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What employers need to know about employing foreigners in South Africa

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What employers need to know about employing foreigners in South Africa

13th February 2017

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The employment of foreigners in South Africa is regulated by the Immigration Act 13 of 2002, as amended (“the Immigration Act”). The Immigration Act provides for the admission of foreigners to, their residence in and departure from South Africa and matters connected therewith including the ability of foreigners to work in South Africa. The Immigration Act is supplemented by the Immigration Regulations which underwent significant changes in May 2014, specifically in relation to work visas.

The Employment Services Act 4 of 2014 (“ESA”), which came into effect in August 2015, further regulates the employment of foreigners. ESA has been introduced to promote employment, encourage productivity, decrease levels of unemployment and provide training for unskilled workers. One of the specific aims of ESA is to facilitate the employment of foreign nationals in a manner that is consistent with the objects of the Immigration Act. Importantly, the ESA accords jurisdiction to the Labour Court to deal with issues relating to the employment of foreigners and also confirms the sanctions for non-compliance as set out in the Immigration Act.

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In addition the Labour Relations Act 66 of 1995, as amended (“the LRA”) is applicable regardless of the legal status of the employee. The LRA governs disputes relating to unfair dismissal and unfair practices in employment and regulates the resolution of these disputes.

The Immigration Act and Regulations

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Section 38 of the Immigration Act provides that no person shall employ:

  • an illegal foreigner;
  • a foreigner whose status does not authorise him or her to be employed by such person; or
  • a foreigner on terms, conditions or in a capacity different from those contemplated in such foreigner’s status.
  • In terms of section 38(2) of the Immigration Act, a duty is placed on an employer to make an effort, in good faith, to ensure that no illegal foreigner is employed by it and to ascertain the status or citizenship of the persons it employs.

Furthermore, section 49(3) of the Immigration Act provides that anyone who knowingly employs an illegal foreigner or a foreigner in violation of the Immigration Act shall be guilty of an offence and liable to a fine or a period of imprisonment not exceeding one year for a first offence.

The Labour Relations Act

There is a misguided view amongst employers that they can side-step labour regulations when it comes to employing foreigners.  It is important to note that foreign employees, including those who do not have valid working visas, are afforded legal protection from unfair dismissal under the Labour Relations Act 66 of 1995, as amended (“the LRA”).

Section 213 of the LRA defines an ‘employee’ as:

(a) any person, excluding an independent contractor, who works for another person or for the state and who receives, or is entitled to receive, any remuneration; and

(b) any other person who in any manner assists in carrying on or conducting the business of an employer.

It is also relevant to consider the provisions of the Constitution of the Republic of South Africa, Act 5 of 2005 (“the Constitution”) which provides in section 23(1) that everyone has the right to fair labour practices and not only citizens.

The law does not declare that a contract of employment concluded without the required permit is void nor does it provide that a foreigner who accepts work without a valid permit is guilty of an offence. What is prohibited is the act of “employing” a foreign national in violation of the law. All of the liability is therefore attributed to the employer and the law does not penalise the action of the foreign person who accepts work or performs work without valid authorisation. It is the illegal employment of a foreigner that is prohibited. 

Therefore a foreign national whose work permit expires whilst employed, or who is employed without a relevant work permit is still an ‘employee’ for the purposes of the LRA. This means that the employee would have recourse to compensation in the case of an unfair dismissal, through the CCMA. Such employees would not be entitled to reinstatement as such an order would be in contravention of the Immigration Act.

These principles were confirmed in the matter of Discovery Health Limited v CCMA & Others [2008] 7 BLLR 633 (LC) where the employee was dismissed after the expiry of his work permit. The employee referred an unfair dismissal dispute to the CCMA, where the question of the CCMA’s jurisdiction to hear the case was considered. The CCMA ruled that it did have jurisdiction to determine whether the employee had been unfairly dismissed and found further that the employee’s dismissal had been unfair.

In view of the CCMA’s ruling, the employer took the matter on review to the Labour Court. The Court held that the contract of employment between the employee and employer was valid, and remained so until it was terminated by the employer.  The Court also found that the employee, despite being a foreign national, fell within the definition of an employee for the purposes of section 213 of the LRA and as a consequence enjoyed the protection afforded by the LRA.

It is important to understand that employers must still act fairly towards foreign employees, regardless of the legality of the employment.

Conclusion

The law clearly places the onus on the employer to comply with the relevant legislation and holds the employer liable for non-compliance. It is therefore, necessary that prior to the employment of any foreign person, employers should take legal advice to ensure that they comply with the relevant statutory obligations, including the recently enacted ESA.

The employment of foreigners is designed to be a short-term measure to bridge the skills shortage within an employer’s business and to facilitate the transfer of skills. Employers should, therefore, ensure that a skills transfer plan be prepared to ensure that the relevant skills are transferred to a South African citizen and that the necessary time and resources are invested in transferring and retaining the skills in South Africa.

Written by By Shahnaaz Bismilla, Associate, Cowan-Harper Attorneys

For more information please contact Shahnaaz Bismilla at sbismilla@chlegal.co.za or (011) 783 8711 / (011) 048 3000

Article published with the kind courtesy of Cowan-Harper Attorneys www.cowanharper.co.za

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