The Employment Law Review: South Africa

Introduction

South Africa's Constitution entrenches fundamental rights and contains several provisions that are relevant to employment and labour, which confer on everyone the right to fair labour practices, provide for freedom of association for workers and employers, and the right to participate freely in the activities of a trade union or employers' organisation. Trade unions and employers' organisations have the right to form and join federations and to engage in collective bargaining. The Constitution provides for the enactment of national legislation to regulate collective bargaining, inter alia, and the legislation so enacted is the Labour Relations Act (LRA).

The LRA also provides for resolution of labour disputes through, inter alia, the establishment of the Commission for Conciliation, Mediation and Arbitration (CCMA), industry bargaining councils, the labour courts and the Labour Appeal Court (LAC). The LAC is generally the final court of appeal, although when disputes involves a constitutional issue, appeals to the Constitutional Court (CC) are possible.

The LRA provides protection for employees against unfair dismissal and unfair labour practices, with further guidelines supplied in codes of good practice. The LRA also regulates the rights of employees and the obligations of employers in the context of the transfer of a business as a going concern.

Minimum conditions of employment are regulated by the Basic Conditions of Employment Act (BCEA), namely working time, leave, particulars of employment and the keeping of records regarding remuneration, termination of employment (notice and severance pay), and the prohibition of child and forced labour. A particular sector or industry can regulate its own terms via a bargaining council agreement, which then takes precedence over the BCEA (subject to some limited exceptions). In addition, the Minister of Employment and Labour may make sectoral determinations setting basic conditions for a specific sector and area, a number of which have been made. The National Minimum Wage Act sets a general minimum wage for all workers in South Africa.

Discrimination and affirmative action issues are regulated by the Employment Equity Act (EEA). The Occupational Health and Safety Act (OHSA) imposes on all employers a general duty to provide and maintain a working environment that is safe and without risk to employees' health. Work-related injuries and illnesses are covered by the Compensation for Occupational Injuries and Diseases Act.

Unemployment benefits are regulated by the Unemployment Insurance Act.

Skills development in the workplace is regulated by the Skills Development Act. It is compulsory for employers to make contributions to a statutory fund, against which employers can obtain refunds if they implement workplace skills development plans, among other things.

The aim of the Employment Services Act is to increase productivity within South Africa, decrease levels of unemployment and provide for the training of unskilled workers.

Retirement funding and provision for medical insurance is private unless regulated under a bargaining council agreement.

The employment of foreign nationals who are not asylum seekers, refugees or permanent residents is governed by the Immigration Act and the Regulations published pursuant thereto, as well as various practice directives issued by the Department of Home Affairs (DHA) that influence the execution and application of the law. At present, a number of directions that affect immigration are also being promulgated under the Disaster Management Act to deal with challenges arising from the covid-19 pandemic.

Year in review

With much of 2021 continuing to be dominated by the covid-19 pandemic, there have been few legislative changes to employment law during the past year. Employers have adjusted to the 'new normal', which has resulted in many employers adopting policies for working from home and hybrid working.

Covid-19 vaccines became available in South Africa in 2021 but vaccination is not mandatory by law. Employers have been grappling with whether or not to adopt mandatory workplace vaccination policies. In June 2021, a Consolidated Direction on Occupational Health and Safety Measures in Certain Workplaces (the Vaccination Direction) was issued under OHSA, which did not go as far as stating that employers are entitled to mandate vaccination in their workplaces, but it allowed for that possibility in appropriate circumstances, thereby acknowledging that some employers may be justified in mandating vaccination based on the assessment of risk in their particular workplace. However, the Vaccination Direction guidelines recommend that employers who make vaccination mandatory should consider the right of an employee to refuse to be vaccinated on constitutional2 or medical grounds.

Although a host of temporary measures were implemented by the DHA to deal with border closures, the grounding of flights and other issues arising from the pandemic, these have largely now come to an end. Only a very limited number of concessions and automatic status extensions remain. However, it is anticipated that relief in the form of various concessions and automatic extensions may be reintroduced, depending on international border closures and grounding of flights.

Significant cases

i Association of Mineworkers and Construction Union and Others v. Anglo Gold Ashanti Limited t/a Anglo Gold Ashanti and Others3

Section 66 of the LRA allows employees of an employer (the secondary employer) to embark on a secondary strike in support of a strike by other employees against their employer (the primary employer) if certain requirements are met, one of which is that the nature and extent of the secondary strike must be reasonable in relation to the possible effect, whether direct or indirect, that the secondary strike may have on the business of the primary employer.

The Labour Court had found a number of intended secondary strikes by members of the Association of Mineworkers and Construction Union at mining companies operating in different mineral sectors in support of a primary strike at a mine known as Sibanye Gold (Sibanye), to be unprotected. The LAC had dismissed an appeal, finding that the matter was moot. While the dispute was no longer live and the primary strike had ceased, the CC heard an appeal about the proper interpretation of the above requirement.

The majority judgment of the CC held that the matter was moot but that it would nevertheless be in the interests of justice for leave to appeal to be granted. It considered that a decision of the CC would clarify the approach to secondary strikes for the parties and others in the labour relations community. The judgment noted that collective bargaining plays a role in remedying inequality, discrimination and poverty in the workplace and, consequently, courts must be cautious when interpreting, applying and limiting the right to strike. It held in its interpretation of Section 66(2)(c) of the LRA, that, in relation to the primary employer, a secondary strike must have an effect, and that, in relation to a secondary employer, the secondary strike must be reasonable. The judgment interpreted the phrase 'reasonable in relation to' in Section 66(2)(c) to import proportionality in assessing reasonableness. It held that because secondary employers do not have the same procedural safeguards, such as conciliation and more than seven days' notice of the intended strike that primary employers have, proportionality and reasonableness are shields to safeguard secondary employers. They are needed to preserve the equilibrium that Section 66(2)(c) seeks to establish. Further, the judgment determined that the principle of proportionality derives not only from the reasonableness requirement in Section 66(2)(c) of the LRA but also from the Constitution and international law. In relation to the secondary strikes in the present matter, and purely for the sake of practical illustration, the judgment held that they were unreasonable, primarily, for having no effect on Sibanye as the primary employer. Additionally, they would have been unreasonably destructive in relation to their impact on the secondary employers. The appeal against the judgments of the Labour Court and the LAC was dismissed.

The judgment provides welcome guidance for secondary employers and the grounds on which they can seek to interdict secondary strikes.

ii Cape Peninsula University of Technology v. Mkhabela

This case4 involved a claim of 'automatically unfair' dismissal made by an executive employee, emanating from a disagreement about the employer's security strategy to quell unrest in 2016 arising from #FeesMustFall, a student-led protest movement the goals of which were to stop increases in student fees and to increase government funding of universities, which took place across universities in South Africa.

The employee objected to a suggestion by one of the deputy vice chancellors that dogs be used to stop the unrest, with the employee likening this to the use of dogs by apartheid security forces to quell the student anti-apartheid uprising in 1976. The employee had ultimately resigned and claimed that she had been constructively dismissed (i.e., continued employment had been made intolerable for her, forcing her to resign) and that the reasons for the constructive dismissal were automatically unfair in that it was because of harassment or conduct relating to harassment, and discrimination based on prohibited grounds, namely conscience, belief or political opinion, or a combination of these.

In considering these prohibited grounds of discrimination, the LAC held that the concept of 'belief' found some parallel in Section 15(1) of the Constitution of South Africa, 1996, which guarantees a right for everyone to freedom of conscience, religion, thought, belief and opinion, and commented that the combination of these rights in one section appears to signify the protection of the right to hold the religious belief of a person's choice together with the right to entertain agnostic or atheist views and other beliefs. The Court held that the fact that the right extends beyond religion indicated that the scope of its protection extends beyond protecting the right to belief in a supreme being.

As regards the phrase 'political opinion', the LAC held that it cannot be extended to apply to any and every opinion in any matter whatsoever. Its scope must be read within the context of conscience and belief that appear in the same section. Read thus, the Court held that the term rather refers to a broad category of attitudes that a person might hold on matters of concern to that person concerning the state, government or society. The Court said that it had in mind as the contours of 'opinion' a view that is (1) a matter of public concern, (2) expressed in a way that makes it hard to prove whether it is true or false and (3) cannot be reasonably interpreted to be a factual statement about someone or something.

The LAC ultimately held that the conduct established in evidence did not justify a finding of discrimination on any of the three grounds pleaded by the employee.

This case provides useful guidance to employers in relation to the reach of the protected grounds of belief, conscience or political opinion, which grounds may well become territory for contestation by employees seeking to avoid the application of mandatory workplace covid-19 vaccination policies of an employer on the basis of belief, conscience or political opinion.

iii South African Navy and Another v. Tebeila Institute of Leadership, Governance and Training

This matter5 involved determining whether age requirements for a particular job constituted unfair discrimination.

The South African (SA) Navy had a military skills development system (MSDS), which is used by the SA National Defence Force (SANDF) to select people for training. Under the MSDS, applicants who would serve in a combat role are required, inter alia, to be between 18 and 22 years old, with graduate applicants being required to be between 18 and 26 years old. Tebeila's challenge was based on three grounds: (1) the age requirements constitute unfair discrimination; (2) the age requirements fail to accord with post-matriculation students' right to further education, which the state, through reasonable measures, must make progressively available; and (3) the Navy failed to respect, protect, promote and fulfil the rights in the Bill of Rights by stipulating the age requirements.

The Supreme Court of Appeal (SCA) concluded that the duty of the SANDF is to defend and protect South Africa. To do so, it must be combat-ready and this requires soldiers who may be readily deployed. It held that older recruits have young families with attendant responsibilities, and that they are more area-bound and less amenable to lengthy and stressful deployments away from home, and that these considerations support the age requirements. The SCA held that Tebeila's challenge failed to properly reckon with the age profile of the ranks making up the defence force. It concluded that the older a person is when first recruited, the shorter the time that they may serve as soldiers who are combat-ready – a core competence that the defence force must have. The SCA held that this was precisely the problem the MSDS was meant to address, because too many serving soldiers in the junior ranks were simply getting too old, which compromised the capacity of the defence force to protect and defend. The SCA accepted that there may be persons older than 26 years who would make good soldiers. However, this did not render the threshold arbitrary or unfair. As long as the age requirements were imposed for reasons that bear rational scrutiny, then the requirements are not arbitrary or unfair merely because there are persons of merit who are excluded.

The SCA concluded that the age requirements withstand scrutiny under the constitutional standard of unfair discrimination, and that the requirements have a rational basis that serves the functional requirements of the SANDF so as to permit the force to carry out its constitutional mandate.

This decision highlights that it is permissible for an employer to have in place age requirements for hiring certain employees for a particular job, provided that the age requirements are imposed for reasons that bear rational scrutiny and can withstand the constitutional standard of unfair discrimination. Employers may already have in place age requirements for other purposes, such as providing certain benefits to a certain age class of employees or imposing age requirements pertaining to retirement age. Employers need to tread carefully and ensure that any age requirements imposed are rationally connected to the purpose for which they have been prescribed, and that they can withstand the constitutional standard of unfair discrimination.

Basics of entering an employment relationship

i Employment relationship

The definition of an employee under most South African employment legislation is wide enough to include persons (excluding independent contractors) who assist in carrying on or conducting the business of the employer even though they may not be formally employed by the employer. However, most employees in South Africa are employed under employment contracts.

The BCEA obliges employers to provide their employees with written particulars of their employment conditions once the employee commences employment. Signatures on a contract are not legally required, subject to two limited exceptions.6

Under South African law, employers and employees are generally free to conclude their contracts of employment for either a fixed term or an indefinite period. The LRA places certain restrictions on the use of fixed-term contracts for employees whose earnings are below the BCEA threshold.7

Parties to an employment contract can only amend the contract by agreement. Agreement is obtained either through negotiation or, if this fails, and after taking certain procedural steps, parties can resort to industrial action (i.e., a strike in the case of employees or a lockout in the case of employers) aimed at compelling the other party to agree.

It is mandatory that all offers of employment to foreigners who require work visas be made subject to the employee procuring a work visa before commencing employment.

ii Probationary periods

Probationary periods are permitted for newly hired employees to afford the employer an opportunity to evaluate the employee's performance and suitability for employment before confirming his or her appointment. An employer must still have a fair reason and follow a fair procedure before effecting the dismissal of a probationary employee. The minimum notice periods for termination of employment described in Section XII.i also apply to employees on probation.

iii Establishing a presence

A foreign employer can hire employees and engage independent contractors in South Africa without being required to set up a local entity. However, a foreign employer may be required to register as an external company (a branch) with the South African Companies and Intellectual Property Commission if it conducts business within South Africa as contemplated by the South African Companies Act. A company is deemed to be conducting business in South Africa if it is (1) a party to one or more employment contracts within South Africa, or (2) engaging in a course of conduct that would 'lead a person to reasonably conclude that the company intended to continually engage in business' within South Africa.8

A non-resident employer is not obliged to withhold employees' tax from remuneration (provided that it does not have a 'representative employer', as defined, in South Africa). The employees themselves will be required to settle their tax liabilities in respect of the remuneration they receive from the non-resident employer for the services that they render in South Africa. This will be done through provisional tax payments.

If a foreign employer appoints a South African resident agent to pay remuneration on its behalf, the South African agent will be regarded as a representative employer of the foreign employer in South Africa and will be required to register as an employer with the South African Revenue Service and withhold employees' tax from remuneration paid to the employees of the foreign employer.

A foreign employer will be liable for income tax on its South African-sourced income. However, if there is a double taxation agreement in place between South Africa and the jurisdiction within which the foreign employer is resident (for the purposes of the double taxation agreement), and the income of the foreign employer comprises business profits, then the double taxation agreement would allocate taxing rights to the country in which the foreign employer is a resident, unless the foreign employer carries on business in South Africa through a permanent establishment. Most of South Africa's double taxation agreements are based on the Organisation for Economic Co-operation and Development's Model Tax Convention on Income and Capital.

If employees of a foreign employer spend significant periods in South Africa and carry on the business of the foreign employer in South Africa, these employees may create a permanent establishment for the employer in South Africa. If so, the profits of the foreign employer that are attributable to the permanent establishment may also be taxed in South Africa.

If a company resident in South Africa hires employees in South Africa, whether the employees are foreign or local, employees' tax must be deducted from remuneration at source and the employer is responsible for reporting and withholding the employees' tax. Employers are required to provide few statutory benefits.

Restrictive covenants

Restraint of trade (i.e., non-compete or restrictive covenant) clauses can be included in employment contracts. In principle, these clauses are valid and enforceable. Nevertheless, when an employer seeks to enforce restraint provisions, the courts retain discretion as to whether to enforce the restraints and will not enforce them if, in a particular case, the enforcement would be unreasonable or contrary to the public interest.

The restraint may also operate in combination with garden leave in appropriate cases. In these cases, when assessing the reasonableness of the restraint period, the period of garden leave will be taken into account.9

It is not a prerequisite for an employer to financially compensate an employee in exchange for the employee undertaking restraint of trade obligations.

Wages

i Working time

Generally, no employee may work more than 45 ordinary hours a week and nine hours a day if he or she works a five-day week. Alternatively, an employee may not work more than eight hours a day if he or she works a six-day week. Total working hours may not exceed 12 a day. Wage-regulating measures specific to industries can have different provisions regulating working hours.

Night work (i.e., work performed after 6pm and before 6am the next day) may only be performed with the employee's consent and he or she must be compensated with an allowance, which may be a shift allowance or a reduction of normal working hours. Transport must be available between his or her residence and the workplace prior to and at the end of the shift. If employees regularly perform night work (i.e., work for longer than one hour after 11pm and before 6am at least five times a month, or 50 times a year), the employer must inform them of health and safety hazards associated with night work and of their right to request a medical examination at the employer's expense. If a regular night worker suffers from a health condition associated with the performance of night work, the employer must transfer the employee to suitable day work within a reasonable time, if it is practicable to do so.

ii Overtime

Employees generally enjoy the following statutory overtime benefits (excluding those who are not senior managerial employees, sales staff who travel to customers' premises and regulate their own working hours, employees who work for fewer than 24 hours a month, or employees whose earnings are above the BCEA threshold):

  1. An employer can only require an employee to work overtime if the employee's agreement to do so has been obtained. If the employee's agreement is obtained on commencement of employment or within three months thereof, the consent shall lapse after 12 months and must be secured again by the employer, after which the consent does not lapse. An employer must pay an employee at least one-and-a-half times the employee's usual wage for overtime worked or grant the employee paid time off (90 minutes off for every 60 minutes of overtime worked).
  2. Employees are not permitted to work more than 10 hours of overtime a week, or three hours of overtime in a day if they work a nine-hour day.

A national minimum wage of 20 rand per hour (with slightly lower minimums for farm and domestic workers) will be reviewed annually.

Foreign workers

The employment of non-South African citizens who are not asylum seekers, refugees or permanent residents (foreign workers) is governed by the Immigration Act, as amended, and the regulations thereto.

The Act and regulations impose obligations on any person or organisation that employs a foreign national, regardless of the size of the business or number of employees, although stricter compliance is required of any employer with more than five employees or that has been found guilty of a prior offence under the Act.

An authorisation to work is required irrespective of the duration for which services will be rendered within South Africa. A business visitor's visa is suited to temporary placements of fewer than 90 days. The visa may be extended for a further 90 days. However, only one visa renewal may be issued to an applicant in one calendar year. If a traveller, such as an academic, business person or frequent visitor, has established himself or herself as a bona fide frequent business visitor, he or she may be issued with a multiple-entry visa valid for two to three years, usually for visits of 30 days. Longer placements require a temporary residence work visa, such as an intra-company transfer, a general work visa, a critical skills visa or a corporate worker visa, or another appropriate visa authorising the work.

There is no restriction on the number of foreign workers that an employer may employ or on the number of categories under which work visas may be applied for. Nonetheless, the work visa process guards against employing foreign workers in positions that can be filled by local people.

By way of example, the regulations provide that a company wishing to obtain a corporate visa or a business visa must have a workforce that is made up of at least 60 per cent South Africans, and that an application for a general work visa must include a certificate from the Department of Labour confirming that, despite a diligent search, the employer has been unable to find a South African citizen or permanent resident with equivalent qualifications and skills or experience. The Department of Labour's application process for this certification includes the submission of proof of advertisement of the position and a letter of motivation from the employer and from a recruitment agency detailing the labour market test, and disclosing the details of all unsuccessful applicants for the position and justifying the need to employ a foreign worker in that position.

No labour market testing is required when applying for a critical skills visa, which facilitates applications for foreign nationals who meet the minimum qualifications and experience listed on the critical skills list published in terms of the regulations.

Similarly, no labour market testing is required when applying for an intra-company transfer work visa. However, an undertaking must be given to develop a skills transfer plan. Foreign missions usually insist on the filing of a skills transfer plan, which identifies the South Africans to whom skills will be transferred.

There is no general legislative cap on the period for which a foreign worker may be employed in aggregate, although the Immigration Act does provide maximum periods for which certain categories of work visas may be granted. Intra-company transfer work visas may be issued for a maximum of four years and cannot be renewed. On expiry of a visa, the holder must depart from South Africa. If the worker wishes to apply for a different category of visa, he or she must bring the application abroad.

In general, work visa holders become eligible to apply for permanent residence after holding a temporary residence work visa for a continuous period of five years, provided that they have received a permanent offer of employment. Intra-company transfer visas cannot be relied on as a path to permanent residence. Holders of critical skills visas may apply for permanent residence sooner. Although not legislated, the Department of Home Affairs would usually insist on proof of work experience in the relevant area of skill. Individuals who have obtained qualifications listed as critical skills are also able to apply for permanent residence on the basis of those qualifications without the need to obtain an evaluation of their qualifications from the South African Qualifications Authority or to demonstrate prior work experience.

Any foreign worker needs to obtain a work visa to render services in South Africa irrespective of the amount of time they are required to render services locally and notwithstanding the fact that they may be employed through a foreign entity. Foreign workers and their employers can be fined or jailed, or both, for non-compliance with their obligations in this regard.

South African employment laws are of universal application to employees who fall within their jurisdiction. They therefore apply to foreign workers working in South Africa, even if they are working illegally in contravention of their visa status.

To ensure regulatory compliance, an employer in South Africa must maintain documentary records for each foreign employee for two years after the termination of employment. The employer must also report to the authorities the termination of a foreign worker's employment and any breach by the worker of his or her status. Employers must also make a reasonable effort in good faith to ensure that they have no illegal foreigners in their employ and to ascertain workers' status or citizenship.

Global policies

Employers are under no legal obligation to have written rules on internal discipline or policies, and individual employers may decide whether they want to establish written rules to regulate conduct in the workplace or introduce policies (although the absence of policies on dealing with issues of unfair discrimination and sexual harassment will increase the risk of employer liability).

In general, an employer does not require the approval or agreement of its employees or their representative body when deciding to introduce disciplinary rules.

Disciplinary rules should be accessible to all employees.

Parental leave

The BCEA provides for parental leave for an employee of 10 consecutive days' leave (unpaid by the employer) on the birth of a child. Parental leave may also be applicable when an employee legally adopts a child or when a child is placed by a court in the care of a prospective adoptive parent.

Translation

There is no legal requirement for employment-related documents to be translated.

Employee representation

Employees are permitted to form and join a registered trade union of their choice. At an undertaking where there are more than 100 employees, the employees, through their trade unions, are permitted to establish workplace forums to consult on numerous defined workplace issues. However, these are rarely set up.

A majority union in a workplace in which at least 10 of its members are employed may elect certain numbers of union representatives depending on the size of the workforce, but ranging from one representative where the union has 10 members in the workplace up to 12 representatives (where there are more than 1,000 members) for the first 1,000 members plus one representative for every additional 500 members (up to a maximum of 20).

The constitution of the trade union will govern the nomination, election, term of office and removal from office of the representatives. It will also regulate the holding of meetings and the issues relating thereto. Under the LRA, any registered trade union that represents a 'significant interest' or a 'substantial number of employees' in the workplace may be entitled to be recognised for organisational rights, irrespective of a collective agreement to the contrary.

Representatives of recognised unions have the right to assist and represent employees in grievance and disciplinary proceedings, to monitor the employer's compliance with labour laws and any collective agreements, and to report any contraventions of these laws and agreements. They also have the right to perform any other functions as agreed with the employer and to take reasonable time off work for trade union activities.

Depending on the level of representation of the union, an employer must allow it access to the workplace to recruit members, communicate with them, hold meetings, and otherwise serve them and grant stop orders due to the union from the employees' wages.

Data protection

i Requirements for registration

The Protection of Personal Information Act (POPIA) places restrictions on the information that may be collected from employees and applicants, and processed by employers. The POPIA does not require employers to register with a data protection agency or other government body, but an employer can only collect and store personal information about its employees if it is necessary or relates to a lawful and permitted purpose under the legislation.

Personal information must generally only be collected by an employer directly from and with the consent of the employee, who must be informed of the purpose of any collection and who the intended recipients are once the information is collected. Employee consent is generally a justifiable ground for processing, but extra requirements apply to sensitive data. Personal information should not be kept for longer than necessary to achieve the (permitted) purpose for which it was collected and it must be distributed in a way that is compatible with the purpose for which it was collected. The employer must take reasonable steps to ensure that the information is accurate, up to date and complete.

Under the POPIA, an employer must ensure that all personal information about its employees is protected against risks of loss, damage, destruction or unauthorised access. The employees must also be allowed to access their personal information and can demand that the information be corrected if it is found to be inaccurate.

ii Cross-border data transfers

The POPIA prohibits cross-border (and onward) transfers of personal information to countries that do not have substantially similar protections for the information (except under limited circumstances). Notification of transfers of sensitive personal information or the personal information of children must be given to the Information Protection Regulator, and an employer must obtain the Regulator's prior authorisation before processing any information. The employee's consent to the transfer is generally required. The transfer must also be necessary under contractual arrangements involving the employee. Authorisation from the Regulator need only be obtained once and not each time that personal information is received or processed, except when the processing departs from the purpose that has already been authorised.

iii Sensitive data

The POPIA considers the following information to be 'special personal information' for which additional protections are required: information concerning children, religious or philosophical beliefs, race or ethnic origin, trade union membership, political persuasion, health, sex life or biometric data, and criminal behaviour in certain instances.

This special personal information may not be processed by an employer unless specifically permitted under exemptions provided for in the legislation. An example of an exemption would be the processing of information about race because the employer is required to comply with laws designed to protect or advance persons from groups historically disadvantaged by unfair discrimination (under the terms of the EEA).

iv Background checks

Background checks are generally permitted provided they do not involve checks that amount to unfair discrimination under the EEA.

A code of good practice issued under the EEA stipulates that an employer should only conduct integrity checks – such as checking credit references or investigating whether an applicant has a criminal record – if they are relevant to the requirements of the job. The National Credit Act also stipulates that a credit bureau can only issue a credit report to a prospective employer when the employer is considering the candidate for a position that requires trust and honesty and entails the handling of cash or finances, and only with the prior consent of the candidate.

Medical testing is only permitted if legislation permits or requires it, or if it is justifiable in the light of medical facts, employment conditions, social policy, the fair distribution of employee benefits or the inherent requirements of the job. Testing an employee for his or her HIV status is prohibited unless determined to be justifiable by the labour court. Psychological testing and other similar assessments are also prohibited unless the test has been scientifically shown to be valid and reliable, and that it can be applied fairly to all employees and is not biased against any employee or group of employees.

The Immigration Act and regulations thereto provide that medical reports and chest X-rays must be submitted in support of applications for temporary and permanent residence visas. Police clearance certificates are also required from all countries if an applicant for a temporary or permanent residence visa has resided for more than one year in South Africa since their 18th birthday.

Discontinuing employment

i Dismissal

Dismissals are required to be for a fair reason and effected pursuant to a fair procedure; therefore, employees may not be dismissed without cause.

There are no requirements to notify government authorities of dismissals. In some instances, an employer must consult a trade union about pending dismissals, for example, if an employee is a trade union representative or if union members are to be made redundant.

The grounds on which an employer can fairly dismiss an employee are misconduct, incapacity (which can be incapacity either because of ill-health or for poor performance) and the operational requirements of the employer. Dismissal may be summary when it is warranted (e.g., in cases of serious misconduct) but otherwise the employee must be given notice (the BCEA stipulates minimum notice periods of one week for employees with less than six months' service, two weeks for employees with service of between six months and one year, and four weeks for employees with service of more than one year). Employers may pay their employees in lieu of notice.

An employee whose employment is fairly terminated for misconduct or poor performance is not entitled to any separation or severance pay. It is possible for employers to conclude separation or settlement agreements with departing employees.

An employer is obliged to notify the Department of Home Affairs when the employment of an individual who holds a work visa is discontinued.

ii Redundancies

An employee may be dismissed for a reason relating to the employer's operational requirements, namely, circumstances based on the employer's economic, technological, structural or similar needs. A dismissal based on operational requirements must be both procedurally and substantively fair, as is the case with any other dismissal.

The process that must be followed when considering dismissals for operational reasons is set forth in Sections 189 and 189A of the LRA. The basic Section 189 provisions apply to all retrenchments and Section 189A imposes additional procedural requirements for when large businesses conduct large-scale retrenchments. A large employer is one that has 50 or more employees.

Section 189 requires consultation with either the employees who may be affected or their representatives (e.g., trade union or workplace forum) regarding the proposed retrenchments. There is no requirement to notify a works council or the government.

As soon as an employer contemplates retrenchments, it must commence consultation about ways to avoid retrenchment, to minimise the number of retrenchments, to change the timing, to mitigate the hardships caused to employees who are retrenched, to select the employees to be retrenched, and about severance pay. Consultation must commence with the employer issuing a written notice inviting the other party to consult and disclosing relevant information to enable the other consulting party to engage in the consultation process. Facilitation is an additional process available to the parties to a large-scale retrenchment on request. Facilitation occurs alongside the normal consultation process and is essentially consultation with the assistance of a commissioner appointed by the CCMA. The facilitator's job is to help the parties with their discussions and their attempts to reach agreement on as many issues as possible in relation to the proposed retrenchment.

An employer must pay severance to an employee dismissed for operational requirements that is equal to at least one week's remuneration for each completed year of continuous service with that employer. Employees who unreasonably refuse offers of alternative employment with the retrenching employer, or any other employer, are not entitled to severance pay.

Transfer of business

Under the terms of Section 197 of the LRA, if a transfer of a business takes place, unless otherwise agreed, the new employer automatically substitutes the old employer in respect of all employment contracts in existence immediately before the date of transfer and all rights and obligations between the old employer and an employee at the time of the transfer continue to be in force, as if they had been rights and obligations between the new employer and the employee.

Various statutory requirements must be met for a transaction to fall within the ambit of Section 197 of the LRA. Whether this Section applies to a specific transaction depends on the following:

  1. the relevant business transaction must be a 'transfer' envisaged by Section 197 (i.e., a transfer as a going concern); and
  2. the entity being transferred must be a 'business'.

The test for whether or not there is a going concern transfer is objective, in which the substance of the transaction is considered rather than its form. The courts have formulated a test that involves taking a 'snapshot' of the entity before the transaction and assessing its components. This is then compared with a snapshot of the business after the transaction is concluded to establish whether it is essentially the same business but in different hands. There is no inflexible test, however, and each transaction is considered on its own merits.

The buyer of the transferred business (the new employer) must provide employees with terms and conditions that are generally not less favourable than those that applied before the transfer. However, the buyer can transfer employees to different retirement plans or similar schemes. Employees cannot be dismissed because of the transfer of a business or any reason relating to the transfer. A dismissal that breaches this provision is automatically unfair.

It is possible to contract out of the provisions of Section 197 but only if the requirements of Section 197(6) are met. This means that an employer must negotiate with the same body that would have had to be consulted in the event of a retrenchment and must make full disclosure of all relevant information during the negotiation process.

Work visas are specific to an employer and a position, and holders of a work visa may not continue working on their existing work visa but must apply for an amendment to the visa to authorise work for a new employer.

Outlook

Managing workplaces in the context of covid-19 and whether or not to adopt mandatory vaccination in the workplace are the issues expected to dominate in the coming year.

Legislative amendments of interest that are in the pipeline include the following:

  1. amendments to the EEA's provisions on affirmative action to:
    • enable the Minister of Employment and Labour to set affirmative action targets for identified sectors;
    • limit the application of the affirmative action obligations by excluding smaller employers (with fewer than 50 employees) who are currently subject to the obligations by virtue of the size of their turnover; and
    • increase the affirmative action compliance requirements for businesses wanting to conclude contracts with the state; and
  2. amendments to the Companies Act to introduce pay differential reporting and other obligations.

Since the beginning of the pandemic, the DHA has issued numerous directions in terms of the Disaster Management Act with the aim of alleviating the plight of foreigners who are unable to travel because of international travel restrictions. Although South Africa has lifted all travel restrictions, many jurisdictions continue to ban or limit travel to and from South Africa. It is expected that this will continue. Concessions and automatic visa extensions, although anticipated, are not guaranteed. A new critical skills list was published for comment in 2021 and is expected to come into operation during the course of 2022.

Footnotes

1 Stuart Harrison, Brian Patterson and Zahida Ebrahim are directors at ENSafrica. Susan Stelzner was also a director of ENSafrica. Sadly, she passed away on 5 January 2011 but this chapter continues to reflect her invaluable contribution and it remains dedicated to her memory.

2 For example, based on the right to bodily integrity, or the right to freedom of religion, belief and opinion.

3 [2021] ZACC 42 (12 November 2021).

4 LAC Case No. CA12/2020 (27 September 2021).

5 (252/2019) [2021] ZASCA 23; [2021] 6 BLLR 555 (SCA); (2021) 42 ILJ 1431 (SCA) (19 March 2021).

6 Namely for written employment contracts under the Merchant Shipping Act and contracts relating to learners (i.e., apprentices) under the Skills Development Act.

7 As of 29 November 2021, this is 211,596.30 rand per annum.

8 Companies Act, Section 23(2).

9 Vodacom (pty) Ltd v. Motsa and another, 2016 (3) SA 11 6 (LC).

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