1. BRIEFING BY THE DEPARTMENT OF LABOUR TO THE PORTFOLIO COMMITTEE 9 OCTOBER 2012 Annual Report 2011/12 Doc Id: 464695 1

2. TABLE OF CONTENTS 2 1.MANDATE 2.MEDIUM TERM STRATEGIC FRAMEWORK (MTSF) AND SERVICE DELIVERY OUTCOMES ALIGNED TO THE DOL STRATEGIC OBJECTIVES 3.KEY ASPECTS OF THE DOL STRATEGIC PLAN 2011/12, TARGETS AND PERFORMANCE 4. BUDGET ALLOCATIONS AND UTILISATION INCLUDING AUDIT FINDINGS 5. SHELTERED EMPLOYMENT FACTORIES 6. MANAGEMENT ACTION TO RESPOND TO AUDIT MATTERS 7. HUMAN RESOURCES

3. 3 1. Mandate Vision The Department of Labour will strive for a labour market which is conducive to investment, economic growth, employment creation and Decent Work. Mission Regulate the South African labour market for a sustainable economy through: Appropriate legislation and regulations Inspection, compliance monitoring and enforcement Protection of human rights Provision of Employment Services Promoting equity Social and income protection Social dialogue.

4. 2. MTSF and Service Delivery Outcome aligned to the Department of Labour’s strategic objectives 4 In this report, the Department reflects on its contribution to year three of the Medium-Term Strategic Framework (MTSF) 2009-2014 with a focus on the following Government service delivery outcomes: Outcome 4: Decent employment through inclusive economic growth, and two other outcomes; Outcome 11. Create a better South Africa and contribute to a better and safer Africa and World; and Outcome 12: An efficient, effective and development orientated public service and an empowered and inclusive citizenship.

5. 2. MTSF and Service Delivery Outcome aligned to the Department of Labour’s strategic objectives - continues 5 SERVICE DELIVERY OUTCOMES AND OUTPUTS DoL STRATEGIC OBJECTIVES 4: Decent employment through inclusive economic growth Outputs: 4.1 Making our growth more labour absorbing 4.2. Reducing youth unemployment 4.3. Raising our international competitiveness 4.4. Analysing the cost structure of the South African economy 4.5. Reviewing support for small business 4.6. Expanding our Public Works Programme 1: Contribution to employment creation 2: Promote equity in the labour market 3: Protecting vulnerable workers 5: Strengthening social protection 6: Promoting sound labour relations 7: Monitoring the impact of legislation 11: Creating a better South Africa and contributing to a better and safer Africa in a better world. 4: Strengthening multilateral and bilateral relations 12: An efficient, effective and development orientated public service and an empowered and inclusive citizenship Output: 12.1 Service delivery quality and access 8: Strengthening the institutional capacity of the Department

6. 2. MTSF and Service Delivery Outcome aligned to the Department of Labour’s strategic objectives - continues 6 To achieve these objectives, the Department, in the 2011/12 financial year focused on the following strategic programmes Labour law amendments. Rebuilding the Public Employment Services. Implementation of Decent Work Country Programme. Strengthening of Department of Labour inspectorate. Reduce inequality and discrimination in the labour market through effective compliance monitoring and enforcement of the Employment Equity Act. Improved access to income protection services (CF and UIF) including reintegration of workers into the labour market.

7. Branches/Programmes within the Department of Labour Programme 1: Administration (ADMIN) Programme 2: Inspections and Enforcement Services (IES) Programme 3: Public Employment Services (PES) Programme 4: Labour Policy and Industrial Relations (LP and IR) 7

8. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance 8 OUTCOME 12: AN EFFICIENT, EFFECTIVE, AND DEVELOPMENT ORIENTED PUBLIC SERVICE AND AN EMPOWERED AND INCLUSIVE CITIZENSHIP Strategic Objective 8: Strengthening the institutional capacity of the Department KEY PERFORMANCE INDICATORS ANNUAL TARGETS PROGRESS 1. % of customer complaints attended to within 14 days of Receipt 90% within 14 days 98% (5 434 out of 5 517) were resolved within timeline 2. Percentage of women, youth and people with disability (PwD) employed in line with the EE Plan 34% women employed in Senior Management Service (SMS), 43% youth and 3% people with disability (PwD) employed in the Department 38.5% (32 out of 83 employees at Senior Management Service level) women are employed in Senior Management Service (SMS) as at 31 March 2012 40% (2 830 out of 7 057 filled posts) youth employed in the Department as at 31 March 2012 2.6% (184 out of 7 057 filled posts) of the employees in the Department are people with disabilities as at 31 March 2012. 3. Percentage of vacancy rate reduced with a specified period of time Vacancy rate reduced to below 8% by 31 March 2012 The vacancy rate in the Department has been reduced to 7.28% (554 out of 7 611 posts) as on 31 March 2012.

9. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 9 OUTCOME 12: AN EFFICIENT, EFFECTIVE, AND DEVELOPMENT ORIENTED PUBLIC SERVICE AND AN EMPOWERED AND INCLUSIVE CITIZENSHIP Strategic Objective 8: Strengthening the institutional capacity of the Department KEY PERFORMANCE INDICATORS ANNUAL TARGETS PROGRESS 4. % of misconduct cases finalised within a prescribed period of time 70% of misconduct cases finalised in line with applicable prescripts by 31 March 2012 79% (216 out of 271 cases) of misconduct cases were finalised in line with the applicable prescripts as on 31 March 2012. 5. Exit and services transfer plan developed and implemented Implementation of Exit and Services Plan The Exit and Services Transfer Plan was developed and approved.

10. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 10 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 2: Promote Equity in the Labour Market KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 1. Inspect JSE listed companies and ordinary designated employers to achieve 80% compliance with EE legislation 10 000 workplaces inspected JSE (60 ) Designated (140) Procedural (9 800) A total of 10 223 workplaces were inspected; 65 JSE listed companies inspected 218 Designated employers inspected 9 940 companies were inspected procedurally Refer to page 39 of the Annual Report for Provincial breakdown.

11. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 11 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 3: Protecting vulnerable workers KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 1. Inspect 130 000 workplaces to achieve 80% compliance rate 130 000 inspections with 80% compliance rate 172 300 routine inspections were conducted and 74% (123 181) compliance achieved The Limpopo figure of 14 890 (target) was omitted in the Annual Report.

12. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 12 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 3: Protecting vulnerable workers KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 2. Conduct blitz inspections in targeted sectors Conduct 15 000 blitz inspections in the targeted sectors 21 394 blitz inspections conducted Refer to page 40 and 41 of the Annual Report for Provincial and Sector breakdown

13. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 13 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 3: Protecting vulnerable workers KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 3. Settle at least 70% of received labour related complaints within 14 days at Registration Services Settle 70% of received complaints within 14 days 135 807 labour related complaints were received and 110 610 (74%) settled within 14 days

14. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 14 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 5: Strengthening Social Protection KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 1. Reduce incidents in the following high risk sectors by conducting audits, do blitzes and hold 1 seminar per year: - Iron and Steel, - Construction, - Chemical and - Agriculture/forestry) Establish a baseline by conducing at least: 20 audits per sector Blitz per sector 1 seminar per year 722 inspections conducted in the Iron and Steel Sector, 1003 Inspections conducted in the Construction Sector, 144 inspections conducted in the Chemical Sector and 1338 inspections conducted in Agriculture and Forestry Sector Refer to pages 43 and 44 of the Annual Report 2. Conduct inspections in the identified industries exposing workers to silica dust 200 workplaces inspected in order to reduce exposure by at least 2% 213 workplaces were inspected The inspections conducted were the first. Follow-up inspections will continue to determine the level of reduction to exposure. Prov.TargetActualDeviance GP 200 213 13 NATIONAL 200 213 13

15. 3. Key Aspects of the Department of Labour’s Strategic Plan 2011/12 - Targets and Performance 15 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 1: Contribution to employment creation KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 1. Number of registered job-seekers on the Employment Services for South Africa system per year 600 000 reporting job-seekers registered on the System Work-seekers registered : 553 883 Prov.TargetActualDeviance EC 90000 3622753773 FS 66000 3947426526 GP 120000 146865+26865 KZN 78000 104718+26718 LP 54000 61002+7002 MP 60000 4631713683 NC 36000 2332312677 NW 48000 2108126919 WC 48000 74876+26876 NATIONAL 600 000 553 88346117

16. 3. Key Aspects of the Department of Labour’s Strategic Plan 2011/12 - Targets and Performance 16 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 1: Contribution to employment creation KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 2. Number of job-seekers Registered on the system assessed and profiled 50% job- seekers registering on the system are assessed and profiled within 60 days of Registration 222 956 (40%) of the 553 883 job seekers registered on the system were assessed and profiled Prov.TargetActualDeviance EC1811418149+35 FS19737172222515 GP734324488428548 KZN5235951542817 LP305011392216579 MP2315838093+14935 NC1166241547508 NW1054116373+5832 WC374381861718821 NATIONAL27694222295653986

17. 3. Key Aspects of the Department of Labour’s Strategic Plan 2011/12 - Targets and Performance 17 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 1: Contribution to employment creation KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 3. Number of job- seekers placed/referred to opportunities 450 000 job- seekers placed/referr ed to opportunities 96 505 referred/placed into opportunities

18. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 18 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 1: Contribution to employment creation KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 4. Number of employers registering vacancies on ESSA 2 0002 475 companies registered vacancies Prov.TargetActualDeviance EC300361+61 FS220260+40 GP400578+178 KZN260274+14 LP180212+32 MP20015248 NC120227+107 NW160187+27 WC160224+64 NATIONAL20002475+475

19. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 19 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 1: Contribution to employment creation KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 5. Number of private employment agencies registered 1500 1 162 PEAs were registered Prov.TargetActualDeviance EC22413292 FS16057103 GP300491+191 KZN196211+5 LP1367660 MP1526983 NC923260 NW1203090 WC1206456 NATIONAL15001162338

20. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 20 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 1: Contribution to employment creation KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 6. Number of jobs saved through social plan intervention 20 00015 165 jobs saved 7. Increased sales of goods from Service Products leading to more intake of people with disabilities into SEF 30% in sales leading to 500 more people with disabilities employed in SEF subject to Government departments placing 30% of their orders from SEF Only 0.67% increase in sales was recorded. No additional people with disabilities were employed. Only 1.47% increase in sales/orders was placed by government departments Insufficient orders placed by government departments 8. Number of people from designated groups placed in training and income generating opportunities- Youth, Women, PWD 100 000 Youth 50 000 Women 1 000 PWD 28 339 Youth 17 055 Women 608 PWD Low skills levels of candidate and insufficient opportunities registered Refer to page 51 for Provincial breakdown

21. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 21 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 2: Promote Equity in the Labour Market KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 1. Employment Equity Act (EEA) and its Regulations Amended Amended EEA promulgated NEDLAC negotiations on the Employment Equity Bill was postponed to commence in April 2012 due to prolonged negotiations on the LRA and BCEA Bills. VS: Copy of document outlining the Amendment themes 2. Code of Good Practice and Technical Assistance guidelines on HIV and AIDS reviewed and Amended HIV and AIDS Code and Technical assistance Guidelines amended The Code on HIV and AIDS and the World of Work reviewed and finalised by 28 March 2012 and Technical Assistance guidelines finalised in June 2012. VS: Copy of the Revised Code on HIV and AIDS and the World of Work 3. Income Differentials assessed to determine race and gender disparities in salaries 6058 Income Differentials assessed to determine race and gender disparities in salaries

22. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 22 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 3: Protecting Vulnerable Workers KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 1. BCEA amended Amended BCEA promulgated Bills were approved by Cabinet and submitted to Parliament. Information sharing sessions conducted country wide 2. Review existing sectoral determination Publish an amended SD for: Civil Engineering, Taxi, Contract Cleaning, Domestic Workers, Farm Workers, Wholesale and Retail, Forestry Five (5) Sectoral determinations reviewed. They are the following; Taxi published on 27/06/11 GG 34392 Contract Cleaning published 28/11/11 GG 34798 Domestic published on 28/11/2011 GG 34797 Farm Worker published 18/01/2012 GG 34947 Forestry worker published 18/01/2012 GG 34946

23. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 23 OUTCOME 11: CREATE A BETTER SOUTH AND CONTRIBUTE TO A BETTER AND SAFER AFRICA AND WORLD Strategic Objective 4: Strengthening bilateral and multilateral relations KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 1. Ensure compliance with ILO’s constitutional requirements in terms of Article 19 and 22 of the Constitution of the ILO. Compile and submit reports in consultation with programmes and other departments on South Africa’s compliance in law, policy and practice. Article 19 and 22 reports submitted to the ILO -Two (2) reports with recommendations of Article 19 and six (6) reports from Article 22 were submitted. Refer to page 62.

24. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 24 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 6: Promoting Sound Labour Relations KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS 1. Extend collective agreements within 90 days 18 collective agreements published within 60 days of receipt 24 collective agreements Average turnaround time: 57 days 2. Decision to register new labour organisations taken within 90 days 90 days144 Average turnaround time: 104 days

25. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 25 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 7: Monitoring the impact of legislation KEY PERFORMANC E INDICATORS TARGETSACHIEVEMENTS Annual Labour Market Review report developed and disseminated Four (4) Annual Labour Market Review report developed and disseminated (100%) Four annual labour market were produced and published by Sept 2012. These include: 1.Industrial Action report 2011: It provides a trend analysis on industrial disputes in the country. 2.Annual Labour Market Bulletin: It provides a general overview of key indicators regarding the performance of the SA economy, labour force and wage agreements in the financial year 2011/12 3.Annual Administrative Statistics report: It presents data series in the last 12 months of 2011. It considers only selected key indicators to assess progress made by each branch within the DoL 4.Job Opportunity and Unemployment in the SA labour market: It examines the deficiency in the demand and supply of labour based on the analysis of vacancies and unemployment insurance data in the financial year 2011/12.

26. 3. Key Aspects of the DoL Strategic Plan 2011/12, Targets and Performance - continues 26 OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Strategic Objective 7: Monitoring the impact of legislation KEY PERFORMANCE INDICATORS TARGETSACHIEVEMENTS The impact of the Department’s Strategic Plan on stated goals and objectives researched and reported on Implementation of RME agenda 2 continues with the following projects. 1.Evaluation of the NSDS II 2.UIF noncompliance in the taxi, domestic and catering sectors 3.Assessment of the registration, recruitment and selection services in ESSA 1.The following RME 2 projects were completed, submitted to the Minister and disseminated through research seminars:  Evaluation of the NDSD II,  UIF Client satisfaction survey,  UIF noncompliance in the taxi, domestic and catering sectors,  Assessment of registration, recruitment and selection services in ESSA

27. 4. Budget Allocations and Utilisation per Main Division of the Vote 27

28. 4. Budget Allocations and Utilisation per Main Division of the Vote 28

29. 4. AUDIT FINDINGS – 2011/12 29 Qualification - None Emphasis of Matter - None Other Findings: Predetermined Objectives: Performance targets not specific (25% of PES priorities) Performance targets not specific (28% of IES) Performance indicators not well defined (33% of IES) Procurement and contract management: Goods and services of a transaction value above R500 000 were procured without inviting competitive bids The Accounting Officer did not report the deviation from normal procurement processes to National Treasury and the Auditor General. Employees of the Department performed remunerative work outside their employment without written permission from the relevant authority.

30. 4. AUDIT FINDINGS – 2011/12 30 Human resource management : Funded vacant posts were not filled within 12 months and vacant positions in the department were not advertised within six months. Expenditure Management: Contractual obligations and money owed by the department were not settled within 30 days.

31. 5. FINANCIAL MANAGEMENT OF SEF 31 SHELTERED EMPLOYMENT FACTORIES (SEF)

32. 5. FINANCIAL MANAGEMENT OF SEF 32

33. 5. AUDIT MATTERS OF SEF 33 Qualification - None Emphasis of Matter - Financial sustainability / going concern: The entity is unable to operate as a going concern Material losses: The entity disclosed material losses amounting to R1 006 852 and R130 374 due write down of inventory and criminal conduct by fraudsters, respectively. Irregular expenditure incurred: SEF incurred irregular expenditure due to the lack of Supply Chain Management processes.

34. 5. AUDIT MATTERS OF SEF 34 Compliance with laws and regulations Procurement and contract management: Goods and services of a transaction value above R500 000 were procured without inviting competitive bids Consultants were appointed to render services for which there was sufficient time to recruit people to perform the work. Employees of the entity performed remunerative work outside their employment without written permission from the relevant authority

35. 6. MANAGEMENT ACTION TO RESPOND TO AUDIT 35 The Department, including SEF, has developed a Management Action Plan to address all audit findings/queries. Progress reports are provided to Management Committees and the Audit Committee. Follow-ups are performed during the year by Internal Audit.

36. 7. HUMAN RESOURCES – Staff compliment 36 ProgrammeNo. of postsNo. of posts filledVacancy Rate Number of posts filled additional to the establishment Administration (Corporate Services) 39135210.10 COO 5 7915 4006.895 PES814248.21 LP and IR1231119.811 IES594818.65 Social Insurance UIF: 455 CC : 711 UIF:421 CC :683 7.5 3.9 UIF: 25 CC : 418 Total*7 6117 0577.3555

37. 7. HUMAN RESOURCES – Employment status 37

38. 7. HUMAN RESOURCES – Equity by Occupational Band 38 Occupational Bands Male (44%) Female (56%) AfricanColouredIndianWhiteAfricanColouredIndianWhiteTotal Top Management51003000 9 Senior Management3443424103 73 Professionally qualified and experienced specialists and mid- management 29426202929127665 758 Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents 74684347279510840255 2134 Semi-skilled and discretionary decision making 13711723964172424342201 4083 Unskilled and defined decision making 8412141111401 0 Total 2534299971732948393885257057

39. CONCLUSION 39  The Department of Labour has appreciated the tenable successes and acknowledged some of the challenges facing the organisation. And, we continue in our strides to address these challenges.  The Department received its second unqualified audit opinion consecutively. The Sheltered Employment Factories (SEF) obtained its first unqualified report in years. Issues raised by the Auditor General are being corrected and improvements in the control environment are on an on-going process.  Chairperson, the Department has significantly improved its internal efficiencies and focuses on service delivery; that is the reason for changes to the labour legislations are recommended.

40. Thank You… 40