Select Committee on Education and Recreation 29 November 2011 Parliament, Cape Town

SKILLS DEVELOPMENT AMENDMENT BILL, 2011 Background and Process This Bill was drafted and published for comment in Government Gazette No of 15 April During the development stages of the Bill, consultation took place by way of a National Skills Summit with NEDLAC, the National Skills Authority and role-players in Skills Development. The Minister’s efforts to enhance service delivery by SETAs were supported and all parties who attended the National Skills Summit supported the amendment of existing legislation in order to provide for more effective oversight in both the composition of the Accounting Authority and the constitution of the SETAs. The Minister engaged Business Unity South Africa in a meeting where the principles underpinning the need for the amendments to the Act were deliberated.

The Bill was referred to the Minister of Labour for comments and approval on the repeal of sections in the Act relating to employment services and Productivity South Africa, and to take cognizance of the fact that the repeal of those provisions is subject to her approval. The Bill was referred to NEDLAC for discussion and approval as was necessary to effect changes to the Skills Development Act. This Bill was revised based on merited comments received and forwarded to the State Law Advisers to provide a legal opinion on the constitutionality of the provisions of the Bill. The State Law Advisers were of the opinion that the provisions of the Bill are constitutionally sound as they do not infringe on any of the fundamental rights or other provisions contained in the Constitution. This Bill conforms to legislative practice. This opinion together with the Bill were presented to Cabinet on 22 June 2011.

PURPOSE OF THE BILL This Bill aims to amend the Skills Development Act, 1998 so as to define certain words or expressions and to delete certain obsolete definitions; to amend provisions relating to the establishment, amalgamation and dissolution of SETAs; to provide for the incorporation of a subsector of one SETA into another SETA; to provide for the composition of an Accounting Authority for each SETA; to regulate the eligibility to become a member of an Accounting Authority; to provide for a constitution for every SETA; to regulate the conduct of a member of an Accounting Authority, or of a member of the staff, of a SETA when engaging in business with the SETA; to require members of Accounting Authorities to disclose any conflict of interest with the relevant SETA; and to repeal or amend certain provisions which became obsolete as a result of the transfer of the administration of the said Act to the Minister of Higher Education and Training; and to provide for matters connected therewith.

Clause 1 seeks to introduce a number of definitions related to SETAs and the constitution of SETA. This clause further provides for the deletion of references and definition relating to redundant legislation or corrects the definition to refer to the applicable legislation. Clauses 2, 4, 14 to 19, 21 to 26 and 28 are dealing with those provisions in the Skills Development Act that have been assigned to the Minister of Labour. These clauses seeks to repeal those provisions from the Skills Development Act once the corresponding Labour legislation is enacted and comes into force. These clauses must be read with clause 30(3) of the Bill which provides that the Minister cannot determine a date on which these sections will be repealed unless the Minister of Labour has approved such determination.

Clause 3 substitutes the reference to the repealed South African Qualifications Authority Act for a reference to the National Qualifications Framework Act. Clause 5 amends section 9 of the Skills Development Act to allow the Minister to establish SETAs for a period specified by the Minister and to re-establish the SETA if needed after that period lapsed. This clause must be read with the amendments to section 13 of the Skills Development Act which introduced a standard constitution as a Schedule to the Bill. Clause 6 seeks to amend section 9A of the Skills Development Act by providing the statutory framework to deal with the consequences of an amalgamation of existing SETAs. Clause 7 introduces a new section 9B which provides for the incorporation of specific SIC codes from one SETA into another and the legal consequences thereto.

Clause 8 provides for an amendment to section 10A of the Act to ensure that SETAs Service Level Agreements comply with government policies and service delivery strategies. Clause 9 amends section 11 of the Act which deals with the composition of the Accounting Authority of a SETA. It provides for a SETA to have a chairperson and not more than 14 members appointed by the Minister. It provides that not more than 6 members must be nominated by organised labour and 6 members by organised employers. The remaining 2 members must be appointed from nominations received by government departments interested professional bodies, bargaining councils or organisations in a community with an identified interest.

It further provides that all members except the chairperson have voting rights, however, in a case of an equality of votes, the chair has a casting vote. It provides the criteria which the Minister must apply when the members of the accounting authority are appointed. It provides for the process to invite nomination from the identified bodies before the Minister appoints the members. Clause 10 introduces three new sections. The new section 11A deals with the eligibility to become a member of the Accounting Authority. It requires the member to be a citizen who resides permanently within the Republic. A person to be appointed may not be mentally ill or disordered. The person to be appointed may not be convicted of a criminal offence without a fine.

The person to be appointed may not have a criminal record which involves theft, fraud, forgery and uttering a forged document or corruption. The new section 11 prescribes the criteria to vacate office by members of the Accounting Authority. The new section 11C requires that members must disclose any conflict of interest. The member may not be appointed unless a disclosure has been made that he or she has no direct or indirect financial interest in the SETA. If a conflict of interest occurs at any stage during the proceedings of the accounting authority, the member who has a conflict of interest must disclosed such interest and may not participate in the proceedings. If a member fails to disclose the interest or is present at the meeting, the proceedings of the accounting authority shall be null and void.

Clause 11 amends section 13 of the Act. This clause provides for a standard constitution of a SETA. – It further provides that the Minister may deviate from the standard constitution if a SETA apply for such a deviation on the following grounds: » unique functions or operation requirement » justified in terms of the National Skills Development Strategy » recommended by the National Skills Authority. Clause 12 introduces two new sections. The new section 13A provides for the conduct of an Accounting Authority member or a staff member to declare a conflict of interest. – It prohibits a staff member or an accounting authority member to conduct business of a commercial or financial nature with the SETA. – It further provides that any person may draw the attention of the chairperson to the possible conflict of interest. – It requires that the member must recuse himself or herself from the meeting.

The new section 13B provides for the appointment of a Chief Executive Officer. – It requires that the SETA must within in 6 months of establishment submit 3 names of persons who have experience in accounting, financial and senior management matters to the Minister. – The Minister must appoint a CEO from the list of names. – The term of office of the CEO is linked to that of the accounting authority. Clause 13 amends section 20 of the Act. This clause corrects the reference to the repealed South African Qualifications Act and substitutes it for a reference to the NQF Act. Clause 20 is a technical amendment in order to be consistent in the Act when referring to the NQF Act.

Clause 30 is technical amendment to the Long Title of the Skills Development Act to replace the reference to “South African Qualifications Authority Act, 1995” with “National Qualifications Framework Act, 2008”. Clause 31 is dealing with the transitional arrangements to ensure that all SETAs comply with having a constitution in line with the standard constitution. If the current constitution of a SETA is different from the standard constitution, the Minister must consider if it is possible to allow for a deviation as provide for in Section 13(3) of the Act. If it is not possible to accommodate deviation within section 13(3) of the Act, the Minister must direct the SETA to align its constitution with the standard constitution.

Clause 32 is providing for the Short Title and commencement of the Act. The Act will commence on a date determined by the Minister, however, sections 1(c), 2, 4, 14-19, and 28 can commence only after the Minister of Labour agreed to the Notice published in a Gazette by the Minister of Higher Education and Training.

Thank you