Employment Act/Labor Laws South Africa

South Africa has a promising developing economy with a huge job market of about one million people. It has a plentiful supply of natural and labor resources, and its legal, communications, financial, energy, and transportation sectors are well-developed. South Africa also has one of the largest stock exchanges globally attracting several investors to the country. Its modern infrastructure allows for the efficient distribution of goods to major regional urban centers.

Business owners setting up their business in Africa must consider South Africa as one of their business expansion centers. They can take advantage of the skilled and talented workforce of the country, contributing to businesses’ growth.

Companies need to comply with the local rules and regulations while they hire and draft an employment contract. Refer to this article to know about South African labor laws while setting up a business!

Applicability of the Act

The South African labor laws apply to all employers and employees regardless of nationality. However, employees working for the National Defence Force, National Intelligence Agency, South African Secret Service, and individuals who provide their services without remuneration and voluntarily are not protected under the South African employment act.

Employment Contract

There are primarily two types of contracts under South African labor laws, which are as follows:

Fixed-term contracts

• The fixed-term contract’s period is specified in the contract and lasts for the period specified until an event occurs or until a task is completed.
• Unless agreed otherwise, this type of contract can only be terminated with justifiable reason during its duration.
• If the contract ends and the employee remains employed, it may be renewed through the parties’ conduct. The non-renewal of a fixed-term contract suggests a dismissal if the employee expected it to be renewed on similar terms.

Indefinite-period contracts

• Indefinite contracts are also permanent contracts that are not bound by time.
• It ends either with the death of the employee or their resignation or in case they have flouted the norms laid down by the company.

Key Provisions of the Act

Employers in South Africa need to have a sound understanding of the key provisions of its employment laws. Here is a list of all they need to know:

Minimum age for employment

• The BCEA prohibits the employment of children under 15 years of age. Employers must also refrain from employing children under the minimum school-leaving age (if this is higher than 15 years).
• Once a child reaches age 15, they can only be employed for appropriate work that does not negatively affect their education, physical or mental well-being, or moral or social development.
• It is considered a criminal offense to employ a child violating these provisions.

Probation

• No laws prompt the exact duration of an employee’s probationary period. It entirely depends on the nature of the work.
• However, South Africa has an extendable probationary period of up to 3 months, but it has to be reasonable.

Working hours

• Normally an employee in South Africa can work for up to 8 hours.
• Any work done above the prescribed duration of 8 hours will be considered overtime work for which they must be duly compensated.

Rest period

• According to South African labor law, if an employee works continuously for more than five hours, the employer must provide them with a meal interval of at least 60 minutes.
• This interval can be reduced to 30 minutes if required by the employer through a written agreement.
• During this interval, the employee can only perform duties that cannot be left unattended or performed by another worker.
• The employee must be compensated if required to work or be available during a break.
• They must also be compensated for working for any portion of the interval exceeding 75 minutes unless they reside on the workplace premises.

Night-time work

• The employer has to get the employee’s consent for night-time work too.
• However, as per South African labor law, this must be compensated via an allowance or reduced working hours.
• The employer has to arrange for transportation between the workplace and the employee’s residence in case of night-time work.
• The employer is duty-bound to inform employees of any health issues that might crop up if they regularly work between 11 pm and 6 am.

Overtime clauses and benefits

• According to the labor act rules in South Africa, employers must get the employee’s consent if they want them to work overtime.
• Employers must pay employees one and a half times their regular wage for overtime work or grant them paid time off.
• Either of them is feasible and it depends upon the agreement between the employer and the employee.
• However, employees are supposed to work up to 10 hours of overtime in a week or three hours in a day if they work a nine-hour day.

Sick leave

• According to South African labor law, employees can claim some sick leave on full payment.
• During the first four months of employment, an employee is entitled to one day of paid sick leave every 26 days.
• After this initial period, the entitlement is 30 days of paid sick leave for every 36 months worked (which is known as the leave cycle).
• An employer must only provide paid sick leave for more than one day or absences that occur more than twice within eight weeks if the employee provides a valid medical certificate from a medical practitioner.

Family responsibility leave

• South African labor laws specify the ‘family responsibility’ leave.
• Employees have the right to take annual family responsibility leave for three days.
• This leave allows them to take time off work to attend to important family matters.
• To qualify for this leave, the employee should have worked with the same employer for four months.
• They also need to work at least four days weekly during these four months to claim the family responsibility leave.

Maternity leave

• Pregnant employees have the right to take a minimum of four months away from work as maternity leave, according to South African labor law.
• This has to begin four weeks before the expected due date and end at least after six weeks after the child’s birth.
• This leave is unpaid unless there is an agreement between the employer and the employee.
• Women are not allowed to work for six weeks after giving birth to the child.
• There is also a unique rule that entitles breastfeeding employees to have two 30-minute breaks each workday to breastfeed during the first six months of childbirth.
• Although this provision is not enforceable by law, it is considered by courts and tribunals when dealing with labor law disputes.

Paternity leave

• Under South African labor law, fathers must take ten days of unpaid paternity leave.
• The father can draw money from the Unemployment Insurance Fund (UIF) during this period.
• This paternity leave is not limited to biological fathers. It applies equally to fathers who adopt a child under 2.

Parental leave

• The Basic Conditions of Employment Act (BCEA) under South African labor law allows for employee parental leave for employees.
• Under this act, the employee can take ten consecutive days of unpaid leave upon the birth of a child.
• Employees may also take parental leave when they legally adopt a child or when a child is placed by a court in the care of a prospective adoptive parent.

Payment for working on public holidays

• If a public holiday coincides with a regular working day and an employee is scheduled to work on that day, the employee will be qualified to receive an amount that is a minimum of double their normal wage rate for the day, states the South African labor law.
• According to South African law, there are 12 public holidays. If the public holiday coincides with a Sunday, the following Monday will be a holiday.

Equality guaranteed by the Constitution

The Constitution provides that everyone has equal rights and is protected from unfair discrimination. The government of South Africa also has an Employment Equity Act that promotes fairness and equality in the workplace.

Employers are prohibited from practicing any unfair discrimination against employees based on certain grounds. These grounds include race, sex, family responsibility, marital status, ethnicity or social origin, sexual orientation, age, disability, religion, HIV status, political opinion, culture, language, and birth. This prohibition applies to all employment policies and practices. The South African labor code entertains no form of discrimination.

Termination of employment

During the employment’s probationary period, an employer can terminate the employee for a just reason. Upon the completion of the probationary period, employers can terminate employees for reasons such as poor performance, misconduct, or operational requirements specific to the employer.

The BCEA, under South African labor law, has laid down specific timelines for giving notice in case of termination of employment.

Notice period and severance pay

In South African labor law, employees who have worked for the same employer for more than six months continuously are entitled to severance pay. Here is a table for a better understanding!

Penalties

Employers not adhering to South African labor laws may face severe penalties. They may also face the consequences such as fines, legal action, or imprisonment. The penalty severity will depend on the nature of the offense.

Organizations that violate the Employment Equity Act (EEA) may have to pay huge fines. The maximum penalty of R1.5 million for a first-time offense will have to be paid by offenders. This may shoot up to R2.7 million or 10% of turnover for repeat offenses.

Compliance Strategies for Employers

Here are some compliance strategies that can help prospective employers set up their business in compliance with the labor code of South Africa:

• Employ an HR manager to manage recruitment, training, payroll, benefits, performance evaluations, and legal compliance related to employees.
• Create written policies and procedures for the company and update them from time to time.
• Have a standard template ready for basic employment documents like employment contracts, offer letters, and termination notices.
• Provide regular training to employees to meet compliance policies.
• Hire a third-party company to ensure compliance and conduct audits from time to time.

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Multiplier can help you streamline your business with solutions such as drafting multilingual contracts, employee onboarding, and international payroll management. Expand into new markets, accelerate growth, and bypass the complications of establishing a new business in a foreign land with Multiplier!