New legislation could limit the number of foreign nationals employed in South Africa

A recent Bill and Policy published by the Minister of Employment and Labour aims to limit the extent to which employers who are operating in South Africa can employ foreign nationals in possession of a valid work visa, and imposes stricter obligations on an employer engaging foreign workers.

The Employment Services Amendment Bill aims to amend the Employment Services Act, 2014 (“ESA”) and proposes that sections 8 and 9 of the ESA, which govern the employment of foreign nationals and prohibited acts in respect of foreign nationals respectively, be repealed in their entirety.

Government has proposed the insertion of an entirely new chapter (currently titled “3A”), regulating the employment of foreign nationals generally. Of great interest in this chapter is Section 12B, dealing with the quotas for employment of foreign nationals.

Section 12B(1) provides that “The Minister, after consulting the Board, may, by notice in the Gazette, specify a maximum quota for the employment of foreign nationals by employers in any sector.” [our emphasis added]

Section 12B(2) goes on to say that these quotas may apply to employees or workers:

“In one or more sectors specified in the notice;

in one or more occupational categories specified in the notice;

nationally; or

to one or more regions specified in the sector.”

In addition to the limitation on the employment of foreign nationals, the Bill proposes that foreign nationals be precluded from starting small businesses in certain business sectors. Amendments to the National Small Business Act, 1996 will accompany these proposed amendments.

The Draft National Labour Migration Policy, which was also recently published, supplements the provision for the imposition of quotas, stating that this is one of the priorities provided for in South Africa’s various national policy frameworks and international and regional commitments.

Precisely how these proposed quotas would play out in practice remains unclear: will they apply equally to foreign nationals who are already in employment or only to appointments of new employees going forward, should be Bill be passed into law?

The Policy’s stated aims are to:

  1. improve South African employee expectations of fair access to work opportunities in light of increasing unemployment rates; and
  2. alleviate the adverse perception that foreign nationals are creating barriers to entry in the labour market.

A further interesting element of the proposed amendments relates to “digital labour platforms”. According to the Bill, “a digital labour platform is an employer and any person who provides work or services in the Republic to another person by means of a digital labour platform is a worker if—

(a) the payment for, or terms and conditions of, such work or services are determined by digital labour platform; and

(b) the digital labour platform remunerates ‘the worker’.”

The addition of this provision appears to be aimed at ensuring that the amended ESA applies to workers who are employed through digital platforms, such as Uber and Bolt drivers. This is in line with the global trend to protect platform workers, who form part of the new gig economy and are often considered a vulnerable group in themselves.

Recently, the Ontario Government in Canada launched a Bill titled the “Digital Platform Workers’ Rights Act, which envisages certain rights and protections for individuals who provide services through digital platforms. The Bill’s proposed protections include:

  • a minimum wage rate;
  • a regular pay period and recurring pay day; and
  • the requirement of written notice before removing a worker from the digital platform and a written explanation regarding the reasons access is being removed.

While the proposed amendments are not as far-reaching as those proposed in Canada, they remain of particular importance to South African employers, as if implemented, they could have extensive implications for the composition and regulation of many workforces across the country.

Henry Rossouw

Employment | Executive

Curtis Nhliziyo

Employment | Associate

Tyrone Roode

Employment | Candidate Legal Practitioner