No word if R32m shortfall will be paid by National Treasury

March 23, 2010

By SAMANTHA ENSLIN-PAYNE

Source: Business Report - Home - CCMA 'will not be able to pay its bills'

A severe cash flow crisis has hit the Commission for Conciliation, Mediation and Arbitration (CCMA) and if it does not receive additional money from the National Treasury this week it will not be able to pay its bills at the end of the month.

"If we don't get the money this week we will not be able to pay our debts," Nerine Kahn, the director of the CCMA, said on Friday.

The CCMA's bank balance currently stands at about R2.4 million, but due this week are payments of about R34.4m, including R11.9m for full-time staff salaries and R4.3m for part-time commissioners' salaries. Overall the CCMA is R32m short.

The CCMA's annual disbursement from the Treasury for the 2009/10 financial year was R326m. Last year it was granted an additional R32m that came out of savings identified by the Department of Labour - from whose budget vote it obtains funding. But at the time the CCMA indicated that that would not be enough to see it through to the end of the financial year.

"We have been lobbying since June last year for additional funds," Kahn said.

On Friday, the National Treasury could not say whether additional funds would be made available this week.

"We have been told that another R32m will be paid, but it has not been signed off," Kahn said.

Jimmy Manyi, the director-general of the Department of Labour, said: "Ever since I started at the Department of Labour, all the funding requests by the CCMA have always been honoured by the National Treasury."

The cash crunch facing the organisation is due to an increase in the use of part-time commissioners to cope with the sharp rise in its case load.

The CCMA facilitates section 189A retrenchment processes, which have increased sharply as a result of the economic crisis. Last year it was also tasked with implementing the training lay-off scheme, a plan by the government to encourage companies to send staff who are on short time or earmarked for retrenchment on training instead.

The CCMA's case load increased to about 150 000 in the year to March 2010 from about 136 000 the year before, with more than 60 percent of these cases handled by part-time commissioners.

In the year to March 2011 it has been granted additional funds of almost R74m for its increased case load and inflation adjustments for staff salaries.