Skills Development Amendment Bill [B16-2011] submissions – Department of Higher Education & Training response

Higher Education, Science and Technology

15 November 2011
Chairperson: Adv I Malale (ANC)
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Meeting Summary

The Portfolio Committee on Higher Education and Training heard a response from the Department of Higher Education and Training on written and oral submissions made to the Department during the hearings held on the Skills Development Amendment Bill.

The Department of Higher Education and Training noted 15 key areas identified by the various role-players as being matters worthy of further consideration and deliberation and responded. The definition of employer organization was specific to the Skills Development Act and differed in its approach from the definition in the Labour Relations Act. Reference to any other standard than the Standard Industrialization Classification code would lead to confusion. With regard to Ministerial appointments, the broad context of the legislation spoke to the fact that all the role-players were to have an important role. As to the composition of the sector education and training authorities the protection sought by the role-players already existed in the proposed legislation. The use of an independent chairperson provided for stability and upheld the interests of the sector as a whole. There was a resistance to the concept of a conflict of interest. On the appointment of the chief executive officer, the protection of permanent appointments already existed in practice even thought the Bill made no mention of it. That the functions of the finance and remuneration committees differed justified the need for them to provide separate statements to the audit committee, regardless of some instances of overlap. As to the quorum, there were to be 14 voting members, seven members being the minimum requirement plus one for any decision to be taken. As to the Chairperson being required to vacate his or her position after only an absence of six months, the Department conceded that perhaps the period might be too long. The legislation required at least 12 meeting per year, raising the concern that this frequency might be too excessive and might need to be reduced.  The overarching principle was having a uniform approach to the constitutions for all 21 sector education and training authorities. The issues introduced by this Bill were had already been attended to by the Minister and the Department since April, illustrating the Minister and The Department’s capacity to handle the responsibilities envisaged. 

The Committee voiced specific concern on a number of issues, specifically, the inclusion of a standardised constitution for sector education and training authorities; the Bill's seeking to prescribe the number of meetings a sector education and training authority was to hold annually; as well as issues surrounding the manner in which the legislation itself was drafted.

The Committee struggled to find a resolution to the issues that it had with the legislation, particularly with the manner and the wording used to draft the legislation. The Chairperson asked for a Member to submit, in writing, proposed amendments so as to allow the Committee to establish their value and make any necessary changes.

Meeting report

Skills Development Amendment Bill [B16-2011] submissions - Department of Higher Education and Training response
Adv Eben Boshoff, Chief Director: Legal Services, Department of Higher Education and Training, presented a response compiled in consultation with the Director General to the submissions on the Skills Development Amendment Bill.

In his presentation, he focused on 15 key issues raised in both the written and the oral submissions to the Committee. He presented these issues as they were organized in the Bill (see attached document for details).

On the issue of the definition of the employer organization, he noted that the definition presented was one that was specific to the Skills Development Act and differed in its approach from the definition in the Labour Relations Act. This definition aims to ensure that both the big and smaller organizations were represented in the membership. This distinction was necessary as the role of the employer differed in the public sector as to this context.

With regard to the reference to the Standard Industrialization Classification (SIC) Codes, this dealt with the incorporation of a portion of one sector education and training authority (SETA) into another. This was the current landscape that was used for this purpose. Reference to any other standard would lead to confusion. There had also been no research to indicate that the use of International SIC Codes would be better than the use of SIC codes. It would therefore not be suitable for the Department to consider changing to this system.

On the issue of Ministerial appointments, he noted that all members of SETA boards were Ministerial appointments, including the Chairperson. He suggested that the role-players were possibly alluding to the appointments that were made from the four constituencies consisting of departments other than employees, namely being; the Bargaining Councils; the professional bodies, and organizations in communities. The principle behind that was to say that when looking at the composition of the membership, there was a need for all constituencies to be represented as role-players. The broad context of the legislation spoke to the fact that all the role-players were to have an important role that they each played.

With regard to the composition of the SETAs, he noted that what must be considered was that in bodies such as collective bargaining councils, their main constituencies of employer and employee groups were already represented and should therefore not be given further opportunity for representation. On the issue of the preferred situation where these were replaced by organizations representing disability, he noted that the intention of the Bill was not only to limit the nomination of people with disabilities to those two members, but rather for the Minister to look at the composition of the accounting authority as a whole, and must apply the principle that there had been people that had been disadvantaged in the past and these people were to be represented not only in the two, but in the entire membership of the SETA.  Adv Boshoff then concluded this point by suggesting the protection sought by the role-players already existed in the proposed legislation.

On the issue of the appointment of the chairperson by the Minister and the recommendation that this chairperson was then to have no voting rights, Adv Boshoff noted that there was great support for the current practice and that there was an accepted notion that the Chairperson should be an independent person whose function was to bring the various role-players together. The use of an independent chair provided for stability and upheld the interests of the sector as a whole. The instance where the Chairperson could exercise his or her voting right (for the purposes of breaking a stalemate) would be the exception and not the rule. He noted that the Department was of the view that this position would not affect the independence of the Chairperson.

On the issue of conflict of interest and in particular to the requirement of the partners and spouses declaring their interests, he expressed the view that there was a resistance to the concept of a conflict of interest. He noted that any direct or indirect favouring by a decision-maker should not be allowed, conceding that there was no doubt that there was a direct benefit to the spouse or partner of a member resulting often in a conflict, and that this position was one that was accepted in business and other sectors alike.

With regard to the appointment of the chief executive officer (CEO), the Bill made reference to the appointment period being five years and remained silent on the issue of CEOs being appointed on a permanent basis. Advocate Boshoff noted that the Bill was not drafted so as to have a retrospective effect and could therefore not overturn current practice and could only seek to affect future appointments. The protection of permanent appointments already existed in practice even thought the Bill made no mention of it. He also made reference to the National Economic Development and Labour Council (NEDLAC)'s being satisfied that there was in fact sufficient protection as existed in the Labour Law.

On the issue of both the Financial and Remuneration Committees having to provide financial statements to the Audit Committee, Adv Boshoff argued that it must be noted that both Committees dealt with finances and had an impact on the auditing process. The fact that their functions differed justified the need for them to provide separate statements, regardless of some instances of overlap.

With regard to the quorum and that it might be too high, to deal with this issue Adv Boshoff asked the Committee to consider the essence of the paragraph in question. The quorum required 50% plus one. The requirement was that there be equal representation of both employer and employee organization meaning that there must be more than 50% for any decision to be taken. This meant that there was no undue burden placed on other role-players. There were to be 14 voting members, seven members being the minimum requirement plus one for any decision to be taken. This, he suggested, spoke to there not being an undue burden created.

On the issue of the Chairperson being required to vacate his or her position after only an absence of six months, he noted that the Department conceded that perhaps the period might be too long considering the importance of the work of a SETA, as well as the lifespan of a SETA being only five years. He suggested that a possible way to deal with this issue was to take into consideration the number of meetings missed as opposed to the time period, however still noting that the Department considered this concern to be valid.

With regard to the frequency of meetings, he noted that the legislation required at least 12 meeting per year, raising the concern that this frequency might be too excessive and might need to be reduced. Adv Boshoff conceded that this frequency might in fact be too much and that it might or should perhaps be reduced to two meetings per quarter of six in one financial year. He highlighted the need for the principle of oversight to be upheld and that there were statutory obligations that required decisions and policies to be implemented effectively. He conceded that reducing the frequency of meetings must be balanced with the need to uphold this principle.

With regard to reference in Annexure 4 to Schedule 6 referring to five as opposed to six members representing the employer organization and the employee organization, Advocate Boshoff merely conceded to this being an error and that the Schedule should read six and that he supported this being corrected.

On the issue of a constitution containing operational matters and the requirement that this constitution be in line with the Act and the Bill itself, he then emphasised how important this issue was and voiced concern to the fact that the role-player had failed to indicate what these operational requirements that were in the constitution, and should not have been, were. For this reason, the role-players then accepted the issue of the constitution, leaving the only point of dispute being the absence of the voting rights of the two Ministerial appointments. He assured the Committee that the Department had gone over the legislation to ensure consistency. He then made reference to Annexure 4, paragraph 3(1)(b)(dd) and 3(1)(c) and suggested that  both had the same wording and meaning, rendering one redundant. Because of this, he said, a formal amendment might be required.

With regard to the inclusion on a standard constitution as part of the Bill, he noted that the overarching principle being considered was one of having a uniform approach to the constitutions that would cater for all 21 SETAs. There were certain criteria that should be complied with when compiling a constitution. Difficulty had arisen with having various constitutions, making it increasingly difficult to monitor. The aim was to ensure that there was legal certainty, and to limit the likelihood of court challenges that were expensive and time-consuming. The adverse consequences of this action, he noted, was that flexibility would be limited and that would be necessary when it was acknowledged that different SETAs might have variable interests and concerns.
 
On the issue of the concern that the Minister might be garnering a lot of responsibility and might be limited by capacity in fulfilling these responsibilities, Adv Boshoff noted that the issues introduced by this Bill were issues that were already being attended to by the Minister and the Department since April, illustrating the Minister and The Department’s capacity to handle the responsibilities envisaged.

Discussion
Dr J Kloppers-Lourens (DA) sought clarity on the process used by the Department in dealing with the production of the Amendment Bill with regard to the proof-reading as the Bill contained many grammatical errors. She also asked what the situation was when a Chairperson had been absent or illness - did the position differ from that which called for his or her dismissal after having been absent for six months? She then sought clarity as to the provision that was going to be scrapped of the two that Adv Boshoff had identified as being an error and suggested that they said the same thing. She voiced particular concern on this issue as she was of the view that the both the provisions, through their respective wordings, had different meanings. She then wanted to know when the Committee was to expect to receive the final document.

On the grammatical errors, Adv Boshoff suggested that the Bill was a document of Parliament and that there was a Language Service in Parliament which he felt should take responsibility for quality control. He assured the Committee that he would communicate with it to correct the errors identified.

Mr A Mpontshane (IFP) sought justification on the Minister’s power to deviate from the standard constitutions that were to be included as part of the Bill.

The Chairperson argued that the argument that suggested that if a standard constitution, if included in the Bill, would result in legal challenges, was not a persuasive one. He then contested that the Bill itself was inarticulate as to the Minister’s approval powers and sought clarity on this issue. He then stated that Parliament accepted and took the position that supported the suggestion as to the implementation of a uniform constitution. On the issue of the frequency of meetings, the Chairperson asked whether it was wise for legislation to prescribe meetings, as not having prescribed meetings would be tantamount to a breaking of a law. On this issue, he then asserted that bills should not be prescriptive.

On the issue of including constitutions in bills, Advocate Boshoff noted that there were various ways of dealing with this issue, taking into consideration what the aims were. Foremost on this issue would be ensuring that the constitution presented by the Minister was clear and that any variations there from would not cause any disruptions in the system. The aim of having a standardized constitution in the Bill was to limit the legal challenges that could be raised. The purpose was to standardise so as to have legal stability. He also noted that, whenever a standard was created, it was common practice for there to be deviations; however, it was important to note that such deviations were not to constitute a norm, but rather to speak to specific circumstances affecting various SETAs. In terms of the discretion envisaged, he noted that this discretion would refer to instances where specific issues relating to each SETA was identified.

Mr A van der Westhuizen (DA) noted that the document presented represented very shoddy work and voiced his concern in this regard as the document contained many grammatical errors. He then asked the Committee to consider the bigger issues, namely the fact that in the 13 years of the Act’s existence, the Act had been subjected to five revisions. He suggested that this was indicative of a failing system. He then made special reference to specific provisions of the Bill with which he had gripe with, seeking clarity on the wording. The Chairperson asked him, as he had presented provisions that he had an issue with, to submit his questions and amendments in writing and present them to the Committee and the Department to allow time for proper deliberation on these important issues. The Chairperson envisaged a follow-up meeting in the very near future to deal with these issues.

Mr P Dexter (COPE) made special note  that the problem was in the architecture of the system, using this construct to explain the problems that the Committee was experiencing at the meeting and with the responses presented by the Department. For this, he provided some suggestions, stating that if one was going to draft legislation and put details in that legislation, then one was likely to encounter problems. He suggested that less be said in the law, and more said in regulations. He also noted that problems were bound to creep up when different interests were being represented, namely business and labour interests. He argued that when such structures were created, there was then a risk of embedding conflict. He then noted concern with the fact that the SETA was tasked with two things - it must deliver on its objectives as well as governing the money that it was given to do that. He suggested that these two functions need to be separated. He voiced further concern at the fact that legislation received was defective and that the Department must now task itself with tweaking the defective legislation. He noted the need for a debate that would help solve the architectural defects of the system.

Ms Percy Moleke, Deputy Director-General: Skills Development, Department of Higher Education and Training, conceded the defective architecture of the system. She suggested that all the structures of the post-school system needed to be re-evaluated so as to counter the adverse effects of the architecture. She noted that these issues would be a part of the Green Paper process and highlighted the need still to attempt to better the current system in the interim.

Mr Van der Westhuizen recommended that the main Act also establish a National Skills Fund that must be made an entity and have its own governing structures. He voiced concerns that this issue had not been brought forward at that revision. He also noted that when drafting legislation under time constraints, it was more effective practice for certain parts to be contained in regulations.

The Chairperson interjected and noted that a meeting should take place so as to satisfy the Committee’s need to engage with some of the issues pertaining to SETAs specifically. For this to happen, the Committee would have to meet with the necessary stakeholders.

Mr Dexter suggested that there be an engagement between the Chairperson of the Portfolio Committee and the Minister to find resolution. He voiced concern with the drafting of the Bill, and asked for simple legislation that produced less hassle.

The Chairperson asked for submission of amendments to be made to him timeously so as to allow for further engagement with these recommendations and the Bill.

The meeting was adjourned.


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