As you may be aware, if your organisation pays skills development levies to the Services SETA you are entitled to a 50% Mandatory Grant on your levies paid to the Services SETA.

Please note that the Skills Development Act and the Skills Levies Act has recently been reviewed.

Here we explain the changes in legislation.  

Employment Equity

On 14 August 2012 the Minister of Labour announced amendments to the Employment Equity Act, No. 55 of 1998.  “Unfortunately employers have refused or are unwilling to make a leap of faith with regards to transformation”  said  the Minister of Labour, Nelisiwe Mildred Oliphant, MP. ©2013 The South African Department of Labour

Skills Development

On 3 December 2012 the Department of  Higher Education and Training announced SETA grant regulations as part of amendments to the Employment Equity Act, No. 55 of 1998 .

“The Minister of Higher Education and Training, Dr Blade Nzimande is on record for saying that he has not seen or felt the impact of the R37,5 billion ploughed into SETAs over the past 12 years.” Accountancy SA, August 2012. 

“Every workplace is a training space. Unless and until employers open their workplaces for  youngsters to acquire the necessary experiences, we are not going to crack the problem of skills shortages.“  Dr Blade Nzimande, Fin24, 4 July, 2012


On 11 October 2013 Rob Davies, Minister of Trade and Industry, announced the Codes of Good Practice under Code 9(1) of the B-BBEE Act, 2003. 

“BBBEE policy is a business imperative for companies to comply with BBBEE in order to transform the economy. For this reason, both black and white companies were required to contribute to the transformation of the economy through BBBEE” says Trade and Industry Minister Rob Davies. City Press 17 October 2013

Employment Equity

  • Companies are required to develop your Employment Equity Plans in consultation with their employees
  •  Companies with more than 50 employees (or a turnover above the designated threshold) are required to have an Employment Equity Plan and report in line with the requirements of the act by 01 October 2013
  • Companies are required to appoint a Senior Manager to monitor implementation.
  • Companies that fail to implement Employment Equity face severe penalties

Skills Development

  • The mandatory grant related to WSP's and ATR's has been reduced from 50% to 20% of an employer's 1% skills levy. 
  • SETAs will allocate 80% of discretionary grants to PIVOTAL (professional, vocational, technical and academic) learning aimed at addressing scarce skills through accredited training that fully or partly contribute to  NQF-registered  qualifications. 
  • To gain access to discretionary grants employers need to submit their requirement plan for PIVOTAL training as part of the WSP/ATR submission. For 2013 the deadline for submission was 1 June 2013. As of 1 April 2014, the deadline for submission will be 30 April of each year.

Considering the impacts of either the Employment Equity Act or the Skills Development Act, non-compliance may still seem to be manageable.  However, non-compliance with these Acts link directly to the Codes of Good Conduct relating to  B-BBEE, and failure to comply with these codes puts businesses’ very “licenses to trade” at risk…

“All organizations are granted licenses to operate. Not in the formal sense of pieces of paper or certificates although these are issued in certain cases - but in the informal sense of whether people are willing to accept and interact with the organization.” (Neely, 1998.)

“The fundamental principle for measuring compliance is that substance takes precedent over legal form.” 

The CoGC (Codes of Good Conduct) are clear – companies are required to provide evidence of compliance,  misrepresentation will be dealt with in terms of provisions provided by the Act and failure to meet minimum requirements will impact on a company’s ability to trade with public service or providers to public service. 
  • The priority elements of the scorecard are Ownership, Skills Development and Enterprise and Supplier Development.
  • Companies fall into one of three  categories based on size.  Large enterprises with annual turnover equal to or more that R50 million, Qualifying Small Enterprises (QSEs) with annual turnover of  equal to or greater than R10 million but less than R50 million and  Exempted Micro Enterprises (EMEs) with annual turnover of less than R10 million.  Large enterprises must meet  40% sub-minimum requirements in all three priority areas.  QSEs must meet  40% sub-minimum requirements for Ownership and either Skills Development or Enterprise and Supplier Development. Failure to do so will result in the rating being dropped a level. Large enterprises and QSEs will be measured on all 5 codes of the scorecard. 
  • The Scorecard aligns with amendments to the Skills Development Act and the Employment Equity Act:

    - Qualifying criteria for B-BBEE rating relate focus on equipping black people, with a further focus on young and unemployed people, with accredited qualifications or part qualifications that relate to. scarce skills defined per sector.

    - Emphases on workplace learning.  

    - Recognition for supporting  small businesses

    - Prevention of discrimination.  Psychometric testing is one example. Psychological tests may be used on employees (including prospective employees) if they have been shown to be scientifically valid and reliable, can be applied fairly to all employees, is not biased against any employee or group and  have been certified by the Health Professions Council of South Africa, or another body which is authorised to certify such tests.

New B-BBEE codes impact on businesses in different ways:

With amendments all pillars apply and the thresholds per type of scorecard are higher. The letter of the law is one aspect.  What are the opportunities for Business in the spirit underpinning the Acts and Codes?

The business case for compliance:

“According to the World Economic Forum's (WEF's) 2013 Global Competitiveness Index, job creation and skills development pose "considerable challenges" for South Africa.  At 116th out of 148 countries  labour market efficiency (116th) is seen as  "poor“. However, South Africa's most serious challenge, the report finds, lies in the "very poor" quality of its educational system (146th). "Raising educational standards and making the labour market more efficient will thus be critical in view of the country's high unemployment rate of over 20 %, with the rate of youth unemployment estimated at close to 50 %," the report states.

” Source:  

If this description fits the target market, where will future sustainable profit growth come from?

How and where to?

  • We provided a summary of some of the key aspects.  To work with the system and gain maximum benefit from opportunities require a comprehensive learning strategy.  As learning specialists who comply, we can work with you to design your approach.
  •  There is a desperate need to develop the broad base of skills in the country. In South Africa we have too many people and too few jobs, and this is exacerbated by fact that many South Africans are structurally marginalised as a consequence of a lack of basic skills training. The focus is therefore not just on employment per se but rather on employability. This is where the skills development section of the transformation scorecard can now have a big influence of on the future of the South African economy.
  • Our offerings are accredited and align with scarce skills 
  • A blended approach enables us to design solutions that deliver measurable impact cost effectively.