Higher Education Laws Amendment Bill; Further Education and Training Colleges Amendment Bill: briefing

Higher Education, Science and Innovation

09 August 2011
Chairperson: Adv I Malale (ANC)
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Meeting Summary

The briefing on the Higher Education Laws Amendment Bill noted that the functions, processes and composition of boards of public higher education institutions would be regulated and a process would be put into place to manage their dissolution should boards not perform adequately. The same would apply to the National Student Financial Aid Scheme board. Importantly, the provision compelling employers to deduct funds from employees to repay loans would be removed.

The briefing on the Further Education and Training Colleges Amendment Bill explained that the competence of FET Colleges would change from provincial to national. Additionally amendments would seek to change the employment status of staff at FET Colleges. Further, transitional arrangements were to be put in place to facilitate these changes.

Discussion centred around the chopping-and-changing nature of the higher education sector which certain Members felt undermined higher education, as well the specific problems that might come about as a result of these changes. These included difficulties in implementing employee payroll and benefit programmes while changing FET college employee status from being employed by provinces to being employed by national government, queries about NSFAS, its board, its performance, and its abilities to perform its functions due to the fact that the obligation of employers to deduct monies from employee salaries to repay loans had been deemed unconstitutional. The concern was Dr Kloppers how would NSFAS collect its funds.

Meeting report

Mr Eben Boshoff, Chief Director: Legal and Legislative Services, Department of Higher Education communicated the Director General’s apologies. He noted that the Skills Development Amendment Bill would soon be tabled as well. The salient features of the two new Bills were then outlined.

Higher Education Laws Amendment Bill [B14-2011]
The Bill amended the Higher Education Act, 1997, to prevent conflicts of interest in the functions and processes of the board. Council and staff members would be compelled to declare any conflicts of interest in their dealings with any public higher institution. This will prevent conflicts of interest as well as curb corruption and the abuse of public funds.

The Bill amended the time allowed for independent assessors to work and make presentations to the Minister. This was previously 30 days, and was insufficient. A longer period, no longer than 90 days, was required.

The National Student Financial Aid Scheme Act (1999) would be amended to empower the Minister to intervene by way of an administrator in the case of poor or non-performance or maladministration by the NSFAS Board. It also provided for ministerial power to remove the Board, including the procedure for such removal.

Further, the Bill repealed the provision which placed an obligation on the employer of a borrower to make deductions from his or her remuneration. This obligation had been considered an infringement on the rights of the employer, and legal opinion obtained by the National Student Financial Aid Scheme (NSFAS) had viewed this obligation as unconstitutional which forced the change.

Further Education and Training Colleges Amendment Bill [B13-2011]
Amendments of this Bill sought to assign the functions currently with provincial authorities to national authorities to free provincial authorities to deal primarily with school education. Cabinet further approved that Schedule 4 of the Constitution be amended to make FET Colleges an exclusive national competency. The Constitutional Nineteenth Amendment Bill has already been tabled in Parliament.

Amendments also sought to amend the employment status of certain employees who were fully funded by state subsidies to become state employees. The pre-2006 situation regarding this employment was recommended at the 2010 FET Colleges Summit.

Transitional arrangements envisaged in the Bill would ensure that employees were not prejudiced in this process.

Discussion
Mr van der Westhuizen (DA) commented on the FET Colleges Act. There was a concern that the Department were ‘running in circles’. National competences and employee status had changed as recently as five years previously. Other than the change of splitting the Ministry of Education in two, what justification was there for all these changes that reversed previous changes, especially in terms of transferring employees from one payroll to another?

Mr Boshoff replied that in 1994 the Technical Colleges Act assigned the competence to provincial government. If this amendment Bill were approved this would be the first time that FET Colleges would be a competence of national government.

Mr van der Weshuizen disagreed.

Mr Boshoff stated that in 1994 the technical colleges act was assigned to all nine provinces. It was a function that was dealt by the provincial government as part of transfer of legislation. All portion of the technical colleges’ act that dealt with policy making was kept at the national level. He further added that the colleges would, for the first time, become national competency (44.04)


Mr Boshoff noted that this amendment was not supported in 2006. Colleges were not in the position to deal with the demands of the employer. Even today colleges used the Persal system. Transferring employees back to a national system would reverse this trend.

Mr van der Westhuizen queried the benefits for support staff as opposed to educators of FET Colleges. Considering their differing roles, how would support staff be managed as opposed to lecturers / educators? He referred to hostel workers, employed by College councils, as an example. How would these employees be accommodated? The previous changes had hurt the College system. This further change could do the same.

Mr Boshoff noted that the ‘employer’ was defined by the amendment. Differentiations in the normal employment environment were not defined. The legislation driving employment would be based on the flexibility of the Public Services Act and not repeated in this Act. Remaining posts would be funded by budget allocations and would deal with specific flexibility within that college to deal with those specific demands. For example, if a steel plant opened in a rural area, the FET College in that area would have the flexibility itself to provide training specifically for those needs.

Regarding hostel staff, Mr Boshoff commented that this Bill catered for the employment of these employees at the college level. The Act provided the authority to those different layers to act independently and flexibly.

Mr van der Westhuizen commented on senior management positions. In some provinces these employees were permanently employed, and in others they were employed on fixed term contracts. Would all employees become permanent staff?

Mr van der Westhuizen requested clarity on the organograms on FET Colleges which would not allow them to be flexible in their own particular role. This was especially applicable with reference to South Africa’s rural colleges. Would colleges only be allowed to deviate from their organogram through self generated funds?

Mr Boshoff noted that the employer was now required to differentiate between employees during recruitment. For example lecturers as opposed to support staff themselves, and employees doing the same work would be compelled to be paid on the same level. This allowed for flexibility at the college level, and was not dictated by legislation.

Mr Boshoff added that the Bill provided for different dates for implementation to prevent a breakdown of operations. The status quo would continue until national departments could sufficiently deal with the changes envisaged.

Mr van der Westhuizen queried how two different members could have the same conditions of service when there were different disciplinary codes and fringe benefits, for example medical aid schemes. Did conditions of service include fringe benefits?

Mr van der Westhuizen also noted that it would be difficult for FET Colleges to manage their budgets when their budget allocation was only available four months after the start of the financial year. How was this viable?

The Chairperson added that this was only a Bill, and that there was still a chance to thoroughly investigate the Bill.

The Chairperson said there was the anticipation of the Eighteenth Constitutional Amendment where the phrase ‘Ministry of Education’ was to be abolished and replaced by two other Ministries. Various pieces of legislation referred to the Department of Education and it needed to be noted that correct wording was important.

Mr Moni (ANC) asked what recourse NSFAS had if the section of the Act on loan repayment was repealed. How could NSFAS compel people to pay back their study loans?

Mr Boshoff replied that the remedy available to NSFAS was to look at the agreement between the two parties. A legal process was available to NSFAS in terms of breach of contract. No employer had ever been charged with a criminal offence for not deducting money from employees’ salaries, despite this provision being on the statute books.

Dr Kloppers asked what the intention was in removing the obligation for employers to deduct monies to repay NSFAS. How would NSFAS collect its funds? Was this with an aim to provide free tertiary education?

Mr Boshoff responded that the intention was not to move towards free tertiary education. However 40% of the loan was repayable at the time of employment. The sustainability of the fund was affected by the lack of compliance by employers. There was a complete lack of communication to employers about this.

Do Kloppers asked what the cost was in terms of dealing with administration costs? Was there another budget that could help with these costs?

Mr Boshoff replied that where the board was replaced by an administrator those costs were dealt with within the structure envisaged in the Bill. The public funds were already available in terms of the institution’s budget which was why the amendment was worded in such a way. The costs were in line with what would be required by the administrator within the needs identified in that intervention, similar to the costs involved in a higher education institution.

Mr van der Westhuizen asked what the reason was for the ability of the Minister to suspend or dissolve the board in the Bill.

Mr Boshoff responded that the statutory responsibility of boards was not always complied with. Somewhere along the line, the Minister needed to ensure effective governance and management after the board had been given the opportunity to improve that situation. A soft approach was used first, but a procedure needed to be put into place if this soft approach failed. Also, where 75% of the Board had resigned, this was clearly a symptom of a dysfunctional board which would need to be dealt with. The Bill also provided for a full procedure to address problems of this nature within a proper timeframe which was envisaged to be less than two years. This was in the best interests of higher education.

The Chairperson asked where Umalusi featured in this process.

Mr Boshoff replied that this was a grey issue. Two pieces of legislation provided for reporting to two different Ministers. The outcome of Umalusi’s legislative position was still being dealt with. The Department of Higher Education and Training hoped for more guidance through the white and green paper process in Parliament.

Mr Mpontshane (IFP) referred to the new provisions for the dissolution of the NSFAS board. What legislation outlined the responsibilities and competencies of the board?

Mr Boshoff replied that the Minister needed to provide the board with a code of conduct or specific conditions of service to board members to measure said conduct. This approach was used in various pieces of legislation, for example the legislation that dealt with the South African Broadcast Corporation board.
 
Mr Mpontshane referred to clause 17C. What did the word ‘may’ refer to in terms of remuneration?

Mr Boshoff replied that the word ‘may’ meant remuneration was discretionary. As an example, Mr Boshoff said that a Minister might employ a public servant to administer this process which would negate payment. The intention was not to force the Minister to pay for an administrator when there was no need. This depended on the person that the Minister selected for this.

Mr Mpontshane referred to clause 17A and commented on the difference between ‘in consultation’ with and ‘after consultation’ with in the Bill.

Mr Boshoff noted that there was a difference and that ‘in consultation’ presumed an agreement by parties.

Mr van der Westhuizen asked what risk assessment had been done in terms of implementing the Bill. For example, transferring thousands of employees to different payrolls would entail risks. Were these aspects looked at?

Mr Boshoff replied that the amendments had come out of the Ministerial Task Team report. Risk assessment came out of that report and was a part of that process. Specific risks had been assessed in terms of the changes since 2006. The costs of these changes were not major, since employment was already budgeted for.

The Chairperson noted that public participation would occur in the following weeks.

The meeting was adjourned.

Appendix
Comment & Public Hearings: Further Education Colleges & Training Amendment Bill [B13-2011] & Higher Education Amendment Bill [B14-2011]
The Portfolio Committee on Higher Education and Training invites stakeholders and interested parties to submit written submissions on the following bills: Further Education Colleges and Training Amendment Bill [B13-2011] and Higher Education Amendment Bill [B14-2011]. 

The purpose of the Further Education Colleges and Training Amendment Bill [B13-2011] was to: 
• Amend the Further Education and Training Colleges Act, 2006, so as to remove all references to provincial authority;
• Assign functions previously assigned to the Member of the Executive Council to the Minister;
• Remove all references to ‘Head of Department’ and replace them with ‘Director-General’;
• Regulate the conduct of members of the council and staff of a public further education and training college engaging in business with the relevant public college;
• Provide afresh for the appointment of staff; 
• Provide transitional arrangements; and to provide for matters connected therewith.

The purpose of the Higher Education Amendment Bill [B14-2011] was to: 
• Amend the Higher Education Act, 1997, so as to regulate the conduct of members of the council and staff of a public higher education institution engaging in business with the relevant public higher education institution;
• Adjust the period within which an independent assessor appointed by the Minister must finalise an investigation;
• Amend the National Student Financial Aid Scheme Act, 1999, so as to empower the Minister to intervene in the case of poor or non-performance or maladministration by the Board of the National Student Financial Aid Scheme;
• Provide for the dissolution of the Board, as well as the procedure for such removal;
• Provide for the appointment of an administrator to temporarily take over the management, governance and administration of the Board;
• Repeal the provisions placing an obligation on the employer of a borrower to make deductions from the remuneration of the borrower; and to provide for matters connected therewith.

Public hearings on the Bills will be held at Parliament on Tuesday 23 August 2011 and Wednesday 24 August 2011.

Comments can be emailed to the Committee Secretary Mr Anele Kabingesi at akabingesi@parliament.gov.za by no later than 12:00 on Thursday 18 August 2011. Please indicate your interest in making a verbal presentation.

Enquiries tel Mr Anele Kabingesi: (021) 403 3760; cell: 083 412 1585

Issued by: Adv I Malale, MP Chairperson: Portfolio Committee on Higher Education and Training.

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