IntroductionThe main purpose of this programme consists of establishing an equitable and sound labour relationsenvironment and promoting South Africa’s interests in international labour matters. There are nine mainsub-programmes which aim to deliver on the following strategic objectives of the Department:

● Monitoring the impact of legislation● Promote equity in the workplace● Strengthen social protection.

Within the labour market programmes, there are three sub-programmes. These are:

● Research, Policy and Planning● Labour Market Information and Statistics● International Labour Matters.

RReesseeaarrcchh PPoolliiccyy aanndd PPllaannnniinngg

The Department has institutionalised monitoring and evaluation as one of its core priorities. In thisregard, a comprehensive Research, Monitoring and Evaluation (RME) agenda was developed in2006/07 and subsequently implemented. The RME Agenda focuses on research topics covering specificpieces of legislation, reflecting all the aspects of our regulatory framework. All research reports werecompleted in March 2008.

AAcchhiieevveemmeennttss

● The following research reports were completed and submitted:

● Analysing Wage Formation in the South African Labour Market: The role of Bargaining Councils

● Labour Reform in South Africa: Measuring Regulation and a Synthesis of Policy Suggestions ● An empirical analysis of Dispute Resolution ● Minimum Wages, Employment and Household Poverty: Investigating the Impact of Sectoral

Determinations ● Adherence to and Progress Made in respect of the Hours of Work provisions within the BCEA ● A synthesis analysis of labour regulation studies ● Employment and the informal economy in South Africa ● National research on identification of critical skills ● Sector specific research and related skills requirements● Learnerships: Learning and employment pathways of leanership participants in the NSDS

2005-2010 ● Towards measuring the pool of designated groups that are suitably qualified in various

sectors and occupational categories ● Tracking progress on the implementation and impact of the Employment Equity Act since its

inception

PPrrooggrraammmmee 44:: LLaabboouurr PPoolliiccyy aanndd LLaabboouurrMMaarrkkeett PPrrooggrraammmmeess

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● State of skills, 2006 ● National Skills Survey 2007 of small, medium and large firms.

● Train five Masters Degree Research Interns over two years and five Human Science Research Council(HSRC) interns. Five appointed interns participated in a specific study as part of the RMEprogramme. They are currently working on the final report under the employment and the informaleconomy project. The project is a joint collaboration between the Department of Labour and theSociology of Work Unit in the Department of Sociology at WITS University. It is aimed at developingfemale researchers in the area of labour market policy as an intervention to bridge the identified gapin this regard

● Four (4) quarterly reports compiled on the implementation of the Growth and Development Summit(GDS) agreement.

Labour Market Information StatisticsThe LMIS Directorate is responsible of collecting internal and external labour market statistics, analysingand producing reports to inform managers about progress made with regard to key specific indicatorsrelated to the Strategic Objectives of the Department. In addition, it produces reports based on varioussurveys and provides resource materials to various stakeholders to improve the knowledge basedworking environment.

AAcchhiieevveemmeennttss

● The Unemployment and Job opportunity report 2007 was completed and will be published soon. Itis designed to show the skills gap between job advertisements appearing in the weekly Sunday Timesnewspaper and unemployment insurance beneficiaries

● The placement verification survey report was completed. It provides information on placement

Reports produced include the Annual Labour Market Bulletin and the Annual Industrial Action Report.

39

statistics to verify if the Department of Labour has reached placement targets in training projectsfunded under the Social Development Funding Window of the National Skills Fund, as established bythe Skills Development Act, 1998 and Skills Development Levies Act. 1999

● Other reports produced include the 2007 Annual Labour Market Bulletin and the 2007 AnnualIndustrial Action report

● The Labour Market Information System has been developed and web-enabled. The system poolsinformation from various sources into one database to ease comparison

● The library provided support to Provincial Offices with regard to the establishment of resourcecentres. It hosted the Library Open day to promote knowledge based working environment

● The scope of the Job Opportunity Index extended to Provincial Offices to cover other provincial jobadvertisements

● As from February 2008, the Department sent five (5) officials for capacity development at theInternational Labour Organisation (ILO) through the ILO Associate Experts Programme. Theseofficials will be trained over a period of two years with a specific focus on Labour Market Informationand Statistics. This intervention will assist to increase a pool of labour market statistical analysts frompreviously disadvantaged backgrounds.

International Relations

RRee--eessttaabblliisshhmmeenntt ooff tthhee SSAADDCC eemmppllooyymmeenntt aanndd llaabboouurr sseeccttoorr ((SSAADDCC--EELLSS))

AAcchhiieevveemmeennttss

● At the African Regional Labour Administration Centre (ARLAC) Governing Council of Ministers’meeting held at Vumba, Zimbabwe, on 9 February 2006, the following SADC Member Statesconvened to discuss and agreed to the re-establishment of the SADC ELS: Botswana, Lesotho,Malawi, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe. This process wasspearheaded by South Africa

● As a follow up to the above mentioned meeting, a preparatory meeting of Senior Officials wasconvened on 5 April 2006 at SADC Secretariat in Gaborone, Botswana. The meeting was attendedby the Deputy Director-General of Labour Policy and Labour Market Programmes, Mr L Kettledas

● Since the revival of the SADC Employment and Labour Sector, the Department of Labour has playedan active role in terms of following up on outstanding issues and have been represented by tripartitedelegations. The next meeting of the SADC-ELS will be convened from 31 March to 4 April 2008, inLesotho.

BBiillaatteerraall

● The Department has signed a number of bilateral cooperation memoranda of understanding withcountries like Zimbabwe, Mozambique, Lesotho, Cuba and China. This is based on the need toexchange and share experiences with other countries with regard to a number of labour relatedchallenges

MMuullttiillaatteerraall rreellaattiioonnss

IInntteerrnnaattiioonnaall LLaabboouurr OOrrggaanniissaattiioonn ((IILLOO))The Department continues to actively participate in the activities of the ILO through the Governing Bodyand International Labour Conference. Periodic reports are also submitted in terms of the conventions

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and recommendations which the Department is party to.

AAffrriiccaann UUnniioonn LLaabboouurr aanndd SSoocciiaall AAffffaaiirrss CCoommmmiissssiioonn The Department specifically participates in the African Union Labour and Social Affairs Commission(AULSAC). Activities of this body are aimed at harmonising labour and social development standards inthe continent and thus contribute to the eradication of unemployment and poverty.

CChhaalllleennggeess

● The Restructuring of SADC Institutions which was approved by the Summit in 2001, entailedcentralisation of activities at the SADC Secretariat based in Gaborone, Botswana. Accordingly, SADCEmployment and Labour Sector (ELS) Programmes that where hitherto being coordinated by Zambiaon behalf of Member States, were transferred to the Directorate of Social and Human Developmentand Special Programmes of the SADC Secretariat

● The functions of the Desk on Employment and Labour were put on hold. In addition, the ELS PolicyDocuments, Programmes and activities remained unattended to in terms of coordinatedimplementation, monitoring and evaluation

● The main challenge with regards to cooperation agreements remains the collective implementationby all stakeholders in the Department. Cooperation with Departments/Ministries in other countries isseen by Programmes as an added responsibility which is burdensome and is not embraced in apositive way.

Sheltered Employment FactoriesAAcchhiieevveemmeennttss

● Broad direction of a turn-around strategy developed and approved by the Minister of Labour. TheMinister visited both Cape Town factories and impressed with the work within the ShelteredEmployment Factories (SEF)

● Awarded a R2,8 million tender by the Eastern Cape Department of Health for 2007/08 and afurther R10.8 million by the Northern Cape Department of Education

● Contact was made with three SETA’s and they have shown interest in assisting with skills development– CTFL, MERSETA and SERVICES SETA

● Private sector interest is beginning to mount and several meetings have been arranged that includeSA Cricket, Local Organising Committee for 2010 soccer and PEP stores

● As at February 2008 the order book totalled R14.7 million and production was in progress● Compliance with SA GAAP; assets were reconciled and a new asset register was compiled;

accounting practices were revised and the SEF is now fully GAAP compliant● All Audit qualifications will be dealt with by March 2008● All disciplinary matters have been finalised.

CChhaalllleennggeess

● Legal identity of SEF: preparation of a business case for possible listing has commenced. Howeverthe assistance of external resources will be required. Funding and assistance to accomplish this hasbeen required from the National Treasury

● No progress was made in addressing the disadvantages imposed by the Preferential ProcurementPolicy Framework Act.

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Labour RelationsIInnttrroodduuccttiioonn

The main focus of the Labour Relations Programme is the implementation of the Employment Equity Act,Basic Conditions of Employment Act, Labour Relations Act and the administration of the Strengtheningof the Civil Society Fund (SCSF). This report outlines the activities and achievements of the Programmefor the 2007/08 financial year.

PPrroommoottee eeqquuiittyy iinn tthhee wwoorrkkppllaaccee

EEmmppllooyymmeenntt eeqquuiittyy iimmpplleemmeennttaattiioonn aanndd eennffoorrcceemmeenntt mmeecchhaanniissmmss ssttrreennggtthheenneedd

AAcchhiieevveemmeennttss

In order to continue enhancing the implementation and enforcement mechanisms of the EmploymentEquity Act, the Department adopted a vigorous approach in conducting the Director-General’s Review(DG Review) in various companies which cut across a number of sectors. As was the case in theprevious financial year, the DG Review process focused again on the assessment of substantivecompliance of companies listed in the top 100 of the Johannesburg Securities Exchange (JSE).

To ensure that the DG Reviews make the necessary impact on increasing the compliance levels ofemployers with the requirements of the Act, seven companies were identified and subjected for a reviewby the Director-General in terms of section 43 of the Employment Equity Act. This process included thereview of subsidiaries that fell under each of these companies.

In order to ensure that all areas pertaining to substantive compliance with the Act were assessed,additional information, i.e. employment equity plans and any records deemed important for the reviewprocess had to be sourced from these companies. This information enabled the Department to conductan intensive qualitative analysis of the level of compliance of each of these companies. After completionof this analysis, on-site verification meetings were conducted in each company to inform the finalisationof the compliance recommendations to these companies by the Director-General. Therecommendations together with specific time frames within which each company is expected to complywith the requirements of the Act, were then presented and accepted by each company. Follow-ups toassess the extent to which each company was able to comply with the DG Review recommendations willbe conducted in the 2008/09 financial year. Failure by these companies to comply as required mayresult in the matter being referred to the Labour Court in terms of section 45 of the Act.

In order to continue enhancing the accuracy and integrity of the employment equity data being receivedby the Department from the designated employers in each reporting cycle, the programme embarkedon an awareness campaign in June and July 2007. The campaign focused mainly on educatingemployers regarding their legislative duties as designated employers, such as consultation with workers,conducting the workplace analysis, preparing and implementing an Employment Equity Plan, includingthe preparation and submission of the EE Report to the Department of Labour on 1 October 2007. Inaddition, employers were encouraged to cut the paper work and submit their EE reports utilising the EEOnline service provided by the Department of Labour.

To further enhance the capacity of the Department to be able to provide quality assistance todesignated employers during the reporting period of October 2007, the EE System was rolled-out to the

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provinces, including providing training to provincial staff on the capturing of the EE Reports on the EESystem. This initiative enabled the provincial offices to acquire the necessary knowledge and skillsrequired not only to capture the reports, but also to be in a better position to assist and guide their ownprovincial stakeholders during the EE Reporting period. Again, it is worth noting that this initiative formspart of the broader agenda of the Department, i.e. the decentralisation of certain functions to Provincesaimed at empowering the provincial staff with the necessary knowledge and skills required in assistingand enforcing the compliance of their own stakeholders with the Employment Equity Act.

As part of its advocacy interventions to ensure that the existing employment equity implementation toolssuch as Codes of Good Practice are made accessible to all stakeholders in other official languages, theProgramme managed to translate a number of the different Codes into more than one officiallanguage, i.e. Disability Code (Sesotho, Afrikaans, Siswati); HIV and Aids Code (Setswana) and SexualHarassment Code (Siswati, Sesotho, Tshivenda and Afrikaans). These translations are due forpublication in the next financial year.

There is also a continuous drive by the programme to monitor the progress made in the implementationof the Act and providing feedback to the nation regarding the status of employment equity in thecountry. In order to fulfill this mandate, the Commission for Employment Equity (CEE) published its 7thCEE Annual Report on 15 May 2007. Furthermore, the CEE and the programme are in the process ofdeveloping the 8th CEE Annual Report and the 2007 EE Public Register, which are due to be releasedin the next financial year.

CChhaalllleennggeess

● A key challenge for the Department is to strengthen the implementation and enforcementmechanisms of the Act through enhancing the capacity of the labour inspectors to be able to enforcethe Act

● A second challenge is to enhance the capacity of provincial staff to be able to manage the EEreporting process of their provincial stakeholders

● Finally, the Department aims to overcome recurring IT problems that impact negatively on theintegrity of the employment equity data and reports.

PPrrootteecctt vvuullnneerraabbllee wwoorrkkeerrss

AAcchhiieevveemmeennttss

Employment Standards has two key areas of focus:

● The establishment and review of sectoral determinations ● The administration of the Basic Conditions of Employment Act (BCEA), which includes child labour,

as well as the assessment of applications for variations of minimum wages and conditions ofemployment received from employers.

Employers active within the performing arts are also required to apply for permits before they employchildren younger than 15 years. The Directorate made huge strides in ensuring that employers andother role players are aware of this new requirement, contained in the sectoral determination publishedto protect children in this sector. A total of 639 applications for permits have been granted sinceAugust 2004.

The Earnings Threshold was reviewed and published in the Government Gazette. The purpose of the

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threshold is to fundamentally reduce the burden of compliance on employers in respect of thoseemployees who earn in excess of the new threshold of R149 736. What the new notice does is that italigns this threshold with the UIF threshold.

Investigations were embarked on in the following sectors:

Hospitality; Welfare; Unskilled workers (all sectors) and the Taxi Sector. The reduction of working hoursand wage differentials were also investigated.

A new determination was published for the Hospitality Sector. It combined at least three old wagedeterminations into a single one as well as extended the protection of this determination to otherworkers in the Hospitality Sector. What is significant is that the determination separates the wages ofwaiters and waitresses from the tips that they invariably receive.

With respect to the Welfare Sector significant progress was made in the deliberations at the EmploymentConditions Commission level. The research process that was initially envisaged to be conducted byexternal stakeholders will now be conducted internally. A research programme was developed, trainingwas conducted with the relevant provincial offices and the field work will be conducted internally.

In the Unskilled investigation 17 existing old determinations were cancelled. This brought the workersthat were covered by these determinations into the fold of the current Basic Conditions of EmploymentAct which they were hitherto excluded from. This has identified the need to do further investigations intoparticular categories of employment such as funeral undertaking and stonecrushing.

The investigation into the Taxi Sector with a view to review wages and conditions of employment hasbeen finalised. One of the critical areas of concern that has emerged from this investigation is theconsultation process. This has posed a significant challenge in certain provinces where it was extremelydifficult to consult with the different stakeholders. Another area of concern that has come out of thisinvestigation is that the determination is not being fully enforced.

Employers active within the performing arts are also required to apply for permits before they employchildren younger than 15 years.

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HHiigghhlliigghhttss iinn rreessppeecctt ooff CChhiilldd LLaabboouurr

A revised national Child Labour Programme of Action (CLPA) for the next five years was completed.

A critical element in the CLPA is the need for support from different government departments. At a highlevel meeting, comprising of Deputy Directors-General held in September, this matter was raised withthe different departments. There are however significant challenges in this regard.

A process to phase out the Towards the Elimination of the Worst Forms of Child Labour (TECL)programme was started this year since the contract of the service provider expires at the end of March2008. A number of exit meetings were held with key government departments such as SocialDevelopment, Water Affairs and Forestry, and the South African Police Service so that these departmentscould mainstream the activities performed by TECL into their work plans.

VVaarriiaattiioonnss ttoo tthhee BBaassiicc CCoonnddiittiioonnss ooff EEmmppllooyymmeenntt AAcctt,, 11999977

All the applications received from the broader industry have been dealt with. The following show thenumber of applications for variation that were dealt with during the year and their outcome.

Brought forward (from 2006/07) 28Total number received 520Total number granted 373Total number refused 104Number withdrawn 15Further information requested 56

CChhaalllleennggeess

● Acceding to the greater demands for wider and thorough consultation whilst on the other handmeeting the deadlines for publication of sectoral determinations remains a challenge

● Coordinating and ensuring the consistent participation of government departments in theimplementation of the Child Labour Programme of Action has proved very challenging

● An ongoing challenge is raising awareness of all the sectoral determinations and ensuring awarenessof annual wage increases

● Finally, supporting provincial offices and labour centres in respect of the implementation of thesectoral determinations remains a challenge.

PPrroommoottee ssoouunndd llaabboouurr rreellaattiioonnss

AAcchhiieevveemmeennttss

Sixty three collective agreements of bargaining councils were extended to non-parties covering 884 403workers. These agreements were main collective agreements covering wages and basic conditions, aswell as agreements dealing with council levies, illness benefits, pension and provident funds.

In the current financial year 38 bargaining councils were visited to determine their representivity and 12representivity certificates were issued in terms of section 49 of the Labour Relations Act. At the end of2007, there were 52 registered bargaining councils.

The Department received a total of 99 applications for the registration of employers organisations and

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trade unions. Of these, only 13 applications were approved – four in respect of employersorganisations and nine applications for the registration of trade unions. The registration of 15employers organisations and 42 trade unions were cancelled during the year. The total number of registered trade unions is currently 265 and there are 203 registered employersorganisations.

An amount of R265million was transferred to the CCMA for its budget for the 2007/08 financial year.From 1 April to 31 December 2007 the CCMA received 99 502 referrals and settled 68% of its cases.It conducted 29 280 con/arbs, facilitated 149 section 189A cases (dismissals based on operationalrequirements) and conducted 42 pre-dismissal arbitrations. A large number of Department of Labourofficials (834) in the provincial offices and labour centres were given access to the CCMA CaseManagement System (CMS). Having access to the CMS will enable the Department to advise clientsabout progress of their cases at the CCMA. The Department of Labour continued its active involvementin the governance structures of the CCMA during the year.

A section 77 application to engage in protest action to promote or defend socio-economic interests ofworkers was brought by the Motor Transport Workers’ Union of South Africa. The application arosefrom a safety and security hazard for workers and the public due to unsafe conditions arising from thetransportation of cash. The matter was resolved through the parties agreeing to a set of measures to befollowed in the transportation of cash.

CChhaalllleennggeess

Ensuring compliance with the requirements of the Labour Relations Act by registered trade unions andemployers organisations remains a challenge. The number of organisations whose registration hasbeen cancelled remains high and, in most cases, the grounds for cancellation relate to non-compliancewith administrative requirements. The number of employers organisations that use their status mainly toaccess the CCMA, remains high and ensures that there continue to be organisations that do not

The registration of 15 employers organisations and 42 trade unions were cancelled during the year.

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operate as genuine employers organisations. Changing this behaviour remains a challenge for theDepartment.

During 2007, amendments were effected to the Pension Funds Act, 1956 (PFA) requiring the pensionand provident funds established under the auspices of bargaining councils, to register in terms of thePFA. The funds under the LRA are the outcome of a process of collective bargaining and therefore differin certain respects from funds established under the control of an employer as per the PFA. A challengefor the bargaining councils will be to bring their constitutions, agreements and fund rules in line with thePFA. The Department will have to oversee this process and continue its responsibilities in relation to theamendment of constitutions and the extension of agreements. The registration of council pension andprovident funds under the PFA may also require technical amendments to the Labour Relations Act intime.

SSttrreennggtthheenniinngg CCiivviill SSoocciieettyy FFuunndd

The Strengthening Civil Society Fund aims to improve working conditions of vulnerable workers bycontributing to a stable and well functioning labour market.

AAcchhiieevveemmeennttss

The Fund was granted a budget of R9 919 000 for the 2007/08 financial year. The table belowindicates the names of organisations that were allocated funds and the amounts allocated during theyear.

The secretariat of the Strengthening Civil Society Fund will continue to monitor all the projects to ensurefinancial control and accountability. In terms of the financing agreement, all funded projects submitprogress reports of their activities to the Department.

NNaammee ooff oorrggaanniissaatt iioonn AAmmoouunntt RR aallllooccaatteedd

DITSELA 7 614 782

Sterkstroom Advice Centre 172 425

South African Labour Bulletin 673 050

Workers College Natal 126 797

Barkly East Advice Office 239 930

Nkomazi Community Advice Centre 219 638

Lotavha Labour Advice Office 86 627

Network Against Child Labour 375 360

FEDUSA/NACTU Workshop 91 460

TToottaall 99 660000 006699

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Unemployment Insurance FundIInnttrroodduuccttiioonn

The Unemployment Insurance Fund contributes to the alleviation of poverty by providing effectiveshort-term unemployment insurance to all workers who qualify for unemployment and related benefits.The Fund strives to render an effective and accessible service to all stakeholders. Furthermore the Fundstrives to be a sustainable organisation with sufficient reserves.

No new legislation was introduced during 2007/08. The Fund continued to administer theUnemployment Insurance Act, 2001 as amended. This Act deals with the administration of the Fundand the payment of benefits. The Act also makes provision for the Commissioner to maintain anemployer/employee database which is used to pay benefits to beneficiaries. The South African RevenueService (SARS) continued to administer the Unemployment Contributions Act, 2002. The SARS collectscontributions from all those employers who have employees who pay the PAYE tax and the collection ofcontributions from all other employers is delegated to the Unemployment Insurance Commissioner.

As at the end of January 2008, the Fund had 381 employees at its Head Office. There are 65 vacantposts. With regards to equity, 25.5% of staff members are White, 4.7% are Coloured, 2.1% are Asianand 67.7% are Black. Staff development plays a major role in the Fund and 44 staff members wereawarded bursaries for personal development. Amongst these, four are pursuing Masters Degrees and10 are doing Honors Degrees.

AAcchhiieevveemmeennttss

● The call centre received 226 482 calls and of these 219 679 were answered, resulting in a responserate of 97% and the average time spent in the queue was 13 seconds

● Of the 395 873 applications received for benefits, 385 706 were approved giving an approval rateof 97.4%

● On average, more than 140 000 payments are made per month to beneficiaries ● As at the end of December 2007, the fund had collected R6.685 billion in contributions and paid

R2.176 billion to beneficiaries ● The Fund’s total assets amounted to R26.006 billion as at the end of December 2007 ● As at end of December 2007, the Fund had 7 371 230 employees on its database of which

633 062 are domestic, 6 732 722 are commercial and 5 441 are Taxi Industry employees ● There were 1 153 523 employers on the database of which 555 804 are domestic, 592 857 are

commercial and 4 862 are taxi owners ● Decentralisation of functions has resulted in an increase in the number of claims payment centres

from 14 to 57 ● All beneficiaries are paid through electronic funds transfer into their banking accounts ● The signing of the unemployment register has been replaced by a user friendly declaration document

that the beneficiary completes, signs and delivers to the labour centre, when convenient for him/her.

CChhaalllleennggeess

● Elimination of work and draw cases ● Recovery of overpaid amounts ● Reduction of opportunities for fraud

PPrrooggrraammmmee 55:: SSoocciiaall IInnssuurraannccee

48

● Implementation of schemes to alleviate the harmful effects of unemployment ● Extension of UIF coverage to the Taxi Industry ● Improving on claims turn-around times ● Implementing a new service delivery model ● Implementation of a fraud prevention plan ● Recruiting and retaining competent staff.

Compensation FundIInnttrroodduuccttiioonn

The Compensation Fund renders assistance to workers who were injured in the workplace or whocontracted a disease in the workplace, as well as to assist the families of those workers who died inworkplace incidents.

AAcchhiieevveemmeennttss

● During the financial year the Fund introduced a strategy to reduce the backlog dating as far back as2004 and was able to achieve an 84% reduction in the backlog in the claims area

● A new imaging system (Kofax) was piloted and implemented during the same year and 2, 5 milliondocuments were scanned, indexed and filed

● The Fund did away with a cheque payment method and introduced a new system that ensures thatall payments are paid directly into the bank accounts of individual claimants through an ElectronicFunds Transfer System

● Revenue Collection initiatives realised an improvement of around 2% from R2.5billion in 2006 toR3.3billion

● Despite the challenges still faced by the Fund in the management of claims processing, 117 272 ofthe 182 723 claims received were processed and accepted, representing 64%.

● A new communication strategy was developed and finalised.

The Fund subsidise rehabilitation centres where injured workers are treated.

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CChhaalllleennggeess

● Consolidating the EFT Payments● Improving Revenue Collection● Improving the Claims Turn-around time● Development of the Fund’s Information System● Addressing the Human Capacity Challenge.

50

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