HEAD FOR SUCCESS

Business Studies Grade 12

TERM 1

Topic 1: Impact of recent legislation on business – response to demands for redress and equity

IMPACT OF RECENT LEGISLATION ON BUSINESS

• • • • • • • • Since 1994, several Acts were introduced by the current government that have an impact on al businesses, whatever their size. These Acts were set to redress the inequality / imbalances of the past.

Goal: to transform businesses relating to employees, management and ownership.

Businesses must ensure that they have access to legal experts who are familiar with the various legislation and its provisions.

Different types of legislation is applicable to employees, the environment and consumers.

Legislation forms part of the macro environment and therefore businesses have no control over legislation. Businesses’ management teams are responsible for compliance with the provisions of the various laws applicable to businesses.

Non-compliance with the laws is punishable by a fine, imprisonment or both.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

(to develop knowledge and skills of the people of South Africa) • • Must be complied to in conjunction with the provisions of the following two acts: Skills Development Levies Act Act on the National Qualifications Framework These 3 Acts form part of the National Skills Development Strategy.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998) NATIONAL SKILLS DEVELOPMENT STRATEGY:

Aims to develop the skills of employees, to make it possible for employees to become more productive and competitive, to reverse apartheid imbalances and to create a more inclusive and cohesive society. These 3 Acts link closely with the Employment Equity Act which addresses the principles of equity, access and redress.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • •

NATURE of the SDA:

Provide more skilled people to satisfy the needs of the businesses. To promote self-employment.

The government tried to lower the unemployment and poverty rate. The restoration of discrimination against workers’ training in the past. Because, a lack of skills hinders job seekers to find work, or to occupy positions where a higher income can be earned. The SDA is an important part of the National Skills Development Strategy aimed at training and the demands of the workplace.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • •

PURPOSE of the SDA:

The training of a workforce for the various sectors in the economy in an organized manner. Development of skills of the South African workforce to meet the needs of businesses.

Increase in the levels of investment in education and training in the labour market and boost return on this investment.

The use of the workplace as an active learning environment for workers, to give them the opportunity to develop new skills.

Provide opportunities for new entrants to the labour force to get work experience.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • • •

PURPOSE of the SDA:

Promotion of productivity and self-employment. Encourages employers to employ people who struggle to find work, e.g. disabled persons.

Encourage workers to participate in learnerships and other training programs.

Promotion of employment of previously disadvantaged people, and to restore these disadvantages through education and training.

Ensure that quality training occurs in the workplace.

Assist job seekers to find employment, retired workers to return to the labour market and employers to find qualified workers.

Provide and regulate employment services.

Development of skills in South Africa to improve productivity.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

How should these objectives be achieved?

Through the implementation of an institutional and financial framework comprising of: • • • • • The National Skills Authority Skills Development Levies The National Qualifications Framework The National Skills Development Strategy Strategy for Human Resource Development

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • THE NATIONAL SKILLS AUTHORITY: Advises the Minister of Labour on all aspects of the National Skills Strategy. Information on the need for skills development will be received from trade unions and employer organizations and Government will implement it through the various skills development institutions.

This institution also liaise with the various SETA’s and report to the Minister of Labour on the progress of implemented skills plans in the workplace.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • SKILLS DEVELOPMENT LEVIES : Skills development in terms of he Skills Development Act, is financed by a skills levy.

Implemented in 1999 under the Skills Development Levies Act (9 of 1999) Employers pay a skills development levy of 1 % of the total amount of money paid in salaries to employees every month, if: the employer has registered the employees with SARS and / or the employer pays over R500 000 per year in employees’ salaries and wages. The levies paid to SARS are put in a special fund.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • SKILLS DEVELOPMENT LEVIES : The National Skills Development Fund is administered by the Director General.

The National Skills Development Fund (funds skills development programs not already funded by SETA’s) receive 20 % of the levy. The respective SETA’s receive 10 % for organizational expenses.

Businesses must have workplace skills plans and must submit implementation reports to enable them to be refunded 50 % of the paid fees. 20 % of the levies for the specific sector is used by the relevant SETA to implement learnerships and other skills development plans. Each economic sector has a SETA.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • THE NATIONAL QUALIFICATIONS FRAMEWORK: Provides for learnerships and strategies on how to start learnerships. The NQF is designed is such a way that people can choose from different options to qualify for a specific career.

Learnerships is theoretical and practical training opportunities that lead to a recognized qualification and consists of different qualifying levels and credit points, e.g. NQF level 1 with 60 credit points. The NCF addresses discrimination that previously occurred in education and employment. Previously disadvantaged people also have the opportunity to obtain recognized qualifications.

This is an approved training program for workers in a particular sector.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • THE NATIONAL QUALIFICATIONS FRAMEWORK: This program must give workers the opportunity to learn a specific job, while in the service of the particular sector.

Their competence in the work shall be assessed by the relevant SETA.

The development and implementation of the NQF is controlled by the South African Qualifications Authority (SAQA) The NQF has 10 levels, for example:

Level

5 - 10 2 – 4

Type of Training

Higher Education, e.g. after school qualifications at tertiary institutions such as universities.

Education and training at school level, through SETA’s and colleges.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • THE NATIONAL SKILLS DEVELOPMENT STRATEGY (NSDS): It is a comprehensive framework for the development of workers’ skills.

Focuses on the redressing of past imbalances through skills development.

It encourages good quality training in the workplace to ensure that skills will be developed. It indicates the way of usage of funds that SETA’s received through the skills development levies.

The emphasis is on equality, to create the workplace into a learning environment, quality of training and strengthening of the relationship between FET colleges, universities and SETA’s.

The NSDS is adapted as targets are reached and the needs in terms of skills development change. (See p. 4)

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • • THE NATIONAL SKILLS DEVELOPMENT STRATEGY (NSDS): Goals of the NSDS III (implemented in 2011) Increasing access to occupationally-directed programmes. Building career and vocational guidance.

Establishing a credible institutional mechanism for skills planning.

Encouraging better use of workplace-based skills development.

Promoting growth of the public FET college system.

Addressing youth and adult language and numeracy skills to enable further training.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • STRATEGY FOR HUMAN RESOURCE DEVELOPMENT: Human resource development refers to empowering people to reach their potential.

Human resource development is done in a number of ways, including skills development and education.

• • • • • Human resource development has several advantages, including: Lower unemployment levels Increased productivity Increased income levels Social and economic development

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

STRATEGY FOR HUMAN RESOURCE DEVELOPMENT: • • Human resource development has been identified as a priority in South Africa.

The first Human Resource Development Strategy in South Africa was introduced in 2001.

• • • The mission of this Human Resource Development Strategy was: to maximise the potential of all South Africans through the acquisition of knowledge and skills; to productively and competitively towards a higher quality of life for all.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • • STRATEGY FOR HUMAN RESOURCE DEVELOPMENT: The strategy for human resource development 2001 was reviewed and some shortcomings were identified.

The strategy was revised and a new strategy, HRDS SA, was introduced.

HRDS SA is a long-term strategy which will run from 2010 – 2030.

The main goals of the HRDS SA are: To reduce poverty and unemployment in South-Africa To improve economic growth and development To promote justice and social unity through education and skills development.

• • • • HRDS SA is a twenty-year strategy with fifteen strategic priorities including: Elimination of adult illiteracy Ensuring that the youth remains in education and training up to the age of 18 years.

Ensuring access to employment-focused training to people who enter the labour market.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

STRATEGY FOR HUMAN RESOURCE DEVELOPMENT: • • • All training and skills development offered to workers should be approved by the South African Qualifications Authority (SAQA).

To ensure the abovementioned, SETA’s (Sector Education and Training Authorities) was implemented in March 2000.

All companies should have a skills development facilitator (SDF) to oversee the skill development process in the company. This person must be trained by the relevant SETA that the company is registered with and must formally be accredited by the SETA as SDF.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • SETA’s (Sector Education and Training: SETA’s are mainly responsible for developing and implementing Sector Skills Plans.

Sector Skills Plans are strategies that address challenges regarding skills in each sector.

Sector Skills Plans are focused mainly on improving the supply and demand of labour – this means that the right skills must be available when and where a need for those particular skills.

SETA’s play and important role in the implementation of the NSDS III.

Previously, people had negative views about SETA’s. regarding their performance and governance.

The performance of SETA’s will be closely monitored during the implementation and execution of the NSDS III.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • The task / purpose of SETA’s include the following: Develop a skills plan for that sector within the framework of the national skills development strategy.

Implement the specific sector plan by establishing learnerships, approving workplace skills plans, monitor education and training in the specific sector and distribution of skills levies according to the prescribed method among employers.

Promote learnerships by identifying workplaces for practical work experience, supporting the development of learning materials, promotes learning facilitation and assistance in the conclusion of learnership agreements..

Registration of learnership agreements.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

The task / purpose of SETA’s include the following: • • • • • Application within one week of establishing a SETA at SAQA for accreditation. This accreditation must be approved within 18 months of application.

Liaise with the National Skills Authority in relation to the National Skill Development Policy, the National Skills Development Strategy regarding the skills plan of the sector.

Report to the Director General regarding the SETA’s income and expenditure, the implementation of the sectors’ skills plan, etc.

Appointment of staff required, to perform certain functions.

Manage the learnerships and training in the specific sector.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

The task / purpose of SETA’s include the following: • • • • • Identification of skills requirements in the specific sector.

Ensure quality skills training in the sector.

Development of skills programs to improve existing workers’ skills.

Assistance to the unemployed to enter the labour market through skills programs.

Accreditation of training providers and facilitators. (SETA’s do not do the training and skills development. It is done by approved and appropriately accredited service providers.)

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

The task / purpose of SETA’s include the following: • • • • • • • SETA’s receives finances from: Skills development levies The National Skills Fund Grants and donations Interest that was earned on investments Income earned from services rendered Money received from other sources

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

STRATEGY FOR HUMAN RESOURCE DEVELOPMENT: SETA’s represent all economic areas, e.g.

NAME

FASSET BANKSETA CHIETA ESETA ISETT

FOCUS AREA / ECONOMIC SECTOR

Financial and Accounting Services Banking Sector Education and Training Authority Chemical \industries Education and Training Authority Energy Sector Education and Training Authority Information Systems, Electronics and Telecommunications Technologies /

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

STRATEGY FOR HUMAN RESOURCE DEVELOPMENT: SETA’s represent all economic areas, e.g.

NAME

MQA MERSETA THETA W&RSETA agriSETA

FOCUS AREA / ECONOMIC SECTOR

Mining Qualifications Authority Manufacturing, Engineering and Related Services Education and Training Authority Tourism and Hospitality Education and Training Authority Wholesale and Retail Sector Education and Training Authority Agriculture sector

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998) ADVANTAGES

Developing skills of the South African workforce.

Improve the quality of life of employees.

Improve employment and labour mobility.

DISADVANTAGES

The process is bureaucratic and requires a lot of paperwork and administration, time effort and is money consuming.

Only businesses paying more than R500 000 per annum in salary expenses, may reclaim money for skills development.

Are monitored by various government departments who do not have education and training as their main priority.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998) ADVANTAGES

Productivity in the workplace is improved.

Promote international competitiveness of workers.

Promote self-employment.

Promote the provision of social services.

DISADVANTAGES

SETA’s are not well organised and some courses offered have not the required credits relevant to the content of the course.

Some service providers for skills development is not accredited by the SAQA.

Many organisations do not support this government initiative.

It is difficult to monitor and control all the regulations and institutions arising from this Act.

Promote job opportunities.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998) VOORDELE

Trained employees are more productive.

Discrimination can be addressed through training.

Employees become more marketable as they acquire skills.

Preference is given to develop skills specifically required by employers.

NADELE

Difficult to assess the performance of SETA’s.

Difficult to assess the contribution made by SETA’s towards skills development.

Leads to increased costs and paperwork for business enterprises that contribute towards the National Skills Fund.

Continuity in the workplace is affected when workers attend training.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • IMPLICATIONS FOR SMALL BUSINESSES: Employees become more skilled.

Businesses with an annual salary expense exceeding R500 000 are required to register employees with SARS and to pay the Skills Development Levy.

A monthly Skills Development Levy must only be paid to SARS if the business’ salary expenses are more than R500 000 per year, hence not all businesses are affected by the Skills Development Act.

Businesses with limited employees may be disrupted when employees are away on training.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • IMPLICATIONS FOR LARGE BUSINESSES: Businesses with 50 or more employees must appoint a Skills Development Facilitator.

Employees become more skilled.

Businesses must pay a monthly skills development levy of 1 % of the total amount payable to employees.

Registration with SARS for payment of the levy.

Calculation of the levy that is due each month.

Paperwork involved in paying skills levy.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • RIGHTS / IMPLICATIONS FOR BUSINESSES: Businesses have the right to expect better educated workers, a more skilled workforce and higher productivity.

Certain businesses are exempt from paying skills development levies like, organisations that deal with public benefits for the community.

• • RIGHTS OF EMPLOYEES: The law gives workers who have little or no formal training, the right to acquire skills and training in the workplace to gain greater participation in the economy and a possibility of a better standard of living to gain.

Formal qualifications that the NQF and SAQA recognised, offers workers the opportunity to be more mobile in the labour market, as well as opportunities for promotion.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • COMPLIANCE WITH THE PROCISIONS IN THE ACT AND PENALTIES IF THE BUSINESS FAILS TO COMPLY: It is required from businesses to register with the SARS according to the sector in which the business is classified in terms of the specific SETA.

Businesses that do not pay the prescribed charges will be fined.

Late payments will be fined with 10 % of the levy amount.

Repeated fines may result in legal action.

Businesses that do not pay Skills Development Levy (< R500 000 to salary expenses) may not present learnerships nor may they claim from the Skills Development Fund.

Payments for penalties and fines are monitored by SARS.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • COMPLIANCE WITH THE PROCISIONS IN THE ACT AND PENALTIES IF THE BUSINESS FAILS TO COMPLY: Inspectors from the Department of Labour may stop the business’ operations if the business is found guilty of violations of the Act.

The Act lists the following as criminal offenses: Employees may not be withheld from appropriate skills development opportunities in the workplace, based on race, gender or disability.

No unfair promotion of skills development by employers, e.g. nepotism.

Providing false information regarding skills development is against the law.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • COMPLIANCE WITH THE PROCISIONS IN THE ACT AND PENALTIES IF THE BUSINESS FAILS TO COMPLY: Providing employment services without registration as an employer.

Conduct of employment agencies that are inconsistent with the provisions of the SDA.

Obtaining or attempting to obtain any prescribed document by means of fraud, false pretences or by submitting a false or forged prescribed document.

SKILLS DEVELOPMENT ACT

(NR. 97 OF 1998)

• • • • • • COMPLIANCE WITH THE PROCISIONS IN THE ACT AND PENALTIES IF THE BUSINESS FAILS TO COMPLY: The Act applies to all employers, except the following : Public services Religious or charity organisations Public entities that receive more than 80 % of their funding from the government Employers that spend less than R500 000 on employees’ salaries Employers who is exempt from registering, in terms of the Income Tax Act