Company Announcement - The Labour Court handed down judgement in favour of Business Unity South Africa to set aside certain aspects of the 2012 SETA Grant Regulations, declaring them invalid. The case related to a dispute regarding over the new regulations which reduce mandatory skills grant payable to employers from 50% to 20%. The regulations also included a “sweeping mechanism” which required SETAs to pay over all unspent funds to the National SBUSA Wins Court Case Against Minister of Higher Education: SETA Grant Regulations Declared Invalid

On Friday, 7 August 2015, the Labour Court handed down judgement in favour of Business Unity South Africa to set aside certain aspects of the 2012 SETA Grant Regulations, declaring them invalid. The case related to a dispute regarding over the new regulations which reduce mandatory skills grant payable to employers from 50% to 20%. The regulations also included a “sweeping mechanism” which required SETAs to pay over all unspent funds to the National Skills Fund.  As a result, these funds could be spent on national skills initiatives that were not related to workplace training.

BUSA’s attempts to persuade the Minister of Higher Education against these measures were unsuccessful, and BUSA ultimately resorted to the courts to review and set aside these regulations. The Labour Court’s judgement declared both regulations to be invalid, and it set them aside with effect from 31 March 2016. The court found that the Minister of Higher Education had failed to consult the National Skills Authority as required by law. The court also ruled that the Minister had acted irrationally by reducing the mandatory grant to employers as set out in the Skills Development Act. The Minister had exceeded his powers by prescribing that surplus SETA funds be moved to the National Skills Fund.

The Minister was ordered to pay all costs of the application and that SETAs now have a period of approximately six months to prepare for the return to the previous skills funding regime effective in March 2016. BUSA views this judgment as a significant decision that reinforces the rule of law and that reasserts the importance of workplace skills training programmes in South Africa.kills Fund.  As a result, these funds could be spent on national skills initiatives that were not related to workplace training.

BUSA’s attempts to persuade the Minister of Higher Education against these measures were unsuccessful, and BUSA ultimately resorted to the courts to review and set aside these regulations. The Labour Court’s judgement declared both regulations to be invalid, and it set them aside with effect from 31 March 2016.

The court found that the Minister of Higher Education had failed to consult the National Skills Authority as required by law. The court also ruled that the Minister had acted irrationally by reducing the mandatory grant to employers as set out in the Skills Development Act. The Minister had exceeded his powers by prescribing that surplus SETA funds be moved to the National Skills Fund.

The Minister was ordered to pay all costs of the application and that SETAs now have a period of approximately six months to prepare for the return to the previous skills funding regime effective in March 2016.

BUSA views this judgment as a significant decision that reinforces the rule of law and that reasserts the importance of workplace skills training programmes in South Africa.