Why is the Skills Development Act Important?

The Skills Development Act stimulates education, addresses socio-economic challenges, and promotes a skilled and competitive workforce.

The Awesome Skills Development Act of 1998


The Skills Development Act is important in South Africa for various reasons, particularly from an education and socio-economic development perspective. The Skills Development Act stimulates education, addresses socio-economic challenges, and promotes a skilled and competitive workforce that contributes to the overall development of the country.

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Here are 10 key points to consider:

10. Addressing Unemployment:

  • South Africa faces high levels of unemployment, particularly among the youth. The Skills Development Act aims to reduce unemployment by equipping individuals with the skills needed to enter the workforce.

9. Closing the Skills Gap:

  • The Act is designed to bridge the gap between the skills demanded by the labor market and the skills possessed by the workforce. By identifying and addressing skills shortages, it contributes to a more efficient and competitive economy.

8. Promoting Lifelong Learning:

  • The Act encourages a culture of continuous learning and development. It emphasizes the importance of ongoing education and training to keep individuals relevant and adaptable in a rapidly changing job market.
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7. Enhancing Quality of Education and Training:

  • The Act sets standards for the quality of education and training programs, ensuring that individuals receive relevant and valuable skills. This contributes to a workforce that meets international standards and is competitive on a global scale.

6. Fostering Economic Growth:

  • A skilled workforce is a key driver of economic growth. The Act supports the development of skills that are essential for various sectors, contributing to increased productivity, innovation, and competitiveness.

5. Encouraging Private Sector Participation:

  • The Act encourages collaboration between the government and the private sector. This partnership is essential for identifying industry-specific skills needs and tailoring education and training programs accordingly.

4. Promoting Equity and Inclusivity:

  • The Act emphasizes the importance of equal access to skills development opportunities, regardless of background or demographic factors. This contributes to a more inclusive society and helps address historical inequalities.

3. Meeting Employment Equity Goals:

  • The Act aligns with South Africa’s broader employment equity goals by promoting equal opportunities for all individuals, irrespective of race, gender, or other factors.

2. Reducing Poverty:

  • By empowering individuals with relevant skills, the Act contributes to poverty reduction. A skilled workforce is more likely to secure stable employment and higher incomes, leading to improved living standards.

1. Global Competitiveness:

  • In an increasingly globalized economy, having a skilled and adaptable workforce is essential for a country’s competitiveness. The Skills Development Act plays a role in positioning South Africa as a competitive player in the international arena.

What is the Purpose of the Skills Development Act?

This act is a response to the short supply of skilled personnel. This shortage creates a serious obstacle to the competitiveness of the South African industry. The Skills Development Act aims to expand the knowledge and competencies of the labour force to improve productivity and employment.

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The Main Aims of the Skills Development Act

  1. To improve the quality of life of workers, their prospects of work and labour mobility
  2. Harness productivity in the workplace and increase the competitiveness of employers
  3. Stimulate the levels of investment in education and training in the labour market and improve the return on that investment
  4. To promote self-employment
  5. To improve the delivery of services

Key Issues and Obligations of the Act

The aims of the Act are to be achieved by establishing an institutional and financial framework. For example the National Skills Authority (NSA), the National Skills Fund (NSF), the Sector Education and Training Authority (SETAs) and institutions in the Department of Labour.

The National Skills Authority in the SDA Framework

The Act established the National Skills Authority on 12 April 1999. The functions of the NSA are to advise the Minister of Labour on a national skills development policy and strategy, and on guidelines to implement the national skills development strategy. It also advises the Minister on the allocation of subsidies from the NSF. It reports to the Minister on the progress made in the implementation of the strategy. The NSA has to conduct investigations on any matter that arises out of the application of the Act.

The composition of the NSA is as follows:

  1. Chairperson
  2. Executive Officer
  3. Organised business (BSA and Nafcoc)
  4. Organised labour (Cosatu, Nactu and Fedusa)
  5. Government departments (Labour, Education, DPSA, DTI and DACST)
  6. Community (Youth, Women People with disabilities, Rural and Civic)
  7. Representatives from education and training providers (higher education, further education, adult basic education and training, and private)

The Role of the Different SETAs Now Fall under the QCTO

The Minister of Labour is given the responsibility by a law (the Act) to create and support a SETA (Sector Education and Training Authority) for different economic sectors in the country. A SETA’s main job is to plan and carry out skills development within a specific industry. This involves creating plans for developing skills, using grants to encourage skill development in workplaces, and promoting learnerships, which are structured programs combining learning and practical work experience.

SETAs also have the role of ensuring the quality of education and training in their sectors, and they need to coordinate with various entities such as Employment Services, the NSA (National Skills Authority), and provincial bodies. They are required to regularly report to the Director-General of the Department of Labour about how they’re implementing their plans, managing their finances, and achieving their goals. The funding for SETAs comes from levies collected from the industries they serve and money received from the National Skills Fund.

The composition of a SETA must, in terms of section 11 of the Act, include:

  1. Organised employers (including sme’s)
  2. Organised labour
  3. Relevant government departments
  4. Relevant professional bodies (optional)
  5. Representatives form the relevant bargaining council (optional)

The Importance of SETA Learnerships are Emphasized

One specific function of a SETA is to create learnerships. A learnership is a program that includes both a structured learning curriculum and hands-on work experience of a specific kind and duration. The ultimate goal of a learnership is to lead participants to gain a qualification that is officially recognized by the South African Qualifications Authority.

The Skills Development Planning Unit

The Director-General of the Department of Labour is obliged in terms of section 22 of the Act to establish a Skills Development Planning Unit in the Department and provide it with the personnel and financial resources necessary for the performance of its functions. The functions of the Unit are:

  1. to research and analyse the labour market in order to determine skills development needs for South Africa as whole, each sector of the economy and organs of state
  2. assist in the formulation of the nations skills development strategy and sector skills development plans
  3. to provide information on skills to the Minister, NSA, SETA, education and training providers, and organs of state.

The Establishment of Labour Centres

The Director-General has the mandate to set up labour centres in the Department. The functions of the labour centres are to provide employment services for workers, employers, training providers and rural communities. The labour centres carry out the following:

  1. register work-seekers
  2. list vacancies and work opportunities
  3. assist prescribed categories of persons to:
  • enter special education and training programs
  • find employment
  • start incoming generating projects
  • participate in special employment programs

The Act established the National Skills Fund to fund projects that have been identified in the national skills development strategy as priority or other projects the Director-General sees as necessary to the achievement of the purposes of the Act. The Skills Development Levies Act of 1999 provides for the collection, administration, disbursement and regulation of the monies in the Fund.

Finally, the Act provides for the public service employer in the national and provincial spheres of government to budget for at least one percent of its payroll for education and training of its employees with effect from 1 April 2000 and to contribute funds to a SETA where necessary.

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