Labour Court Judgement on SETA Grant


This topic contains 1 reply, has 3 voices, and was last updated by  sylvia hammond 2 years, 4 months ago.

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  • #27124

    Angelique Bannau
    Participant

    We received fantastic news…

    • With effect from 1 April 2016 the mandatory grant that may be claimed is again 50% (and not 20%, as provided by the invalid Regulation 4(4) of the 2012 Regulations); and
    • The sweeping mechanism introduced by the invalid Regulation 3(11) of the 2012 Regulations is no longer in place.

    Please follow this link to read the BUSA update

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  • #27129

    sylvia hammond
    Keymaster

    Hi Angelique, I have accepted this discussion but in my opinion the BUSA notice is incorrect.

    On the 13th January 2016 the DHET Minister re-promulgated Regulation 4(4) in GG39592 No23. The gazette states “after consultation with the NSA”, therefore the requirement for consultation has been done and the 20% re-promulgated.

    Please see attached.

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  • #27128

    sylvia hammond
    Keymaster

    Further comment from Gill Connellan:

    – ASDSA have been advised by Johnny Goldberg that the legal advice they have is that the GG 39592 is invalid.  Gill is seeking further explanation on exactly why they consider it invalid.

    So whether it is 20% or 50% is still not clear.

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  • #27127

    Angelique Bannau
    Participant

    Thanx Sylvia, I was not aware of this 

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  • #27126

    Maryna Ritter
    Participant

    Hi All, see merSETA’s response!

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  • #27125

    sylvia hammond
    Keymaster

    Hi to all, 

    As I previously maintained – BUSA could not simply say the DHET Minister had not complied.  BUSA would need to go back to the Labour Court.  BUSA want to challenge the Regulation that the Minister issued in January 2016.  

    This morning I received the following information courtesy of Memet Hamel confirming that BUSA has now gone back to the Labour Court.

    For those members new to the conversation – you will recall that the Mandatory Grant was 50%.

    The DHET Minister issued Regulations for comment proposing 40%.  However, when the final Regulations were issued it was stated as 20%. BUSA challenged this at the LC and those Regulations were set aside until March 2016 for the Minister to amend.  The Minister then re-issued a Regulation in Janaury 2016 for 20% – stating that consultation had taken place with the NSA. BUSA is rejecting that Regulation.

    There is a second issue on the “sweeping” up of unspent discretionary funds from SETAs into the NSF. 

    “SETA GRANT REGULATIONS: AN UPDATE
     

    Judgement was handed down by the Labour Court in August 2015 in the litigation brought by BUSA to challenge aspects of the 2012 SETA grant regulations, specifically the change in mandatory grant payment of only 20% of employer’s 1% skills development levy.
     
    The Court declared Regulations 3(11) and 4(4) of the 2012 Grant Regulations to be invalid, and it set them aside.  However, it suspended the effect of that order until 31 March 2016 in order to give the Minister an opportunity to rectify the position by introducing a valid replacement of the invalid regulation.
     
    The Minister initially took steps to appeal against the Labour Court judgement and order, however the Minister instead re-promulgated the invalid regulation in identical terms, prior to the order coming into effect.
     
    The Minister took administrative action by issuing Government Notice 39592 on the 13th of January 2016 in which he aimed to re-promulgate regulations 4(4) of the SETA Grant Regulations in terms of section 36 of the SDA. Regulation 4(4) focuses on the percentage of levies paid by an employer during each financial year
     
    It is our opinion that the January 2016 notice should be set aside as the Minister’s decision to re-promulgate Regulation 4(4) is inconsistent with the constitutional principle of legality, is not rationally connected to its purpose and was adopted in an unlawful manner.
     
    Since the DHET and the Minister appear to hold the contrary view, and since this view will have the effect of preventing SETAs from paying, or a company from claiming the 50%, BUSA has approached the Labour Court on a semi-urgent basis for a fresh order setting aside the January 2016 notice to the extent necessary, and declaring both that the 50% applies and that the sweep doesn’t.
     
    The reduction in the mandatory grant bears significant consequences for all levy paying companies and we will continue to update you on the matter.”

     

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