Honourable speaker and members of this House
Ministers and Deputy Ministers present
Senior managers of the Department, and its entities.
Ladies and gentlemen
Up front, the priorities of this Department this year and during the 6th Administration are:
- Employment: job creation and preservation;
- Strengthening social dialogue for inclusive growth; and
- Transformation and decent work: health and safety, and equity in the workplace. Two massive milestones – in the form of the COIDA and Employment Equity amendments - received presidential assent in April this year, fittingly just ahead of May – Workers' Month.
Employment
With the expansion of the mandate in 2019, and the need to reconfigure as Employment and Labour, the Department's focus has been strengthened in regard to job creation and retention, particularly youth employment.
This has been done against the backdrop of difficult economic conditions, both nationally and internationally. Although the economy is showing early signs of a rebound, the rate of recovery falls far short of what is required to create sustainable jobs for the most vulnerable in the country, particularly youth, people with disabilities and African women. The unemployment rate remains high at 32,7% as at Quarter 4 of 2022. One glimmer of light: there was an increase of 86 000 in the number of employed youth during the same period.
From the side of the Department, in order to contribute to the alleviation of unemployment, the UIF's Labour Activation Programme will continue to fund projects to maintain and create employment:
The Temporary Employer Employee Relief Scheme (normal TERS), administered through the CCMA (Council for Conciliation, Mediation and Arbitration), will continue to provide support to distressed companies that seek to retain their employees.
The Employability Enhancement Programme is designed to integrate unemployed people back into the labour market. 240,000 people will be recruited by the end of the MTSF.
The Business Turnaround and Recovery programme, implemented through Productivity South Africa, enhances the productive capacity and operational efficiency of enterprises in order to preserve jobs and minimise retrenchments.
In the 2023-2024 financial year:
- A number of new youth employment projects will be launched from June across the provinces.
- We have ensured that 50% of all opportunities and subsequent employment goes to women and youth.
- The Department will closely monitor the implementation and performance of funded Labour Activation projects.
The UIF is currently reviewing its funding model to further increase support for job creation.
The UIF will continue to pursue the objectives of the R5 billion partnership with the Industrial Development Corporation in creating and retaining jobs. The fund supports start-ups and existing businesses.
Productivity SA continues to promote employment growth and productivity through the Competitiveness Improvement Services (CIS). Over the past three financial years, the CIS Programme provided support to SMMEs in both the formal and informal economy, and consistently achieved 100% performance on its planned targets.
We are now beginning to see the positive results of the Turnaround Strategies and Labour Activation Programmes. 186 companies facing economic distress were supported and these interventions resulted in nearly 16,000 jobs being retained.
It is now mandatory for every business that receives assistance from the Temporary Employer/Employee Relief Scheme (TERS) to implement the Business Turnaround and Recovery programme. In this way, we have created synergy between our financial and non-financial instruments aimed at job preservation. It is important to flag that the reconfiguration of the Department will strengthen the focus on improved productivity as key to growth and jobs.
Productivity SA aims to support 37 250 Enterprises, place 1250 students/youth, and contribute a total of 113 000 jobs over the 5 year period.
Oiling the wheels of the labour market, the Department will launch the upgraded Employment Services System of South Africa (ESSA). This will make it easier for work seekers to access employment opportunities.
The Department will also offer more than 200 unemployed graduates an internship opportunity this year, extending the programme that was started during the last financial year. These internship programmes are offered by departments across government at every level.
Supported Employment Enterprises (SEE) as part of its legislative mandate will increase employment of people with disabilities at its factories from the current 940 to 1250 during the current year. The Department will also provide subsidies to nine organisations that will provide work opportunities to 1041 workers with disabilities.
Focusing on unemployed youth, the Department in partnership with the Presidency and the Government Technical Advisory Centre (GTAC), will continue to support the development of the Pathway Management Network - bringing together multiple online networks of training and employment opportunities - also providing support to unemployed youth through the establishment of an Innovation Fund and support to a National Youth Service.
Decent work, policy and legislation
Even as the Department seeks to leverage its resources to support job creation and retention, we do not lose sight of our traditional mandate to regulate the labour market and labour relations with the objective of strengthening decent work and conditions conducive to a stable labour market and growth.
Policy and legislative priorities during this administration include the following:
- National Labour Migration Policy – a draft has been developed by the Department of Employment in line with the decisions of the Ministers of Employment and Labour in the SADC Region. The draft Policy recognizes the legitimate expectations of South Africans, at the same time aligned to constitutional requirements, international law and international agreements. The Draft National Labour Migration Policy and supporting Employment Services Amendment Bill were approved by Cabinet for public comment in February 2022. The Department appreciates all organisations that submitted comments. The policy has been revised accordingly. We are currently engaging NEDLAC stakeholders on the documents. The NLMP forms part of the broader National Employment Policy intervention.
- National Employment Policy – the Department in conjunction with the International Labour Organisation (ILO) has developed a Draft National Employment Policy (NEP) to address the country's persistently high levels of unemployment, and to realize the following outcomes, amongst others:
- An inclusive employment growth trajectory for demand-side employment growth;
- Harmonious and coordinated implementation of all policy activities and plans across government with a direct and indirect bearing on employment creation; and
- To significantly reduce the unemployment rate and increase levels of labour force participation by 2030.
The Draft NEP is guided by key policy interventions which are being shared during the consultations with Economic Departments before it is presented at the Economic Cluster and Cabinet.
- The National Minimum Wage (NMW) was designed to reduce inequality in the national labour market and to establish a threshold for workers' remuneration. It is not a living wage, but has already benefited about six million workers. These workers are generally unorganized and vulnerable to exploitation. For the past three years the national minimum wage level has been adjusted to maintain its value relative to inflation. Furthermore, the minimum wage for the farm sector was equalised with the general national minimum wage rate in 2021 and the minimum wage in the domestic sector were equalised in 2022. The NMW Commission monitors the impact of the national minimum wage on employment and wages. The large-scale job losses foretold by naysayers has not happened. For marginal employers who genuinely cannot pay, they can apply for an exemption.
- Labour Law Amendments - I have reported to this Parliament that my Department has tabled labour law proposals to NEDLAC for negotiation. The desire of my Department is to conclude these amendments as soon as possible given that the thrust of these amendments are intended to contribute to job creation and the ease of doing business especially for small business.
- As part of routine activities to strengthen decent work, for 2021/22 my Department extended twenty-four collective agreements to non-parties covering one-and-a-quarter million employees in different sectors. These agreements cover wages, social security benefits, and working conditions - improving the livelihoods of vulnerable employees and their families.
- Amendments to the Employment Equity Act have received presidential assent. Self-regulation for 25 years by employers has not succeeded in significantly shifting the demographics of employment particularly in the higher echelons of business – to the cost of Africans, coloureds, people with disabilities and women. The amendments provide for the Minister, in consultation with stakeholders, to set sectoral targets, and ensure that non-compliant businesses will not do business with government entities. Implementation guidelines are now ready for publication, and stakeholders have been consulted on sector EE targets, which will be published for public comment. Whilst still required to comply with the law, small businesses (employing less than 50 workers) are not required to submit reports.
Equal opportunity in the labour market is at the core of decent work and workplace transformation.
- The Occupational Health and Safety Amendment Bill is due for completion by September 2023 for engagement with Nedlac. We trust that proposed steep fines will curb high levels of non-compliance by some employers. Remember the object here is to reduce workplace accidents and diseases – which in turn also increases productivity, necessary for economic growth.
- The President assented to the COID (Compensation for Occupational Injuries and Diseases) Amendment Bill on 7th April 2023. Benefits include:
- The inclusion of domestic workers in the category of employees entitled to occupational injury benefits.
- The introduction of rehabilitation and return to work programmes to support the reintegration of injured workers with disabilities into the labour market.
- To enable the Compensation Fund to obtain the requisite resources for inspection of workplaces and to develop preventative programmes with employers that will contribute to safer workplaces and reduce the number of injuries.
Social Dialogue
The Department and its entities, led by Nedlac, are also charged with strengthening social dialogue. Last year this mandate focused on the establishment of a new Social Compact. Much was learned from this process, with the focus now on developing specific compacts by economic sector some of which have been successfully concluded. These efforts are now focused on defined priority areas, currently: energy, transport and crime.
Nedlac achievements in 2022/23 include:
- The incorporation of the Presidential Climate Commission (PCC) as a programme under Nedlac.
- Nedlac convened twenty-two dialogue sessions focusing on issues such as government budget planning, electricity generation, the Occupational Diseases in the Mines and Works Act, public employment schemes and food distribution to vulnerable groups and communities.
- Nedlac Reports were concluded on ten bills and policies.
- A new rapid response task team focusing on cost-of-living increases was set up.
Nedlac planned activities for 2023/24 include: progress with labour law reforms which focus on improving the effectiveness of labour laws as well as extending them to atypical workers and emerging issues such as the future of work, remote work and the just transition.
Inspection and Enforcement
It is all very well to devise good policies and laws, but they also have to be implemented and enforced. The Department's Inspection and Enforcement Services (labour inspectors) have been expanded and strengthened in recent years, particularly since the Covid19 pandemic – resulting in over 100,000 Health and Safety inspections in the last year.
In relation to Employment Equity laws our inspectors are currently focused on JSE-listed companies to ensure compliance. For 2022/23 we referred 238 companies to court for failure to comply.
National roving teams are conducting a blitz programme focused on high risk and problematic sectors to ensure compliance with the NMW and Basic Conditions of Employment Act. During the last year, the Department carried out over 300,000 inspections – seeking to promote compliance, fair labour practices, decent work and a safe workplace.
IES also seeks to realize the 'Durban Call to Action' to combat child labour, and to advance ILO Recommendation 204 which, among others, seeks to improve the rights and conditions of workers in the informal sector.
Access and service
Good legislation and plans can also be compromised by inadequate access and service. Historical and systemic challenges within the two funds (Compensation Fund and UIF) are being addressed. Relevant professional capacity has been in-sourced to strengthen the programmes to tackle negative audit findings, and for a more fundamental and thorough-going review of systems architecture across the Funds. These interventions will be strengthened during the current year.
Despite the challenges, the Funds continue to provide critical social security protection to workers – through UIF and the Compensation Fund which paid benefits of R4 billion in the 2022/23 financial year. The benefits consist of monthly pensions, salaries, funeral benefits and medical expenses. The Compensation Fund has developed a tertiary bursary programme for dependents of permanently and deceased injured workers.
The UIF will strengthen monitoring of its investments with the Public Investment Corporation (PIC) to ensure due diligence and fair returns.
We are also pleased to report significant progress in recovering Covid19 Ters funds wrongly or fraudulently paid. The SIU, Asset Forfeiture Unit, the President's Fusion Centre, working with the UIF's 'Follow the Money' programme, have recovered R61 million as at 31 March 2023. There have been 60 arrests with 12 individuals sentenced including a Ms Moremi sentenced to 10 years imprisonment and Mr L.P. Gumede sentenced to 20 years. A large number of additional matters are still under investigation.
Finally, I need to mention South Africa's role as the Presidency of BRICS during the current year. The second BRICS Employment Working Group technical group is meeting to prepare for the BRICS Summit to be hosted by South Africa in Durban later this year. The technical group is focusing, amongst others, on the relationship between productivity and employment.
Let me take this opportunity to thank the DM, the DG and his team for their commitment and hard work.
The budget allocation to the Department is R1,092,225,000 (1 billion, 92 million, two hundred and twenty-five thousand Rand). I move Budget Vote 31.
Thank you.
