Setas seek lay-off lifelines from NSF
zz Chemical and education sector authorities fall hundreds of millions of rands short of financing scheme
September 14, 2009
By Donwald Pressly
Two key training authorities need hundreds of millions of rands to finance their lay-off programmes - meant to provide a gap for workers who may otherwise be retrenched.
This money would have to be acquired from the National Skills Fund (NSF), MPs were told on Friday.
The Education Training and Development Practices (ETDP) Sector Education and Training Authority (Seta) - which works in the education sector including further education colleges and libraries - and the Chemical Industries Education and Training Authority (Chieta), told MPs on the labour portfolio committee that they would be seeking funding over and above the levy revenue they receive.
Companies are levied 1 percent of turnover for training purposes, which is allocated to the NSF and Setas.
The Finance, Accounting, Management Consulting and Related Services Seta (Fasseta) reported that job losses were not anticipated in the broader finance sector - which excludes banking. It would focus on beefing up workers' skills to prepare them for an economic upturn.
The three Setas explained to MPs what contribution they were making towards ameliorating the effect of the economic downturn. They also reported on progress made in training workers under the special lay-off programmes in affected sectors.
Fasseta's chief operating officer, Nadine Kater, noted that there tended to be a moratorium on staffing of administration departments at companies in the sector but required skills in accounting, for example, were not being shed.
Its chief executive, Cheryl James, said that Fasseta's training budget was just short of R200 million a year.
Of the company levy contribution for training, 20 percent went to the NSF and 80 percent to the relevant Seta. Half of the money was returned to the companies through mandatory training grants, 10 percent was spent on administration and about 20 percent was discretionary.
The latter was being used in appropriate further education in finance, accounting and management consulting, James reported.
ETDP Seta, one of 23 skills development agencies, reported that it had collected nearly R170m in revenue in 2008/09 but job losses in the sector would mean less revenue in the coming year.
Its chief executive, Kelebogile Dilotsethle, predicted potential job losses of about 16 000 employees. Her Seta represented about 6 percent of the workforce.
It had R30m in reserve funding and this would allow it to participate in the lay-off scheme for about 5 000 employees, or only about a third of the requirement.
It would be seeking assistance of more than R110m from the NSF to pay the salaries of retrenched workers and to expand the programme.
Economic Development Minister Ebrahim Patel put the Setas at the forefront of the lay-off programme.
"The programme for workers at risk of retrenchment was intended to use the period of industrial slack to train and reskill workers," he said.
He put the retrenchment and job loss figure at a far higher 450 000, which would imply that the ETDP Seta would have to provide lay-off support for about nearly 30 000 workers.
Farhad Motala, the chief financial officer of Chieta, said while his organisation had not established the numbers of those who would need to be retrained through the lay-off programme, it had budgeted R10m for this purpose.
Its funding reserves were about R160m, but "these are fully committed". Any extra support for the lay-off scheme would have come from the NSF.
In terms of the training lay-off scheme, workers faced with retrenchment may be suspended from work, be paid half of their basic wages - capped at R6 230 a month - and undergo training.
The government has set aside R2.4 billion for this purpose, through the Unemployment Insurance Fund and the National Skills Fund.
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