Skills development act no. 97 Of 1998




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14.   Finances of SETA.--(1)  A SETA is financed from--

  1. the skills development levies collected in its sector;

  2. moneys paid to it from the National Skills Fund;

  3. grants, donations and bequests made to it;

  4. income earned on surplus moneys deposited or invested;

  5. income earned on services rendered in the prescribed manner; and

  6. money received from any other source.

(2)  The money received by a SETA must be paid into a banking account at any registered bank and may be invested only in--

  1. savings accounts, permanent shares or fixed deposits in any registered bank or other financial institution;

  2. internal registered stock contemplated in section 21 (1) of the Exchequer Act, 1975 (Act No. 66 of 1975);

  3. a unit trust scheme managed by a company which has been registered as a management company in terms of section 4 or 30 of the Unit Trusts Control Act, 1981 (Act No. 54 of 1981); and

  4. any other manner approved by the Minister.

(3)  The moneys received by a SETA may be used only in the prescribed manner and to--

  1. fund the performance of its functions; and

  2. pay for its administration within the prescribed limit.

(4)  In each financial year, ending on the prescribed date, every SETA must, at a time determined by the Minister, submit to the Minister a statement of the SETA's estimated income and expenditure for the following financial year.

(5)  Every SETA must, in accordance with the standards of generally accepted accounting practice--



  1. keep proper record of all its financial transactions, assets and liabilities; and

  2. within six months after the end of each financial year, prepare accounts reflecting income and expenditure and a balance sheet showing its assets, liabilities and financial position as at the end of that financial year.

(6)  The Auditor-General must--

  1. audit the accounts, financial statements and financial management of a SETA; and

  2. report on that audit to the SETA and to the Minister and in that report express an opinion as to whether the SETA has complied with the provisions of this Act, and its constitution, relating to financial matters.

15.   Taking over administration of SETA.--(1)  The Minister may, after consultation with the National Skills Authority, by notice in the Gazette, direct the Director-General to appoint an administrator to take over the administration of a SETA if the Minister is of the opinion that--

  1. the SETA fails to perform its functions;

  2. there is mismanagement of its finances; or

  3. its membership no longer substantially represents the composition contemplated in section 11.

(2)  In that notice the Minister--

  1. must determine the powers and duties of the administrator appointed in terms of subsection (1);

  2. may suspend or replace one or more members of the SETA for a reason contemplated in subsection (1) (a), (b) or (c);

  3. may suspend the operation of the constitution of the SETA; and

  4. may, in the prescribed manner, transfer funds in the SETA's bank account to the National Skills Fund.

(3)  If a notice is published in terms of subsection (1), the Minister may, to ensure that the SETA resumes the performance of its functions--

  1. amend its constitution;

  2. reinstate any of its members; and

  3. withdraw or amend any provision of the notice contemplated in subsection (2) on such conditions as the Minister considers appropriate.

CHAPTER 4
LEARNERSHIPS

16.   Learnerships.--A SETA may establish a learnership if--

  1. the learnership consists of a structured learning component; the learnership includes practical work experience of a specified nature and duration;

  2. the learnership would lead to a qualification registered by the South African Qualifications Authority and related to an occupation; and

  3. the intended learnership is registered with the Director-General in the prescribed manner.

17.   Learnership agreements.--(1)  For the purposes of this Chapter, a "learnership agreement" means an agreement entered into for a specified period between--

  1. a learner;

  2. an employer or a group of employers (in this section referred to as "the employer"); and

  3. a training provider accredited by a body contemplated in section 5 (1) (a) (ii) (bb) of the South African Qualifications Authority Act or group of such training providers.

(2)  The terms of a learnership agreement must oblige--

  1. the employer to--

    1. employ the learner for the period specified in the agreement;

    2. provide the learner with the specified practical work experience; and

    3. release the learner to attend the education and training specified in the agreement;

  2. the learner to--

    1. work for the employer; and

    2. attend the specified education and training; and

  3. the training provider to provide--

    1. the education and training specified in the agreement; and

    2. the learner support specified in the agreement.

(3)  A learnership agreement must be in the prescribed form and registered with a SETA in the prescribed manner.

(4)  A learnership agreement may not be terminated before the expiry of the period of duration specified in the agreement unless--



  1. the learner meets the requirements for the successful completion of the learnership;

  2. the SETA which registered the agreement approves of such termination; or

  3. the learner is fairly dismissed for a reason related to the learner's conduct or capacity as an employee.

(5)  The employer or training provider that is party to a learnership agreement may be substituted with--

  1. the consent of the learner; and

  2. the approval of the SETA which registered the agreement.

(6)  A SETA must, in the prescribed manner, provide the Director-General with a record of learnership agreements registered by the SETA.

18.   Contract of employment with learner.--(1)  If a learner was in the employment of the employer party to the learnership agreement concerned when the agreement was concluded, the learner's contract of employment is not affected by the agreement.

(2)  If the learner was not in the employment of the employer party to the learnership agreement concerned when the agreement was concluded, the employer and learner must enter into a contract of employment.

(3)  The contract of employment with a learner contemplated in subsection (2) is subject to any terms and conditions that may be determined by the Minister on the recommendation of the Employment Conditions Commission established by section 59 (1) of the Basic Conditions of Employment Act.

(4)  Chapters Eight and Nine1 of the Basic Conditions of Employment Act apply, with the changes required by the context, to a determination made in terms of subsection (3) except that--



  1. for the purposes of section 54 (3) of that Act, the Employment Conditions Commission must also consider the likely impact that any proposed condition of employment may have on the employment of learners and the achievement of the purposes of this Act; and

  2. section 55 (7) of that Act does not apply.

(5)  The contract of employment of a learner may not be terminated before the expiry of the period of duration specified in the learnership agreement unless the learnership agreement is terminated in terms of section 17 (4).

(6)  The contract of employment of a learner terminates at the expiry of the period of duration specified in the learnership agreement unless the agreement was concluded with a person who was already in the employment of the employer party to the agreement when the agreement was concluded.



19.   Disputes about learnerships.--(1)  For the purposes of this section a "dispute" means a dispute about--

  1. the interpretation or application of any provision of--

    1. a learnership agreement;

    2. (a contract of employment of a learner; or

    3. a determination made in terms of section 18 (3);

  2. this Chapter; or

  3. the termination of--

    1. a learnership agreement; or

    2. a contract of employment of a learner.

(2)  Any party to a dispute may in writing refer the dispute to the Commission for Conciliation, Mediation and Arbitration established by section 112 of the Labour Relations Act, 1995 (Act No. 66 of 1995).

(3)  The party who so refers the dispute must satisfy that Commission that a copy of the referral has been served on all the other parties to the dispute.

(4)  The Commission must attempt to resolve the dispute through conciliation.

(5)  If the dispute remains unresolved, any party may request that the dispute be resolved through arbitration as soon as possible.

(6)  The law that applies to the lawfulness2 and fairness3 of a dismissal for a reason related to an employee's capacity or conduct applies to a dispute contemplated in subsection (1) (c) (ii).

CHAPTER 5
SKILLS PROGRAMMES

20.   Skills programmes.--(1)  For the purposes of this Chapter, a "skills programme" means a skills programme that--


  1. is occupationally based;

  2. when completed, will constitute a credit towards a qualification registered in terms of the National Qualifications Framework as defined in section 1 of the South African Qualifications Authority Act;

  3. uses training providers referred to in section 17 (1) (c); or

  4. complies with the prescribed requirements.

(2)  Any person that has developed a skills programme may apply to--

  1. a SETA with jurisdiction for a grant; or

  2. the Director-General for a subsidy.

(3)  The SETA or the Director-General may fund the skills programme if--

  1. it complies with--

    1. subsection (1);

    2. any requirements imposed by the SETA or the Director-General; and

    3. any prescribed requirements; and

  2. it is in accordance with--

    1. the sector skills development plan of the SETA; or

    2. the national skills development strategy; and

  3. there are funds available.

(4)  A SETA or the Director-General may set any terms and conditions for funding in terms of subsection (3) that the SETA or the Director-General, as the case may be, considers necessary.

(5)  The SETA or the Director-General must monitor the skills programmes funded by the SETA or the Director-General, as the case may be.



(6)  A SETA or the Director-General that has made funds available for a skills programme may withhold funds or recover any funds paid if the SETA or the Director-General, as the case may be, is of the opinion that--

  1. the funds are not being used for the purpose for which they were made available;

  2. any term or condition of the funding is not complied with; or

  3. the SETA or the Director-General, as the case may be, is not satisfied that the training is up to standard.

21.   Disputes.--Any party to a dispute about the application or interpretation of--

  1. any term or condition of funding referred to in section 20 (4); or

  2. any provision of this Chapter,

may refer the dispute to the Labour Court for adjudication.

CHAPTER 6
INSTITUTIONS IN DEPARTMENT OF LABOUR

22.   Skills Development Planning Unit.--(1)  Subject to the laws governing the public service, the Director-General must--

  1. establish a Skills Development Planning Unit in the Department; and

  2. provide the Unit with the personnel and financial resources necessary for the performance of its functions.

(2)  The functions of the Skills Development Planning Unit are--

  1. to research and analyse the labour market in order to determine skills development needs for--

    1. South Africa as a whole;

    2. each sector of the economy; and

    3. organs of state;

  2. to assist in the formulation of--

    1. the national skills development strategy; and

    2. sector skills development plans; and

  3. to provide information on skills to--

    1. the Minister;

    2. the National Skills Authority;

    3. SETAs;

    4. education and training providers; and

    5. organs of state.

23.   Employment services.--(1)  Subject to the laws governing the public service, the Director-General must--

  1. establish labour centres in the Department; and

  2. appoint such number of persons in the public service at each centre as is necessary to perform the functions of that centre.

(2)  The functions of those labour centres are--

  1. to provide employment services for workers, employers and training providers, including improvement of such services to rural communities;

  2. to register work-seekers;

  3. to register vacancies and work opportunities;

  4. to assist prescribed categories of persons--

    1. to enter special education and training programmes;

    2. to find employment;

    3. to start income-generating projects; and

    4. to participate in special employment programmes; and

  5. to perform any other prescribed function related to the functions referred to in paragraphs (a) to (d).

(3)  The Minister may, after consulting the National Skills Authority, by notice in the Gazette, require each employer to notify a labour centre in the prescribed manner of--

  1. any vacancy that employer has; and

  2. the employment of any work-seeker referred by that labour centre.

24.   Registration of persons that provide employment services.--(1)  Any person who wishes to provide employment services for gain must apply for registration to the Director-General in the prescribed manner.

(2)  The Director-General must register the applicant if satisfied that the prescribed criteria have been met.

(3)  If the Director-General--


  1. registers an applicant, the prescribed certificate must be issued to that person; or

  2. refuses to register an applicant, the Director-General must give written notice of that decision to the applicant.

(4)  A registered employment service must comply with the prescribed criteria.

25.   Cancellation of registration of employment service.--(1)  Subject to this section, the Director-General may cancel the registration of an employment service if satisfied that the employment service is not complying with the prescribed criteria.

(2)  If the Director-General has reason to believe that an employment service is not complying with the prescribed criteria and accordingly that its registration should be cancelled, the Director-General must, before cancelling its registration--



  1. notify the service of the intention to cancel registration and the reasons for doing so;

  2. give the service 30 days from the date of the notice to make representations on why its registration should not be cancelled; and

  3. take those representations into account in reaching a decision.

(3)  If the Director-General cancels the registration of an employment service, the Director-General must give written notice of that decision to the employment service.

26.   Appeal against Director-General's decision.--(1)  Any person aggrieved by a decision of the Director-General in terms of section 24 (3) (b) or 25 (3) may, within 30 days of the written notice of that decision, in writing, request the Director-General to give that person written reasons for the decision.

(2)  The Director-General must give that person written reasons for the decision within 30 days of receiving that request.

(3)  Any person aggrieved by a decision of the Director-General in terms of section 24 (3) (b) or 25 (3) may appeal to the Labour Court against that decision within 60 days of--


  1. the date of the Director-General's decision; or

  2. if written reasons for the decision are requested, the date of those reasons.

(4)  The Labour Court may, on good cause shown, extend the period within which a person may note that appeal.

CHAPTER 7
FINANCING SKILLS DEVELOPMENT

27.   National Skills Fund.--(1)  The National Skills Fund is hereby established.

(2)  The Fund must be credited with--



  1. 20 per cent of the skills development levies as contemplated in the Skills Development Levies Act;

(Date of commencement of paragraph (a) to be proclaimed.)

  1. the skills development levies collected and transferred to the Fund, in terms of the Skills Development Levies Act, in respect of those sectors in which there are no SETAs;

(Date of commencement of paragraph (b) to be proclaimed.)

  1. money appropriated by Parliament for the Fund;

  2. interest earned on investments contemplated in section 29 (3);

  3. donations to the Fund; and

  4. money received from any other source.

(Date of commencement of s. 27: 2 February, 1999.)

28.   Use of money in Fund.--The money in the Fund may be used only for the projects identified in the national skills development strategy as national priorities or for such other projects related to the achievement of the purposes of this Act as the Director-General determines.

(Date of commencement: 2 February, 1999.)



29.   Control and administration of Fund.--(1)  The Director-General is the accounting officer of the Fund in terms of the Exchequer Act, 1975 (Act No. 66 of 1975) and must--

  1. control the Fund;

  2. keep a proper record of all financial transactions, assets and liabilities of the Fund; and

  3. as soon as possible after the end of each financial year, ending on the prescribed date, prepare accounts of the income and expenditure of the Fund for the year and a balance sheet of its assets and liabilities as at the end of that year.

(2)  Any money in the Fund not required for immediate use may be invested with the Public Investment Commissioner or with a financial institution approved by the Minister and may be withdrawn when required.

(3)  Any unexpended balance in the Fund at the end of the financial year must be carried forward to the next financial year as a credit to the Fund.

(Date of commencement of s. 29: 2 February, 1999.)

30.   Budget for training by public service employers.--Each public service employer in the national and provincial spheres of government--


  1. must budget for at least one per cent of its payroll for the training and education of their employees with effect from 1 April 2000; and

  2. may contribute funds to a SETA.

CHAPTER 8
GENERAL

31.   Jurisdiction of Labour Court.--(1)  Subject to the jurisdiction of the Labour Appeal Court and except where this Act provides otherwise, the Labour Court has exclusive jurisdiction in respect of all matters arising from this Act.

(2)  The Labour Court may review any act or omission of any person in connection with this Act on any grounds permissible in law.

(3)  If proceedings concerning any matter contemplated in subsection (1) are instituted in a court that does not have jurisdiction in respect of that matter, that court may at any stage during proceedings refer the matter to the Labour Court.

32.   Monitoring, enforcement and legal proceedings.--Chapter Ten and Schedule Two of the Basic Conditions of Employment Act apply, with changes required by the context, to--


  1. the monitoring and enforcement of this Act; and

  2. any legal proceedings concerning a contravention of this Act.

33.   Offences.--It is an offence to--

  1. obstruct or attempt to influence improperly a person who is performing a function in terms of this Act;

  2. obtain or attempt to obtain any prescribed document by means of fraud, false pretences or by submitting a false or forged prescribed document;

  3. furnish false information in any prescribed document knowing that information to be false; or

  4. provide employment services for gain without being registered in terms of section 24.

34.   Penalties.--Any person convicted of an offence referred to in section 33 may be sentenced to a fine or imprisonment for a period not exceeding one year.

35.   Delegation.--(1)  The Minister may in writing delegate to the Director-General or any other officer of the Department any power or duty conferred or imposed on the Minister by this Act.

(2)  The Director-General may, in writing, delegate to any officer of the Department any power or duty conferred or imposed on the Director-General by this Act.

(3)  Any person to whom any power or duty has been delegated in terms of subsection (1) or (2) must exercise that power or perform that duty subject to the conditions that the person who made the delegation considers necessary.

(4)  Any delegation in terms of subsection (1) or (2)--



  1. must be in writing;

  2. does not prevent the person who made the delegation from exercising the power or performing the duty so delegated; and

  3. may at any time be withdrawn in writing by that person.

36.   Regulations.--The Minister may, after consultation with the National Skills Authority, by notice in the Gazette, make regulations relating to any matter which--

  1. may or must be prescribed under this Act; and

  2. is necessary to prescribe in order to achieve the purposes of this Act.

37.   Repeal of laws and transitional provisions.--(1)  The laws referred to Schedule 1 are hereby repealed to the extent specified.

(2)  The repeal of those laws is subject to any transitional provision in Schedule 2.



38.   Act binds State.--This Act binds the State.

39.   Short title and commencement.--(1)  This Act is called the Skills Development Act, 1998.

(2)  This Act takes effect on a date to be determined by the President by proclamation in the Gazette.


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