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DEPARTMENT OF LABOUR PRESENTATION TO THE SELECT COMMITTEE ON LABOUR & PUBLIC ENTREPRISES

This presentation by the Department of Labour highlights the importance of jobs and employment in economic and social development. It discusses the department's mandate, contribution towards job creation, employment levels, unemployment rates, and government programs supporting job creation.

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DEPARTMENT OF LABOUR PRESENTATION TO THE SELECT COMMITTEE ON LABOUR & PUBLIC ENTREPRISES

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  1. DEPARTMENT OF LABOUR PRESENTATION TO THE SELECT COMMITTEE ON LABOUR & PUBLIC ENTREPRISES 14 AUGUST 20113

  2. PRESENTATION OUTLINE 1. Jobs and Employment debates 2. Mandate 3. DOL contribution towards job creation and employment Chief Directorate Communication | 2011.00.00 2

  3. Jobs and Employment debates • “Jobs are the cornerstone of economic & social development. Indeed, development happens through jobs. People work their way out of poverty & hardship through better livelihoods. Economies grow as people get better at what they do, as they move from farms to firms & as more productive jobs are created & less productive ones disappear. Societies flourish as jobs bring together people from different ethnic & social backgrounds & nurture a sense of opportunity. Jobs are thus transformational, they can transform what we earn, what we do & even who we are. ” Jobs Report , World Bank 2013 • “Jobs are activities that generate income, monetary or in kind without violating human rights”. ILO declaration on fundamental principles and rights at work 1998 / UN declaration of Human Rights 1948. • “A job is not the same as employment e.g. existence of job vacancies & people with more than one job means that the number of jobs is greater than the number of people employed on the other hand existence of unemployment means that people do not find the jobs they want”. Jobs Report , World Bank 2013 • “Work across the developing world is also characterized by a high prevalence of informality, whether defined on the basis of lack of firm registration, lack of social security coverage or lack of an employment contract”. Jobs Report , World Bank 2013 3

  4. AS AT Q1 4

  5. Employment • Employment levels increased between from 2008 to 2013; • SA Employment level increased during the time of the global economic crisis but the effects of the crisis led to employment decline in 2010 with more than 750 000 jobs being lost; • Employment levels continued to rise again from 2011 to 2013; 5

  6. Employment Cont. • Employment levels increased in most industries from 2012 to 2013; • Just above 200 000 jobs were lost in the Trade industry; 6

  7. Employment Cont. • Employment levels by Occupation paints a mixed picture with some occupations gaining employment while others lost; • Clerks, Managers and Elementary occupations were some of the occupations that gained momentum in the past year; • Sales & trade, Plant operators and Technicians shed jobs between 2012 and 2013; 7

  8. Unemployment • Unemployment rate remained the same (25,2%) in quarter 1 of 2012 and 2013; • This could be explained by the increased number of people who might have joined the labour market in 2013 as the labour force level increased from 17.7 to 18.2 million; • Over the 6-year period unemployment level steadily increased by 8.2% even though 2011 saw a less number. 8

  9. Unemployment Cont. • Unemployment by education level also painted a mixed picture; • The level of those with no matric declined consistently from 2008 to 2011 ; • On the contrary those with Tertiary education and Matric as their highest level of education increased over the 6 years; 9

  10. Job Creation Mandate and Priority Areas • The Mid-Year Cabinet Lekgotla of 26 - 28 July 2011, Cabinet adopted a 12 point implementation plan on job creation, within the ambit of the New Growth Path. • During his SONA for 2011, President Zuma outlined the following said that research had indicated that in six priority areas with potential to create jobs : Infrastructure development , Agriculture ; Mining and beneficiation; Manufacturing; Green economy; Tourism. • The New Growth Path (NGP) aims to enhance growth, employment creation and equity • The National Development Plan (NDP), August 2012, proposes the creation of 11 million more jobs by 2030, among others by expanding the public works programme, lowering the cost of doing business and costs for households and helping match unemployed workers to jobs. The Unemployment Insurance Fund set aside 5% of its reserves towards social responsibility investment, with a focus on job creation. The Compensation Fund has made a similar allocation for investment in the healthcare industry. • Addressing high levels of Unemployment especially amongst the Youth is an international priority. 10

  11. DOL contribution towards job creation and employment • DOL Strategic Plan 2013/14 to 2017/18 • Key Challenges • Unemployment and under employment • The changing nature of work • Inequalities and unfair discrimination in the workplace • Domestic as well as cross-border labour migration • Inadequate instruments for constant performance monitoring and evaluation of labour market policies and programmes to determine their impact on the economy 11

  12. What are some of DOL initiatives included in:Government programs supporting job creation 12

  13. What are some of DOL initiatives included in:Government programs supporting job creation 13

  14. Reducing youth unemployment:PUBLIC EMPLOYMENT SERVICES In 2009 the Presidential through a Proclamation transferred skills development functions to DHET and left DOL with Employment Services provisions. To deal with the legislative vacuum the ES Bill was developed and published for public comments during 2010 The ES Bill was approved by Cabinet and tabled at NEDLAC for negotiations during 2011-2012 Parliamentary processes commenced during 2012/13 financial year and the ES Bill is currently before the Labour Portfolio Committee 14

  15. Reducing youth unemployment:EMPLOYMENT & SKILLS DEVELOPMENT SERVICES 2009-10 During the last year of Skills Development under DOL: • Percentage of work-seekers placed in registered opportunities: 41% (20 003) • Number of unemployed people trained and placed: 12 802 number trained, 7008 (48%) placed. • Number of artisans registered for training: 18 693 • Number of learners registered for ABET: 56 669 • Entrants into scarce and critical skills programmes: 111 831 • Youth supported through New Venture Creation programmes: 3 412 15

  16. Reducing youth unemploymentEMPLOYMENT SERVICES 16

  17. NUMBER OF WORKSEEKERS REGISTERED PER PROVINCE

  18. Reducing youth unemploymentOther DOL Interventions • Co-ordinated South Africa’s participation in the ILO Youth Unemployment discussions and Conclusions during 2011 • Organised Job Fairs and Job Summits under the theme “My Job My Future” throughout all 9 Provinces in partnerships with a range of stakeholders during the 2012/13 financial year. Partnership establishment process is on-going to secure employer commitment to use ESSA for recruitment. Major clients using ESSA includes: ESKOM, SASOL, Transnet, DoH, DPW. • Contributed towards G20 Employment Task Team and Ministers of Employment Conclusions under the American, French; Mexican and Russian Presidency during the period 2009 to 2013. • Contributed towards the EDD led Youth Pact development. 18 18

  19. Making our growth more labour absorbingProviding special employment to PWD: SEF A SEF Business Case and Implementation plan strategy has been finalized and approved for implementation. Pilots currently underway includes: • Development of a product costing model and is currently being piloted in 3 of the 12 SEF factories to ensure that SEF prices their products to make adequate revenue. • Improvement of working conditions for the factory workers • Transformation and a change management process. • Sustainable revenue and sales through long term contracts and contract and Customer Relationship Management.

  20. Making our growth more labour absorbingProviding special employment to PWD: SEF Manufacturing of School furniture Impact on Job Creation : Three year contract in access of R76 million with the National Department of Basic Education to supply school furniture to rural areas has been concluded and to date. • During the 2nd year of the contract approximately R10million worth of school learner’s furniture and teacher’s furniture has been manufactured and delivered. • Deliveries have been made to 70 out of 118 schools in Limpopo in the past six months. Where over 350 temporary employments has been created through a skills transfer initiative of the assembling of school desks. • In the Eastern Cape deliveries have been completed in 34 of 49 schools and over 170 temporary jobs were created in the process. • Contracts have also been entered into with the Western Cape Departments of Education totaling R11million to deliver schools furniture to over 550 schools 20

  21. Making our growth more labour absorbingProviding special employment to PWD: SEF A SEF Business Case and Implementation plan strategy has been finalized and approved for implementation. Pilots currently underway includes: • Development of a product costing model and is currently being piloted in 3 of the 12 SEF factories to ensure that SEF prices their products to make adequate revenue. • Improvement of working conditions for the factory workers • Transformation and a change management process. • Sustainable revenue and sales through long term contracts and contract and Customer Relationship Management. • A product costing model has been developed 21

  22. Making our growth more labour absorbingProviding special employment to PWD: SEF Manufacturing of Hospital Linen • A contract to the value of R12million to manufacture and deliver linen has been concluded with the Western Cape Health Department. Extension of benefits to SEF employees • An agreement was reached with the worker representative for better employment conditions for factory workers to include; • A R300 housing subsidy for the first time ever for factory workers • A medical aid contribution by the SEF • 6% wage increase • A submission has been developed to translate the 108 personnel staff to the Department of Labour in accordance with the National Treasury allocation and change management initiatives are being introduced. 22

  23. UIF/IDC INITIATIVE • The Industrial Development Corporation (IDC) and the Unemployment Insurance Fund (UIF) commenced their relationship in April 2010 in response to the job losses that were taking place in the country. • In terms of the relationship, the UIF initially purchased a R2 billon bond from the IDC. The IDC uses these proceeds to fund businesses that will create and save jobs. • During the 2012/13 financial year, the UIF and IDC continued their collaboration through the issuance of an additional bond of R2 billion. This has increased the total bond to R4 billion. • To date 21 234 new jobs have been created and 20 161 job saved by companies that accessed the funding from the UIF/IDC initiative.

  24. UIF/IDC INITIATIVE • The investment in the IDC by the UIF is part of the UIF’s objective of investing 10% of its total investment portfolio in socially responsible investments, were the focus is on job creation. • Transactions from this initiative are funded on standalone basis or on a co-funding basis with the IDC funds • Businesses that access the funding, receive a discounted rate of 5% for a period of time, after which it reverts to a concessionary variable rate linked to prime

  25. UIF/IDC INITIATIVE • Since inception, there have been 199 approved deals with a total value of R3,3 billion • Jobs created were created and saved in the following areas

  26. UIF/IDC INITIATIVE

  27. UIF/IDC INITIATIVE

  28. UIF/IDC INITIATIVE

  29. UIF/IDC INITIATIVE

  30. TRAINING OF THE UNEMPLOYED UIF BENEFICIARIES • This was a response for UIF beneficiaries who have already lost jobs and require re-skilling for re-integration into the labour market. • It is implemented through collaboration with various government training institutions to train beneficiaries on critical and scarce skills required in the economy. • The project began with a pilot in 2010 where 774 youths and unemployed UIF beneficiaries where trained as Artisans in collaboration with MERSETA • During the 2010/2011 financial year, 1976 youths and unemployed UIF beneficiaries were trained in various artisan disciplines within the mining sector.

  31. TRAINING OF THE UNEMPLOYED UIF BENEFICIARIES • During the 2012/13 financial year, three training initiatives were rolled out: • Training of 1000 UIF beneficiaries and unemployed youth on various ICT related training programmes in a collaboration with the MICT SETA • Training of 1000 UIF beneficiaries and unemployed youth on mining related artisan programmes in a collaboration with the Mining Qualification Authority • Training 1500 beneficiaries and unemployed youth in various artisan trades in collaboration with the MERSETA

  32. FUNDING FOR TURNAROUND SOLUTIONS • In addition to investment in social responsible investments, the UIF continues as the sole funder of Productivity South Africa’s Turnaround Solutions. • A three year funding agreement has been signed between the UIF and Productivity South Africa and enables the assistance to companies that are in distress with the objective of saving jobs and keeping people in employment. • In terms of the funding agreement, the UIF allocated R39 million for 2012/13, R55 million in 2013/14 and R58 million in 2014/15 to fund the Turnaround Solutions during the three year period. • For the 2013/14 financial year, 130 companies are targeted for intervention with potential to save 10200 jobs through the Turnaround Solution intervention.

  33. FUNDING FOR TRAINING LAYOFF SCHEME • The UIF has maintained its commitment of R1, 2 billion made towards the funding of the Training Layoff Scheme. • A total of R105 million has been budgeted for the 2013/14 financial year and R400 million over the next three years.

  34. CCMA job saving interventions(TLS) 34

  35. Section 189(A) Facilitations 3rd Quarter 2012/2013: A total of 3158 jobs were saved in the 3rd quarter of 2012/2013 through facilitated section 189(A) processes.

  36. Section 189(A) Facilitations 4th Quarter 2012 / 2013: A total of 6756 jobs were saved in the 3rd quarter of 2012/2013 through facilitated section 189(A) processes.

  37. Section 189(A) Facilitations Annual : 01 April 2012 to 31 March 2013: A total of 26054 jobs were saved over the financial year of 2012/2013 through facilitated section 189(A) processes.

  38. Re-employment and re-instatement from Conciliations and Arbitrations 3rd Quarter of 2012/2013. A total number of 2301 of employees were either re-instated or re-employed in the 3rd quarter of 2012/2013 through conciliations and arbitrations. 4TH Quarter of 2012/2013. A total number of 2527 of employees were either re-instated or re-employed in the 4th quarter of 2012/2013 through conciliations and arbitrations. Annual figures for 2012/2013. A total number of 10411 of employees were either re-instated or re-employed in the financial year 2012/2013 through conciliations and arbitrations.

  39. Re-employment and re-instatement from Conciliations and Arbitrations

  40. Conciliation Settlements and Arbitration Awards The total number of jobs saved through conciliation and arbitration awards over the reporting period is as follows:

  41. Section 189A Facilitations Herewith please find the statistics for section 189A facilitations for the reporting period:

  42. Training Layoff Scheme Jobs Saved There are 23 companies involving 3,273 workers in the Training Layoff Scheme Process for the period 1 April 2012 to 30 September 2012. Total of jobs saved Total number of jobs (settlements, arbitration awards and section 189A facilitations) over the period 01 April to 30 September 2012 is 30, 413 with 3,273 workers currently in process under the Training Layoff Scheme.

  43. Raising our international competitivenessProductivity SA Job Creation Initiatives 43 43

  44. Reviewing support for small businessProductivity SA Job Creation Initiatives * LMP Small Business Determination on SMMEs was approved without any amendments by NEDLAC Social Partners during 2011 * DOL and its entities financial reports provides more information w.r.t procurement from SMMEs & payments within 30 days 44 44

  45. Reducing youth unemploymentProductivity SA Job Creation Initiatives 45 45

  46. CONCLUSION There is a potential to maximize DOL and its entities contribution towards jobs and employment DOL Annual Review resolved that increased co-ordination should be undertaken on job creation and employment initiatives

  47. Thank You… 47

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