/ 7 June 2019

Ministry to labour for job creation

Proactive: Thulas Nxesi has his job cut out for him now that employment is part of the labour department’s portfolio.
Proactive: Thulas Nxesi has his job cut out for him now that employment is part of the labour department’s portfolio. (Delwyn Verasamy)

South Africa’s sixth democratically elected administration has zeroed in on unemployment, a commitment that was put into sharp focus by President Cyril Ramaphosa’s decision to rename the labour department. But what this means for the freshly designated department of labour and employment remains unclear.

READ MORE: Unionists, women and an alleged smuggler? Who’s who in Ramaphosa’s Cabinet

In his Cabinet announcement last week, Ramaphosa revealed his decision to include the responsibility of employment in the labour portfolio “so that we demonstrate that indeed our country is on a journey of creating jobs”.

The department’s acting spokesperson, Mokgadi Pela, said on Wednesday that the department “is still coming to grips with what the renaming means”. The new minister, Thulas Nxesi, met department officials and commissioners this week, who briefed him on their work, Pela said.

The spokesperson for the presidency, Khusela Diko, said the department’s mandate relating to employment is set to be “fine-tuned” in the Cabinet lekgotla, which is set down for next week.

Diko said Ramaphosa has indicated that the change will require the department to shift its focus away from being purely one of checking compliance with labour laws. “What he has said is that the labour department has to move away from being compliance-driven … to one that is more proactive, so that it can use the tools at its disposal to drive employment.”

This means the department will not be tasked with creating jobs, but it will have an expanded role in ensuring that the labour environment is conducive to job creation, Diko said. “Remember, labour right now is about box ticking, so they come in to look at whether a business is complying with employment equity targets and so on. But the president says that it must be more proactive in assisting companies to comply with those issues.”

Nxesi’s predecessor, Mildred Oliphant, spent eight years at the helm of the department. Her time was characterised by big changes to labour legislation. In January, a number of these changes were enacted.

The National Minimum Wage Bill punctuated Oliphant’s legacy as minister. The R20-an-hour minimum wage was criticised by the left for being a poverty wage. It was criticised by others as being a possible impediment to job creation.

READ MORE: Ramaphosa: ‘Historic’ minimum wage to come into effect on January 1 2019

Union federation Cosatu has welcomed the change to the department’s focus.

Its general secretary, Bheki Ntshalintshali, said this week that Cosatu had proposed the renaming in an effort to align with other ministries around the world.

“[Employment] is not a focus point. The department tends to focus on policy alone,” Ntshalintshali added. “Our responsibility is to ensure that now [that] government has agreed to that proposal, they must walk the talk.”

He said he foresees the renaming means a greater allocation of resources to institutions such as Productivity South Africa, which was established in terms of the Employment Services Act to promote employment growth and productivity.

This requires the department of labour to provide a number of public employment services, including matching and placing job seekers with available work opportunities.

The Act also empowers the labour minister to step in when an employer is experiencing financial or operational difficulties that could lead to retrenchments.

The groundwork for an expanded public employment service has seemingly been laid: the department’s annual performance plan for 2019-2020, published last week, noted new regulations in terms of the Employment Services Act that “aim to strengthen the provision of employment services within the department”.

The annual performance plan shows that employment is already high on the department’s radar. It also notes that “the South African economy is running well short of the target of 500 000 jobs to be created annually”.

“Unfortunately, this could appear as if not much has been achieved in improving the lives of people by the South African government.”

By the department’s own admission, its employment services system — an IT portal aimed at connecting workers with employers — has not been a major player in mitigating unemployment.

“Whilst there has been a noticeable increase in the counselling of the number of registered work seekers, the placement of work seekers against registered opportunities has been low,” the annual performance plan reads.

In 2017-2018, 890 523 job seekers were registered on the system, but only 21 076 were placed in jobs or internships.