Skills Development Act, 1998

The Skills Development Act 97 of 1998 is a law enacted in South Africa in 1998.


This Act was promulgated by government in 1998, in the midst of high levels of unemployment, low levels of investment in the South African labour market, pronounced disparities in income distribution, inequality of opportunity as a result of apartheid and poverty.. Through this Act, the government aimed to address two main priorities, i.e. the need to improve skills and increase productivity in order to compete successfully in the global economy, and the need to reverse apartheid imbalances and to create a more inclusive and cohesive society.


In line with the overall government objectives set out above, the purposes of the Act are as follows :
The Republic of South Africa defines as the following:
To provide an institutional framework to devise and implement national, sector
and workplace strategies to develop and improve the skills of the South African work force; to integrate those strategies within the National Qualifications
Framework contemplated in the South African Qualifications Authority Act, 1995;
to provide for: learnerships that lead to recognised occupational qualifications; to
provide financing of skills development by means of a levy-grant scheme
and a National Skills Fund; to provide for and regulate employment services; and
to provide for matters connected therewith.


Key Stakeholders and their roles

To give effect to its transformational goals, the government created a platform for all stakeholders to give input in the implementation of the Act in order to protect their interests, while discharging their respective responsibilities to their constituencies. The government also created various key institutions as vehicles for the fulfillment of its goals. Finally, the government provided for the financing of the activities associated with skills development via the Skills Development Levies Act 9 of 1999. Key stakeholders in the successful implementation of the Act are:

Organized Labour

Organised Labour participates at all three levels of implementation. At a strategic level, organised labour forms part of the National Skills Authority that advises the department of labour on policy and strategy formulation. At sector level, organized labour participates in the Sector Education Training Authorities that design and implement sector specific skills plans. At company level, labour participates in the formulation of workplace skills plans and reports, which address both company and sector training needs. Organized labour secures the growth and employability of their members by participating in the various structures.

Organised business

Business mirrors the participation of organised labour at all three levels of implementation. In addition, however, organised business finance the implementation of skills plans through payment of levies. According to the CEO of the Forestry Sector Mr. Mkhwanazi, 50% of the levies are paid to all participating companies on submission of the workplace skills plans and implementation reports. In addition as much as 20% of the levies are disbursed to those employers who implement learnerships and other skills programs identified as priority in each sector. 10% of the levies are used for the running of the SETAs. Improving current skills levels and creation of new skills through learnerships increases “productivity which is crucial to building internationally competitive industries and sustaining and expanding employment”.

Institutions Created by the Act

The National Skills Authority (“NSA”)

The NSA advises the Minister of Labour on the formulation and implementation of the national skills strategy and policy, implementation guidelines of the above, and allocation of subsidies from the National Skills Fund. The NSA also liaises with the SETAs and reports progress on implementation of skills plans to the Minister.

Sector Education and Training Authorities (SETA">Sector Education and Training Authority">SETAs)

SETAs receive 80% of the levies paid by companies. SETAs develop sector skills plan in line with the national skills development strategy. They approve the workplace skills plans submitted by organizations in their sectors. SETAs also promote and establish learnerships. Finally, SETAs disburse grants to participating companies, provided that those companies have submitted workplace skills plans and implementation reports to the SETA by 30 April every year.


This legislation affords all key stakeholders the platform and opportunity to participate in a meaningful way in the rebuilding of our country. Through this legislation, transformation is “our business”. This is an attractive option because everybody wins it can be helping any situation for ever.


  1. Accessed 20 July 2007

    Other references

  2. Brendan, B., Down, N., "The Skills Development Act: transforming education and training for workers." S A Labour Bulletin 24 p 6 – 11.
  3. Erasmus, B.J.& van Dyk, P.S. Training Management in South Africa. Cape Town, Oxford University Press.
  4. Grobler, P.A., Wärnich, S., Carrell, M.R., Elbert, N.F. & Hatfield, R.D. Human Resource Management in South Africa. 3rd ed. London, Thomson Learning.
  5. Strong, L., "New Skills Legislation replaces apprenticeships." People Dynamics 18 p15 – 19.
  6. Accessed 4 April 2012