Presentation to Portfolio Committee DEPARTMENT OF LABOUR IES Presentation to Portfolio Committee 22.04.2015 1

Table of Content Background IES Strategy Basis for Proposal Developing trends in the IES field Strategic Imperatives Benchmarking A. Current realities Implications thereof 2

Table of Content 10. Request for Goods and Services budget B. Request for Improved Staff Establishment 12. Assumptions 13. How post will be distributed 14. Different Scenarios (100; 60 and 30%) 15. Action Plan 7/18/2018

Background Inspection and enforcement services are committed to the following strategic objective: To promote good labour practices including sound labour relations, improved conditions at work and minimum wages, fair labour practices and healthy and safe working environment. We are enforcing the law to achieve these objectives.

IES Strategy It is common cause that the IES strategy is premised on three pillars: Advocacy and Awareness creation Inspections and Enforcement. 7/18/2018

Basis for Proposal This proposal is developed against the backdrop of: The changing nature of work we are currently experiencing The inspectorate being the primary mode of service delivery of the department The reality that our inspectorate is not geared towards meeting these changing demands 7/18/2018

Developing Trends in the Labour Market The rate of OHS incidents in the country continue to increase. The construction industry alone, two fatalities are occurring a week The amount of money that the country bleeds as a result of workplace incidents is in excess of R2 billion (CF Claim stats 2012)  Amendments to the Labour legislation. 7/18/2018

Developing Trends in the labour market New legislation PESA Currently there are at least three other pieces of labour legislation proposed for amendments Secondary legislation e.g. sectoral determinations as well as the introduction of a national minimum wage) 21 OHS regulations that requires an inspectorate that is fit for purpose. 7/18/2018

Strategic Imperatives Both the NDP and the MTSF obliges us to contribute to the key outcomes such as: A long and healthy life for all (Promotion of occupational health services) Strengthening of social protection (development of occupational health and safety policies) Transforming the society and uniting the nation (promotion of equity in the workplace 7/18/2018

Benchmark Based only on one discipline, Occupational Health and Safety, the ILO benchmark is 1 Inspector for every 20 000 members of the workforce. In terms of the Quarterly Labour Force Survey (February 2015) RSA has 15 320 000 employed persons. It means that South Africa requires 1011 OHS inspectors for the economically active population but for employed works would require 766 inspectors.

Current reality Dol has a total staff establishment of 1347 inspectors with 1247 filled.  

Total budget for IES 2015-2016 Table 2 Cost of current Inspectorate 2014/15 Sum IES Salaries Employer Contribution Total Budget Allocation Surplus/ -Shortfal DDG 2,683,404.00 390,276.00 3,073,680.00 11,456,000.00 8,382,320.00 CD IES 18,306,373.00 2,717,293.00 21,023,666.00 18,234,000.00 -2,789,666.00 CD S&AS 4,616,616.00 634,493.00 5,251,109.00 2,731,000.00 -2,520,109.00 EC 35,438,070.00 6,373,736.00 41,811,806.00 32,470,000.00 -9,341,806.00 FS 26,931,832.00 4,804,877.00 31,736,709.00 24,548,000.00 -7,188,709.00 GP 71,260,999.00 12,828,161.00 84,089,160.00 66,785,000.00 -17,304,160.00 KZN 59,489,639.00 11,181,138.00 70,670,777.00 56,963,000.00 -13,707,777.00 LP 29,097,330.00 4,696,416.00 33,793,746.00 26,508,000.00 -7,285,746.00 MP 26,942,402.00 4,643,816.00 31,586,218.00 23,678,000.00 -7,908,218.00 NC 15,595,422.00 2,534,096.00 18,129,518.00 115,343,000.00 97,213,482.00 NW 23,905,014.00 4,191,662.00 28,096,676.00 22,361,000.00 -5,735,676.00 WC 35,379,928.00 6,356,927.00 41,736,855.00 32,858,000.00 -8,878,855.00 349,647,029.00 61,352,892.00 410,999,921.00 333,935,000.00 -77,064,921.00

2015/16 of Goods and Services The allocated budget is R87.310 000. Of this amount the allocation for inspections is around R49 000 000. The remainder of the budget is utilized for operational matters However to deliver on our current Annual Performance Plan as approved by cabinet the goods and services budget required by IES for goods and services for inspections only is set out in the table below based on an average cost R449.38 per inspection:

Operational cost to fund APP   2016/17 Indicators Totals numbers Total inspection costs Employment Equity 5271 R2 371 132.66 Vulnerable workers 144 831 R65 084 154.78 High risk sector(OHS) 21 909 R9 845 466.42 Employer audits 12 386 R5 566 020.68 Totals 184 397 R82 866 774.54 Therefore in terms of the operational budget, we are already projecting a shortfall.

Implications for increased targets over the MTEF   2015/16 Indicators Totals numbers Total inspection costs Employment Equity 4 926 R2 213 645.88 Vulnerable workers 135 356 R60 826 279.28 High risk sector(OHS) 20 476 R9 201 504.88 Employer audits 11 576 R5 202 022.88 Totals R77 443 452.92

Cost of Employment (CoE) The current approved staff establishment is 1347 inspectors. Of these we have 100 vacancies. The total CoE budget is (R349 286 971) This only covers the filled posts. You would recall that Treasury reduced the IES budget by R64 million). We thus had to freeze these vacancies because of the shortfall created by this reduction.

Funding of IES: CoE(current)

Current IES Reality  from the latest establishment report (March 2015) IES requires R402.797 million for the approved establishment (1 347 full time equivalent posts). The filled posts (1 247 FTE posts) require R371.037 million. The current vacancies (100 FTE posts) amount to R31.692 million. Therefore IES have a shortfall of R27.631 million for 2015/16.

Current IES Reality These amounts include the NT projected annual salary increase of 5.8% from 1 April 2015 and a 1.5% Pay Progression System increase from 1 July 2015 for qualifying officials. Please note that these amounts exclude the 1.5% of establishment for merit awards. It should therefore be noted very clearly that the additional budget of R64 000 000 intended for the next (2016-17) financial year can only be utilized to address the deficit on the approved staff establishment.

Implications There will be no budget to appoint additional inspectors. The R64m intended for the 2016-17 financial does not address the shortfall in the goods and service budget. Of critical importance now however is to fill the staff establishment as approved. It would be foolhardy to utilize this funding to fill vacancies and we do not allow inspectors to conduct inspections since we do not provide the concomitant goods and services budget.

Request for Goods and Services funding The department acknowledges that within this tight fiscal framework, it would be difficult to request an additional R77 million on goods and services in addition to the proposed R64million earmarked. Therefore a proposal to spread this load is set out in the following table.

percentage allocation per annum Proposal Additional required goods and services for the approved staff establishment: percentage allocation per annum 2016/17 40% 77,443,452.92 30,977,381.17 2017/18 20% 15,488,690.58 2018/19

B. Proposal for improved Staff Establishment

Assumptions The following assumptions are made: That the organisation sits with a critical shortage of inspectors The proposal however is made to establish critical capacity in all three major areas with a focus on Employment Equity as well as Occupational Health and Safety

Assumptions Any improvement plan should recognize the tight fiscal environment Three different possible scenarios is proposed (a) a full funded scenarios; (b) funding only provided for 60% of the proposal and (c) funding provided for 30% of the proposal.  

Assumptions All three disciplines and a possible spread over labour centres is provided Additional requirement is 636 ( 500 OHS Inspectors and 100 EE and 36 BCEA inspectors Large Labour Centres will consist of the following posts: 1 - SR12 Control Inspector 6- SR10 Principle Inspectors for the following fields: OHS BCEA and EEA

How posts will be distributed: Estimated deployment per province Eastern Cape 95 15% Free State 32 5% Gauteng 159 25% Kwazulu Natal 127 20% Limpopo Mpumalanga Northern Cape North West Western Cape   636 100%

Scenario 1: 100% funded

Compensation of Employees 100% funded SR Level Number Annual COE cost pp Total Cost 12 27 630 876.00 17033652.00 10 478 454 078.00 217 049 284.00 8 131 320 374.00 41 968 994.00   636 276 051 930.00

Goods and services (100% funded ITEM Number Annual cost per post Total Costs Comments Office furniture 636 40 000.00 25 440 000.00 once off Cell Phones 22 800.00 14 500 800.00   Transport cost 81 600.00 51 897 600.00 1700km pm@4/km Accommodation 26 000.00 16 536 000.00 1300*20 nights pp Stationary/uniform/etc 6 000.00 3 816 000.00 Total: Goods and Services 112 190 400.00 Total Requirement 388 242 330.00

Scenario 2: 60% funded

Compensation of Employees 60% funded SR Level Number Annual COE cost pp Total Cost 12 27 630 876.00 17 033 652.00 10 250 454 078.00 113 519 500.00 8 79 320 374.00 25 309 546.00   356 155 862 698.00

Goods and services (60% funded ITEM Number Annual cost per post Total Costs Comments Office furniture 356 40 000.00 14 240 000.00 once off Cell Phones 22 800.00 8 116 800.00   Transport cost 81 600.00 9 256 000.00 1700km pm@4/km Accommodation 26 000.00 1300*20 nights pp Stationary/uniform/etc 6 000.00 2 136 000.00 Total: Goods and Services 43 004 800.00 Total: Requirement 198 867 800.00

Scenario 3: 30% funded

Compensation of Employees 30% funded SR Level Number Annual COE cost pp Total Cost 12 8 630 876.00 5 047 008.00 10 143 454 078.00 64 933 154.00 39 320 374.00 12 494 586.00   190 82 474 748.00

Goods and services (30% funded) ITEM Number Annual cost per post Total Costs Comments Office furniture 190 40 000.00 7 600 000.00 once off Cell Phones 22 800.00 4 332 000.00   Transport cost 81 600.00 15 504 000.00 1700km pm@4/km Accommodation 26 000.00 4 940 000.00 1300*20 nights pp Stationary/uniform/etc 6 000.00 1 140 000.00 Total: Goods and Services 33 516 000.00 Total: Requirement 115 990 748

Action Plan # Activity Responsible person Date Comments   Budget allocation National Treasury 2016/17 financial year 2  Job profiles finalised OD Q2 – 2015/16 3  Adverts placed CS Branch Q3 – 2015/16 4  Interviews IES Branch Q4 – 2015/16 5  Posts filled Q1 – 2016/17 6  Resources provided: Cars Legislation Personal Protective Equipment Furniture Offices Cell phone/Tablet Stationery Suit case to carry inspection equipment (notices; legislation, etc.) Notices (prohibition; Contravention and Improvement)  IES Branch   On appointment and as competency is found to be adequate 7  Training: Q2 - 2016/17 to Q4 - 2017/18 Training will take place in groups. Each groups training will be staggered. Training will be conducted over six (6) months for each group. 8  Support through Mentoring/Coaching programme Schedule to be drafted. Coaches and mentors to be trained where this has not already taken place. 9  Competency requirements met Q 4 - 2016/17 to Q4 - 2017/18 Testing will take place throughout the training programme. 10  Issuing of inspector cards At end of course Inspector understands mandate.

What is required from the Portfolio Committee The Portfolio Committee is requested to: Take note of the Department of Labour's plan to strengthen the inspectorate. Support the Department of Labour in its quest to strengthen the inspectorate.

Thank You 39