Global HR Compliance in South Africa

South Africa enforces a comprehensive labour framework governed by the Basic Conditions of Employment Act (BCEA), the Labour Relations Act (LRA), and sector-specific regulations. Employment relationships are closely regulated, particularly around contract types, termination, dismissal procedures, and compensation structures.

For foreign employers hiring staff in South Africa, whether local or expatriate, compliance with these rules is not optional. Non-compliance risks include claims of unfair dismissal, constructive dismissal, unlawful termination, and reclassification of contractor roles.

This guide outlines the legal obligations for hiring, employing, and terminating workers in South Africa. It is written for international companies operating without a local entity or reviewing their current employment arrangements in-country.

Hiring and Firing Workforce in South Africa

Employment Agreements

South African labour law allows permanent, fixed-term, temporary, and project-based employment contracts. All must be provided in writing and signed by both parties. A permanent contract establishes indefinite employment. A fixed-term or temporary contract sets a defined end date, while a project-based agreement concludes upon completion of a specific task. Fixed-term contracts exceeding three months are restricted unless objectively justified.

Collective agreements are enforceable where binding on both employer and employee and override individual contract terms. These must be in writing, specify their duration, effective date, and scope of coverage.

Working Hours and Overtime

The maximum ordinary work time is 45 hours per week:

• Nine hours per day for five-day workers
• Eight hours per day for those working more than five days weekly

Overtime is restricted to 10 hours per week, with a daily limit of 12 total hours (ordinary plus overtime). A collective agreement may raise the weekly cap to 15 hours for a maximum of two months in any 12-month cycle.

Employees must receive a one-hour meal break after five continuous hours of work, or 30 minutes by agreement. A 12-hour daily break between shifts and a 36-hour uninterrupted weekly rest period (usually over Sunday) must be observed.

Probation Period

Employers may impose a probation period appropriate to the role. This must be explicitly stated in the employment contract. Probationary employees are entitled to regular evaluation and guidance. Termination during probation requires procedural fairness, including the opportunity to respond to concerns with union or peer support. Probation does not eliminate the right to challenge dismissal.

Annual Leave

Employees are entitled to a minimum of 21 consecutive days of paid annual leave per 12-month cycle. By agreement, leave may accrue at the rate of one day for every 17 days worked. Public holidays are additional to annual leave. Unused leave must be taken within six months of the end of the leave cycle unless otherwise agreed.

Sick Leave

Sick leave is calculated over a 36-month cycle. Employees are entitled to paid sick leave equal to the number of days they ordinarily work in six weeks. During the first six months, sick leave accrues at one day per 26 days worked. Employers must be notified promptly, and a medical certificate is required for absences exceeding two consecutive days or occurring more than twice in eight weeks.

Parental Leave

Maternity leave consists of four consecutive months, unpaid, starting up to four weeks before the due date. Employees are prohibited from working for six weeks after birth. Contracts may provide more favourable terms, but there is no statutory obligation to pay maternity benefits. Fathers and adoptive parents are entitled to 10 days of paid parental leave, funded by the Unemployment Insurance Fund (UIF) at 66% of ordinary earnings.

Termination and Notice Periods

Employment may be terminated on several grounds, including:

• Expiry of a fixed term or project contract
• Resignation with notice
• Dismissal for misconduct, incapacity, or operational requirements
• Mutual agreement
• Death or insolvency
• Legal impossibility of continued performance

Minimum notice periods apply:

• One week if employed less than six months
• Two weeks if employed for six to twelve months
• Four weeks if employed more than one year

Dismissal must be both substantively and procedurally fair. Unfair dismissals, whether constructive, discriminatory, or procedurally flawed, are actionable under the LRA. Mutual separation agreements may be used to end employment consensually, provided terms are documented in writing.

Severance Pay

Severance pay is owed only in cases of retrenchment (operational requirements), subject to a consultation process. The statutory minimum is one week’s remuneration for each completed year of service. Severance is not paid for dismissals based on performance or misconduct. If the employee refuses reasonable alternative employment, entitlement to severance is forfeited.

Employee Benefits and Contributions

Statutory Contributions

Employers must register employees with and contribute to:

• Unemployment Insurance Fund (UIF): 1% from the employer and 1% deducted from the employee
• Skills Development Levy (SDL): 1% of the total monthly wage bill, uncapped
• Compensation for Occupational Injuries and Diseases Act (COIDA): Industry-based contribution rate calculated on annual declared earnings

These employee benefits are mandatory. UIF covers parental, sick, and unemployment benefits; SDL funds sector training; COIDA provides injury and disease compensation.

Private Benefits

There is no statutory requirement for employers to provide retirement or private medical coverage. However, many employers offer non-mandatory benefits, including:

• Retirement fund contributions
• Group medical schemes
• Bonuses or performance incentives
• Transportation or car allowances
• Onsite wellness support and education funding

These must be disclosed in the employment contract and administered in line with SARS (South African Revenue Service) compliance rules.

Acumen International: Global Employment Services in South Africa

Scope of Engagement

Acumen International enables you to engage personnel in South Africa without the administrative and legal burden of entity setup. As the formal employer of record, we contract and onboard your selected candidates under local law while you maintain full control over day-to-day direction, performance management, and role definition.

Employment and Payroll Execution

We execute compliant employment contracts aligned with South African labour legislation. Salaries are processed through in-country payroll systems, with all mandatory deductions and contributions remitted monthly. We maintain compliant employment files and deliver payslips, reporting, and supporting documentation as required.

Termination and Advisory Support

We manage terminations under lawful notice, retrenchment, or dismissal protocols, ensuring fair process, documentation, and severance calculations where applicable. Our local advisors support you in applying the correct dismissal route based on the facts of each case.

Immigration and Work Authorisation

For expatriate hires, we coordinate work visa applications, liaise with the Department of Home Affairs, and manage supporting compliance records. We ensure right-to-work checks and onboarding formalities are completed in line with legislation.

Legal Compliance and Risk Mitigation

All employee engagements are structured to eliminate reclassification risk and exposure under the Labour Relations Act. Acumen assumes legal liability for employment conduct, payroll taxes, and filings under the UIF, SDL, and COIDA frameworks. We provide a local legal footprint while shielding your core entity from direct risk.

Use Scenarios

• Employing local staff without a registered branch
• Managing in-country sales, project, or support personnel
• Supporting remote teams with formal local contracts and social security coverage
• Reducing risk during trial market entry or transitional periods.