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Employers Unwilling To Retrain Workers

By Glenda Daniels, in The Mail & Guardian (Johannesburg)
28 April 2000

Johannesburg - South Africa's Skills Development Levy Act comes into effect on May 5 to kick off a process that would see the retraining of the country's 10-million- strong workforce. However, more than 180E000 employers still have to register with the South Africa Revenue Service (SARS) to comply with the provisions of the new Act.

Only 20E000 employers have so far registered. Under the new Act, employers are compelled to make contributions towards a levy that will fund the development of the country's skills base. Those employers who fail to meet the May 5 deadline face a penalty.

This new labour dispensation seeks to reposition the country's labour market for the unfolding global economy. The Act should hold workers in good stead against challenges brought about by competition, rationalisation and retrenchments.

The intention of the Act is to provide millions of workers with different skills - such as the techniques needed for IT, small business and entrepreneurship, as well as interpersonal and leadership competencies - to position them favourably in the unfolding competitive and globally integrating labour market.

Registration has been required since April 1 of all employers with more than 50 employees (or with an annual wage bill in excess of R250E000) - those required by the Act to pay a skills development levy amounting to 0,5% of a company's total annual remuneration costs.

"It is disturbing that so few employers have registered voluntarily, but then not many understand the process," says SARS representative Christo Henning.

The skills shortage that exists in our country is reflected in the fact that only 20% (three million) of our economically active population is skilled or highly skilled, while about 80% (12-million) is semi-skilled, unskilled or unemployed. South Africa's skills profile also compares poorly with other middle-income countries with, for example, only about 4% of our labour force comprising professionals, compared to about 8% for other middle-income countries.

In terms of the Act, grants of up to 50% can be recovered by companies - depending on the level of training they offer - from new structures called Sector Education and Training Authorities (Setas). The Act provides for the establishment of these statutory bodies to develop and implement a sector skills plan within the framework of the national skills development strategy. The country's economy has been divided into 27 sectors, each with a Seta of its own, which has been tasked with the development of skills in each sector.

Each Seta will compile and implement an annual sector skills plan, indentifying skills areas and levels for which there is a demand.

The Department of Labour is confident that it has the capacity to oversee the implementation of Setas. "We have technical assistance and financial assistance from the European Union. We have received R300-million to implement the process," says Sam Morotoba, the National Skills Authority's executive officer.

However, many employers are not aware of the new levy and how it works. Debbie Marchard, a representative of the Education Training Development Practices Seta, says her organisation has been inundated by calls from employers seeking clarity on the issues.

"Advocacy workshops will be held throughout the country within the next few months to this end, with the private sector, NGOs, trade unions and other sectors of civil society," she says.

The process is moving slowly because it is new; structures need to be set up; and there is not enough information on the Act, on how to set up a Seta, on the skills levy and how the process will be monitored.

n An Employer's Guide to the Skills Development Act by Getti Mercorio and Carlo Mercorio (published by Seifsa) can help employers understand the new legislation. The book lays out the practical steps employers can take - to claim the Seta grant, for instance, by appointing a skills development facilitator and preparing a workplace skills plan. The authors explain that the Skills Development Act is a strategic response to the challenge of globalisation and the need to increase skills and knowledge in the labour market.