25 February 2000


The purpose of the Act

The short supply of skilled personnel is a serious obstacle to the competitiveness of our industry. The Skills Development Act aims to expand the knowledge and competencies of the labour force in order to improve productivity and employment.

The Main Aims of the Act are:

  1. To improve the quality of life of workers, their prospects of work and labour mobility
  2. To improve productivity in the workplace and the competitiveness of employers
  3. To increase the levels of investment in education and training in the labour market and to improve the return on that investment
  4. To promote self-employment
  5. To improve the delivery of services

Key Issues and Obligations of the Act

The aims of the Act are to be achieved by establishing an institutional and financial framework, which will include the National Skills Authority (NSA), the National Skills Fund (NSF), the Sector Education and Training Authority (SETAs) and institutions in the Department of Labour.

The Act established the National Skills Authority on 12 April 1999. The functions of the NSA are to advise the Minister of Labour on a national skills development policy and strategy, and on guidelines to implement the national skills development strategy. It also advises the Minister on the allocation of subsidies from the NSF. It reports to the Minister on the progress made in the implementation of the strategy. The NSA has to conduct investigations on any matter that arises out of the application of the Act.

The composition of the NSA is as follows:

  1. Chairperson
  2. Executive Officer
  3. Organised business (BSA and Nafcoc)
  4. Organised labour (Cosatu, Nactu and Fedusa)
  5. Government departments (Labour, Education, DPSA, DTI and DACST)
  6. Community (Youth, Women People with disabilities, Rural and Civic)
  7. Representatives from education and training providers (higher education, further education, adult basic education and training, and private)

The Minister of labour is mandated by the Act to establish and, where necessary, assist a SETA for any national economic sector. A SETA must develop and implement a sector skills plan, within the national skills development strategy, by establishing sector workplace skills plans by means of the skills development grants. It has to promote learnerships by identifying workplaces for practical work experiences. SETAs have the function to monitor the quality of education and training in their sectors. They have to liase with Employment Services, the NSA and the provinces. A SETA has to report to the Director-General of the Department of Labour on the implementation of its sector skills plans and its income and expenditure. The SETAs are financed for the levies collected from its sector and monies paid to it form the National Skills Fund.

One of the functions of a SETA is to establish a learnership that has a structured learning programme and a practical work experience of a specified nature and duration. The learnership must lead to a qualification that is recognised by the South African Qualifications Authority.

The composition of a SETA must, in terms of section 11 of the Act, include:

  1. Organised employers (including sme’s)
  2. Organised labour
  3. Relevant government departments
  4. Relevant professional bodies (optional)
  5. Representatives form the relevant bargaining council (optional)

The Director-General of the Department of Labour is obliged in terms of section 22 of the Act to establish a Skills Development Planning Unit in the Department and provide it with the personnel and financial resources necessary for the performance of its functions. The functions of the Unit are:

  1. to research and analyse the labour market in order to determine skills development needs for South Africa as whole, each sector of the economy and organs of state
  2. assist in the formulation of the nations skills development strategy and sector skills development plans
  3. to provide information on skills to the Minister, NSA, SETA, education and training providers, and organs of state.

The Director-General has the mandate to set up labour centres in the Department. The functions of the labour centres are to provide employment services for workers, employers, training providers and rural communities. The labour centres are to carry out the following:

  1. to register work-seekers
  2. to register vacancies and work opportunities
  3. to assist prescribed categories of persons –

The Act established the National Skills Fund to fund projects that have been identified in the national skills development strategy as priority or other projects the Director-General sees as necessary to the achievement of the purposes of the Act. The Skills Development Levies Act of 1999 provides for the collection, administration, disbursement and regulation of the monies in the Fund.

Finally, the Act provides for the public service employer in the national and provincial spheres of government to budget for at least one percent of its payroll for education and training of its employees with effect from 1 April 2000 and to contribute funds to a SETA where necessary.