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Introduction to the Legal Environment of a Selected Business Sector (13936)

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The Competition Act, 1998 (Act 89 of 1998), which came into effect on 1 September 1999, is aimed at eliminating anti-competition practices, eliminating abuse of dominant positions, and strengthening merger control. The Act provides for the establishment of the Competition Commission, Competition Tribunal and Competition Appeal Court to replace the former Competition Board. The Act outlaws the following main areas of business practice:

  • Restrictive practices between businesses, or between businesses, their supplier(s) and customers, which hinder competition. These include price-fixing, collusive tendering, and restricting output, investment and market sharing.
  • The abuse of a dominant position which, according to the Act, is defined as a market share of 35% or more.

The Competition Second Amendment Act, 2000 (Act 39 of 2000), includes an amendment to provisions which allowed the Minister to change the thresholds in relation to merger control and abuse of dominance only every five years. Section 3(1)(d) was amended to cater for concurrent jurisdiction over competition matters between competition authorities and sector regulators. Furthermore, the Minister can now change the thresholds for merger controls and abuse of dominance whenever the need arises. The Competition Commission also has an obligation to evaluate the impact of mergers and acquisition activity on employment.

The Employment and Skills Development Strategy (ESDS) and HRD Branch of the Department of Labour has two areas of legislative responsibility. It is responsible for the implementation of the Skills Development Act, 1998 (Act 97 of 1998), (amended in 2003), and the Skills Development Levies Act, 1999 (Act 9 of 1999), the latter in cooperation with the South African Revenue Service (SARS).

Skills Development Act, 1998 the Minister of Labour amended the Act to address certain issues. The Act was amended to:

  • Define certain expressions and amend certain definitions
  • Extend the functions and change the composition of the National Skills Authority
  • (NSA)
  • Provide for the obligations of SETA’s in respect of their performance management in general, and financial management in particular
  • Extend the Minister’s powers to regulate learnership agreements and private employment agencies
  • Provide anew for budgeting in respect of training by public entities
  • Empower the Minister to establish a national standard to promote good practice in skills development.
  • The President assented to the Skills Development Amendment Act, 2003 (Act 31 of 2003), on 11 November 2003.

National Skills Authority

The NSA was established under the Skills Development Act, 1998. Its membership consists of organised business, labour and community organisations, government departments, and representatives from the education and training-provider community.

National Skills Fund

The NSF was established following the promulgation of the Skills Development Act,1998. Administered by the Department of Labour, it is made up of 20% of the total skills levy paid by employers and is used to address significant national skills priorities.Funds are allocated through a range of funding windows. The funding windows for 2001/2004 were:

  • Social development
  • Strategic projects Allocations go towards training in small business development, strat egic occupations and educational skills.
  • Bursaries 
  • Innovation and research