Transition to Quality Council for Trades and Occupations (QCTO) Creates Uncertainty


As the July 1st transition to the QCTO system looms, the Skills Development sector faces mounting uncertainty around the implications for Broad-Based Black Economic Empowerment (B-BBEE) compliance. Despite the relief brought by the extended S12H tax incentive, businesses urgently require clear guidelines to address pressing concerns.



A pivotal shift for South Africa's Skills Development sector, the recent announcement of a three-year extension to the S12H tax incentive, has sparked both relief and renewed uncertainty for companies. While welcomed, it has brought some pressing questions to the fore around the transition to the Quality Council for Trades and Occupations (QCTO) and its implications for Broad-Based Black Economic Empowerment (B-BBEE).

Rajan Naidoo, Managing Director of EduPower Skills Academy says businesses’ need for further information is now urgent with the 1st July starting date for the transition to QCTO Occupational Certificates looming. “The extension to the S12H tax incentive has provided some guidance for the sector around rebates but we still need clarity in several other areas,” he adds.

With just over two months until companies can no longer register learners for SETA-accredited learnerships, each day without answers heightens the challenges faced by businesses that want to comply with regulations and meet their B-BBEE objectives.

Naidoo highlights the following key questions regarding B-BBEE and the transition to the QCTO Occupational Certificates:

1. How will QCTO qualifications be recognised within the B-BBEE framework?

There is uncertainty around how QCTO Occupational Certificates will be acknowledged under Skills Development on B-BBEE scorecards; and if these will contribute the same number of points as SETA legacy qualifications.

2. Are there specific Skills Development scorecard changes related to QCTO qualifications?

In light of the traditional 12-month cycle associated with learnerships and employment creation, clarity is required regarding how the awarding of corporate credits will be dealt with in future. The longer duration and potentially higher credit requirements of QCTO Occupational Certificates compared to legacy learnerships could also pose challenges for B-BBEE verifiers.

3. Are there any incentives or bonuses for supporting QCTO qualifications?

While the extension of the S12H tax incentive is a positive, businesses need to understand if there will be any other funding. Currently, companies can access mandatory and discretionary grants via their industry SETAs.

However, will these continue or be replaced with other incentives?

4. Will existing B-BBEE points remain valid?

Clarification is needed about whether investments made in prior skills development initiatives by companies will still count towards their B-BBEE scores during the transition period.

5. Will companies be able to claim B-BBEE points for investing in the transition to QCTO qualifications?

The substantial investment required to transition to QCTO qualifications prompts questions regarding the eligibility of companies – especially those with Training departments – to claim B-BBEE points for expenses related to this process, including training materials and staff development.

6. Will B-BBEE verification agencies be qualified to adjudicate QCTO qualifications and what documentation will be required?

Businesses need assurances that B-BBEE Verification Agencies will be upskilled and certified in the transition to QCTO qualifications and their implications for scorecards. There has also been no communication around the specific documentation and evidence required to prove compliance with QCTO Occupational Certificates during B-BBEE verification audits.

7. How will QCTO qualifications impact Employment Equity targets and Socio-economic Development initiatives?

The question of how employing individuals with QCTO qualifications and supporting QCTO-related socio-economic development initiatives will align with companies’ B-BBEE strategies and goals still remains.

The Skills Development industry is clearly in a state of limbo currently, grappling with uncertainties surrounding the impact of QCTO on B-BBEE compliance. As the 30th June deadline which marks the end of SETA-accredited learnerships approaches, Naidoo emphasises the critical need for decisive action and clear guidelines to address these concerns and many other unanswered questions facing the industry.

"Without this direction, we risk stalling progress and undermining the very essence of transformational change that the Skills Development sector has worked so hard to achieve,” he concludes.

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