Employ Candidates Compliantly in South Africa

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Global HR Compliance in Republic of South Africa

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Record in Republic of South Africa Guide below will help you understand the nuances of labor legislation in the country.

There are two main reasons for companies hiring foreign workforce:

  • Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
  • Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.

After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.

If you need to hire foreign workforce in Record in Republic of South Africa so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.

With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.

We are experts in global workforce employment in Record in Republic of South Africa (RSA), and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Record in Republic of South Africa.

Hiring and Firing Workforce in Record in Republic of South Africa Guide

# Employment Agreements

The contract of permanent employment 

The first thing that happens is that an offer of permanent employment is given in writing to the prospective of the employee. The prospective employee then accepts the offer of employment in writing. The permanent contract of employment is then entered into.

The Fixed Term Contract of Employment 

The fixed term contract of employment is in fact almost identical to the contract of permanent employment. The only real difference is that the fixed term contract of employment will stipulate a starting date and an ending date. The contract will state that “Upon the attainment of (state ending date) this contract of employment will terminate, and the employment relationship between the employee and the employer will cease. The employee will no longer be employed by the employer as from (state ending date.)

The temporary contract of employment 

This is in fact merely another name for a fixed term contract of employment, and the same stipulations apply.

The project contract of employment 

Here again, the project contract of employment is also in fact a fixed term or temporary contract of employment. The difference is that instead of stipulating a starting date and an ending date (a contract which runs according to time,) the project contract of employment is a contract where an employee is employed by the employer to complete a certain project. In other words, the date of completion of the project is unknown – it may be six months, it may be 12 months or even longer.

Collective agreement

At the end of the negotiation process, a collective bargaining agreement (also known as a collective agreement) is produced, outlining the conditions agreed to and any limitations with regards to time. In certain jurisdictions, such as South Africa (to be discussed below) the only formality for a collective agreement is that it should be reduced to writing.

Labour legislation in South Africa states that collective agreements alter the terms of any contract or employment relationship between an employee and employer who are both bound by the collective agreement.    The agreement is the most important part of the negotiation process. Understand all the clauses in the agreement before signing.  Below are some essentials of a proper collective agreement:

  • The agreement is clear and in writing.
  • The agreement must cover a fixed period.
  • The date that the agreement comes into effect must be clearly stated.
  • The agreement must be clear about who benefits.

#Employment Termination and Severance Pay (Dismissal)

The contract of employment can be terminated on the following grounds:

  • On expiration of the agreed period of employment
  • On completion of the specified task
  • By notice duly given by either party
  • By summary termination in the event of a material breach on the part of either party
  • By repudiation
  • By mutual agreement
  • By death of either party
  • By the insolvency of the employer
  • y the supervening impossibility of performance, where either party becomes permanently unable to perform his/her obligations in terms of the contract.

South African law recognises the doctrine of constructive dismissal. A resignation will be regarded as a dismissal where an employee terminates his/her contract of employment because the employer made continued employment intolerable. In constructive dismissal cases the employee concerned is deemed to have been dismissed even though he/she terminated the contract of employment.

The LRA  (Labour Relations Act) expressly recognises the following grounds for termination of the employment contract:

  • Misconduct on the part of the employee
  • The employee’s poor work performance and/or incapacity
  • The operational requirements of the employer.

A dismissal that is not automatically unfair is deemed to be unfair unless the employer proves that the dismissal is for a fair reason either related to the employee’s conduct or capacity or based on the operational requirements of the employer.  In addition the employer must prove that the dismissal was effected in accordance with a fair procedure.

A mutual separation agreement can be entered into between an employer and employee to terminate the contract of employment by mutual agreement. Such an agreement should set out the terms and conditions of the mutually agreed separation.

#It is prohibited to dismiss

There are no categories of protected employees.

#Notice period

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.

For farm and domestic employees, the above notice periods must be followed and may not be shortened. It is possible, however, to shorten the notice of 4 weeks to no less than 2 if stated under a collective bargaining agreement for other types of employees.

#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. If the employee is terminated due to poor performance or misconduct, the employee is not entitled to pay severance pay. If the employee is terminated due to operational requirements, the company is obligated to pay the employee one week’s severance pay for ever year employed.

#Employee Benefits and Contributions

Mandatory benefits required by law to be provided by an employer

Not all South African organizations offer a full range of employee benefits, nor do they have to. While the government offers some social security benefits to certain members of society and employers are required to contribute to certain funds, benefits such as retirement funding and medical insurance are private matters.

Unemployment Insurance Fund (UIF)

All employers are required to register their employees for and contribute to the UIF. The employer is required to pay 1% of an employee’s salary to the fund, and a further 1% of the employee’s salary is to be withheld and paid over to the fund on a monthly basis.

Skills Development Levy (SDL) 

The SDL is imposed to promote learning and development in South Africa and is driven by an employer’s salary bill. The employer must make contributions and the funds are to be used to develop and improve the skills of employees. The amount is paid by an employer on a monthly basis, has no cap, and amounts to 1% of the total salaries paid to all the employer’s employees each month (including overtime payments, leave pay, bonuses, commissions and lump sum payments).

Compensation for Occupation Injuries and Diseases (COIDA) 

COIDA regulates the compensation of employees for occupational injuries and diseases. The fund will determine the danger of the specific industry and will apply a percentage rate to the amount of annual earnings declared to raise an assessment – this will be payable.

Non-mandatory benefits that are offered by an employer 

Further perks, including car allowance, banking assistance, discounted mobile phone contracts, as well as gym memberships and sporting facilities, are also on offer, while Performance Awards recognize those who go the extra mile. You can also find many diversified resource companies providing benefits, including subsidized canteen meals, car-wash facilities, free access to Lifeworks, access to on-site wellness programs and medical rooms, free on-site gym facilities, free annual comprehensive medical checks, an onsite travel agency for business travel arrangements, free parking, access to online training, as well as training financed by the company and study support. Employees of few fortune companies are also given the opportunity to travel and work globally, while those happy to stay in South Africa are invited to important sporting events like the Confederations Cup, etc.

#Probationary period

The employer stipulates all the conditions applicable to the probation period in the contract of permanent employment, for example, that the probation period will not be extended (i.e. three months can be enough time for an employee to prove himself). The period of probation is determined depending on the position. If the employee is dismissed during the probation period, he has the chance to state a case in response, assisted by a trade union representative, or a fellow employee. A newly hired employee may be placed on probation for a period that is reasonable given the circumstances of the job. The period should be determined by the nature of the job, and the time it takes to determine the employee’s suitability for continued employment.  When appropriate, and employer should give an employee whatever evaluation, instruction, training, guidance or counseling the employee requires to render satisfactory service. Dismissal during the probationary period should be preceded by an opportunity for the employee to state a case in response and to be assisted by a trade union representative or fellow employee.


An employer may not require or permit an employee to work overtime, except in accordance with an agreement. Employees may work a maximum of 10 hours overtime a week, and employees may not work for more than 12 hours on any given day. A collective agreement may increase the maximum permitted overtime to 15 hours a week, provided such an agreement does not apply for more than 2 months in any 12 month period.

#Work hours

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).

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 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.

#Annual leave

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.

#Sick leave

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. 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. Paid sick leave cannot be recovered from the state. If an employee takes a day’s sick leave, the employer must pay the employee, on the employee’s usual pay day, the wage that the employee would have ordinarily earned for work on that day. An employer is not required to pay an employee who has been on sick leave for more than 2 consecutive days or on more than two occasions during an 8 week period, if the employee, on request by the employer, does not produce a medical certificate stating that the employee was unable to work for the duration of his/her absence on account of sickness or injury.

#Parental leave

Maternity leave

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 or earlier if a certified medical practitioner deems it necessary for the employee’s health to commence leave at an earlier date. 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. There is no legal obligation on an employer to pay an employee whilst she is on maternity leave.

Paternity leave

Paternity falls under Parental leave. Fathers are entitled to 10 days of parental leave, paid by the UIF at a rate of 66% of the regular pay.  For the father to exercise parental leave, they must inform their employer in writing at least one month before the expected due date of the child. This leave also applies to adoptive fathers.

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