Employment and employee benefits in South Africa: overview

A Q&A guide to employment and employee benefits in South Africa.

The Q&A gives a high level overview of the key practical issues including: permissions to work; contractual and implied terms of employment; minimum wages; restrictions on working time; illness and injury; rights of parents and carers; data protection; discrimination and harassment; dismissals; redundancies; taxation; employer and parent company liability; employee representation and consultation; consequence of business transfers; pensions; intellectual property; restraint of trade agreements and proposals for reform.

To compare answers across multiple jurisdictions, visit the Employment and Employee Benefits: Country Q&A tool.

The Q&A is part of the global guide to employment and employee benefits. For a full list of jurisdictional Q&As visit www.practicallaw.com/employment-guide.


Scope of employment regulation

1. Do the main laws that regulate the employment relationship apply to:
  • Foreign nationals working in your jurisdiction?

  • Nationals of your jurisdiction working abroad?

Laws applicable to foreign nationals

Section 23 of the Constitution of the Republic of South Africa, 1996 guarantees everyone the right to fair labour practices. The reference to "everyone" means every person in the Republic of South Africa. All legislation that regulates employment law in line with this right is therefore applicable to foreign nationals working in South Africa.

Laws applicable to nationals working abroad

The choice of law is determined by the jurisdiction in which the operation is located that the South African national is providing services to.


Employment status

2. Does the law distinguish between different categories of worker? If so, what are the requirements to fall into each category, the material differences in entitlement to statutory employment rights and are there any maximum time periods for which each category of worker can be engaged?

Categories of worker

South African law distinguishes between employees and independent contractors. When considering whether an individual is an employee or an independent contractor, the courts consider the substance of the agreement over its form and make a determination based on the dominant impression gained from considering a wide range of factors, such as the employer's control over the employee's productive capacity and hours worked.

Entitlement to statutory employment rights

Employees are entitled to the benefits and protections provided by South African labour legislation. Independent contractors are governed by the laws of contract and the specific contract under which they are working. As a result, they are not entitled to the benefits and protections afforded to employees by labour legislation.

Time periods

There are no maximum time periods during which a person can act as an employee or an independent contractor.



3. Are any grants or incentives available for employing people? Does any information/paperwork need to be filed with the authorities when employing people?

Grants or incentives

The Employment Tax Incentive Act, 26 of 2013 potentially provides employers with a tax rebate for hiring workers between 18 and 29 years of age.

The Employment Services Act, 4 of 2014 (ESA) makes provision that regulations can be published establishing employment schemes aimed at promoting the employment of young people and other vulnerable categories of people. However, no such regulations have been published to date.


UIF. Under the Unemployment Insurance Act, 63 of 2001 and the Unemployment Insurance Contributions Act, 4 of 2002 employers are required to register all employees with the Unemployment Insurance Fund (UIF). The following categories of employee are exempt from this requirement:

  • Those working less than 24 hours a month for an employer.

  • Learnerships (the equivalent to apprentices).

  • Public servants.

  • Foreign nationals working on a contract.

  • Workers who only earn commission.

Employers must make a monthly payment to the UIF on behalf of their employees, which consists of both:

  • An employee contribution of 1% of the employee's monthly remuneration.

  • A further 1% of the employee's monthly remuneration as an employer contribution.

COIDA. Under the Compensation for Occupational Injuries and Diseases Act, 130 of 1993 (COIDA), an employer must register themselves and all of their employees with the Compensation Commissioner. They must provide the Commissioner with an estimate of the number of employees they will employ in the upcoming financial year, and how much they will be paid. At the end of each financial year the employer must complete a return of earnings report, which must be submitted to the Commissioner.

SARS. Every employer must register with the South African Revenue Services (SARS) for the purposes of the taxation of employees. Employers must withhold a percentage of the employees' monthly salary, which must be paid to SARS within seven days after each month end. Employers must also complete an annual reconciliation and provide this to SARS.

ESA. The ESA makes provision that regulations can be published requiring employers to report on vacancies and the filling of positions. However, no such regulations have been published to date.


Background checks

4. Are there any restrictions or prohibitions on carrying out background checks in relation to applicants?

Employers can access an employee's credit and criminal records with their consent. Under the Employment Equity Act, 55 of 1998 (EEA) employers (and prospective employers) are prohibited from discriminating against employees on unfair grounds. As a result, employers should be mindful about what information they seek out. For example, employees are not generally obliged to disclose HIV status or pregnancy.


Permission to work

5. What prior approvals do foreign nationals require to work in your country? What information/paperwork needs to be kept or filed with the authorities when they start work?


Procedure for obtaining approval. There are a number of work visas that a foreign national can potentially obtain in order to work lawfully in South Africa. An employee can apply for one of the following types of work visa:

  • General work visa.

  • Critical skills visa.

  • Intra-company transfer visa.

Other required documents to support the visa application include:

  • Police clearance certificates.

  • Medical certificates.

  • Proof that the employee has sufficient funds to survive in the country until they are paid a salary.

An employer can apply for a corporate visa, which allows them to hire a number of foreign national employees for a limited period of time. The employer will need to both:

  • Demonstrate why they need to appoint non-South African citizens.

  • Prove that 60% of their workforce comprises South African citizens or permanent residents of South Africa.

Cost. The cost of a work visa is ZAR1,520 (the cost is the same for all the types of work visa).

Time frame. The procedure to process a visa application usually takes a minimum of eight to ten weeks.

Sanctions. Section 49(3) of the Immigration Act, 13 of 2002 provides that anyone who knowingly employs an illegal foreign national will be guilty of an offence and liable, on conviction, to a fine or to imprisonment not exceeding one year. The Immigration Act does not expressly provide for maximum fines, but these are generally applied similarly to administrative fines, which provide for a maximum fine of ZAR8,000. An employee who works without the correct visa risks detention and deportation. Whether the employee did so knowingly or not does not materially have an impact on the outcome.


Restrictions on managers and directors

6. Are there any restrictions on who can be a manager or company director?

Age restrictions

Children under the age of 15 or under the minimum school-leaving age (which is 15 or the end of the ninth grade, whichever comes first) cannot be employed. There are no additional requirements for a manager or director.

Nationality restrictions

There are no statutorily prescribed nationality restrictions.


The following persons are disqualified from being the directors of a company:

  • Unrehabilitated insolvents.

  • Court-declared delinquents.

  • Persons removed from an office of trust for misconduct involving dishonesty.

  • Persons who have been convicted of an offence involving dishonesty.

  • Persons who have been convicted of an offence set out in the companies' legislation.


Regulation of the employment relationship

7. How is the employment relationship governed and regulated?

Written employment contract

All employers who employ more than five employees are required by law to set out in writing certain particulars in respect of employees who work 24 hours or more per month. These particulars include details on:

  • The employer's full details.

  • The occupation or job description.

  • The amount of the wage or salary and how it will be paid.

  • Salary deductions.

  • Working hours.

  • Leave entitlements.

  • Notice period for termination of the contract.

  • The documents which form part of the employment contract.

There are additionally certain employment contracts which are required by various statutes to be in writing.

Implied terms

There are a number of terms, relating to basic conditions of employment, which are implied by law into the contract of any employee who earns below the statutory earnings threshold. Further, certain collective agreements or sectoral determinations can imply terms into employment contracts.

Collective agreements

Collective agreements are automatically binding upon the parties to an employment contract.

8. What are the main points to consider if an employer wants to unilaterally change the terms and conditions of employment?

An employer cannot unilaterally change the terms and conditions of employment: the agreement of the employee is required. The employee's agreement should be recorded in writing.


Minimum wage

9. Is there a national (or regional) minimum wage?

There is no universal minimum wage.

Sectoral determinations published by the Department of Labour provide for minimum wages in specific industries. Industries regulated by a bargaining council can also set minimum wages in their collective agreements that can be extended to non-parties in the industry by the Minister of Labour.

Section 32 of the Basic Conditions of Employment Act, 75 of 1997 (BCEA) requires that payment must be made in South African Rands, and must be in cash, by cheque or by direct deposit. Payment must be made seven days after the end of the period for which remuneration is payable.


Restrictions on working time

10. Are there restrictions on working hours? Can an employee opt out on either an individual or collective basis?

Working hours

Working hours are regulated by Chapter 2 of the BCEA. The provisions of Chapter 2 only apply to employees earning less than the earnings threshold, currently ZAR205,433.30 per annum. Employees cannot opt out of these provisions.

Maximum ordinary working hours are:

  • 45 hours per week and nine hours per day (for employees who work five days per week).

  • Eight hours per day (for employees who work more than five days per week).

Overtime can only be worked by agreement with the employee and is limited to ten hours per week.

Work on Sundays and Public Holidays can take place only with the employee's agreement.

Arrangements to limit overtime, such as compressed working hours and the averaging of working hours, are subject to the employee's agreement.

Rest breaks

Employees are entitled to a full hour lunch break after working continuously for five hours, or a 30-minute lunch break by agreement. Employees are further entitled to a 12-hour daily break between shifts, and a 36-hour weekly break, which should fall over a Sunday unless otherwise agreed.

Shift workers

Shift workers are not generally treated differently from normal employees. Where night work is undertaken (between 6pm to 6am), employees must be compensated with a shift allowance or reduction of working hours, and transport must be available between the employee's home and the workplace.


Holiday entitlement

11. Is there a minimum paid holiday entitlement?

Minimum holiday entitlement

In a cycle of 12 months, an employee is entitled to at least 21 consecutive days' annual leave on full remuneration. By agreement, annual leave can alternatively accrue at a minimum of one hour/day per 17 hours/days worked.

Public holidays

Public holidays are regulated by the Public Holidays Act, 36 of 1994. There are 12 public holidays in South Africa. If a public holiday falls on a Sunday, the following Monday is also a public holiday. Public holidays are not included in the leave entitlement: an employee must be paid for these days over and above their annual leave. An employee must be paid at least double their usual rate for working on a public holiday.


Illness and injury of employees

12. What rights do employees have to time off in the case of illness or injury? Are they entitled to sick pay during this time off? Who pays the sick pay and, if the employer, can it recover any of the cost from the government?

Entitlement to time off

Section 22 of the Basic Conditions of Employment Act, 75 of 1997 (BCEA) regulates sick leave. A sick leave cycle is 36 months from the commencement of employment or the end of the previous cycle. Employees are not entitled to take unpaid sick leave (for the employees' entitlement to paid sick leave, see below, Entitlement to paid time off).

Entitlement to paid time off

During sick leave an employee is entitled to paid sick leave equal to the number of days that he would usually have worked for a duration of up to six weeks. However, during the first six months of employment, an employee is only entitled to one day per 26 days worked.

Recovery of sick pay from the state

Paid sick leave cannot be recovered from the state. However, time off resulting from injury on duty is not considered as sick leave and is dealt with under the Compensation for Occupational Injuries and Diseases Act, 130 of 1993 (COIDA). Employers may be compensated by the Compensation Commissioner for payments made to employees under this legislation.


Statutory rights of parents and carers

13. What are the statutory rights of employees who are:
  • Parents (including maternity, paternity, surrogacy, adoption and parental rights, where applicable)?

  • Carers (including those of disabled children and adult dependants)?

Maternity rights

There is a right to four consecutive months' unpaid maternity leave. This can commence at any time from four weeks before the expected date of delivery. Additionally, an employee cannot work for six weeks after the birth, regardless of whether the child is a stillborn or not. An employment contract can provide more favourable maternity leave than these provisions.

Paternity rights

Male employees who have been in employment for longer than four months, and who work for four or more days per month, are entitled to three days per year of paid family responsibility leave each year when the employee's child is born. There is no other statutory right to paternity leave.

Surrogacy rights

The surrogate mother of a child is entitled to the same maternity leave that an employer would accord to the biological mother of the child.

Adoption rights

There are no statutory leave rights specifically afforded to adoptive parents. Such leave would either need to be taken as family responsibility leave, or be separately provided for in the employment contract. Employees can also use annual or unpaid leave.

Parental rights

There are no statutorily prescribed leave rights available to parents other than those described above.

Carers' rights

Carers, including those of disabled children and adult dependants, are not provided for under South African labour legislation.


Continuous periods of employment

14. Does a period of continuous employment create any statutory rights for employees? If an employee is transferred to a new entity, does that employee retain their period of continuous employment? If so, on what type of transfer?

Statutory rights created

The period of employment has an effect on the statutorily prescribed minimum notice periods which are required for termination of an employment contract. The entitlement to family responsibility leave arises after the employee has been employed for a period of four months, as does the entitlement to be paid the value of accrued annual leave on termination of employment.

Consequences of a transfer of employee

Employees retain their length of service and conditions of employment on a transfer of a business, or part of it, as a going concern.


Fixed term, part-time and agency workers

15. To what extent are temporary and agency workers entitled to the same rights and benefits as permanent employees? To what extent are part-time workers entitled to the same rights and benefits as full-time workers?

The expiry of a fixed-term contract does not constitute a dismissal. To avoid the abuse of fixed-term contracts, employees who had a reasonable expectation of renewing a fixed-term contract can claim that non-renewal constitutes dismissal. Restrictions are also in place for the use of temporary employees and agency workers that earn below the statutory earnings threshold, currently ZAR205,433.30 per annum. These restrictions are explained below.

Temporary workers

Employees on fixed-term contracts are considered permanent after three months, unless the use of the fixed-term contract is justified. A non-exhaustive list of justifications is provided in the Labour Relations Act, 66 of 1995 (LRA). After three months, temporary workers are also entitled to be treated no less favourably than their permanent counterparts at the employer, unless there is a justifiable reason for different treatment.

Agency workers

Agency workers are considered to also be employed by the client they are rendering services to once they have provided those services for three months. This generally provides protection against unfair dismissal. After three months, agency workers are also entitled to be treated no less favourably than their counterparts at the client, unless there is a justifiable reason for different treatment.

Part-time workers

Part-time employees are entitled to be treated on the whole not less favourably than full-time employees, unless there is a justifiable reason for different treatment.

It is accepted that an employee may have multiple employers at the same time, particularly where an employee is providing services to other companies within a group.


Data protection

16. Are there any requirements protecting employee privacy or personal data? If so, what are an employer's obligations?

Employees' data protection rights

Employees have a right to privacy, which prohibits an employer from intercepting, monitoring or acquiring an employee's private communication without the employee's knowledge, unless the employer has the employee's consent to do so, or if the breach is justified by necessity. The Protection of Personal Information Act, 2013 provides extensive protection in this regard, but its substantive provisions are not yet in force.

Employers' data protection obligations

An employer is under an obligation not to access any personal data or information of its employees unless it is justified to do so by either:

  • A disciplinary investigation.

  • The employee's consent.


Discrimination and harassment

17. What protection do employees have from discrimination or harassment, and on what grounds?

Protection from discrimination

The Employment Equity Act, 55 of 1998 (EEA) protects employees from unfair discrimination on various grounds including, but not limited to:

  • Race.

  • Gender.

  • Sex.

  • Pregnancy.

  • Marital status.

  • Sexual orientation.

  • Age.

  • Disability.

  • Religion.

  • HIV status.

  • Culture.

  • Language.

  • Birth.

  • Any arbitrary ground.

Protection from harassment

Harassment is viewed as unfair discrimination and as a result is protected against by the EEA.



18. Do whistleblowers have any protection?

The Protected Disclosures Act, 26 of 2000 was passed to protect whistleblowers. Section 3 of the Act provides that any employee who makes a protected disclosure cannot then be subjected to an occupational detriment. A protected disclosure includes a disclosure made in good faith to a legal practitioner, employer or various bodies specified in the Act (for example, the Public Protector). The Labour Relations Act, 66 of 1995 further specifies that any dismissal made as a result of the making of a protected disclosure will be automatically unfair.


Termination of employment

19. What rights do employees have when their employment contract is terminated?

Notice periods

There are minimum notice periods for termination of the employment contract either by the employer or employee. The duration of the notice period that each party must provide depends upon the employee's length of service:

  • One week's notice is required during the first six months of employment.

  • Two weeks' notice is required for employment of more than six months to up to one year.

  • Four weeks' notice is required for employment of more than one year.

Severance payments

An employer must pay severance pay of at least one week's remuneration for each completed year of service to the employee if the employee is dismissed for operational reasons, provided that the employee did not unreasonably refuse alternative employment. Severance pay is subject to a consultation process. No severance pay is payable for dismissal for other reasons.

Procedural requirements for dismissal

No filings are required, but the dismissal must be both procedurally and substantively fair (see Question 20, Protection against dismissal).

20. What protection do employees have against dismissal? Are there any specific categories of protected employees?

Protection against dismissal

An employee can be dismissed on the basis of employee conduct or employer capacity.

The dismissal must be procedurally and substantively fair. This applies to all employees, regardless of the length of service or any other criteria. Procedural fairness requires that the employee must be:

  • Allowed to state a case, and reasonable time to prepare.

  • Allowed representation by a union representative/fellow employee.

  • If dismissed, be provided with the reason for dismissal and told of the right to challenge the dismissal.

Substantive fairness requires that there must be a good reason (cause) for the dismissal. Dismissal for misconduct is normally justified by the employee's serious misconduct (such as theft, gross negligence or assault). See Question 21 for the reasons for dismissals due to employer capacity (redundancy).

Protected employees

There are no categories of protected employees.



21. How are redundancies/layoffs defined, and what rules apply on redundancies/layoffs? Are there special rules relating to collective redundancies?

Definition of redundancy/layoff

When dismissing on the grounds of its operational requirements (redundancies), the employer must show that it terminated employment as a result of economic, technological, structural or similar needs, and that termination was the only reasonable option.

Procedural requirements

Section 189 of the Labour Relations Act, 66 of 1995 and the Code of Good Practice on Operational Requirements provide that, before effecting a dismissal for operational requirements, an employer must follow a consultation process which must include (among other things) attempts to avoid the dismissal, and attempts to reduce the effect it will have on the employee. There must be an attempt from both parties to reach consensus. The persons or bodies that an employer is required to consult with, and the topics which must be consulted on, are specified by legislation.

Redundancy/layoff pay

See Question 19, Severance payments.

Collective redundancies

There are additional requirements which relate to large-scale dismissals (which are defined according to a staggered system measuring the proportion of dismissed employees to total workforce). Prior to giving notice of dismissal, there must be a referral, either to facilitation or conciliation, to the Commission for Conciliation, Mediation and Arbitration (CCMA). Facilitation is a process where a CCMA commissioner presides over the consultation meetings and endeavours to facilitate consensus between the parties. Conciliation is a process where the commissioner attempts to encourage the parties to a dispute to agree to a settlement. After the prescribed time periods, employees can refer a dispute regarding substantive fairness to the Labour Court, or strike. Procedural fairness is challenged only by separate motion proceedings.


Employee representation and consultation

22. Are employees entitled to management representation (such as on the board of directors) or to be consulted about issues that affect them? Is employee consultation or consent required for major transactions (such as acquisitions, disposals or joint ventures)?

Management representation

Employees are not entitled to management representation.

Employees are entitled to elect representatives who are able to represent them in grievance and disciplinary hearings, and monitor and report the employer's compliance with labour legislation.

Trade unions are entitled to certain organisational rights if they are sufficiently representative (generally, they comprise 30% of employees). Collective bargaining is voluntary, and unions sometimes have to strike to compel employers to bargain.


Employees retain a number of rights if an employer undergoes business rescue proceedings. Employees are additionally entitled to be consulted by an employer in the case of redundancies.

Major transactions

Employee consent or consultation is not required for mergers, acquisitions or any other similar transactions.

23. What remedies are available if an employer fails to comply with its consultation duties? Can employees take action to prevent any proposals going ahead?


If the consultation process is not followed in the case of redundancies, the matter can be referred by a party for arbitration or to the Labour Court, depending upon the number of employees involved. It can also be an option for the employees to embark upon strike action, depending on the circumstances.

Employee action

Unless the issue is one that can be referred to arbitration or adjudication, employees can strike to prevent proposals by management going ahead (for which consultation is not required).


Consequences of a business transfer

24. Is there any statutory protection of employees on a business transfer?

Automatic transfer of employees

Section 197(2) of the Labour Relations Act, 66 of 1995 (LRA) provides that in the case of a transfer of a business (or part of a business) as a going concern, the new employer is substituted in the place of the old employer. All rights and obligations of the employment contract are automatically transferred to the new employer and employees' length of service must be recognised.

Protection against dismissal

Section 187(1)(g) of the LRA provides that a dismissal related to a transfer of business is automatically unfair. However, the new employer can dismiss on the ground of its operational requirements after the transfer.

Harmonisation of employment terms

Under section 197(3) of the LRA a new employer can employ workers on terms and conditions that are different from the old employer, provided that these terms and conditions are, on the whole, not less favourable. The new employer can only amend conditions of employment by agreement with the employees.


Employer and parent company liability

25. Are there any circumstances in which:
  • An employer can be liable for the acts of its employees?

  • A parent company can be liable for the acts of a subsidiary company's employees?

Under the common law employers may be held liable for conduct by their employees which falls within the course and scope of their employment. In addition, section 60 of the Employment Equity Act, 55 of 1998 makes an employer liable for a contravention of the Act by their employees if the breach was reported to the employer and they failed to take the necessary steps to eliminate the breach.


Employer insolvency

26. What rights do employees have on the insolvency of their employer? Is there a state fund which guarantees repayment of certain employment debts?

Employee rights on insolvency

Once a sequestration order has been granted, all employment contracts are suspended with the result that employees are under no duty to render services and have no entitlement to remuneration. Employees can make a claim for any unpaid monies due.

State guarantee fund

Employees can submit a limited claim to the Unemployment Insurance Fund.


Health and safety obligations

27. What are an employer's obligations regarding the health and safety of its employees?

The safety of the workplace is regulated by the Occupational Health and Safety Act, 85 of 1993. Employers have a general duty to provide a workplace that is safe and without risk to the health of its employees as far as is reasonably practicable. This includes the mitigation of risks and hazards that the employer has identified, as well as training and informing employees about safe conduct.

Detailed obligations on the employer also exist based on the industry the employer operates in (for example, the mining sector in particular is very strictly regulated).


Taxation of employment income

28. What is the basis of taxation of employment income for:
  • Foreign nationals working in your jurisdiction?

  • Nationals of your jurisdiction working abroad?

Foreign nationals

Individuals and companies that are not "tax residents" in South Africa (a term defined in section 1 of the South African Income Tax Act, 58 of 1962 (SAITA), see below) are taxed on a source basis, subject to any relief provided by an applicable double taxation agreement. In relation to services, the "source" is typically where the services are rendered, (and so an employee not tax resident in South Africa who provides services in South Africa will be subject to tax on a source basis).

For tax purposes, "tax resident" is defined in section 1 of SAITA as a natural person that is either:

  • Ordinarily resident in South Africa.

  • Not at any time during the relevant year of assessment ordinarily resident in South Africa, where that person was physically present in South Africa either:

    • for a period (or periods) exceeding 91 days in aggregate during the relevant year of assessment, as well as for a period (or periods) exceeding 91 days in aggregate during each of the five years of assessment preceding that year of assessment; or

    • for a period (or periods) exceeding 915 days in aggregate during those five preceding years of the year of assessment.

Nationals working abroad

South African "tax residents" (a defined term in SAITA) are taxed on their worldwide income in South Africa, subject to any applicable double taxation agreement between South Africa and the country that the resident is working in.

29. What is the rate of taxation on employment income? Are any social security contributions or similar taxes levied on employers and/or employees?

Rate of taxation on employment income

In South Africa income is taxed on a progressive scale. The minimum annual salary required for an employee to be liable for income tax is currently ZAR73,650.

The rates of income tax are charged as follows (for tax year 2017, from 1 March 2016 to 28 February 2017):

  • Taxable income of ZAR0 to ZAR188,000: 18%.

  • Taxable income between ZAR188,001 to ZAR293,600: ZAR33,840 plus 26% of taxable income above ZAR188,000.

  • Taxable income of between ZAR293,601 to ZAR406,400: ZAR61,296 plus 31% of taxable income above ZAR293,600.

  • Taxable income of between ZAR406,401 to ZAR550,100: ZAR96,264 plus 36% of taxable income above ZAR406,400.

  • Taxable income of between ZAR550,101 to ZAR701,300: ZAR147,996 plus 39% of taxable income above ZAR550,000.

  • Taxable income of ZAR701,301 and above: ZAR206,964 plus 41% of taxable income above ZAR701,300.

Social security contributions

Employees and employers must contribute towards the Unemployment Insurance Fund (see Question 3, Filings).

Under the Skills Development Levies Act, 9 of 1999, companies with a payroll of more than ZAR500,000 per annum must contribute 1% of their payroll per month to the South African Revenue Services as a contribution towards the sector education and training authority in their jurisdiction.



30. Is it common to reward employees through contractual or discretionary bonuses? Are there restrictions or guidelines on what bonuses can be awarded?

Both contractual and discretionary bonuses are a common feature of employment contracts in South Africa.

While an employer may exercise discretion when granting a bonus, that discretion must be exercised fairly.


Intellectual property (IP)

31. If employees create IP rights in the course of their employment, who owns the rights?

Unless there is an express agreement to the contrary, the employer owns the IP rights.


Restraint of trade

32. Is it possible to restrict an employee's activities during employment and after termination? If so, in what circumstances can this be done? Must an employer continue to pay the former employee while they are subject to post-employment restrictive covenants?

Restriction of activities

Whilst an employee is employed, the employer can require an employee to disclose any interests or business activities that they undertake outside of their employment and prohibit such activities. Employers do not need to pay employees separately for these restrictions to be enforceable.

Post-employment restrictive covenants

A restraint of trade clause in an employment contract can be enforceable where the employer has a proprietary interest that requires protection, and that interest outweighs the right of the employee to work in his chosen profession. Ex-employees can be restrained for a limited time period, and in a specific area, from conducting activities such as soliciting clients, suppliers or employees, or engaging in activities in competition with the previous employer. Employers do not need to pay employees separately for these restrictions to be enforceable.


Proposals for reform

33. Are there any proposals to reform employment law in your jurisdiction?

There are no current proposals to reform employment law in South Africa.


Online resources

Department of Labour

W www.labour.gov.za

Description. The Department of Labour is an official Government website.

Commission for Conciliation, Mediation and Arbitration (CCMC)

W www.ccma.org.za/

Description. The website for the Commission for Conciliation, Mediation and Arbitration, an independent dispute resolution body established under the Labour Relations Act, 66 of 1995.

Contributor profiles

Hermann Nieuwoudt, Director

Norton Rose Fulbright South Africa Inc

T +27 11 685 8591
E hermann.nieuwoudt@nortonrosefulbright.com
W www.nortonrosefulbright.com/za/

Professional qualifications. Attorney and conveyance, South Africa, 1985

Areas of practice. Head of Employment and Labour Practice (Johannesburg), focussing on collective labour law, and individual and general employment law.

Non-professional qualifications. B.Com (Law) and LLB degrees from the University of Stellenbosch.

Recent transactions

  • Represented a client in the first outsourcing dispute that was heard by our Constitutional Court.
  • Recently advised Exxaro Resources limited on acquisition of Total Coal South Africa (Pty) Limited from Total SA.
  • Acted for a major food company in an arbitration about the alleged unlawfulness of contracts with drivers who used to be employees. The constitutional issue of the contracts being contrary to public policy was the central issue in the matter. The drivers applied to the Labour Court to have the award reviewed, but were unsuccessful.
  • Recently gave strategic advice to a parastatal business and a major food company on major restructurings.

Professional associations/memberships

  • Served as an assessor in the Labour Appeal Court.
  • Served as an acting judge in the Labour Court.
  • Served for a number of years as a member of the Standing Committee on Labour Law of the Law Society of South Africa.
  • Member of the National Committee of the South African Society of Labour Law.

Jonathan Jones, Director

Norton Rose Fulbright South Africa Inc

T + 27 11 685 8914
E jonathan.jones@nortonrosefulbright.com
W www.nortonrosefulbright.com/za/

Professional qualifications. Attorney, South Africa, 2003

Areas of practice. Collective and individual labour law, specialising in employment-related litigation.

Non-professional qualifications. B.Com, LLB and LLM degrees (cum laude) from the University of Stellenbosch.

Recent transactions

  • Specialises in section 197 transfers and has significant experience in designing and implementing compliant equalisations from both a legal and financial perspective.
  • Advises clients from a wide range of sectors, including the retail, hospitality, aviation, energy and petroleum, mining and services sectors.
  • Organises training and has conducted seminars and lectures up to master's degree level.

Verushka Reddy, Director

Norton Rose Fulbright South Africa Inc

T +27 11 685 8603
E verushka.reddy@nortonrosefulbright.com
W www.nortonrosefulbright.com/za/

Professional qualifications. Attorney, South Africa, 2004

Areas of practice. Employment law, specialising in labour litigation and individual and collective disputes.

Non-professional qualifications. BA and LLB degrees from Rhodes University.

Recent transactions

  • Expertise in employment and labour law, with particular focus on drafting employment contracts, advising and litigating collective and individual labour disputes, and strikes.
  • Extensive experience in the retail and FMCG industries, working closely with multi-national clients in various employment matters, with a particular focus on collective bargaining.
  • Recently led the legal team that represented Edcon Limited in the seminal Constitutional Court matter of Steenkamp and Others v Edcon Limited, which changed the law in respect of mass retrenchments.

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