Hiring guide in South Africa

Legal framework

Types of employment contracts

In South Africa, permanent employment is the most common type of work arrangement. This type of contract signifies an ongoing, indefinite relationship between the employer and employee. Employees with permanent contracts benefit from the full range of protections and rights afforded by the Basic Conditions of Employment Act (BCEA).

On the other hand, fixed-term contracts are designed for employment situations where the job has a set end date or is tied to the completion of a specific project. The BCEA outlines specific conditions for these contracts, requiring valid reasons for their use and imposing limits on renewals to prevent the misuse of continuous short-term arrangements

There’s also casual employment that involves hiring individuals on an as-needed basis, often leading to irregular or unpredictable working hours. While casual employees might not have the consistency of permanent staff, they are still protected under the BCEA.

Content of an employment contract

A written employment contract must include the names and addresses of both the employer and the employee, the employee’s job title or a brief job description, the location of the work, and the start date of the employment. 

Additionally, it should outline the regular working hours and days, the wage or pay rate and how it’s calculated, the frequency of pay (whether weekly, monthly, etc.), leave entitlements, the notice period required for termination, and any applicable collective agreements, such as those from bargaining councils.

The contract may elaborate on specific job duties and responsibilities, outline performance expectations, and define the remuneration structure, which might encompass bonuses or incentives. It can also specify benefits like contributions to a pension or provident fund and medical aid and detail company policies on various matters, such as leave, grievance procedures, and disciplinary actions.

Download a free employment contract for South Africa through Native Teams.

Oral, written or electronic employment contracts

In South Africa, oral (verbal) employment agreements are recognised by law and considered legally binding. However, written contracts are still required even when the agreement is initially made verbally.

Such contracts clearly outline the rights and responsibilities of both the employer and the employee, significantly reducing the potential for misunderstandings or disagreements. What’s more, electronic contracts are legally valid like traditional written contracts as long as they meet specific criteria for authenticity and security.

Probationary period

The Basic Conditions of Employment Act (BCEA) recognises the use of probationary periods but does not set a fixed duration. Instead, the length of the probation should be reasonable and reflective of the nature of the job and the time necessary to evaluate the employee’s suitability for the position effectively.

Working hours

Employees in South Africa can work a maximum of 45 hours per week. For those on a five-day workweek, the limit is set at 9 hours per day, while employees working more than five days a week are restricted to 8 hours per day. 

Night work

Night work is defined as any work performed between 6 p.m. and 6 a.m. This regulation takes into account the unique challenges and potential health implications of working during these hours. If employers require their employees to work at night, they must do so under specific conditions outlined in an agreement.

Types of leaves and breaks

Employees are entitled to a minimum of 21 consecutive days of paid annual leave for each year of employment. In terms of breaks, employees are entitled to a one-hour meal break for every five hours worked. This break period can be shortened to 30 minutes if agreed upon by both parties.

Public holidays

There are several public holidays in South Africa, including New Year’s Eve on December 31, Tweede Nuwe Jaar on January 2, Armed Forces Day on February 21, Holy Saturday on March 30, Easter Sunday on March 31, Mother’s Day on May 12, Father’s Day on June 16, Nelson Mandela Day on July 18, and Christmas Eve on December 24.

Salary

The BCEA mandates a National Minimum Wage (NMW) that is reviewed and adjusted annually. For 2024, this minimum wage is set at ZAR27.58 per hour. This wage acts as a mandatory minimum threshold, below which no employee can be legally compensated, regardless of the industry they work in.

To calculate the salary and taxes in South Africa, click here.

Sick leave

The amount of sick leave an employee can take is tied to their tenure with the company. For employees who work five days a week, they are entitled to a minimum of 30 days of sick leave over a three-year period.

Parental leave

Employees who work at least four days a week and have been with their employer for a minimum of 4 months are entitled to 3 days of paid family responsibility leave per annual leave cycle.

Paternity and maternity leave

The Basic Conditions of Employment Act (BCEA) provides birth mothers with the right to four consecutive months of unpaid maternity leave. This leave can begin up to four weeks before the anticipated birth date or at a later date agreed upon with the employer. Additionally, the BCEA has recently introduced 10 consecutive days of unpaid paternity leave for all parents, including biological fathers.

Methods of employment termination

South African labour law acknowledges several methods by which an employment relationship can come to an end. One common way is through resignation, where the employee chooses to leave their position voluntarily. Another is dismissal, which occurs when the employer terminates the employee’s contract, often due to misconduct or poor performance.

Retrenchment is another recognised method, typically involving the termination of employment for economic reasons, such as downsizing or company restructuring. Employment can also be terminated through mutual agreement, where both the employer and employee decide together to end the working relationship.

Another method is the expiry of a fixed-term contract, which happens when the contract’s predetermined end date is reached, concluding the employment without the need for further action from either party. Employment can also end due to the employee’s death or incapacity, which makes it impossible for them to continue working.

Finally, a breach of contract can lead to termination if either party fails to adhere to the terms of the employment agreement, prompting a legal or formal end to the relationship.

Ordinary dismissal by employer

The Labour Relations Act (LRA) in South Africa specifies three primary grounds for the ordinary dismissal of employees. First, there is misconduct, which refers to serious breaches of workplace rules or the employee’s duties. Second, the LRA recognises incapacity as a valid reason for dismissal.

Finally, operational requirements can lead to dismissal. This occurs when economic, structural, or technological changes within a company make an employee’s position redundant.

Notice period and challenging the dismissal

The minimum notice period is one week for those employed for 6 months or less, two weeks for those employed for more than 6 months but less than a year, and 4 weeks for those employed for 1 year or more.

Rights and obligations of unemployed individuals

The Unemployment Insurance Fund (UIF) in South Africa is a social security system designed to provide financial assistance to workers who have lost their jobs after contributing to the fund during their employment. 

To be eligible for UIF benefits, individuals must have made the necessary contributions and meet specific criteria regarding the nature of their unemployment and their recent employment history. The amount of financial support and the duration for which it is provided is determined by how much the employee has contributed to the UIF over time.

Severance pay

Severance pay is generally based on the employee’s regular weekly remuneration, as defined by the BCEA. This calculation includes the basic salary or wage and any regular allowances but typically excludes discretionary bonuses or overtime payments.

Prohibition of competition

Employment contracts often include restraint of trade clauses designed to restrict an employee’s ability to join a competitor, start a competing business, or engage in specific activities for a defined period and within a particular geographic area after leaving their current job.

South African courts typically disfavour overly restrictive restraint of trade clauses. For a restraint clause to be enforceable, it must be deemed reasonable and necessary to protect the employer’s legitimate business interests.

Remote working policy

In South Africa, there are currently no specific laws dedicated to regulating remote work. As a result, traditional labour laws such as the Basic Conditions of Employment Act (BCEA) and the Labour Relations Act (LRA) continue to serve as the primary legal framework, though they may not fully capture the unique aspects of remote work arrangements.

Responsibilities within a remote work arrangement

Remote workers in South Africa are entitled to the same fundamental rights and protections as on-site employees. They are guaranteed reasonable working hours, rest periods, and annual leave. 

Remote workers retain the right to join trade unions and engage in collective bargaining. They are safeguarded against unfair labour practices, including discrimination and unjust dismissal, and have access to dispute resolution mechanisms as outlined by the Labour Relations Act (LRA) should conflicts arise.

Health and safety at home

The Occupational Health and Safety Act (OHSA) is the cornerstone of employee protection in South Africa, establishing comprehensive safety standards. Employers must conduct thorough risk assessments tailored to remote work environments, actively involving employees in the process. It is crucial to identify potential hazards specific to working from home. Once these risks are identified, employers must take appropriate steps to mitigate or eliminate them.

Intellectual property rights

Intellectual property created by an employee in the course of their employment is owned by the employer. This rule applies to any work produced as part of the employee’s job duties or created using the employer’s resources.

However, there are important exceptions to this general rule. South African law allows employees to retain ownership of IP if their employment contract specifically provides for this or if the IP creation falls outside their usual job responsibilities.

Employee data privacy

Under POPIA (Protection of Personal Information Act), employers have specific responsibilities when handling employee data. They must inform employees about why their data is being collected, who will receive it, and how long it will be kept. Employers are also required to take reasonable measures to ensure that the information is accurate and secure.

What are the advantages of hiring employees from South Africa vs other countries?

Hiring employees from South Africa offers a range of distinct advantages compared to sourcing talent from other countries. One of the primary benefits is the country’s large pool of skilled and educated workers.

Another significant advantage is the cost-effectiveness of hiring in South Africa. Compared to many Western countries, the cost of labour in South Africa is relatively lower. This enables companies to access skilled professionals without the high salary demands often seen in countries like the United States or the United Kingdom.

Lastly, South Africa’s legal and business infrastructure supports a stable environment for hiring and operating. The country has well-established labour laws and a regulatory framework that protects both employees and employers.

Why use Native Teams for hiring in South Africa?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.