A key element of the Department of Labour’s (DoL) investment strategy in 2012 will be to dictate and influence the direction where these investments should be targeted and prioritised.
Department of Labour Director-General Nkosinathi Nhleko told the Select Committee on Labour and Public Enterprises in Cape Town today (February 15) that social investments made through the department’s public entities such as the Unemployment Insurance Fund (UIF) and Compensation Fund (CF) need to create more jobs.
Nhleko said investments made through UIF and the CF are beginning to have a stimulus effect in the economy. He said in the past year DoL investments that were run with the state-owned development financier, the Industrial Development Corporation (IDC) managed to create 11000 jobs, while saving 7 000 jobs.
Two weeks ago the DoL also announced a R2-billion tranche that will be invested with the IDC in job creation ventures.
Last year the UIF announced it has allocated about R3 billion in a project assisting companies that are in distress due to the economic downturn and also placed a bond with the IDC for use in funding job creation projects.
“We think that as a department, we can do much better on job creation,” he said.
The Director-General was outlining a strategic direction of the department for 2012. Nhleko identified several key areas which he said would define the department this year.
One of those is up scaling the work of the Public Employment Services (PES); co-ordinating the broader agenda of job creation and the department’s investments through the initiatives of the UIF, CF and Productivity SA; sustaining and up scaling the inspection and enforcement services (IES); tabling to Parliament amendments to Labour Relation Act, Basic Conditions of Employment Act, the Employment Equity, as well as the Public Employment Services Bill.
Another imperative area of focus is the implementation of a developmental strategy to transform the fortunes of the Sheltered Employment Factories (SEF). SEF was established to provide employment opportunities for disabled people who were unable to hold down employment in the open labour market due to the nature of their afflictions. Part of the plan is to have more government departments sourcing their goods from the factories.
The department will be strengthening financial management to sustain the clean bill of health posted by DoL last year after six years of qualified audits; implementation of efficient and effective public private partnership contract management strategy that yield value; and reducing the vacancy rate.
Turning back to specifics, Nhleko said PES, a departmental initiative offered at various labour centres across the country to register job seekers, “need to go beyond capturing and registering job seekers, but must begin to define its role on how it is aligned to broader agenda of job creation!”
He said based on the recommendation out of a report drawn from his provincial visits last year, work was underway to build capacity in the provinces including provision of resources, while aligning their services to have uniformity.
The Director General said that while the long-term goal was to professionalise IES and move away from procedural inspections, specialisation would be an area of focus.
Turning to the CF, he said the fund was peculiar in that it was a medical scheme, while on the one hand it was an insurance of ‘some sort’, “the goal is to efficiently administer the fund and be run like an insurance scheme”. He said the fund would be tapping into the database of the SA Revenue Services to expand its collection base.
Nhleko reiterated that the SEF, a special branch under PES may not be profitable, but should be able to sustain itself. He said a strategy was underway to revitalise the factories and appoint a financial officer.
He said a key element in contract management was deriving value for money utilised. Nhleko said a strong corporate service anchored by a transparent internal and communication strategy was key in defining the face of the department. He emphasised the need to address structural deficiencies and lack of uniformity in operations and dealing with the vacancy rate.
Meanwhile, DoL has announced that no agreement has been reached on the contested issue of labour brokers. The matter is still being discussed at Nedlac.
Nhleko said the department’s approach to labour broking was guided by the protection of the rights of vulnerable workers.
The two bills, Labour Relations Act and the Basic Conditions of Employment Act are also expected to be tabled before Cabinet by the end of March.
Department of Labour (DoL) to shape investment strategy
