toward atypical forms of employment such as casual labour, part-time employment, temporary and seasonal work
  • the challenge of domestic as well as cross-border migration; and
  • the strengthening of labour market institutions and agencies; i.e. compliance monitoring and enforcement structures (Labour Inspectorate Services, CCMA and Bargaining Councils) and increasing their capacity to carry out their mandates.

The Department of Labour has an infrastructure network of 421 service points spread across the country. These include 126 labour centres, 31 satellite offices, 19 mobile offices, 153 visiting points, and also services provided in the 45 Thusong service centres.

Enquiries:
Page Boikanyo
Cell: 082 809 3195

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