Regulations

A crucial development in the vocational development and training space is currently in play regarding the mandatory grants available through the SETA’s. The SETA Grant Regulations issued by the Minister of Higher Education and Training on 3 December 2012 revise the Mandatory Grants from 50% to 20%. As these amended figures fundamentally affect vocational training and development, Business Unity South Africa (BUSA) has taken a pro-active role in addressing the issues arising from these regulations.

BUSA has both engaged with the Minister of Higher Education and Training, and pursued the optional path of seeking legal opinion. However, before a legal process is pursued, BUSA will facilitate a bilateral meeting with the Minister to discuss its concerns, also taking into account the need to resolve this matter amicably as it tries to build trust and strengthen the relationship between business and government as part of its collective goal to deliver on the National Development Plan. A letter requesting a meeting with the Minister has been sent and acknowledged by the Minister, and we are following up with the Minister’s office to secure a date for this meeting. Should this process not yield any positive outcome, BUSA will continue with the legal process bearing in mind that the Regulations come into effect in April 2013 and SETA’s are already preparing for implementation.

According to the preliminary legal opinion, there is a reasonable to good prospect of success on a procedural challenge of the regulations given that there was inadequate consultation with the National Skills Authority as required by s36 of the Skills Development Act. There is also a rationality argument based on the irrationality of giving SETAs more discretion and the NSA more funding if these institutions are already currently struggling to disburse in terms of the current and more limited funding model.