Skills Development Amendment Bill [B16-2011]: hearings

Meeting report

Wholesale and Retail Sector Education and Training Authority (SETA) Input
Mr Joel Dikgole, Chief Executive Officer (CEO), Wholesale and Retail Sector Education and Training Authority (W&R SETA), said that W&R SETA accepted most of the proposed amendments. Some areas of concern were the chairperson's not having voting rights and the appointment of the accounting authority, which did not make provision for a transitional period for already serving appointees.

Another area of concern was that the functions of the remuneration committee, mirrored the responsibility of the finance committee and raised concerns about the frequency of meetings of the executive committee as required by Section 15. Mr Dikgole argued that the executive committee (EXCO) should meet only six times per year. He also said that the period of six months for which the chairperson was allowed to be absent from SETA activities was too long and should be reviewed. He added that the direct and indirect conflict of interest should be better clarified and lastly he mentioned that the idea of eliminating the position of deputy chairperson should be reconsidered, as if the chairperson was unavailable the deputy chairperson would be able to convene a meeting.

Discussion
The Chairperson said that the issue of conflict of interest was an important one and that a member of the board should declare who he/she was doing business with.

Mr Dikgole agreed and said that at present the management and staff had to declare their interests. This new addition to the Act needed to be clarified so that the parameters and impact on a SETA were clearly defined. He added that it was more about the application, as sometimes records were outdated.

The Chairperson agreed that there should be a deputy chairperson and that the absence of a chairperson for more than six months was very long.

Mr A van der Westhuizen (DA) said that a CEO of a SETA was not an accounting authority, unlike a vice- chancellor of a university and queried whether a gap would open between the accounting authority and management.

Mr Dikgole responded by saying that the CEO sat on both the board and the committee. Mr Dikgole did not foresee any problems. It was important for top management to sit on committees. Perhaps the Bill needed to clarify this situation.

Mr Van der Westhuizen agreed that meeting one a month was impractical, and that it would be very difficult for a committee to meet in December, for instance.

Mr Dikgole said that the lines might get blurred if the EXCO met too often and that there would be an inclination of the board to get involved in everyday running and management. The board delegated powers to management and there were also financial implications if a board met too frequently. Document packs needed to be prepared seven days before a meeting and he was concerned that the focus would be on preparation rather than implementation.

Mr Van der Westhuizen said that ten working days notice must be given for meetings and that the situation over November and December would become very complicated. The target was overly ambitious.

BUSA Skills Development Amendment Bill [B16-2011] Presentation
Ms Lee Padayachee, Parliamentary Liaison Officer, Business Unity South Africa (BUSA) introduced the organization - an organization of organizations representing 80% of business in South Africa and the sole representative of businesses' interests in the National Economic Development and Labour Council (NEDLAC).

Mr Vusi Mabena, Chair: BUSA Sub-Committee on Higher Education and Training / BUSA Task Team on Skills Development had given this presentation at NEDLAC, but the NEDLAC report was not yet finalized hence BUSA's appearance before the Portfolio Committee.

He highlighted two areas of concern, the first being the standardization of SETAs. He argued that each industry was unique and that a SETA needed to be flexible and speak to the needs of industry. He also raised concerns around the standard constitution saying that some items should not be included in the constitution but rather in policy documents.

The main areas of disagreement for BUSA were: 
⚫composition of Accounting Authority of SETA.

Mr Mabena argued that Ministerial appointees should not have voting rights. Their role was oversight and to advise the Minister. (Slide 4)

⚫The state as an employer.

Mr Mabena said that if the state were defined as an employer it would also have to also have to pay the levy through the South African Revenue Service (SARS). He said that Government did not pay the required levies. He added that departments were meant to budget and pay the relevant amount to the SETA. Clarity was needed and if the State was defined as an employer it must assume all the obligations of an employer.

Discussion
Mr Van der Westhuizen said that he valued the input made by BUSA but was confused by its request that the Ministerial appointees not have any voting rights. The Minister appointed all the members of the SETA boards and one could not have a board without voting rights.

Mr Mabena replied that stakeholders nominated all board members and that two positions were earmarked for Ministerial appointees. The Minister used his/her prerogative to make these appointments. BUSA agreed with this, but felt that that these two appointees should not vote.

Ms Bev Jack, member of the BUSA Social Policy Committee / BUSA Task Team on Skills Development, added that the skills development was about creating a talent pool and that the appointees who were drawn from a wide spectrum of people might not have a long term view and might not be well informed on the skills development needed.

Mr C Moni (ANC) asked if standardization and flexibility were mutually exclusive.

Mr Mabena answered that not all SETAs had the same capacity and not all SETAs had the same revenue. This required that there be a degree of flexibility. An Agri-SETA did not have the same revenue as a mining SETA, and therefore chief executive officers (CEOs) could not have the same salary scale, as the scope of work was not the same. Circumstances needed to be carefully studied to see how best a SETA could be made to run efficiently.

Mr Moni asked about the state as an employer. At times presenters appeared to be South Africans presenting to non-South Africans. He asked if the issue was indeed just the 1% levy and wanted to know the full extent of the concern.

Mr Mabena replied that the disagreement that business had with the state, as an employer, was the inconsistency. Within the SETA environment, the state did not come to party. The state did not pay the 1% nor did it pay the administration portion. He provided an example and explained BUSA's willingness to train Department of Mineral Resources (DMR) inspectors while the DMR was asked to pay for administration but failed to do so. He concluded that the rules should be applied equally.

Mr Van der Westhuizen said that all board members should have equal responsibility. He said that based on what Ms Jack said it would seem that BUSA would want the board to have an understanding not just of the operational needs of the SETA but a good understanding of the sectoral needs.

The Chairperson said that Cabinet had taken a decision to reaffirm that departments should pay the respective levies. He added that the Ministerial appointees should not just represent the views of the Minister but be there to drive the SETA process forward.

Mr Mabena replied by saying that NEDLAC was a platform for engagement and that the SETA was a place for delivery. He said that people must have understand what the role of SETA was and what SETA was meant to deliver, and therefore it was important for board members to understand the challenges and the sector needs. He went on to say that BUSA welcomed the Ministerial appointees but that these appointees should not vote so that they could be beyond reproach and could not be accused with siding with one or other stakeholder. He said that these appointees represented the Minister and should be there to make sure that the Public Finance Management Act (PFMA) was followed and that things happened in a proper manner.

Health and Welfare Sector Education and Training Authority Input
Mr Derek Shardlow, a board member from the Health and Welfare Sector, Education and Training Authority, said that role players needed to be more clearly defined and that the disability sector should be included. Most people experienced health care periodically and that one of the purposes of National Health Insurance (NHI) was to bring more compassion to health care. The disability sector should have a more prominent role and have better representation on the board.

A further concern was the inclusion of the bargaining council as members of the accounting authority. The origin of members would inform their positions and would therefore impact on the decisions taken by the accounting authority. Bargaining councils were already represented by organized labour and that space should be created for other role players, especially those who regularly received health care.

Government departments should pay levies and the Health and Welfare SETA relied on the private sector levy and it would be beneficial if Government departments made their contributions.

Discussion
Mr Van der Westhuizen asked if Mr Shardlow found it difficult to achieve a quorum.  He asked if Mr Shardlow would support the clause in the Bill requiring that 50% of members representing either organized labour or business be present to form a quorum.

Mr Shardlow responded that, based on his experience, there was at least 95% attendance at board meetings. He could not speak for other SETAs.

The Chairperson thanked Mr Shardlow for his novel contribution and said that the Minister shared the view that the departments must pay their contributions, and that it was important to make sure that SETAs function well. He said that Members were looking forward to reading the NEDLAC report once it was ready and that hearings would continue the next day.

The meeting was adjourned.