What you need to know about the Employment Services Amendment Bill

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The introduction of the Bill follows the publication of an original draft, which was open for public comment, in 2022. Some of the most significant provisions and their practical implications for employers are outlined below.

Removal of digital labour platform provisions and expanded scope

The 2022 version of the Bill introduced the concept of a ‘digital labour platform’ and deemed such platforms to be employers for purposes of the ESA. These provisions have been removed in the 2026 Bill.

However, the Bill still proposes a broad definition of ‘worker’ in line with the definition in the National Minimum Wage Act, 2018, being ‘any person who works for another and who receives, or is entitled to receive, any payment for that work, whether in money or in kind’.

The definition of ‘employer’ is similarly expanded to mean ‘any person who remunerates, or is liable to remunerate, an employee or a worker’.

New Chapter 3A: Employment of foreign nationals

The Bill proposes to repeal sections 8 and 9 of the ESA and to insert a new Chapter 3A dealing comprehensively with the employment of foreign nationals.

For purposes of the ESA, a foreign national means an individual who is not a South African citizen, permanent resident, refugee or asylum seeker. This means that asylum seekers and refugees will have a status equivalent to citizens and permanent residents for employment purposes under the ESA.

In terms of the proposed section 12A(2), any person who employs a foreign national to work within South Africa must:

• ascertain that the foreign national is entitled to work in the Republic and is entitled to perform the work in which they are employed;
  
• satisfy themselves, in such manner as may be prescribed, that there are no persons in the Republic, other than foreign nationals, with the necessary skills to fill the vacancy, before recruiting a foreign national to occupy such vacancy;
  
• prepare a skills transfer plan in respect of any position in which a foreign national is employed (although the Minister may exclude this requirement in respect of any category of employer or employees/ workers if satisfied that it is not practicable);
  
• employ such foreign national on terms and conditions of employment that are not inferior to those which would be provided to South African citizens; and
  
• retain copies of the relevant visa and any other documents that show that the foreign national is lawfully entitled to be employed or to work in the Republic.

The proposed section 12E further prohibits employers from requiring or permitting a foreign national to perform any work that such foreign national is not authorised to perform in terms of their visa or permit, or to engage in work contrary to the terms and conditions of such visa or permit or any law.

In terms of the new section 12D, an employee or worker who is employed in contravention of Chapter 3A (eg. the requirement that the foreign national should not be employed on inferior terms to those applicable to citizens) is entitled to enforce any claim that they may have in terms of any law, collective agreement or contract against their employer.

Labour inspectors appointed in terms of the Basic Conditions of Employment Act, 1997 (BCEA), and bargaining council agents are empowered to bring claims on behalf of these workers where they are unable to personally enforce such claims. (For completeness, bargaining council agents are individuals assigned as such by the Minister upon a request by a bargaining council in terms of section 33 of the Labour Relations Act, 1995 to promote, monitor and enforce compliance with collective agreements concluded in a bargaining council.)

Employment quotas for foreign nationals

One of the most notable proposals in the Bill is section 12B. This section empowers the Minister, after consulting the Employment Services Board, to specify by notice in the Government Gazette a maximum quota for the employment of foreign nationals by employers in any sector. Such quotas may apply in one or more specific sectors, occupational categories, regions within the sector, or nationally.

The notice must specify the period within which existing and newly established employers must comply with the quotas and must exclude small employers. Unless otherwise specified, a ‘small employer’ means any employer outside the public sector that employs fewer than 10 employees, provided that it does not operate more than one business or was not formed by the division or dissolution of an existing business.

Prior to issuing such a notice, the Minister must publish a draft in the Government Gazette and allow interested parties at least 30 days to comment.

A notable change from the 2022 Bill is the removal of the carve-out for critical skills positions. The new section 12B(8) provides instead that no employer may employ a greater percentage of foreign nationals than is permitted in terms of a quota unless the employer has been granted an exemption under the new section 49A.

Monitoring, enforcement and graduated penalties

In relation to monitoring and enforcement, section 49 is proposed to be amended to confirm that the ESA is monitored and enforced by labour inspectors appointed in terms of the BCEA who are issued with a certificate stating that they monitor and enforce the ESA.

In addition to a proposed increase in the amount of the fine that may be imposed on an employer or a private employment agency for contravening any provisions listed in Schedule 3, a graduated penalty regime is introduced for contraventions of sections 12A, 12B(8) and 12E. The proposed penalties are as follows:

• R100,000 for a first offence;
  
• R200,000 for a further offence, where an employer has previously failed to comply with the provision within the previous three years; or
  
• the greater of R1m or 10% of the employer’s turnover in the previous financial year where there has been a failure to comply on two or more occasions (provided that, when determining the fine that is just and equitable, a court must take into account any economic benefit that the employer has derived from the contravention).

Practical implications for employers

If enacted, the Bill will require employers to reassess their foreign employee hiring practices and take appropriate steps to ensure compliance.

Key considerations include:

• Employers who employ foreign nationals will need to ensure that they can demonstrate compliance with each of the requirements in section 12A(2), including conducting a labour market test and preparing skills transfer plans. Under the current immigration law framework, each of these requirements is only triggered for certain categories of work visas. In future, however, they may be required for all foreign national appointments.

• Employers will need to monitor the Government Gazette for any quota notices issued by the Minister and assess their workforce composition against any applicable quotas.

• The removal of the critical skills carve-out means that employers in sectors reliant on foreign nationals with critical skills will need to apply for an exemption if they wish to exceed any applicable quota.

• The graduated penalty regime, with fines of up to R1m or 10% of turnover for repeat offenders, significantly raises the stakes for non-compliance and underscores the importance of robust employment verification and record-keeping systems.

• The expanded definition of ‘worker’ means that employers will need to consider whether persons engaged in non-traditional working arrangements fall within the scope of the ESA.

• Employers should be aware that foreign nationals employed in contravention of Chapter 3A retain the right to enforce employment claims, meaning that non-compliance will not shield employers from liability.