Closing the gap between Skills Development & B-BBEE

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Today it is common knowledge that the 2013 General Amended Codes (effective from 01 May 2015), brought about significant changes in how companies, irrespective of their size, industry and/or ownership, approach and regard B-BBEE. One cannot help but wonder with submissions to the relevant SETA’s due by the end of the month, how does B-BBEE truly impact Skills Development?

Firstly, Skills Development is no longer a mere element on which companies can obtain points so as to increase their overall B-BBEE level. In terms of the 2013 General Amended Codes and also reiterated in all the Sector Codes gazetted to date, Skills Development is deemed to be a Priority Element, meaning that companies need to meet the 40% sub-minimum target in order to avoid a penalty whereby their overall B-BBEE Score is discounted with 1 level, i.e. an overall B-BBEE Level 5 will become a Level 6.

That said, in accordance with the required race and gender targets for Skills Development spend and also for the Head Count of employed and unemployed Black people, having the budget to spend on training programmes and also being able to find a reputable external training provider who specialises in accredited learnerships, internships and apprenticeships for Black unemployed people, are not enough in order to be deemed compliant.

It is important to note that for any Generic company (i.e. a company with an annual turnover exceeding R 50 million per annum) to be eligible to obtain points on their respective Skills Development scorecards, they are not just required to submit their “Workplace Skills Plan (WSP), Annual Training Report (ATR) and Pivotal Report” to the applicable SETA on an annual basis. The applicable SETA’s approval of their submitted WSP and ATR’s are specifically required.

Furthermore, the implementation of a “Priority Skills Programme” generally, and more specifically for Black people is also required. “Priority Skills” in this context refer to the “Core, Critical and Scarce Skills” as well as any skills specifically identified in a Sector Skills Plan issued by SETA, the National Skills Development Strategy III, New Growth Path and National Development Plan. To simplify, these “Core Skills” are skills which are:

  1. Value-adding to the activities of the company whilst being in line with its core business,

  2. In areas, the company cannot outsource and

  3. Within the production or operational part of the company’s value-chain as opposed to the supply side, services or downstream operations.

Based on the above, it is clear that B-BBEE is an assistive and corrective measure to ensure that companies follow a strategic, realistic and economically viable approach to Skills Development as training programmes need to provide value not just to the company and its core business and/or operations but also to the industry of that said company. By specifically requiring companies to ensure that their WSP’s and ATR’s are approved also supports this notion of accuracy and accountability further.

In closing, it is important to note that despite the above changes, the purpose of the 2013 General Amended Codes specifically regarding Skills Development is to ensure that:

“5.1.1. Skills Development must contribute to the achievement of the country’s economic growth and social development goals that will enrich the creation of decent work and sustainable livelihoods,

5.1.2 Promote the development of an industrial skills base in critical sectors of production and value-added manufacturing.

5.1.3 Support “Professional, Vocational, Technical and Academic Learning Programmes” achieved by means of professional placements, work integrated learning, apprenticeships, learnerships and internships, that meet the critical needs for economic growth and development, and

5.1.4 Strengthen the skills and human resource base by encouraging the support of skills development initiatives with an emphasis on skills development and career pathing for all working people in order to support employment creation.”

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