Skills development is the training and development that the employer provides to his employees in the workplace.

It is often construed that only training that is provided by an outside training provider falls within the definition of skills development.

The definition also includes on-the-job training provided by the employer.

In the late 80s, Government started researching a new training methodology - Outcomes-Based Education (OBE).

This method of training was adopted from the then Commonwealth training method, which made provision for people qualifying not only by formal education, but also by informal on-the-job training based largely on their experience.

The system made provision for what is now known as “recognition of prior learning” – or  (RPL) -  which basically entails testing a person's ability to do a specific job and awarding this person either a qualification or credits towards a qualification, based on his current knowledge and ability to perform the required task.

In layman's terms this means that if a person has been working as a plumber for the last 12 years this person may request a training institution to perform an RPL exam, to assess his capability and award him with a qualification based on his experience.

It is therefore possible for him to receive a plumbing qualification based on his experience, without having served a recognized apprenticeship or learnership..

This new training methodology also created what is now known as the National Qualifications Framework (NQF) system, which allows educational levels from different industries to be ranked in parallel on a single system.

In layman's terms this means that you will be able to draw a parallel between the qualification of a secretary and a salesperson or a chartered accountant and a medical doctor. The NQF system consists of eight different levels namely-

NQF level 1 - General Education and Training (GET) levels -  primary training and development up to grade 8 and 9 and ABET 4.

NQF 2 to 4 - Further Education and Training (FET) level -  secondary education including certificates and qualifications up to grade 12 or N5

NQF 5 to 8 - Higher Education and Training (HET) levels -  higher education such as university degrees, doctorates and further research.

This framework allows education and training to take place within a formal structure that can be monitored and controlled by Government.

In terms of the Skills Development Act of 1999, Government created 24 Sector Education and Training Authorities (SETA). The act also divided all organisations into different industries based on their core activities, and the Department of Labour and SARS were tasked with allocating organisations into the different industries.

It was the responsibility of the SETA to ensure that all training within that industry were in-line with the requirements laid down by the industry leaders. During the next 5 years training institutions had to register and accredit all their formal training courses and qualifications with the SETA and the South African Qualification Authority – S.A.Q.A..

Government also identified the need for accelerated qualifications due to the brain-drain effect after 1994 and introduced the learnership system, now people could qualify within 12 to 18 months using on-the-job training.

A learnership consist of two parts – the first part being the theoretical part delivered by a learnership accredited training institution,  and the second part being a practical on the job practical training, where the student receive on-the-job training.

The key principle of a learnership is basically the same as an apprenticeship with the biggest difference being the intensity of training and the tight control over the training delivered on a learnership.

There are several financial and other advantages to having learnerships in the organisation.

Tax rebates of up to R50,000, cash discretionary grants of up to R20.000 and even grants to supply tools and equipment.

It must be borne in mind that the cost of a learnership will equal the benefits received from the SETA, so this is not a moneymaking scheme.

Many organisations have contacted me to start learnerships only to find out that the cost of training can only be recouped once the training has been completed. The organisation needs to financially carry the trainee for the duration of the training period which is usually 12 months. The organisation also need to have mentors as well as the equipment available for training and therefore it is best left to organisations with well-developed infrastructures and deep wallets.

To fund all these wonderful plans and systems, Government introduced the Skills Development Levies Act of 1999. In terms of the Skills Development Levies Act all organisations in South Africa with a payroll exceeding R500,000 per annum must pay a 1% Skills Development Tax on their payroll. This tax is fully contributed by the employer as part of its general statutory taxes calculated on the EMP 201 SARS form.

In terms of the act, organisations may claim back up to 55% of their paid Skills Development Tax -  in other words they may claim back 55 cents out of every Rand.

However organisations my only claim back their SDL tax if

In terms of the Skills Development Levies act, organisations not paying SDL tax may not claim the grants, they may however offer learnership and claim learnership grants. The actual claim that the organisation has to submit to activate the claim procedure is called an annual training report and workplace skills plan (ATR & WSP).

This document consists of two parts. The first part is the annual training report.

The annual training report does exactly what it says; it basically tells the SETA what training has taken place in the organisation in the previous 12 months, and which employees received training.

It also contains information to the type, cost and delivery method of the training it goes further to assess whether the training that the employees received is in line with the planned training for the organisation, industry and critical skills indentified by the SETA.

The second part of the document is the workplace skills plan,

This part of the document tells the SETA what training the organisation will provide to the employees in the next 12 months, based on the operational requirements of the organisation, its industry and the  critical skills identified by the SETA.

This document is thus a check and balance system to the SETA, allowing them to gather valuable statistical information with regards to skills shortages, critical skills in organisations and development requirements within the industry.

It also allows Government to project skills needs and to make this information available to training institutions such as universities and technical training institutions. Without this information the Government would not be able to plan learnership training courses and provide for skills shortages.

This mammoth task falls under the control of the Skills Development Facilitator (SDF) of the organisation.

To complete the required documentation. the organisation will need to have a trained and accredited SDF, although this might seem like just completing a form, the compilation of the information and the implementation is very involved. In terms of the Skills Development Act and the rules and regulations of the SETA the SDF is responsible for the following:

Before submitting the workplace skills plan and annual training report, the skills development facilitator as the responsible person for the organisation, will sign the document verifying that the information contained in the document is correct and true. It must be noted that the information provided on the workplace skills plan and annual training report must be 100% correct and true.

Organisations providing untrue or false information on these documents run the risk of receiving an extremely high fine or even a one-year jail term.

 Stephan du Toit is the Managing Director of Stephan du Toit and Associates.

The South African Labour Guide is a private company and has no association with the Commission for Conciliation, Mediation and Arbitration (CCMA), you may find the CCMA on www.ccma.org.za