Skills Development Act: Impact on Business

Skills Development Act (SDA), 1998 (Act 97 of 1998)

• The purpose is to encourage businesses to improve worker skills.
• The purpose is to redress past imbalances through education and training.
• The purpose is to develop skills to improve productivity in South Africa.
• The purpose is to invest in education and training of workers.
• The purpose is to encourage workers to participate in learning programmes.

Impact of the SDA on business

• Advantages include encouraging businesses to improve worker skills.
• Advantages include redressing past imbalances through education and training.
• Advantages include developing skills to improve productivity in South Africa.
• Advantages include investing in education and training.
• Advantages include encouraging workers to participate in learning programs.
• Disadvantages include many training service providers not being SAQA accredited.
• Disadvantages include implementation difficulties in monitoring and control.
• Disadvantages include increased costs due to extensive paperwork.
• Disadvantages include skills development not always addressing employee training needs.

Actions regarded as non-compliance

• Providing employment services for gain without employer registration is non-compliant.
• Providing fraudulent/false information in any prescribed document is non-compliant.
• Preventing employees from signing for a learnership due to age or position is non-compliant.

Possible penalties for non-compliance

• Businesses not paying the Skills Development Levy may not offer learnerships/claim grants from SDA.
• A labour inspector may order the business to stop operating if found guilty of illegal practices.

Ways in which businesses can comply with the SDA

• Businesses should provide all employees with opportunities to improve skills.
• Employees who collect SDL should register with SARS.
• Businesses should encourage employees to participate in learnerships and other training programmes.
• Businesses should pay one percent of the employer’s payroll to SARS.
• Businesses should register with the relevant SETAs.

Role/functions of SETA’s in supporting the SDA

• SETAs register learnership agreements.
• SETAs promote and establish learnerships.
• SETAs report to the Director General.
• SETAs provide accreditation to skills development facilitators.

How SETAs are funded

• SETAs are funded by funds received for rendering their services.
• SETAs are funded by surplus funds from government institutions.
• SETAs are funded by donations and grants from the public.

Meaning of learnerships

• Learnerships provide theoretical/practical training opportunities that can lead to a recognized occupational qualification.
• Learnerships may include employment for a specified period after completion.
• Learnerships result in a qualification registered on the NQF.
• Learnerships include a structured component and practical work experience.

National Skills Development Strategy (NSDS)

• NSDS aims to increase the skills of the public sector to improve service delivery.
• NSDS makes better use of workplace-based skills development.
• NSDS addresses the low level of language and mathematical skills amongst the youth and adults.

Human Resource Development Strategy (HRDS)

• HRDS addresses skills shortages in the South African workforce.
• HRDS improves the supply of skills.
• HRDS develops short-term and long-term workforce skills.
• HRDS increases employee participation in lifelong learning.

Labour Relations Act (LRA), 1995 (Act 66 of 1995)

• The purpose is to establish Labour Courts and Labour Appeal Courts.
• The purpose is to promote fair labour practice between employers and employees.
• The purpose is to provide the right to lock-out by the employer as a reaction to lengthy strikes.
• The purpose is to promote collective bargaining at the workplace.

Impact of the LRA on businesses

• Advantages include protecting the rights of businesses in labour-related issues.
• Advantages include quicker and less expensive settlement of labour disputes.
• Advantages include promoting a healthy relationship between employers and employees.
• Advantages include workplace forums adding value to business if they function properly.
• Disadvantages include increased labour costs because of legal strikes.
• Disadvantages include employers not getting a court interdict to stop a strike.
• Disadvantages include strike actions always resulting in loss of production for which employers may not claim.
• Disadvantages include reduced global competitiveness due to lower productivity.

Actions regarded as non-compliance by the LRA

• Preventing employees from joining trade unions is non-compliant.
• Refusing establishment of workplace forums is non-compliant.
• Forcing employees to give up trade union membership is non-compliant.
• Not allowing employees to take part in a legal strike is non-compliant.

Penalties for non-compliance to the LRA

• The employer may be forced to enter into a dispute resolution process.
• Businesses failing to comply risk financial costs, e.g., CCMA fees.
• Businesses will be fined for failing to comply with agreements reached during the dispute resolution process.

Ways in which businesses can comply with the LRA

• Businesses must allow employees to form trade unions/participate in union activities/legal strikes.
• Employers should not breach/ignore any collective agreements.
• Businesses should allow/support the establishment of workplace forums.
• Employees should not be unfairly/illegally dismissed.

Rights of employers in terms of LRA

• Employers have the right to form a bargaining council for collective bargaining purposes.
• Employers have the right to dismiss employees who engage in an unprotected strike.
• Employers have the right to form employer organizations.
• Employers have a right to lockout employees who engage in an illegal strike.

Rights of employees in terms of LRA

• Employees have the right to refer unresolved workplace disputes to the CCMA.
• Employees have the right to refer unresolved CCMA disputes to the Labour Court on appeal.
• Employees have the right to embark on legal strikes as a remedy for grievances.

Employment Equity Act (EEA), 1998 (Act 55 of 1998)

• The purpose is to promote equal opportunity and fair treatment in the workplace.
• The purpose is to provide for employees to refer unresolved disputes to the CCMA.
• The purpose is to protect employees from victimisation if they exercise the rights given to them by the EEA.
• The purpose is to prohibit any discrimination based on race, gender, or disability in the workplace.

Impact of the EEA on businesse

• Advantages include encouraging diversity in businesses by employing people from various racial backgrounds.
• Advantages include providing employees with an equal opportunity to be promoted in a position.
• Advantages include promoting equal opportunity and fair treatment in the workplace.
• Disadvantages include it being expensive to train/employ someone who knows little about the ACT.
• Disadvantages include increased administration burden as businesses must compile employment equity reports every two years.
• Disadvantages include positions often going unfilled because there is no suitable employment equity candidate.

Actions regarded as non-compliance by the EEA

• Denying people access to the workforce based on gender/race/culture is non-compliant.
• Not employing a young woman because she will want to have children in the future is non-compliant.
• Refusing to employ a person because he/she has a disability is non-compliant.

Penalties for non-compliance to the EEA

• Fines may be imposed on businesses that fail to comply with reporting obligations.
• The Department of Labour may block non-compliant companies from doing business with the government.
• Businesses may be taken to the Labour Court for prosecution.

Ways in which businesses can comply with the EEA

• Businesses should ensure reasonable accommodation of people from designated groups.
• Businesses should implement an employment equity plan.
• Employees must be paid equally for work of equal value.
• Businesses must guard against discriminatory appointments.
• Businesses should promote equal opportunities and fair treatment.

Basic Conditions of Employment Act (BCEA), (Act 75 of 1997)

• The purpose is to regulate the right to fair labour practices as set out in the Constitution.
• The purpose is to provide clear terms and conditions of employment for employers and employees.
• The purpose regultes the variations of basic conditions of employment.
• The purpose is to advance economic development and social justice.

Impact of the BCEA on businesses

• Advantages include employees submitting complaints to labour inspectors who can address them.
• Advantages include encouraging consultation between employers and employees.
• Advantages include promoting fair treatment of employees in business.
• Advantages include work hours being specified so that the employer cannot exploit employees.
• Disadvantages include developing legal employment contracts being time-consuming/costly.
• Disadvantages include no employer forcing employee to work more than 45 hours in a week.
• Disadvantages include hiring cheap labour no longer being possible, so businesses cannot exploit workers.
• Disadvantages include the BCEA forcing businesses to comply with many legal requirements which may increase labour costs.

Actions regarded as non-compliance by the BCEA

• Preventing workers from having access to employment contracts is non-compliant.
• Refusing to accept a valid medical certificate from a sick worker is non-compliant.
• Refusing to grant a worker leave to support a sick family member is non-compliant.
• Forbidding workers to discuss wages/salaries with co-workers is non-compliant.

Penalties for non-compliance to the BCEA

• Businesses can be ordered to pay compensation and damages to the employee.
• The Director General may cancel the compliance order.
• Labour inspectors may serve a compliance order by writing to the Department of Labour.
• Businesses may be taken to the labour court for a ruling.

Ways in which businesses can comply with the BCEA

• Businesses should not employ children under the age of 16.
• Workers can take a meal break of 60 minutes after five continuous hours of work.
• Workers must receive double pay if they work during public holidays/Sunday.
• Workers can take up to six weeks paid sick leave during a 36-month cycle.

Provisions of the BCEA, Hours of work/Work hours

• Workers may not work for more than forty-five (45) hours in any week.
• Workers may work nine (9) hours a day if they work five days or less per week.
• Workers may work eight (8) hours a day if they work more than five days a week.

Provisions of the BCEA, Annual Leave

• Workers are entitled to 21 consecutive days annual leave per year/ one day for every 17 days worked/ one hour for every 17 hours worked.
• An employer can only pay a worker in lieu of leave if that worker leaves the job.
• Annual leave must be granted within six (6) months after the leave cycle ended.

Provisions of the BCEA, Sick Leave

• Workers are entitled to six weeks' paid sick leave in a period of 36 months.
• Workers receive 1 day paid sick leave for every 26 days worked during the first six months of employment.
• A medical certificate may be required before paying an employee who is absent for more than two consecutive days/who is frequently absent.

Provisions of the BCEA, Maternity Leave

• Female workers are entitled up to four months' leave.
• The granting of leave requires employees to produce a medical certificate/medical proof.
• Employees must not perform labour that can harm or put the unborn child at risk during pregnancy.

Provisions of the BCEA, Family responsibility leave

• An employer may require reasonable proof before granting leave.
• Employees are entitled to 3 – 5 days' leave to attend to the sickness/death of a child or a direct relative.

Provisions of the BCEA, Parental leave

• Employees, other than mothers giving birth, are entitled to 10 days unpaid leave once per year.
• Refers to unpaid leave, but employees may claim from the UIF.
• Employees will no longer be allowed to take Family Responsibility leave for the birth of a child.

Provisions of the BCEA, Adoption leave

• This leave applies to parents adopting a child less than two years old.
• One parent will be entitled to 10 consecutive weeks of Adoption Leave, while the other parent will be entitled to Parental Leave.

Provisions of the BCEA, Commissioning Parental Leave

• Leave applies to parents using a surrogate.
• The primary caregiver will qualify for 10 consecutive weeks of unpaid Commissioning Parental leave.
• The other parent is entitled to 10 days parental leave.

Provisions of the BCEA, Meals breaks and rest periods

• Workers must have a meal break of 60 minutes after five continuous hours of work.
• This can be reduced to 30 minutes by written agreement when working less than 6 hours per day.

Provisions of the BCEA, Overtime

• Workers must agree to work overtime.
• Workers cannot work more than three hours overtime per day/10 hours per week.
• Double the normal rate of pay for overtime worked on Sundays and public holidays.
• Overtime must be paid either at a specified rate for overtime/an employee may agree to receive paid time off.

Provisions of the BCEA, Termination of employment

• A contract of employment may only be terminated following one weeks’ notice if the worker has been employed for six months or less.
• The employee must be given a notice in writing.

Provisions of the BCEA, Child and forced labour

• It is illegal to employ a child younger than 15 years of age.
• It is also illegal to force someone to work.
• Businesses may employ children over the age of 15 years if the employment is not harmful to their education/moral/social development.
• Children/Minors under 18 years of age may not do dangerous work/work meant for an adult.

Compensation for Occupational Injuries and Diseases Amendment Act (COIDA), 1997 (Act 61 of 1997)

• COIDA applies to all casual and full-time workers who become ill/injured/disabled/killed due to a workplace accident/disease.
• COIDA provides for the establishment of a Compensation Board whose function is to advise the Minister of Labour on the provisions of COIDA.
• COIDA provides comprehensive protection to employees who are injured performing their duties.
• COIDA excludes workers who are guilty of wilful misconduct/workers working outside South Africa for at least twelve months/members of SANDF/SAPS.

Impact of the COIDA on businesses

• Advantages include promoting safety in the workplace.
• Advantages include eliminating time and costs spent on lengthy civil court proceedings.
• Advantages include employees not having to contribute towards this fund.
• Advantages include claiming processes being relatively simple.
• Advantages include vulnerable workers like domestic workers also being covered by this Act.
• Disadvantages include claiming process can be time consuming.
• Disadvantages include implementation processes/procedures required by the ACT may be expensive.
• Disadvantages include Workers who are temporarily/permanently employed in foreign countries are not covered.
• Disadvantages include Employers must register all their workers to COIDA, which may result is cash-flow problems.

Actions regarded as non-compliance by the COIDA

• Employers who do not contribute to the Compensation Fund is non-compliant.
• Employers who take long to process claims/delay the claiming process is non-compliant.
• Employers who bribe/prevent employees from reporting the accident/injury, or non-compliant.
• Compensation that is set off against any debt of the person entitled to the compensation is non-compliant.

Penalties for non-compliance to the COIDA

• Businesses may be forced to pay recovery costs required by the Compensation Fund.
• Employees may take the businesses to court for not registering them with the Commissioner of the Compensation fund.
• Businesses can be fined for refusing to lodge the claim/contravening the Act.
• Businesses may pay large penalties if found guilty of any misconduct/face imprisonment.

Ways in which businesses can comply with the COIDA

• Submit returns of earnings by no later than 1 March annually.
• Levies must be paid to the Compensation Fund.
• Businesses should provide a healthy/safe working environment.
• Report all incidents causing death/injury/illness of employees.

Broad-Based Black Economic Empowerment Act, Act 2003, (Act 53 of 2003), (amended in 2013)

• Enable wealth to be spread more broadly across all population groups.
• Outline areas that would give the government a platform for bringing equitable spread of wealth.
• Allows for the development of Codes of Good Practice.
• Aims at targeting inequality in the South African economy.

Impact of the BBBEE on businesses

• Advantages include the skill level of previously disadvantaged people increasing as businesses are compelled to train them.
• Advantages include businesses complying with BBBEE being highly regarded on the BEE scorecard.
• A good BBBEE score will improve the image of the business.
• Provides for human resource development through training or skills development.
• Fronting is discouraged as it can lead to disqualification of a business’s total scorecard.
• Disadvantages include Processes may lead to corruption/nepotism if it is not monitored properly.
• Disadvantages include Non-compliance may have huge financial implications for businesses.
• Disadvantages include Processes and procedures can be very expensive for a business as there are a lot of legal requirements to obtain a grading.
• Disadvantages include Investments/ownership issues may lead to dissatisfaction between current shareholders.
• Disadvantages include Businesses that want to do business with the government must have their BEE status assessed annually.

Actions regarded as non-compliance by the BBBEE

• Failing to implement affirmative action to meet BBBEE responsibilities is non-compliant.
• Refusing to award tenders to black suppliers who are BEE compliant is non-compliant.
• Promoting unsuitable people into a management positions at the expense of qualified PDI’s is non-compliant.

Penalties for non-compliance to the BBBEE

• Business licenses may not be renewed, and authorisation may not be issued.
• The penalty could be a fine of up to 10% of the company’s annual turnover.
• Businesses may face imprisonment for non- compliance and fronting practices.
• A business can be banned from participating in government contracts for a period of 10 years.

Ways in which businesses can comply with the BBBEE

• Develop small businesses/SMMEs through ESD.
• Improve the standard of living of the communities in which they operate.
• Businesses must appoint black people in managerial positions.
• Send black people for skill development training.

Implications of the revised BBBEE pillars on businesses, Management control

• Business must ensure that transformation is implemented at all levels.
• Appoint black people in senior executive positions/to management.
• Involve black people in the decision-making processes.
• Ensure that black females are represented in management.

Implications of the revised BBBEE pillars on businesses, Skills Development

• Business must engage black employees in skills development initiatives.
• Provide learnerships and learning programmes to black employees.
• Business benefits from the increased pool of skilled/trained workers.
• Business must go the extra mile to train staff where learnerships are not offered.

Implications of the revised BBBEE pillars on businesses, Ownership

• Business should include black people in shareholding/partnerships/franchises.
• Encourage small black investors to invest in big companies and share ownership.
• More opportunities are created for black people to become owners/entrepreneurs.
• Businesses sometimes find it difficult to locate suitable black business partners/shareholders.

Implications of the revised BBBEE pillars on businesses, Enterprise and supplier development (ESD)

• Business must create jobs as ESD promotes local manufacturing.
• Identify black owned suppliers that can supply goods and services.
• Outsource services to suppliers that are BBBEE compliant.
• Businesses are encouraged to invest/support black-owned SMMEs.

Implications of the revised BBBEE pillars on businesses, Social responsibility/Socio-economic development

• They should distribute scarce CSI resources to selected beneficiaries in the community.
• Businesses should focus on critical areas which can affect growth and development in the country e.g., environmental awareness/education/housing, poverty/unemployment etc.

National Credit Act, 2005 (NCA) (Act 34 of 2005)

• Makes provision for the establishment of the NCR.
• Ensures that consumers know what is included in their credit contracts.
• Ensures registrations of credit bureau and debt counselling services.
• Promotes the social and financial interests of consumers.
• Promote a fair but competitive credit market.

Impact of the NCA on businesses

• Authorised credit providers may attract more customers.
• Low bad debts resulting in getter cash flow.
• Protects businesses against non-paying consumers.
• Stamps out reckless lending and prevents businesses from bankruptcy.
• Increases cash sales as credit can only be granted to qualifying customers.

Actions regarded as non-compliance by the NCA

• Charging different interest rates to customers based on gender/race is non-compliant.
• Not providing reasons for credit refusal is non-compliant.
• Refusing credit to customers based on gender/race is non-compliant.
• Blacklisting customers without making efforts to recover the debt is non-compliant.

Penalties for non-compliance to the NCA

• The business may not charge any fee/interest/other charges under that specific credit agreement.
• The National Credit Regulator may impose a fine/penalty on the business for non-compliance.
• The business may not demand payment, sue, or attach the clients/consumers assets.
• The court may declare the granting of credit by the business reckless and may order the consumer not to repay the creditor.

Ways in which businesses can comply with the NCA

• Disclose all costs of the loan/No hidden costs should be changed/added.
• Credit providers must be registered with the National Credit Regulator.
• Conduct affordability assessment to ensure the consumer can meet his/her obligations.
• Businesses must submit an annual compliance report to the National Credit Regulator.

Rights of consumers according to the NCA

• Obtain reasons for credit being refused.
• Apply for credit and be free from discrimination.
• Receive pre-agreement documents before concluding any credit transaction.
• Apply for debt review/counselling if the consumer cannot afford to repay their debts.
• Fair and responsible marketing.
• Receive information in plain and understandable language.
• Return goods to the credit provider to settle the outstanding debt.
• Receive protection of their personal information.

Consumer Protection Act, 2008 (CPA) (Act 68 of 28 April 2008)

• Promotes responsible consumer behaviour.
• Strengthens a culture of consumer rights and responsibilities.
• Allows for consumers and businesses to resolve disputes fairly/effectively.
• Empowers consumers to take legal action if their rights are not upheld.

Impact of the CPA on businesses

• Advantages include businesses may be safeguarded from dishonest competitors.
• Advantages include Businesses may gain consumer loyalty if they comply with CPA.
• Advantages include Prevents larger business from undermining smaller ones.
• Advantages include Businesses may be protected if they are regarded as consumers
• Disadvantages include Confidential business information may become available to competitors.
• Disadvantages include Businesses must disclose more information about their products/services.
• Disadvantages include Penalties for non-compliance may be very high.
• Disadvantages include Businesses may feel unnecessarily burdened by legal process.

Actions regarded as non-compliance by the CPA

• Treating consumers differently based on gender/age/race is non-compliant.
• Charging unfair prices for the same goods and services is non-compliant.
• Varying the quality of goods when selling in different areas is non-compliant.
• Denying customers proper information about the product/services is non-compliant.

Penalties for non-compliance to the CPA

• Businesses may face fines or imprisonment for a period not exceeding 10 years.
• Businesses may be forced to compensate consumers in line with the extent to which rights have been violated.
• A contract be rendered void, or a fine/term of direct imprisonment may be imposed.
• Government agencies may conduct audits or even enact fines or even dissolves your business entirely.

Ways in which businesses can comply with the CPA

• Disclose prices of all products on sale.
• All agreements must provide a five-day cooling-off period.
• Implement measures that will facilitate complaints, e.g., suggestions boxes.
• Ensure goods/services offered are standardised/of the same quality.
• Provide adequate training to all staff on the CPA.

Consumer rights in terms of the CPA, Right to choose

• Consumers have the right to choose suppliers and goods.
• Consumers have the right to shop around for the best prices.
• Consumers have the right to return goods that are unsafe/defective for a full refund.

Consumer rights in terms of the CPA, Right to privacy and confidentiality

• Consumers have the right to stop/restrict unwanted direct marketing.
• Consumers can object to unwanted promotional emails and telesales.
• Consumers have the right to lodge complaints about the sharing of their personal details.

Consumer rights in terms of the CPA, Right to fair and honest dealings

• Suppliers may not use physical force to customers to buy products.
• Suppliers may not give misleading/false information.
• Businesses may not promote pyramid schemes and chain-letter schemes.

Consumer rights in terms of the CPA, Right to information about products and agreements/Right to disclosure andinformation

• Contracts should be in plain language and easy to understand.
• Businesses should display prices which are fully disclosing all costs.
• Businesses should label products and trade descriptions correctly.

Consumer rights in terms of the CPA, Right to fair/responsible marketing/promotion

• Businesses should not mislead consumers on pricing, benefits/uses of goods.
• Consumers may cancel purchases made through direct marketing within five working days.
• All information related to the country of origin, expiry dates/ingredients of the products should be disclosed.

Consumer rights in terms of the CPA, Right to fair value/good quality and safety

• Consumers have the right to demand quality service or goods.
• They have the right to return faulty items if the fault occurs within six months after purchasing the item.
• Consumers may receive a written warranty.

Consumer rights in terms of the CPA, Right to accountability from suppliers

• Consumers have the right to be protected in lay-bye agreements.
• Businesses should honour credit vouchers and prepaid services.

Consumer rights in terms of the CPA, Right to fair/just/reasonable terms and conditions

• Businesses should provide consumers with written notices of clauses that may limit consumer rights.
• Businesses may not market/sell goods at unfair prices.

Consumer rights in terms of the CPA, Right to equality in the consumer marketplace

• Businesses should not limit access to goods and services.
• Businesses may not vary the quality of their goods to different consumers.
• Businesses may not charge different prices for the same goods/services.

Explore the Skills Development Act (SDA) of 1998 and its impact on businesses. Discover advantages like improved worker skills and addressing past imbalances. Also, understand disadvantages such as accreditation issues and monitoring challenges.