EMPLOYER ACTION CODE: ACT

As part of a series of labor market reforms intended to address chronically high levels of unemployment, among other things, the government has amended the Basic Conditions of Employment Act (BCEA), Labor Relations Act (LRA) and Employment Equity Act (EEA). The package of reforms also includes new legislation, the Employment Services Act (ESA), which is likewise intended to boost employment. Earlier this year, the Immigration Act was substantially amended, revising numerous elements of immigration law and visas affecting the employment of foreign workers.

KEY DETAILS

The aims of the legislation vary by the nature of their regulatory frameworks and may touch on a variety of issues. Notable aspects of each piece of legislation (and the effective date of the changes) are as follows:

  • BCEA. Effective September 1, 2014. Labor protections, enforcement and fines for noncompliance increased. The amendments also enhance the Minister of Labor’s powers to make sectoral determinations on matters such as temporary employment and pay increases for employees not covered by a collective agreement.
  • LRA. Effective August 17, 2014. Limits the length of fixed-term employment contracts to three months for employees covered by the BCEA (i.e., workers earning less than SAR205,433 per annum). Longer-term contracts may still be permitted by sectoral or enterprise agreement, or where the employer can provide reasonable justification that the nature of work justifies longer terms, such as temporary replacement of employees on leave. General protection from unfair dismissal will no longer apply to employees earning SAR1,000,000 or more per year, provided the employee received at least three months’ notice or pay in lieu of notice. Protection against unfair dismissal due to discrimination or unfair labor practices is unaffected.
  • EEA. Effective August 1, 2014. This act was amended to expand the definition of discrimination to include arbitrary forms of employment discrimination, and require that differences in terms and conditions of employment for workers doing the same or similar work of equal value be justifiable on nondiscriminatory grounds.
  • ESA. Effective April 3, 2014. This new legislation was enacted to establish a public employment service to help match workers with jobs. It also requires firms to inform the Department of Labor of all vacancies and use public employment services prior to hiring foreign nationals.

Effective May 26, 2014, the revised immigration laws:

  • Change the term of reference from “permits” to “visas” for all former work permits including general, intracompany transfers and corporate work permits
  • Increase the duration of intracompany work visas from two to four years on a nonrenewable basis
  • Replace the former quota and exceptional skills work permits with critical skills visas; fields under which applicants may qualify are based on a list of critical skills maintained by the Department of Immigration
  • Broaden the definition of “spouses” to include long-term domestic partners
  • Require that sponsors of general work visas obtain certification from the Department of Labor that the salary and benefit packages of applicants are commensurate with pay and benefits for local citizens in the same or similar positions
  • Require sponsors of corporate visas to demonstrate that at least 60% of staff is comprised of citizens or legal residents of South Africa

EMPLOYER IMPLICATIONS

The changes to the legal framework for employment and immigration in South Africa are fairly numerous. Companies with offices in South Africa may want to consider reviewing the impact of these changes on their policies and practices with their legal counsel.