28 February 2025
The long awaited Nedlac Report on the Labour Law Reform Process has now been published, marking a significant milestone in the ongoing discussions between organised business, organised labour, and government. These negotiations, which began in April 2022, have resulted in a series of proposed amendments to key labour laws, including the Labour Relations Act, the Basic Conditions of Employment Act, the Employment Equity Act, and the National Minimum Wage Act. The report offers a comprehensive framework for the future of South Africa's labour market, with potential implications for employees, employers, and the economy. The report has been submitted to the Minister of Employment and Labour, along with four proposed amendment bills. We outline some of the key changes that have been proposed.
Limitation of remedies for unfair dismissal of high-paid employees
A new section stands to be included in the Labour Relations Act which would provide that high-paid employees are only entitled to reinstatement in cases of automatically unfair dismissals, with other dismissals limited to capped compensation. This compensation cap will not apply to automatically unfair dismissals or unfair labour practices involving whistleblowing. The high-earnings threshold is set at R1.8 million per year for May 2024 to April 2025, with annual adjustments based on the consumer price index.
Qualifying period of employment for full protection against unfair dismissal
A newly proposed section 188(4) of the Labour Relations Act would provide that protection against unfair dismissal will not apply to new employees during their first three months of employment, or any longer probation period specified in the contract, if it is reasonable and justifiable. However, these employees will still be protected from automatically unfair dismissals. The proposal aims to encourage employers to hire new employees, particularly young people with no prior work experience
The test for procedural fairness in dismissal cases
A proposed amendment aims to clarify that, subject to any relevant collective agreement, a fair dismissal procedure is one where the employee has been given a reasonable and adequate opportunity to respond to the reason for dismissal. This aligns with the new draft Code of Good Practice on Dismissal and supports the shift away from formal, adversarial pre-dismissal processes.
Amendments to provisions dealing with large-scale retrenchments
Several changes to the retrenchment process under section 189A of the Labour Relations Act were proposed, including giving the Commission for Conciliation, Mediation and Arbitration (CCMA) the authority to make rules regarding facilitation, instead of the Minister. The process for challenging procedural fairness in retrenchments is also set to be amended, including the deletion of certain subsections and the introduction of post-dismissal challenges. Additionally, if a facilitated consultation process has occurred, disputes about the fairness of the dismissal can proceed directly to the Labour Court without prior conciliation. These amendments effectively restore the legal position on challenging retrenchment procedures that existed before section 189A was introduced.
Curtailment of the definition of ‘unfair labour practice’
Proposed changes to the definition of "unfair labour practice" under section 186(2) aim to delete sub-sections (a) and (c), limiting justiciable disputes to unfair suspension, disciplinary action short of dismissal, and occupational detriment due to protected whistleblowing. A one-year transitional period will allow disputes related to promotion to be handled as if those sub-sections hadn't been repealed, but this only applies to employers in the public service, local government, the Employment of Educators Act, and the South African Police Service. This period gives these employers and trade unions time to conclude collective agreements on promotion and dispute resolution.
Increase in statutory severance pay
The proposed amendments suggest increasing the minimum statutory severance pay for retrenched employees from one week to two weeks' remuneration for each completed year of continuous service. This entitlement to severance pay will only apply to years of service completed after the commencement of the accompanying Amendment Act.
Extended definition of ‘employee’
A newly proposed Schedule 11 in the Labour Relations Act aims to extend freedom of association, organisational, and bargaining rights to a broader group of employees, including those not traditionally classified as employees under section 213 of the Labour Relations Act. The new definition of "employee" includes individuals who work personally for someone that is not a client or customer of their profession or business, with a presumption of employment unless the employer can prove otherwise. This expanded definition also stands to be included in the Basic Conditions of Employment Act, allowing the Minister to set basic employment conditions for this group of employees, potentially providing additional protection for platform workers like e-hailing and food delivery drivers.
Start-up businesses’ exclusion from bargaining council agreements
The proposal suggests that employers of "new businesses" with fewer than 50 employees stand to be exempted from conditions of employment set by extended bargaining council collective agreements. A "new business" is defined as one in operation for less than two years, excluding businesses that have transferred as a going concern under section 197(1) of the Labour Relations Act or those formed through the division or dissolution of an existing business.
Regulation of ‘on-call’ or seasonal workers
A proposed new section in the Basic Conditions of Employment Act addresses employees who are required to remain available for work without a guaranteed job. This newly proposed provision mandates that employers provide written confirmation of key details, including a reasonable notice period for the employee to report for work and a reasonable notice period for the cancellation of work.
Conclusion
The proposed reforms are still in the early stages and must undergo further steps before becoming law. After being reviewed by the State Law Advisor, the draft amendment bills will move through the Parliamentary process, where there will be opportunities for public input. Stay tuned for updates as the process unfolds.
