Labour Activation Fund Presentation to Portfolio Committee on Labour

Department of Labour's Unemployment Insurance Fund presentation outlines initiatives to upskill and reintegrate beneficiaries into the job market. The Labour Activation Programme focuses on poverty alleviation, enhancing employability, and supporting beneficiaries through training schemes. The Fund collaborates with SETAs and other entities to close skills gaps and increase competitiveness among job seekers.

• Labour Activation
• Unemployment Insurance Fund
• Poverty Alleviation
• Training Schemes
• Skills Development

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1. 1 DEPARTMENT OF LABOUR UNEMPLOYMENT INSURANCE FUND PRESENTATION TO PORTFOLIO COMMITTEE ON LABOUR 2017.11.22

2. 2 Background The UIF pays benefits to an average of 60 000 people per month based on qualifying conditions. UIF beneficiaries must be available for employment and possible training as a requirement for accessing benefits Our assessment of the UIF beneficiaries is most of them are unskilled; some semi-skilled and some lacks necessary skills that enable them to be re- integrated in the labour market As a result of the above assessment UIF saw it necessary to implement Labour Activation Programmes that will ensure that unemployed UI beneficiaries are integrated or re-integrated back into the labour market. 2

3. 3 LAP Objective Fund Poverty Alleviation Schemes 3

4. 4 Purpose of LAP at inception Enhance employability through training - scarce skills through Training of Unemployment(ToU) Enable reintroduction of UI beneficiaries back to labour market Increase UIF beneficiaries competitiveness against other work seekers. Mitigate against employee lay-off through Training Layoff Scheme(TLS) Job saving or preservation through Productivity South Africa 4

5. 5 LAP Focus When LAP started the main purpose at the time was to upskill workers with skills that are required by the economy and thereby making it easier for the trained UIF beneficiaries to be employable and access employment opportunities either within ESSA or in the economy in general. As this was the focus there was less drive for placement and monitoring the exit of learners. There are instances where placement was a by-product of the projects and learners were placed in opportunities and absorbed by the companies. 5

6. 6 LABOUR ACTIVATION FUNDING 6

7. 7 Fund Model for LAP Schemes Scheme 1: Training Layoff Scheme(TLS) Scheme 2: Training of Unemployed(ToU) Scheme 3: Turn Around Solutions Productivity SA is funded 100% by UIF and UIF has entered into mutual agreement with SETA s to train UIF beneficiaries. The agreement was informed by a need to close the skills gap for UIF beneficiaries and the fact that SETA are on their part driving sector specific training that may not be within the scope of UIF. The services for TOU are provided by state owned entities including, SETAs, TVETs and Universities. UIF Fund 75% of the wages (currently capped at R9358 funds are released on Quarterly tranches of the gross salaries) of the employees after the previous tranche has been fully SETA assist with training component. accounted for based on the quarterly proposal submitted. The budget allocated for TLS amount to R 177 071 699.55 between 2010/2011 and 2017/2018 financial Funding model for TOU (SETAs A total of R 449 029 666 was the budgeted years. A project is funded on a 50% bases partnership of the total cost. The number of learners correlate with the funding model which is 50% UIF beneficiaries and 50% non UIF. to fund TAS projects between 2010/2011 and 2017/18 financial years. A total of R 54 072 744.93 ( 31%) has been spent since 2010/2011 and 2017/2018 on 53 companies to train A total of R 202 950 588 (46%) has been Funding model for TOU (TVETs 11 224 employees. released to fund TAS between 2010/2011 UIF fund 100% of the total cost of the project. The target is that no less than 30% should fit the youth definition. and 2016/17 financial years to assist 193 companies in distress. A total of 49 429 jobs were saved from 193 companies assisted through this instrument. 7

8. 8 Progress in LAP since last presentation 8

9. 9 LAP GOVERNANCE STATUS Issues raised by the Portfolio Committee in their visit Status LAP Activity Comments LAP Activity Status Training of Unemployed(ToU) Project Monitoring and management Reliance still on partners. Provincial role defined for the new year to assist in monitoring and management Visit to projects The visit has increased with 20 projects visited by LAP and 18 by the monitoring and evaluation team Breakdown of gender and youth Done on each project visited Visibility of Project Universe Spreadsheet created with the universe of projects which is monitored and updated periodically Number of learners absorbed Reported per completed project Status of individual projects Mapped in the project universe Visibility of the cost Drafted in the project universe LAP additional capacity Motivation for structure submitted and approved. The process to create positions in the structure has started. Demographic breakdown Done in the project universe 9

10. 10 PROJECT MONITORED Name Province Learner Target Actual Number Male Female Youth Cost of Training Start date End date Progress Active (To be extended) 50 26 10 16 22 R 1 800 000.00 Boland TVET College Paarl WC 14/03/2016 30/11/2017 50 23 7 16 22 R 1 800 000.00 West Coast Atlantis X2 WC 01/02/2016 31/08/2018 Active Boland TVET College Worcester 50 12 4 8 11 R 1 800 000.00 WC 01/02/2016 28/02/2017 Completed West Coast Vredendal 50 32 16 16 32 R 1 800 000.00 WC 27/02/2017 31/08/2018 Active 2 2 1 1 2 R 300 000.00 Riodor Marine WC 21/11/2016 30/09/2019 Active 2 2 2 0 2 R 300 000.00 Alfa Body Works WC 21/11/2016 30/09/2019 Active 2 2 2 0 2 R 300 000.00 Pad Penal beaters WC 21/11/2016 30/09/2019 Active 33 32 16 16 32 R 4 800 000.00 Transnet Engineering college WC 31/03/2016 30/09/2019 Active 50 50 18 31 49 R 1 800 000.00 30/04/2018Active Mthashane TVET College KZN 01/05/2017 10

11. 11 PROJECT MONITORED Learner targetActual Name Province Male Female Youth Cost of Training Start date End date Progress Number Durban Toyota KZN 3 3 0 3 3 R 450 000.00 01/11/2016 30/10/2020 Active Jorap KZN 2 2 2 2 R 300 000.00 01/12/2016 30/11/2020 Active LHL KZN 2 2 0 2 2 R 300 000.00 01/02/2017 31/01/2021 Active Ehlanzeni TVET X2 MP 50 49 13 36 45 R 1 800 000.00 01/03/2017 31/03/2018 Active MERSETA (Adebare) X 2 KZN 12 12 8 4 12 R 1 800 000.00 01/10/2016 30/09/2020 Active PRASA GP 32 32 8 23 32 R 4 800 000.00 01/11/2014 30/10/2018 Active GENREC Engineering GP 11 11 0 11 11 R 1 650 000.00 01/09/2016 31/08/2020 Active Barloworld Transport Isando depot GP 8 8 8 0 8 R 1 200 000.00 01/04/2015 31/03/2019 Active Arcelomittal SA GP 200 200 26 174 190 R 30 000 000.00 01/04/2016 31/03/2020 Active Morris Material Handling GP 3 3 0 3 3 R 450 000.00 01/04/2017 31/07/2020 Active TOTALS 679 496 136 359 476 R 54 930 000.00 11

12. 12 TAS PROJECTS MONITORED Name Province Excellence motor trimmers GP Epitome consulting GP Vital Power Transmission MP Kele mining NC Red pencil group GP Prime Furniture LIM Vhalungu Beverages LIM Jessey s Catering Services (Mr Platter) GP Tshiala Construction GP 12

13. 13 TAS PROJECTS MONITORED Name Province Bright Idea Project WC C.O Designs WC Colibri Towelling WC Sinoville Fencing GP Pinion and Adams KZN The Embroidery Studio KZN Aluwood Projects GP Human Scale Printers KZN Ridge Stone Trading KZN 13

14. FINDINGS AND RECOMMENDATIONS FROM 1ST SEMESTER REPORT 14 Findings and lessons learnt in the visits 1. Learners are struggling to get host employers for workplace experience in building and civil construction. 2. The amount of the stipend is little to cover the distance travelled to workplaces. 3. Learners have to incur costs from their pockets for required medical check-up before placement. 4. The funding does not cover toolkits in building and civil construction. 5. The quality and quantity of personal protective equipment is not sufficient. Recommendations 1. Encourage partners to seek opportunities with host employers in advance and also assist with engagement with other SETA s for placement. 2. The UIF has engaged the Board and is busy with a comparative study on the stipend payments on projects of LAP nature for consistency; 3. The UIF funding will include costs of toolkits, medicals; protective equipment and project management. 14

15. 15 LAP Governance Structures 15

16. 16 LAP GOVERNANCE STATUS LABOUR ACTIVATION STRUCTURES Status of TOR Training Lay-Off Scheme (TLS) Status of TOR Turnaround Solutions(TAS) Status of TOR Training of Unemployed(ToU) Project Adjudication Committee (PAC) Technical Committee (TC) Technical Evaluation Committee (TEC) Delegated Authority Steering Committee (SC) Delegated Authority Labour Activation Programme Sub-Committee Labour Activation Programme Sub-Committee Labour Activation Programme Sub- Committee Financial Advisory Committee (FAC) Financial Advisory Committee (FAC) Financial Advisory Committee (FAC) Board Board Board Labour Activation Programme has five active governance under each programme (TLS, TAS and TOU). The structures sit periodically to execute mandate as defined in their respective terms of reference to ensure that LAP delivers on their targets. While the structures are sitting as and when required its important next to determine if the structures are effective in that: Quorate when they meet or meetings are postponed due to quorum issues If resolutions are implemented timeously Documentation is kept for future reference They adhere to terms of reference(TOR) as defined 16

17. 17 Labour Activation Diagnosis Results A diagnosis process was undertaken by UIF of the LAP space to determine if there are further gaps that must be addressed to bring about effectiveness and efficiency in the LAP space. The results are in the next slide. 17

18. 18 LAP Diagnostics Analyses Results Misalignment Alignment UIF Process flows LAP Strategy and objectives SOPs System Reporting Targets Checked against Siyaya In draft Stakeholders unaware of it Not aligned to process flow Monthly and quarterly reports by PSA; nothing internal Defined process (start to end) Not documented TAS 7500 jobs saved Draft due 2/18 Subtargets Too low Financial system Process flows mix activities and objectives TLS Done per province Infrequent Not consolidated In place Ad-hoc, Excel databases Aligned with process flows 100 companies Not in the team s control Process not followed Too detailed Well written Disorganised filing (electronic and manual) Not used Defined goals and actions TOU 7 000 learners per annum Monthly reporting Not in place Unable to track progress or create reports Too low Filled with inaccuracies Not documented ED In draft 600 learners Do not enable effective management Not adopted No further breakdown No clear finalization approach Too low LAP projects are executed on high level process flows not SOPs Where detailed SOPs exist, they aren t followed Systems to support execution and reporting are inadequate 18

19. 19 Some work has been done to close GAPS identified Overall Progress to date Structure TAS TLS ToU ED PES Governance Proposed process flow Proposed SOP or SLA N/A Proposed guideline templates Proposed reporting procedures Proposed DMS System Development N/A *Green: Done; Amber: Work in Progress; Red: minimal work started 19

20. 20 LAP Proposed 2018/19 Targets 20

21. PROGRAMME 3: LABOUR ACTIVATION PROGRAMME 21 Purpose: Provide strategic leadership and guidance on the implementation of the Labour Activation Programmes Strategic Objective 5: Enable entrepreneurship; enhance employability and preserve jobs 450000( half of the claiming) of UIF beneficiaries provided with learning and or employment opportunities PPI 2017/18 ANNUAL TARGET 2017/18 QUARTER 2 PERFORMANCE 2018/19 2019/20 2020/21 Number of UIF beneficiaries provided with learning and or employment opportunities 450 000 N/A N/A 1 000 000 2 000 000 21

22. 22 TECHNICAL INDICATOR DESCRIPTOR Indicator title UIF beneficiaries provided with learning and/or employment opportunities Short definition Learning and employment opportunities provide to 70% UIF contributors and 30% non contributors. Purpose/importance To support employment intervention measures( include but not limited to Enhancing employability; jobs preservation and enterprise development etc.) Provincial development plans, SIPS, Source/collection of data Evidence to be submitted Approved project applications. Monitoring reports; Payment advices. Method of calculation Number of participants per approved project (450000) in line with the 70/30 split Data limitations Type of indicator Output Calculation type Cumulative Reporting cycle Quarterly New indicator Yes Desired performance 100% achievement of the indicator Indicator responsibility Chief Director Labour Activation 22

23. 23 Implementation Approach Administration Support ( LAP DD/ASD) 1. Manage province based LAP project and ensure delivery according to specification; 2. Submit monthly reports and invoices for payment; 3. Monitor and evaluate the LAP projects; 4. Receive; verify and assess invoices with supporting documents; 5. Invoices above provincial threshold submitted with all relevant supporting documents to head office for processing 6. Process invoices for payment within the provincial threshold; UIF Head Office 1. Define policy; framework; SOG; processes; governance structures; guidelines and any other mechanism to define the work done at provinces; 2. Strategic planning; monitoring; evaluation and target setting in consultation with implementation partners; 3. Audit implementation of adherence to defined processes; guidelines etc.; 4. Issue and Adjudicate Request For Proposal(RFP) above the provincial threshold; 5. Process the payment of invoices above the provincial threshold; 6. Execute periodic visit to projects implemented in the provinces Provincial :Governance( Internal /External) 1. Research and identify provincial focus areas; 2. Receive; administer and Adjudicate RFP within provincial threshold; UIF Monitoring and Evaluation 1. Execute evaluation of impact of a sample of projects per province per quarter; Provincial and Local Level implementation 1. Execute recruitment; assessment; counselling; coaching and placement of beneficiaries in projects;(PES) 2. Evaluate and assess the implementation of individual projects by partners;(LMIS/PES) UIF Internal Audit 1. Execute periodic audit of the governance structures; appointment service providers and running of projects 23

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