Skills Development Bill [B81-98]: discussion

Meeting report

LABOUR PORTFOLIO COMMITTEE
25 August 1998
SKILLS DEVELOPMENT BILL [B81-98]: DISCUSSION

Documents handed out (See appendix)
Comments and Recommendations on the Skills Development Bill (see appendix)

SUMMARY
The meeting discussed the recommendations arising from the submissions from various constituencies. Not all recommendations were accepted and political parties have until Friday, 28 August to put forward their proposed amendments. These will be considered on 1 September.

A further session on this Bill may therefore be necessary before it is put before parliament. The Skills Development Levies Bill is going to be handled separately and not, as previously stated, together with this Bill.

MINUTES
Ms Bird from the Labour Department referred to the following specific areas as reflected in the Comments and Recommendations document:
This has been discussed extensively with NEDLAC and as some learners will fall outside the formal employer field it is suggested that a third party would be the most suitable party to make decisions on allowance to be paid to learners.

Employment Services: the important addition here is "including partnership agreements" and "to serve the country".

6.3 This is covered under Regulations.

The Government’s recommendation is that the 20% "skim off" be retained, but –
There be a review after 3 years.
Government cannot commit itself to a matching amount.
The social partners concerned will have opportunity to influence the allocation of funds from the National Skills Fund (NSF). This is adequately covered in the Bill in s 5.1 (a) (4). Therefore there will be no change in legislation.

COSATU should ensure that their concern that local government will be excluded from budgeting 1% is covered in the Levies Bill.

The government was criticised for the harsh wording of 7. "Recommendations" . Ms Bird said the word "reject" was meant to signal "delicate balance" rather than "incommutable decision".

Question from the floor were then requested by the chairperson and the meeting went through the document page by page.

Question raised by Mr W Fourie (NP): How can this committee discuss provisions which are to be contained in the Levies Bill?
Response: There is no inter-connection between the two bills and therefore the Skills Development Bill should not be held up. An assurance has been given that the Levies Bill is to be tabled shortly.

A question raised by Mr N Zulu (IFP): Will the chairperson of NSA have voting power as suggested by COSATU?
Mr Oliphant responded in the affirmative saying it is essential that this person has a normal membership vote (not a casting vote).

Mr P Groenewald (FF) requested clarity on the tabling of the Levies Bill. He wanted to know whether this Bill will come to the Labour or Finance Portfolio Committee when it is tabled.

Mr Oliphant replied that at this stage this matter has not yet been decided, but he felt sure that the Minister will ensure the Bill is tabled as soon as possible. Discussion between the two Ministers must take place.

Mr B P Bunting (ANC) was disappointed that the programmes will not commence until the year 2000. He felt that this was too far off.
Mr Oliphant said that there were already 9 projects up and running (as a pilot scheme) which have been fully funded. However the levy will not be introduced until April 2000.

Mr Zulu requested a definition for "Private providers".

Ms Bird said that this includes colleges (such as Damelin) which were fully private. They are proving to be a growing area for furthering developing skills. These groups feel they are not covered and are in the process of establishing their own national body. This will be the body that will nominate a representation to serve on the NSA.

Ms E Thabethe felt very strongly that providers should not have a vote at all.
Ms Bird pointed out that it was important to "bring their voice" to the process so they feel that they are engaged and responsible to the NSA. Also their skills and participation are needed.

Mr Dexter (ANC) requested clarity on Demarcation 3 (section 9). Ms Bird said that the government had not accepted COSATU /FEDUSA’s recommendation as this was a Cabinet decision. It is now proposed that NSA address this process. The National Training Board has discussed all aspects of the legislation and agreed to the establishment of a process which will run from now to the end of the year. This will take in criteria on the establishment of SETAs etc. The NSA will eventually take over from the National Training Board. One of the key purposes of this legislation is the demand side of the labour market. Employers should take a leadership role in establishing what skills should be provided (content of courses). This legislation gives a dominant voice to both employer and trade unions. Thus a 2/3rds majority will enable the labour market to play a major role.

Mr Groenewald (FF) asked to whom is the 1% levy applicable?

Response: All companies will pay a levy to the SETAs. Companies that train, whether in house or use other training facilities will receive a grant.

Have the concerns of the Society for Industrial Psychology now been addressed?
Response: Subsequent to their submission, the wording has now been altered and has received the approval of this organisation (see 6.2).

Mr B P Bunting (ANC) asked what factors could bring about a review after three years?
The response was that recommendations relating to review would apply as they affect the National Skills Fund, and criteria would include looking at the efficiency and effectiveness of the fund - has it achieved its objectives in line with the disbursements made.

The chairperson wanted to know whether this is to be legislated.
Response: Not in legislation, but accountability and credibility will require that the situation is reveiwed periodically.

Mr P Bikitsha (NP) wanted to know why the government is not prepared to match the 20% "skim off". The response was that the government has signaled its full support, but the final decision can only be made at the time of the drawing up of the budget.

Appendix
Summary of submissions
SKILLS DEVELOPMENT BILL
Comments and Recommendations

1 Alignment of Skills Development Levies Bill and Skills Development Bill
The following constituencies commented on the need to discuss the two Bills simultaneously:
Portfolio Committee requested clarity on the progress
Tony Leon, Democratic Party
Business South Africa
COSATU
APSO
SALGA

Recommendation: That the Skills Development Levies Bill be tabled urgently. In order to achieve this an urgent meeting with the Minister of Finance needs to be convened to finalise the Bill and its tabling.

2 Chapter Two: National Skills Authority
2.1 Composition and voting (Section 6(1)(a).)

COSATU: Chairperson to be non-voting
Recommendation this was a Cabinet decision made on recommendation from the Minister of Labour

SALGA: wants to be one of state representatives on NSA.
Recommendation this is not a legal question. The representation will be finalised by the Minister after consultation with the Inter-Ministerial Committee on Human Resources Development established by Cabinet.

APSO Wants representation as one of Employment Services in terms of section 6(2)(f).
Recommendation: This is not a legal matter. It is however the understanding reached at NEDLAC that one of the two employment services representatives would be drawn from the private employment services community. APSO, as the organisation representing this community is the likely nominating agency. The Minister of Labour will resolve the matter.

COSATU: Providers to be non-voting
FEDUSA: Providers should be non-voting members
Recommendation: Provider category be specified more precisely. The composition to be as follows:
- one representative from the Council on Higher Education
- one representative from the National Board for Further Education and Training
- one person representing the interests of Adult Basic Education and Training
- one person representing the interests of private providers.
These providers to have a vote.

NTB providers: suggest that they have 5 voting members.
Recommendation: As above. The list that they have provided is accommodated in above proposal

NTB providers: suggest SAQA have a vote.
Recommendation: No vote to SAQA as per NEDLAC agreement. Note providers were not party to the NEDLAC agreement, although all other stakeholders agreed that SAQA should not vote.

APSO: requests a vote on the NSA.
Recommendation: It is recommended that this request not be granted as the NSA voting procedure was carefully negotiated at NEDLAC and if changed would cause difficulties from other stakeholders

2.2 Constitution of the NSA.

SALGA: Raised concerns over 2/3 voting requirement. They ask why it is necessary to specify a voting Level when the NSA is advisory only.
Recommendation: This was a carefully negotiated formula agreed between the parties in NEDLAC. It is clear that the Minister will be expected to take the advice given very seriously and the formula was arrived at to ensure that the employers and unions – when voting together – have an effective veto on decisions of the NSA.

3. Chapter Three: Sector Education and Training Authorities
3.1 Establishment of SETAs (Section 9)

COSATU and FEDUSA: Recommended that NEDLAC deliberate on and make recommendations to the Minister of Labour on Demarcation.
Recommendation: Our recommendation is that this not be accepted, as this was a cabinet decision. Furthermore, the National Skills Authority has been established to oversee all aspects of the Skills Development Strategy, and it should be noted that after two years of negotiation on the issue of sector demarcation NEDLAC has made little progress on this matter.

FEDUSA: opposes a closed sector list.
Recommendation: This is dealt with as there is no recommendation for a closed sector list but a process based on criteria

3.2 Functions of SETAs
SALGA: has asked the question – what if there are functions outside of those specified in the Act. They want a more general function.
Recommendation: section 10(1)(k) be changed to read as follows: "perform any other duties consistent with the purpose of this Act or imposed on SETAs by this Act."

3.3 Composition of a SETA
COSATU: have recommended that section 10(1) needs following additions: "provide mechanisms for inviting community involvement in SETA deliberations, which may include appointment of representatives of the community to sectoral chambers in terms of section 12 of the Act."
Recommendation: This change is not required as it is covered in section 12(2)

NTB providers: suggest national organisations representing providers be included in a non-voting capacity on SETAs.
Recommendation: It is recommended that this be rejected. It is inappropriate to have an provider representation on the SETA as there will be conflict of interest – SETAs will be tendering out the provision of training and representatives on the SETA would have an unfair advantage. SETAs should network with providers and establish working relationships with them where necessary.

3.4 Chambers of a SETA
SALGA: suggests that section 12(4) be deleted. They believe that the SETA must determine where funds are allocated and there not be entitlement on the part of chambers to receive funds contributed from members of chamber.
Recommendation: Section 12(4) remains as is. There is sufficient latitude in the current wording for a SETA to propose various formulas for distributing money to its chambers to the Minister of Labour. The Minister may determine any formulation after consultation with the SETA.

3.5 Constitution of a SETA
SALGA: requests a broad enabling framework for a SETA constitution. For example, the Act cannot provide through a standard constitution that all sectors should engage in employment services.
Recommendation: This is precisely what section 13 of the Act provides for. For the record section 10 (1) (i) requires SETAs to liase with employment services not to conduct employment service functions themselves

4. Chapter Four: Learnerships
4.1 Learnership agreements

NTB providers: suggests that learning institutions may provide the work experience component of learnerships.
Recommendation: The Bill does not specifically preclude this. It refers, in section 16(b) to "work experience of a specified nature and duration" the details of which will be clarified in regulation.

4.2 Contract of employment with learners & disputes over learnerships

NTB providers: seek clarity on daily allowances to be paid to learners.
Recommendation: This issue is dealt with under section 18(4) of the Bill in terms of which the Employment Conditions Commission will make recommendations to the Minister on allowances to be paid.

SALGA: questions why bargaining councils are not used to establish terms and conditions for learnership employment contracts. They further ask why Bargaining Council dispute resolution procedures are not used, as they have to be approved by CCMA.
Recommendation: The agreement at NEDLAC was reached to avoid a situation where employers and trade unions within a sector collude to drive learnership allowances of wages up and thereby reduce the number of learnerships available to those outside the industry at present. It was proposed that the Employment Conditions Commission should recommend to the Minister such terms and conditions taking into account the implication for the employment of learners. The recommendation from SALGA is therefore rejected.
In respect of the use of bargaining council dispute resolution mechanisms where they exist. Where a bargaining council mechanisms has been accredited by the CCMA they are deemed to act as the CCMA to resolve disputes within the sector.

5. Chapter Five: Skills Programme

SALGA: raised a concern regarding training which does not meet the requirements spelt out in section 20(1)(a)-(c).
Recommendation: This is not a problem. Section 20(a)(d) allows for regulations to be developed which can accommodate this concern.

6. Chapter Six: Institutions in the Department of Labour
6.1 Skills Development Planning Unit

NTB providers: Recommend that the SDPU network with existing research institutions to achieve its objectives.
Recommendation: This is not a legislative matter. It is envisaged that this would occur in practice.

6.2 Employment Services

COSATU: Section 23(2)(a). Recommends that the following words be added: "at such locations and employing such means as are appropriate in order to serve all areas of the Republic, giving priority to improvement of services to rural communities."
Recommendation: Accept with the following amendment:" ..at such locations and employing such means, including partnership agreements, as are appropriate to serve the country, giving priority to improvement of services to rural communities."

SALGA: requests that the Act should not preclude an Exploration of municipalities "hosting" or Acting in partnership with a labour centre.
Recommendation: The recommendation to the above comment by COSATU, we believe, addresses this concern.

Society for Industrial Psychology: are concerned that non-psychologists may provide counselling services and the public interest may thereby be harmed.
Recommendation: Alter definition of "employment services" at the beginning of the Bill to read: "employment services" means the provision of the service of –
(a) advising or counselling of workers on career choices either by the provision of information or other approaches.

6.3 Registration of persons that provide employment services

7. Chapter Seven: Financing Skills Development
7.1 National Skills Fund (Section 27)

Business South Africa
Disagree with 20% top-slice from levy to fund the NSF (section 27(2)(a).
Proposed four point compromise:
- Reduce top-slice to 10% if following agreed:
- Reviewed after 3 years
- Government gives matching amount
- Funds controlled by NSA & DG

Cosatu
Support NSF and 20% top-slice

Fedusa
Opposes skim-off unless government.
Commits a matching amount
Amount of money from govt. to be
Consulted and agreed in NEDLAC.

DPSA
wants a clear commitment from govt.

Recommendation: That Government retains it current position in respect of the 20 percent top-slice from the levy to fund the NSF. But government agrees:

That there be a review of the funding of the NSF three years after the introduction of the levy and the top-slice. That this is an agreement that is made in the NSA with the social partners and not included in the legislation.
That government cannot commit itself to a matching grant as this would undermine the normal budgetary process. Government’s provisional commitments to funding various programmes are outlined in the Medium Term Expenditure Framework.
That the social partners concerns in respect of influencing the allocation of funds from the NSF are adequately catered for under sections 5(1)(a)(iv) and section 28 of the Bill.

Recommendation: Reject FEDUSA request to review budget in NEDLAC. This legislation cannot alter standard budgetary procedures.

7.2 Budget for training by public service employers

COSATU: Concerned that local government excluded from budgeting 1% of personnel costs for training.
Recommendation: Local government covered in the Skills Development Levies Bill.

8. Chapter Eight: General

SALGA: raised a concern that the Minister of Labour could develop regulations without consultation.
Recommendation: Section 36 requires that all regulations pass through the National Skills Authority. Furthermore, the Department will publish regulations for public comment before they are passed. Therefore this concern is addressed.

SALGA: raised a concern about the apparent lack of any requirement for the Minister of Labour to consult with other Minister concerning SETAs falling under the jurisdiction of those ministers eg. Minister of Constitutional Development.

Recommendation: The Minister will consult via the inter-ministerial committee on HRD.

All recommendations relating to the Skills Development Levies Bill have been captured and will be addressed along with further inputs once this Bill is tabled.