The Skills Development Act and Skills Development Levies Act require businesses with yearly payrolls of R500 000 and over to register for Skills Development Levies (SDL).
The purpose of the Skills Development Act is to develop the skills of the South African workforce and to improve the quality of life of workers and their prospects of work.

The purpose of the Skills Development Act is:

  • to develop the skills of the South African workforce-
    • to improve the quality of life of workers, their prospects of work and labour mobility;
    • to improve productivity in the workplace and the competitiveness of employers;
    • to promote self-employment; and
    • to improve the delivery of social services;
  • to increase the levels of investment in education and training in the labour market and to improve the return on that investment;
  • to encourage employers-
    • to use the workplace as an active learning environment;
    • to provide employees with the opportunities to acquire new skills;
    • to provide opportunities for new entrants to the labour market to gain work experience; and
    • to employ persons who find it difficult to be employed;
  • to encourage workers to participate in learning programmes;
  • to improve the employment prospects of persons previously disadvantaged by unfair discrimination and to redress those disadvantages through training and education;
  • to ensure the quality of learning in and for the workplace;
  • to assist-
    • work-seekers to find work;
    • retrenched workers to re-enter the labour market;
    • employers to find qualified employees; and h)to provide and regulate employment services.

This is to be achieved through:

  • an institutional and financial framework comprising-
    • the National Skills Authority;
    • the National Skills Fund;
    • a skills development levy-financing scheme as contemplated in the Skills Development Levies Act;
    • SETAs;
    • provincial offices of the Department;
    • labour centres of the Department;
    • accredited trade test centres;
    • skills development institutes;
    • the Quality Council for Trades and Occupations;
    • a skills development forum for each province;
    • a national artisan moderation body;
    • and Productivity South Africa;
  • encouraging partnerships between the public and private sectors of the economy to provide learning in and for the workplace; and
  • co-operating with the South African Qualifications Authority.

The Deadline for submitting your Mandatory Grant is usually at the end of April

The Mandatory Grant is your Workplace Skills Plan (WSP) for the period/year 1 January – 31 December and your Annual Training Report (ATR) for the PREVIOUS period/year 1 January – 31 December.

Without having an approved mandatory grant, you will not be able to access other grants available from your SETA, nor can you score any points on your BBBEE scorecard for Skills Development.

The penalty for submitting Mandatory Grant applications late is losing the grant in full.

The only two exceptions to this are:

  1. where a Mandatory Grant application is submitted within 6 months of registration in the case of an employer who has registered for the first time in terms of Section 5(1) of the Skills Development Levies Act; and
  2. where the grant has been submitted late to reasons of force majeur (‘force majeur’ means an event beyond the control of the applicant and not involving the applicant’s fault or negligence and not foreseeable. Such events may include, but are not restricted to, acts of the applicant in its sovereign capacity, wars or revolutions, fires, floods, epidemics).

We therefore urge all clients to ensure they are registered with their relevant SETA, they understand the submission requirements and start preparing for the submission of their Mandatory Grant.

This article is courtesy of our partner Moore Stephens: http://southafrica.moorestephens.com/Home.aspx and Palaminosa: http://palominosa.co.za/training/faq/what-is-the-purpose-of-the-skills-development-act.html