NEDLAC REPORT on the SKILLS DEVELOPMENT BILL

12 May 1998

1. BACKGROUND

1.1. The Ministry of Labour's "Programme of Action 1994-98" highlights the urgent need to develop and implement a national training and human resources development policy. This would involve, inter alia, the implementation of the recommendations of the multipartite National Training Strategy Initiative, published in April 1994.

1.2. Several years of discussion within the Department of Labour and between the social partners in the National Training Board and in industry training boards culminated in the preparation of a draft green paper by the National Training Board in September 1996.

1.3. A Nedlac counterpart group of the Japanese Grant Fund, comprising key stakeholders, commissioned research on different options for financing training and to make recommendations on a sustainable funding system for skills development in South Africa. This research contributed to the development of the green paper.

1.4. The green paper on a skills development strategy for economic and employment growth in South Africa was released by the Department of Labour in March 1997.

2. PROCESS IN NEDLAC

2.1. The Nedlac counterpart group on the financing of training agreed to establish a negotiating committee in September 1996 in anticipation of the tabling of a green paper and legislation on skills development in Nedlac by government.

2.2. At the 28 February 1997 Executive Council meeting consensus emerged on the need to address skills development, and particularly the financing of training, as a priority issue in Nedlac.

2.3. Following the release of the green paper in March 1997 the negotiating committee met to discuss how best to interact with the green paper. It was agreed that the parties should have a formal opportunity in Nedlac to respond to the proposals in the green paper before draft legislation was finalised by the department and submitted to Cabinet.

2.4. This meeting took place on 14 May 1997. Business, labour and the community constituency presented their responses to the green paper to government.

2.5. The skills development bill (hereafter referred to as 'the bill') was presented to the negotiating committee on 23 September 1997.

2.6. The negotiating committee met on 1 October 1997 to commence negotiations. At this first meeting business, labour and the community constituency tabled their formal positions on the bill.

2.8. Negotiations were held on the following dates:

2.8.1. 1-3 October 1997.

2.8.2. 7-8 October 1997.

2.8.3. 14-15 October 1997.

2.8.4. 12 November 1997.

2.8.5. 27 November 1997.

2.8.6 16 February 1998.

2.8.7. 15 April 1998.

2.8.8. 4-6 May 1998.

2.9. At the meeting on 27 November 1997 it was agreed that the negotiating committee would meet again in February 1998 to consider a revised draft of the bill. This revised draft would take into account the various amendments to the wording of the bill that had been agreed by the negotiating committee.

2.10. The negotiating committee met on 16 February 1998. It was agreed to adjourn the negotiations until the revised bill had been finalised and circulated to the parties.

2.11. A revised skills development bill was presented to the negotiating committee on 15 April 1998.

2.12. Negotiations resumed on the revised bill on 4, 5 and 6 May 1998. At these meetings the negotiating committee recorded agreement on most areas of the bill. Disagreements were recorded on three aspects of the bill. These are recorded below in point four of this report.

2.13. On 27 March 1998 the Executive Council mandated the Management Committee and the Labour Market Chamber to finalise the Nedlac Report on the Skills Development Bill.

2.14. The Management Committee, on 4 May 1998, delegated its authority to finalise the Nedlac Report to a committee comprising the lead negotiators (A. Bird -government, B. Angus -business, M. Tshehla -labour, M. Toni -community) and the convenors of the Labour Market Chamber (V. van Vuuren -business, M. Buthelezi -labour, and L. Kettledas -government).

2.15. This report was finalised by the lead negotiators and convenors of the Labour Market Chamber on 12 May 1998.

3. AGREEMENTS

The revised skills development bill, which is attached to this report, is supported by Nedlac subject to the reservations recorded in point 4 of the report.

4. RESERVATIONS

The following reservations about the revised skills development bill were noted:

4.1. Funding the National Skills Fund

4.1.1. It was agreed that the issue of how the National Skills Fund is funded requires further consideration and that an exploration of alternatives would be useful.

4.1.2. It is thus recorded that business did not agree to the funding of the National Skills Fund as provided for in the bill.

4.2. Demarcation of sectors for the establishment of Sectoral Education and Training Authorities

4.2.1. The bill provides for the demarcation of sectors to be governed by regulations. Government and community agree that these regulations would give powers to the National Skills Authority to advise the Minister of Labour.

4.2.2. Business proposed that Nedlac should consider the scope of sectors, based on the criteria for demarcating sectors in the bill.

4.2.3. Labour supports business's view that Nedlac should consider the scope of sectors.

4.3. Mechanism to review the levy

It was noted that labour want the bill to inc a provision to increase the quantum of the levy-grant system over time.

4.4. Status of education and training providers on the National Skills Authority

4.4.1. The bill provides for four voting members of education and training providers to be represented on the National Skills Authority in section 5(3)(e).

4.4.2. Labour does not support the voting status accorded to representatives of education and training providers.

5. CONCLUSION

5.1. This report therefore completes consideration of the issue in Nedlac, and the report and the revised skills development bill are hereby submitted to the Minister of Labour in terms of section 8 of the Nedlac Act, No. 35 of 1994.

5.2. It was agreed that the parties will continue to try to reach consensus on outstanding issues.