Grade 12 Business Studies: Impact of Legislation

• These notes are based on the document provided*

Term One Business Studies Grade 12 Revised Notes

• This document is a teaching and learning resource
• It supports Business Studies Grade 12 teachers and learners
• The content aligns with the 2023/24 Annual Teaching Plan and 2021 Examination Guidelines
• Previous NSC & SCE papers, textbooks, and other relevant sources were used

Chapter 1: Impact of Recent Legislation on Businesses

• Focus on the purpose of eight Acts
• Evaluate the positive and negative impacts of the Acts on businesses
• Discuss actions of noncompliance and their penalties
• Suggest ways for businesses to comply with the Acts
• Explain the role and funding of SETAs in supporting the Skills Development Act (SDA)
• Define learnerships and their meaning
• Explain the National Skills Development Strategy and HR Development Strategy
• Differentiate between Black Economic Empowerment (BEE) and the BBBEE Act
• Discuss the implications of the revised five pillars of BBBEE on businesses:
  • Management control
  • Ownership
  • Enterprise and supplier development
  • Skills development
  • Socio-economic development/Social responsibility
• Suggest ways businesses can apply the five BBBEE pillars
• Discuss provisions of the Basic Conditions of Employment Act (BCEA)
• Discuss the rights of employers and employees in terms of the Labour Relations Act (LRA)
• Discuss consumer rights in terms of the National Credit Act (NCA) and Consumer Protection Act (CPA)

Chapter 2: Human Resources Function

• Explain the meaning of recruitment and the recruitment process
• Understand job analysis, including job descriptions and specifications
• Identify and discuss methods of recruitment (internal/external)
• Analyze the impact of different recruitment methods
• Discuss the selection procedure and screening
• Explain the purpose and roles of the interviewer and interviewee
• Define employment contracts and their legal requirements
• Analyze a contract and suggest improvements
• Discuss reasons for terminating an employment contract
• Define and explain the purpose of induction
• Understand aspects to include in an induction program
• Discuss the advantages of induction for businesses
• Elaborate on placement, its procedure, and the importance of training/skills development
• Differentiate between salary determination methods
• Explain the link between salary determination and the BCEA
• Provide examples of employee benefits and their impact on businesses
• Explain Unemployment Insurance Fund (UIF) as a compulsory benefit
• Discuss the implications of the LRA, BCEA, Employment Equity Act (EEA), and SDA on human resources

Definitions

• Skills Development Act (SDA): Improves the skill levels of people already employed.
• Skills Development Levy (SDL): Ensures businesses contribute to employee skill development.
• PDI's: Previously Disadvantaged Individuals or designated group.
• SETAs: Established to implement and monitor the Skills Development Act.
• Labour Relations Act (LRA): Promotes simple procedures for resolving workplace labor disputes.
• Collective bargaining: Negotiations between employers' associations and trade unions.
• Collective agreement: Agreement between employer organizations and trade unions.
• Dispute: Disagreement between employer and employee.
• Bargain councils: Formed by trade unions and employer organizations to prevent/resolve labor disputes.
• Employment Equity Act (EEA): Ensures equal job opportunities regardless of race, culture, etc.
• Affirmative Action: Ensures suitable/qualified previously disadvantaged individuals are given equal opportunities.
• Basic Conditions of Employment Act (BCEA): Sets minimum employment standards to promote fair labor practices.
• Compensation for Injuries and Diseases Act (COIDA): Provides the right to claim compensation for employees injured or contracting diseases on duty.
• Broad-Based Black Economic Empowerment (BBBEE): To ensure full economic participation of previously disadvantaged individuals.
• National Credit Act: Protects consumers against unfair and reckless credit granting by businesses.
• Credit providers: Businesses that offer goods and services on credit.
• National Credit Regulator (NCR): Responsible for regulating the South African credit industry.
• Debt review/counselling: A debt solution for over-indebted South African consumers.
• Consumer Protection Act: Promotes consumer economic interests by providing information for informed choices.
• Compliance: Acting according to a set of rules.
• Penalties: Punishment for doing something against the law.
• Discriminatory actions: Treating people differently from others.

Introduction to Legislation

• Legislation was promulgated post-1994
• Primary purpose is to address injustices and discriminatory laws of apartheid
• Ensures equality and fairness for all South Africans
• Aims for redress and equity
• Improves the lives of previously disadvantaged people

Skills Development Act (SDA) Overview

• Ensures a skilled South African workforce for productivity & economic growth
• Aims to enable more South Africans to access long-term skills training opportunities

Skills Development Act (SDA) Purpose

Develops Skills

• To improve productivity in South Africa

Invests

• In the training of workers

Improves Job

• Prospects for previously disadvantaged

Encourages participation

• In learning programmes

Redresses imbalances

• Through education and training.

Encourages businesses

• To improve worker skills

Impact of the SDA on businesses

Positives/Advantages

• Training improves workplace productivity
• Promotes self-employment and black entrepreneurship
• Increases the return on education/training investment
• Addresses workplace discrimination through training
• Workplace environment becomes active with practical job experience
• Businesses become more globally competitive
• Increases skilled workers in scarce areas
• Encourages continuous learning to sustain improvement
• Improves opportunities for disadvantaged groups
• BBBEE-compliant firms improve products/services by employing skilled workers

Negative/Disadvantages

• Increases costs due to paperwork
• Implementation is difficult to monitor/control
• Skills programs may not address employee needs
• Skills Development Levy is an extra burden
• Monitoring by government departments without training expertise
• SETAs may be disorganized
• Service providers may not be SAQA accredited
• Businesses may not support initiative
• Learnerships during work affect production
• Costly to manage/control learnerships
• Wasted costs if employees leave
• The Skills Development levy applies for company payrolls over R500 000 per annum

Actions for SDA Compliance

• Employers collecting PAYE should register with SETAs
• Pay 1% of payroll to the SETA
• Register with SARS in the business's classified area
• Submit a workplace skills plan with evidence of implementation
• Businesses with >50 employees must appoint a skills development facilitator
• Assess employee skills for development needs
• Encourage workforce participation in skills training programmes
• Provide opportunities for workers’ skill improvements

Role/Functions of SETAs

• Report to the Director-General
• Promote & establish learnerships
• Collect levies & pay grants involved
• Offer accreditation to skills development facilitators
• Register learnership agreements/learning programs
• Approve all workplace skills, training reports
• Monitor/evaluate actual training by service providers
• Allocate grants to training stakeholders
• Oversee the training sectors in South Africa
• Align all skills plans with the (NSDS) National Skills Development Strategy
• Create skills development plans for particular sectors
• Offer resources for development facilitators
• Pay grants to all companies and comply with (SDA) Skills Development Act requirements
• Encourage all learnership programs by finding relevant practical work experience and workplaces

Funding of SETAs

• Skills training grants that employers should obtain from SARS as collecting agency for the government
• Employers exceeding R500 000 pay 1% levy of annual salaries
• SETAs receive 80% of levy for expenses/ 20% goes to the National Skills Fund
• Donations come Businesses or public donations/grants in (CSI) Corporate Social Investment
• Surplus funds that come from government institutions
• Funds received from rendering particular services

Learnership Meaning

• Theoretical/ practical training leading to recognised qualification
• Regular structured programs that are completed during work hours
• Trainee shares agreement along with employer and training provider
• Period of consistent employment is needed for learnership completion

Meaning of National Skills Development Strategy (NSDS)

• Provide easy methods/access to the workforce training
• Make sure that they support or develop local public FET college plan or system needs workers requirements
• Set the language and understanding of adults and youth in the mathematics
• Support small community training groups and small business support for workers training incentives
• Follow the SETAs fund and help workers out using said local fund
• Determine training needs of workplace and set responsibilities.

Meaning of HR Development Strategy (HRDS)

• It provides workforce plans and helps close the gaps that exist among the South African workforce
• Promotes societal justice by eradicating poverty
• Can be used as aid for both Short-term and long-term business workforce goals
• Increase in supply of workplace and employee skills
• Boost workers involvement in continual learning

The Labour Relations Act (LRA)(NO. 66 of 1995)

• Regulates relationships between employers and employees through workplace framework
• Creates solid union and business relations along with work democracy, which can improve business operations/efficiency

Purpose of LRA (Labour Relations Act)

• Helps to establish Council of Labour and Labour Courts, which promotes negotiations in the workplace
• Employee has right to lock down, prevents workplace disruptions and promotes union/company registration
• Fair workplace practice is promoted along with CCMA and provides system structure for work relations, which enables basic rights within maintained workplace

The rights that employees and employers have according to the Labour Relations Act (LRA)

Rights For Companies Include:

• Ability to form an employers organization needed for labour
• Ability to lockout employees which have unprotected strike action
• Prevent and fire employees who have misconduct during a strike (violence, intimidation, etc.)
• Ability to not pay employees or reward services for during a labour strike

Right of all workers to also have:

• Join any union or trade of their choice
• Obtain CCMA and labour court for resolving grievances and strikes
• Ability to have a representative assist their work or legal disputes
• Ability to take reasonable time to work for union without pay deductions
• Workplace community to revolve work or legal issues with over 100 plus employees

Strengths that businesses have from Labour Relations Act (LRA)

• Legal matters are cleared quicker and it protects rights
• Relationship with employer helps and offers correct discipline procedures
• CCMA, Collective barging and Statutory council all provide support
• Court to provide compensation if damages occur in court

Weaknesses that businesses have from Labour Relations Act (LRA)

• If productivity decreases or employees are allowed the ability to strike, it causes company a loss
• Costs from court procedures come from resolving fair dismissals
• Competitive advantages are at risk in the workplace
• Harder to get work in place while strikes are going on

Actions that are regarded as non-compliance by the Labour Relations Act (LRA)

• Stopping workplace unions or not following rights of all workers
• Workers face employee contract removal through sold business
• Collective agreements along with all resolution efforts are breached by both employer and employee
• Illegal dismissal and not giving leave for union work is non compliant

The Employer may be forced to:

• Follow resolution process and risk costs through CCMA, if agreements are not followed
• All Labour Relation Acts (LRA) violations also risk financial costs to the violating business

Steps to ensure company is following the LRA (Labour Relations Act)

• Cannot block, cannot unfairly dismiss and support the development of community union workplace
• Show information/resources to union while allowing them to also participate
• Not going agains any labour agreement

The Employment Equity Act (EEA) (NO. 55 OF 1998)

• Through workplace framework all people face equal opportunities for improvement with better transformation
• Race, religion, sexual orientation, culture, disability are all treated fairly to promote workforce diversity

Purpose Of

Eliminate discrimination

• Through race and all people getting equal pay for opportunity

Promotes

• Variety through diverse people, all while protecting them from employer exploitation

Helps workers by

• Providing a more inclusive representative workforce that are also given fair opportunities

Strengths that Employment Equity Act (EEA) adds to businesses

• Supports variety and equality in the workforce/all applicants are well informed
• Motivation occurs from equal opportunities and business have an opportunity to do more government projects