June 2004

The second quarter of the year is drawing to a close, and for most of us it would appear that the economy is doing well and business is good. We are seeing pleasing growth for most of our clients and the future is looking very positive. Inflation seems to be holding at 4.5% and everything seems to be in place for a successful year.

SKILLS DEVELOPMENT

We have now entered the 5th year of skills development planning with the Seta’s. The new training year started on the 1st April and it is time for levy payers to both submit new plans for the year and report on the training completed in the previous year.

For having complied with the 2003/4 training plan, companies will again receive a 60% refund of levies, 15% for plan submission and 45% for completion and submission of a training report. The criteria for the new year will remain the same 2004/2005. Additional funding can also be applied for if it links to individual Seta sector initiatives e.g. Abet training, HIV/Aids training, Computer Literacy training, etc.

In preparing new plans, we suggest that:

• training should be linked both to operational needs (objectives) and to your Employment Equity Plan
• the recommended process of consultation take place, both through represented committees (if applicable) or with the workforce

Most Seta’s are yet again accepting non- accredited training but ideally you should use accredited training providers (from April 2005 we believe the intention is that only accredited providers will be accepted).

In addition we need to ensure that training planned is not over-estimated, and that a minimum of 65% of the training planned is actually achieved.

We are starting to see a shift in the granting of Discretionary Grant funding and suggest we take advantage of Seta initiatives this year, as they may not be available from April 2005.

For companies concerned with an Empowerdex rating, please note that Skills development is currently given a ranking of 20% if it is linked with a training spend of 5% of payroll.

Should you have any questions with regard to discretionary grants, please contact Jane Alevizos.

NEW LEGISLATION

In line with the Government’s intention of ensuring that employers are fully accountable recent changes to the Unemployment Insurance Act makes Directors or Shareholders who “control or are regularly involved in the management of the company’s overall financial affairs” personally liable for the payment of UIF contributions which have been deducted from an employees salary.

The new penalty for unpaid skills levy will be twice the amount of the levy which has not been paid.

Please note that all companies should have copies of the following acts available for employees to read or displayed in the workplace:

• Labour Relations Act
• Basic Conditions of Employment Act and/or the Bargaining Council Agreement or Sectorial Agreement applicable to their industry
• Occupational Health and Safety Act
• Employment Equity Act

Laminated summaries of these acts are available from the Government Printers and can be arranged through Lynette Gower at our offices.

BLACK ECONOMIC EMPOWERMENT

As Government continues to strive towards a more diverse workplace, one that is representative of the South African population. Black Economic Empowerment is a natural progression from the employment equity and skills development legislation. The Broad Based Black Economic Empowerment Act (No. 53 of 2003) was passed into law on the 06 January 2004 and will come into operation on a date determined by the President. BEE should be a high priority on the agenda for all companies. The BEE process includes elements of human resource development, employment equity, enterprise development, preferential procurement, as well as investment, ownership and control of enterprises and economic assets.

The Department of Trade and Industry have released a generic balanced scorecard as a Code of Good Practice. Government is intending to use a scorecard methodology to monitor and measure the extent to which companies are complying with set BEE targets. Below is an example of the scorecard currently being recommended by the Department of Trade and Industry:

CORE BEE COMPONENT INDICATORS RAWSCORE WEIGHTING TOTAL SCORE

1. Direct Empowerment
   Equity OwnershipManagement % Share of economic benefits% black persons in executive management and/or executive board and board committees 20%10%
2. Human resource development and employment equity score
   Employment EquitySkills development Weighted employment equity analysisSkills development expenditure as a proportion of total payroll 10%20%
3. Indirect Empowerment
   Preferential procurementEnterprise development Procurement from black-owned and empowered enterprises as a proportion of total procurementInvestment in black-owned and empowered enterprises as a proportion of total assets 20%10%
4. Residual
   To be determined by the sector/enterprise 10%
   Total Score 100%

In addition to the DTI scorecard, specific sector charters setting out BEE targets have already been published for the Mining and Financial Services Sectors. Companies need to stay abreast of development in their particular sector. The following sectors intend to draft or are drafting charters:

• Information & Communications Technology (ICT)
• Advertising
• Health
• Transport
• Fishing
• Tourism
• Construction
• Property
• Wine and Agriculture
• Automotives and Metals Fabrication

Public and private-sector reporting on BEE to shareholders, customers and employees is central to the successful implementation of BEE

Mr. Vuyo Jack, the Chief Executive of Empowerdex recently described the various stages typically experienced by companies facing major empowerment transformation as ‘Anger, Denial, Bargaining, Depression and Acceptance. We need to ensure you reach ‘Acceptance’ as quickly as possible in order to comply with BEE requirements and contribute to the South African economy in a meaningful manner.

It is obvious that BEE needs to be a high-priority for all companies and that each organisation should have a BEE vision and strategy to define the way forward and needs to give meaningful consideration to how empowerment is to be achieved. Achieving authentic BEE will require a re-assessment of traditional business models and corporate cultures. For more information on BEE and how it will impact on you please contact Wendy Spalding at our offices.

Please remember that EE Plans must be submitted to the Department of Labour by 30 September 2004.

WEB SITE

Our web site will be up and running by the end of the month. We have really tried to function without one, but have finally given in to pressure and you will be able to find out about all of us on the WEB.

TRAINABILITY TEST

We have purchased the TST test from Thomas International. This is a trainability test, which in combination with the Personality Profile, is an additional tool for recruiting and assessing potential. We will be able to administer and implement the TST by the end of June 2004 and are sure that this will become a valuable test, especially for assessing candidates for learnerships. More information on the test is available from Desrae.

LEADERSHIP TRAINING

We are experiencing interest from several of our clients who require training for their Supervisory and first time Management Staff. However, they are not in a position to implement the programme internally. We are therefore proposing running a “public course” for our clients who would like to send one or two staff members for the training. It would mean a commitment from the staff member to attend one training day each month for 10 months. Details of the training programme are available from Debbie and costs will be confirmed once we know how many delegates would be attending.

Our training brochure of the other courses, which are available, will be displayed on our Web Page or is available from the office.