Browsing by Author "Lucas, Jonathan Winston"

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    Sustainability and financial implications of the Labour Relations Amendment Act No.6 of 2014 for Western Cape health services outsourcing
    (Stellenbosch : Stellenbosch University, 2017-03) Lucas, Jonathan Winston; Burger, A. P. J.; Stellenbosch University. Faculty of Economic and management Sciences. School of Public Leadership.
    ENGLISH ABSTRACT: The Labour Relations Amendment Act No. 6 of 2014 was gazetted during August 2014, and came into effect on 1 January 2015. This amendment act and specifically sections 198A and 198B changes the manner in which employers outsource certain employment functions by means of contract employment. Section 198A specifically changes the definition of temporary employment services and section 198B changes some aspects of fixed-term contracts. When the Act came into effect, employers were given three (3) months to ensure that they become compliant with this new stipulation. The Western Cape Department of Health (WCDoH) currently delivers certain health services through Non-profit Organisations (NPOs). The WCDoH sees this practice as a cost-effective method to reach more clients and areas where traditional formal health services are not available. The WCDoH thus relies on NPO contracts and outsourcing to deliver health services on its behalf. The WCDoH formalises relationships with NPOs through a Service Level Agreement which obligates NPOs to employ suitably qualified staff on an annual contractual basis to deliver these health services. The WCDoH in turn transfers funds to the NPOs for the payment of staff as well as for NPO administration activities. The WCDoH provides strict guidelines as well as standard operating procedures for how, where, when and what services have to be rendered and how payment has to be made for these services. The challenge is that the amended stipulations of the Labour Relations Amendment Act place a damper on the current manner of NPO outsourcing models. The Act stipulates that any employee of outsourced contracts that is in the employ of a contractor for more than three months; and who is not substituting a permanent employee; and / or where the service is not temporary and the contract employee earns less than a certain threshold, is regarded as an employee of the employer, outsourcing the service. The Act further stipulates that these contract employees must receive the same benefits regarding pension, medical aid, housing allowances and service bonuses, as well as leave benefits, as in the case of permanent employees of the employer. The WCDoH regards the current way of NPO outsourcing as cost effective, the reason being that the funding norms to NPOs do not include benefits and the majority of NPO employees receive a stipend, allowing NPOs to employ much more staff with the funding received from the WCDoH. The purpose of the research was to investigate sustainability and whether the Labour Relations Amendment Act of 2014 has financial implications for current NPO outsourcing models applied by the WCDoH. The current NPO outsourced model is applied uniformly in the WCDoH through all it districts and sub structures. The Northern Tygerberg Sub Structure was the area where the study took place. Documents containing the strategic directions for both the WCDoH and the NDoH were reviewed to determine the value placed on NPO outsourcing in health services in particular and the indications are that the strategic direction of the WCDoH is to continuously improve its methods regarding wellness. This direction is evident in the strategic document called “Healthcare 2030”. The document provides detailed analysis of and methods towards how the WCDoH will strengthen partnerships with NPOs and other private providers to keep communities healthy. Further to this document, the strategic direction of the National Department of Health in terms of primary health care services for South African communities is contained in a document called “primary health care reengineering”. Findings from this document indicate that the country is also moving towards rendering services outside of traditional health facilities and is moving towards forming partnerships with NPOs to deliver care in the communities. The aforementioned documents provide a definite indication of the importance of NPO service outsourcing both in the WCDoH as well as the NDoH. It is evident from the analysis of the WCDoH NPO outsourcing model that is applied, that NPO outsourcing is well structured in the WCDoH and documents such as the Services Package of Care for NPO funding, the Service Level Agreement and the Finance Instruction FA21 of 2015 in particular, direct the operationalisation and funding for NPO services. The analyses of NPO performance through outsourcing of services, as well as the access to health care that the model creates through service coverage, indicate the unmissable contribution NPOs make. NPO services have been described as beneficial by managers who were interviewed and there is a definite concern amongst them that the amendments to the stipulations of fixed-term contracts and what the Act regards as temporary employment services will have financial and service sustainability implications. Documentary evidence and findings further show that the South African Labour Court previously ordered that another province should employ staff on a permanent basis with full benefits as a result of the way current NPO staff are contracted. The aforementioned can have further implications for the WCDoH NPO outsourcing models as this province applies a similar approach to NPO outsourcing. To ensure that the WCDoH complies with the Labour Relations Amendment Act of 2014, in particular with the stipulations under sections 198A and 198B, recommendations in the form of different options of staffing funding models as well as organisation structures are made. These recommendations are made on the basis of the current staffing models and service coverage, funding norms, salary, and benefit packages for the public service, with due consideration of the current financial envelope and budgetary constraints.