Skills Development Amendment Bill: Department briefing & The Entrepreneur School presentation

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Employment and Labour

24 June 2008
Chairperson: Ms O Kasienyane (ANC)
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Meeting Summary

Ms Jemima Labuschagne of the Entrepreneur School introduced her ideas for training of entrepreneurs using the existing Sheltered Employment Factories. She noted that traditional training methods were expensive, did not address practicalities, and often was not appropriate. She set out a proposed mechanism for training, which covered various areas of management and people skills through to technical skills and financial literacy. She suggested that research could be done through research institutions to identify the shortfalls in the current systems and that her proposed system could then directly address those areas. Members commended the presentation and asked how they could assist Ms Labuschagne in making the correct contacts to discuss the proposals. The Department of Labour representative was asked by the Committee to help Ms Labuschagne to get in touch with the correct authorities at the Department. Further questions related to the clothing and textile manufacturing, where the factories were situated, their capacity to take on trainees, the need also to consider the group of unemployed people who had experience, but no formal schooling, and interaction with the Small Enterprise Development Agency.

The Department of Labour took Members through the Skills Development Amendment Bill, which had already been introduced during a workshop. The purpose of the Bill was to accelerate the deliver of scarce and critical skills, to support national economic growth initiatives and to align skills development policy and economic growth policy. The amendments being made to existing legislation would result in a more flexible and broadened policy framework. The main objectives of the Bill were outlined in detail. The Bill would take over and upgrade the provisions of the Manpower Training Act, in relation to apprenticeships, following which that Act would be finally repealed, and the uncertainties relating to apprenticeships would be clarified. It would also support the accelerated delivery of quality and quantity of scarce skills and artisans in the country. The Bill aimed further to strengthen the Department’s monitoring capacity for registration of artisans and the assessment and moderation of artisan training, and Quality Council for Trades and Occupations would be established. The accreditation and evaluation system was also to be rationalised, and the legal status of the National Skills Fund clarified. Productivity South Africa, and its legal status, would also be clarified, and it would be linked to skills development. It was noted that the Umsombomvu Youth Fund also needed to be linked, although this had been postponed due to the forthcoming merger with the National Youth Fund. It was further explained that the Sector Education and Training Authorities were not being addressed in this legislation, as it seemed that the problems around them were of an administrative, and not a legal nature.  The presenters took the Committee through the main clauses, setting out their rationale and what they contained. No questions were asked at this stage, although the Chairperson requested Members to study the Bill and raise any concerns at subsequent discussions.

Meeting report

Entrepreneur School Briefing
Ms Jemima Labuschagne, Entrepreneur School, introduced herself and noted that she ran training courses for entrepreneurs. She noted that traditional training methods were expensive, and the best way to equip entrepreneurs was through learning and earning. She suggested that training was usefully done by government, the higher education institutions, including Further Education and Training (FET) colleges, and the private sector. Each had something special to offer. She indicated that entrepreneurs often did not get appropriate training, and she suggested that this could most usefully be provided in factories and “on the job”.

She noted that there were ten government-supported factories for disabled workers.  She believed that a similar concept could be used. She set out a proposed mechanism, addressing various areas, and suggested that there could be certification at the end of it. She set out that the type of training would include marketing, business plans, computer skills, life skills, finance, leadership, management and supervision. The people skills would address also working with disabled people, collaboration with university students, time management and self management. Her suggested Action Plan involved researching the current training system so the entrepreneur school addressed the shortfalls that would have been identified. The research would be done through universities and research institutions and thus will involve little cost. She would recommend canvassing start-up sponsors, appointing mentors for each factory, setting up business plans, a training schedule and relevant contracts. She stressed that the training would be hands on, involving real work experience.
The Chairperson asked whom Ms Labuschagne would like to speak to with regard to her proposed training school to get assistance.

Ms Labuschagne replied that she would like to meet and speak to the Department of Labour (DoL) representatives, or the Minister of Labour.

Ms S Rajbally (MF) commended the presentation and commented that it was about time that such training was provided in all provinces. She asked whether the plans for the school in the factories had included clothing and textile manufacturing.

Ms Labuschagne replied that the factories would be open to all individuals, regardless of the economic sector or business into which they wanted to venture. With regards to clothing and textile manufacturing she indicated that the present factories were however limited to sheet making.

Ms A Dreyer (DA) asked where the factories were located, for whom they were set up, and how the training would take place.

Ms Labuschagne replied that the factories and the school were intended for everyone, including mentally disabled individuals. She added that the school had the capacity to enrol 3 000 people although it currently only had an enrolment of 1 000 people. There was thus enough capacity to enhance and develop the school further. The factories were located in the cities and towns indicated in the presentation, with two factories in Johannesburg and Cape Town.

Mr T Anthony (ANC) commended the presentation and commented that such a school training was crucial as it was progressive and would positively impact on the economic growth. He asked to know whether the school was an original idea or whether there were other institutions providing similar training.

Ms Labuschagne replied that the idea of the school and the factories came about through the realisation that people with disabilities lost their businesses because they were slower in doing their work than those without disabilities. Nonetheless, the disabled people still had skills. The training provided was not really new but was a consolidation of the various types of training already being provided by training centres and institutions. Such training included the entrepreneurship programmes offered by universities, learnerships and so forth, although it was limited and not holistic. The concept that she was outlining was original. The entrepreneurship training would take place in these factories and the students would not have to go elsewhere for further training or to gain experience. The target group was recent matriculants without experience.

Mr Anthony commented that the idea was very good, although since 1994 many companies and business had gone through transformation and reorganisation, which had resulted in a lot retrenchments. This had led to a plethora of unemployed individuals with experience. He added that although the target group was certainly justifiable it was nonetheless also important to consider the group of unemployed people who had experience, but no formal schooling.

Mr L Labuschagne (DA) commented that the Small Enterprises Development Agency (SEDA) was a small agency for entrepreneurships. He commended the inclusion of training and experience in one programme.  This was an important gap that the school was covering. He recommended that Ms Labuschagne hold an appropriate level meeting with the DoL, which would feed back to the Committee as to whether it would be able to assist the school.

Mr Anthony asked where the school and the factories were currently located and where the expansion would take place if the support of the DoL could be obtained.

Mr Anthony asked whether Ms Labuschagne had interacted with SEDA.

Ms Labuschagne replied that she had met with SEDA, which provided her with a list of people and institutions, including training centres, whom she could contact and from whom she should seek assistance.

Mr Anthony commented that the country was facing a problem in growing infant business and industries. He added that there were also moot questions on whether the industries should be protected by the government, and for how long.

Mr Anthony asked whether the Ms Labuschagne had looked at and considered the Industrial Policy that was currently being developed.

Ms L Moss (ANC) asked to know if disabled and handicapped were the same. She added that the DoL had a sheltered employment factories structure that employed people with disabilities, and asked whether the entrepreneur school was different.

Ms Labuschagne replied that the “handicapped” people were permanent workers in the factories, who were able to train others to get into business. She also added that the individuals could also be examined orally, not necessarily through written examinations.

Mr M Mzondeki (ANC) commented that the sheltered employment programme was under transformation and it was good that the entrepreneur school was being expanded.

Mr Sam Morotoba, Senior Executive Manager, Department of Labour, commented that the Department (DoL)  was indeed working on the Sheltered Employment factories programme. He suggested that Ms Labuschagne be directed to the committee overseeing the Sheltered Employment Factories. The DoL had agreed to fund the Sheltered Employment Factories provided that they registered as a Training Provider, due to the implications of the Public Finance Management Act (PFMA) and the Department of National Treasury.

Ms Labuschagne commented that the Entrepreneur School already had accredited training providers on board.

Ms L Moss asked to know whether the Entrepreneur School plans had considered individuals who had failed to complete matriculation, although they had practical skills.

The Chairperson thanked Ms Labuschagne for her presentation and asked Mr Morotoba to facilitate contact with the right authorities at the Department of Labour.

Skills Development Amendment Bill (the Bill): Department of Labour (DoL) Briefing
The Chairperson reminded Members that the Bill had been tabled before the Committee on 17 March and the Department would give a briefing, after which the Bill would proceed to the stage of public hearings.

Mr Sam Morotoba, Senior Executive Manager, DoL briefed the Committee on the amendment bill. He indicated that the written presentation had already been circulated to the Committee Members during a workshop previously held on the Bill and he would therefore focus on the main amendments. He briefly sketched the purpose of the Bill, which was to accelerate the deliver of scarce and critical skills, to support national economic growth initiatives and to align skills development policy and economic growth policy. It was hoped that the amendments being made to the Skills Development Act (the principal Act) would result in a more flexible and broadened policy framework.

Mr Morotoba referred to the transfer of the provisions of the Manpower Training Act (MTA) of 1981 in respect of apprenticeships, and the repealing of that Act as one of the main features of the Bill. Sections 12 to 32 of the MTA were still in place even though the Act has been mostly repealed. These sections continued to govern the apprenticeship system. This was the fourth time the DoL had been to Parliament to request amendments to the MTA; some of its provisions had been incorporated into the Skills Levies Act of 1999, and some in the Skills Development Amendment Act of 2003. These clauses needed to be repealed from the MTA, so that the entire Act could be repealed. They had placed restrictions on the ability of individuals moving from one industry to another in response to the skills shortage. Repealing schedule 2, the remaining sections of the MTA and associated provisions would get rid of the problem once and for all.

Ms S Morotoba referred to page 19 of the Bill and indicated that the DoL and the Office of the Chief State Law Adviser had provided several amendments to the Memorandum of Objects of the Bill. There were six key areas of policy; other amendments were technical in nature. The first object was to clarify the system by removing uncertainties in regard to the apprenticeship system. There had been some fears that the Department was intending to do away with the apprenticeship system, based on the transitional provisions drafted in Schedule 2 of the Skills Development Act (SDA), which had created the assumption that the Minister of Labour could make summary decisions in regard to apprenticeships. This assumption had resulted in certain industries becoming reluctant to initiate apprenticeships. This in turn had had economic development implications and hindered skills development. The perception and assumption therefore needed to be clarified to allow the development of apprenticeships and learnerships.

Mr Morotoba said that the second key area of the Bill was to support the accelerated delivery of quality and quantity of scarce skills and artisans in the country. The issue revolved around the problems that had been faced in targeted training in learnerships, artisan and apprenticeship training for fields with high skills demand. This was important to achieve the aims and targets of the
Joint Initiative on Priority Skills Acquisition (JIPSA).

The third key area was to strengthen the DoL’s monitoring capacity for registration of artisans and the assessment and moderation of artisan training. Currently the
Institute for the National Development of Learnerships, Employment Skills and Labour Assessments (INDLELA) was the national assessment centre, although the function was decentralised under the MTA. The amendment would allow the DoL to establish committees that included industry stakeholders to monitor and assess artisan training in line with international standards. The registration of artisans would also enable the collating of data and information. A Quality Council for Trades and Occupations would be established.

The fourth key area was to address the mechanism that was developed over the last four years over the gaining of accreditation and evaluation. The National Qualifications Framework (NQF) legislation had led to the amendment of the South African Qualifications Authority (SAQA) legislation, which consequently had led to the amendment of the Higher Education Act and Further Education Act. There was agreement that work related issues in the Higher Education Act and Further Education Act would go into the NQF. There had been a request from the Standing Committee On Public Accounts that the Department of Labour must address and clarify the legal status of the National Skills Fund (NSF). The Bill was intended to address the outstanding issues.

The last issue in the Bill related to Productivity South Africa, and its legal status. The amendment would seek to link Productivity South Africa to skills development. Its predecessor, the National Productivity Institute, was not linked to skills development. Umsombomvu Youth Fund (UYF) also needed to be linked to skills development, although this was postponed due to the parallel process of merging the UYF and the National Youth Fund into the National Youth Agency (NYA).

The administration of the Sector Education and Training Authorities (SETAs) was left out of the Bill. It was decided that the problems being faced by the SETAs were administrative not legal, and could not therefore be addressed through legislation.

The rest of the amendments to the SDA were all consequential amendments. Additional definitions were captured in Chapter 1. Chapter 2 addressed the functioning of the National Skills Fund (NSF), specifically the previous inability of the National Skills Authority (NSA) to disburse funds. The NSA was also included in the new chapter 6A to the Act, which set out provisions that were previously omitted.

The new clauses in Chapter 3 would include other functions of the Sector Education and Training Authorities (SETAs). Currently the SETAs had to apply to the South African Qualifications Authority (SAQA) for accreditation, although the Higher Education Act now includes a clause that SAQA remained an independent body. The Amendment Bill therefore sought to ensure that there was synergy between the various pieces of legislation, and had given the accreditation of occupational categories to the Quality Council for Trades and Occupation (QCTO), which was to be established shortly.

Chapter 4 addressed the relationship between learnerships and apprenticeships. The learnerships were very broad and encompassed the apprenticeships and other training programmes. Chapter 6 addressed institutions in the Department of Labour (DoL) and Employment Services, specifically giving clarification of the services provided by the DoL provincial offices, which were previously omitted from the principal Act. The New Chapter 6A included provisions for Artisan Development. Provisions in the MTA addressing learning programmes had been repealed and artisan development would now be aligned to the Basic Conditions of Employment Act (BCEA) and the Labour Relations Act (LRA).

A new Section 26B to be inserted into the principal Act clarified issues on the registration of trades as occupations, the new Section 26C would deal with the National Register of Artisans and the new Section 26D would deal with the trade tests as requested by labour unions. Schedule 2A was a new schedule to deal with the transitional provisions consequent upon Chapter 6A, which also adopted a phased-in approach to some of the new sections.

The New Chapter 6B provided for the establishment of Skills Development Institutions by the Minister of Labour. This was to address the weakness of lack of training provision, and the Minister was to be give powers to establish and contribute resources to public or private institutions to ensure national capacity. 

The new Chapter 6C provided for the establishment of the Quality Council for Trades and Occupations (QCTO) and contained a joint policy statement on the Review of the National Qualifications Framework. It complemented the Department of Education new Bills.

The new Chapter 6D provided clarity on Productivity South Africa, and set out the provisions for its establishment, functions, financing and regulations.

The Chapter 7 amendments provided for a more flexible approach to the financing of skills development administration through the NSF. This needed to be aligned to SETAS. The National Skills Authority would assess the percentage required to be paid over from the skills development levy.

Finally Mr Morotoba set out the consultations that had been carried out with various departments and parties at National Economic Development and Labour Council (NEDLAC) and at the Economic Cluster.

The Chairperson thanked Mr Morotoba for the briefing and commented that this Committee was trying to have the Bill passed before September 2008. He noted that the Bill had already been dealt with at policy level and a number of questions had already been addressed. However, it was important that the opposition parties, particularly the DA, should be allowed to raise any concerns and he therefore asked all Members to study the Bill carefully.

The Chairperson asked the Ms Mdludlu, Office of the Chief State law Adviser: State Law Adviser, if she had any comments.

Ms Mdludlu replied that she did not have any comments for the briefing. She added that she would be attending all meetings on the Bill and would provide comments at a later stage.
The meeting was adjourned.


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