Employer action code: Monitor
The government has released draft amendments to various labor laws, including the Basic Conditions of Employment Act and the Labor Relations Act. Among other changes, the proposals would double severance; revise unfair dismissal rules to exclude reinstatement as a remedy for unfair dismissal of high-income employees and cap compensation payable; make permanent the existing temporary provisions for shared parental leave, building on a 2025 Constitutional Court ruling that separate unequal maternity and paternity leave entitlements were unconstitutional; and apply new requirements for “on-call” and “zero-hour” work arrangements. No timeline has been confirmed for approval of the amendments.
Key details
Proposed changes under the reform package include:
- Statutory employer-paid severance (payable for redundancies due to operational or economic reasons) would increase from one to two weeks’ pay per year of service, but only for service from the date the law is enacted
- Claims for unfair dismissal would be permitted only if the employee’s service exceeded three months (or longer under the terms of a contractual trial period). In the case of a successful claim of unfair dismissal 1) any monetary compensation would be capped at 1.8 million South African rands (in addition to the current cap of up to 12 months’ pay) indexed for inflation, except for cases of automatically unfair dismissal or unfair labor practices involving whistleblowers; and 2) reinstatement/reemployment would not be permitted as a remedy for employees whose annual earnings exceeded that cap, except for cases of automatically unfair dismissal
- The existing parental leave entitlement established by the Constitutional Court’s 2025 ruling (i.e., four months and 10 calendar days of leave, jointly shared between the parents, and paid by the Unemployment Insurance Fund for up to 17.32 weeks and 10 days at 66% of earnings up to 17,712 rands per month) would be codified as a replacement for the previous separate provisions for maternity, partner (paternity) and adoption leaves. The maximum leave is four months for any one parent if leave is shared or if there is only one working parent. Adoptive parents would qualify on the same basis as biological parents, with eligibility extended to adoption of children up to age six (currently, up to age two). In the event of miscarriage in the third trimester or stillbirth, six weeks of leave would apply
- Employment contracts for “on-call,” “zero-hour” and other irregular work arrangements would need to specify maximum working hours in a reference period, time frames when employees must be available for work, and minimum notice periods for employees to report to or cancel work. If scheduled work is canceled by the employer without adequate notice, employees would be entitled to compensation. Covered employees would also be entitled to one day of employer-paid sick leave for every 26 days worked. Exclusivity requirements would be prohibited unless justified (e.g., due to conflicts of interest) and stated in the employment contract
- New companies with under 50 employees, operating for less than two years, would not be bound by employment terms and conditions established by industry/sectoral collective bargaining agreements. Entities created from existing companies would not qualify as “new”
Employer implications
Aside from codifying the Constitutional Court’s ruling on parental leave, the reforms aim to reduce barriers to job creation while increasing protections for workers in more vulnerable types of employment or situations such as collective dismissals. The court set a 36-month time limit for the government to remedy the defects in the legislation on family leave, which increases the likelihood of at least that portion of the reforms passing. The public consultation period on the reform package proposals closed at the end of March 2026. Employers are encouraged to monitor the progress of the reform package and assess potential operational, internal policy and cost implications.
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