Labour Legislation Changes 2015

Employers need to take note of the changes to Labour Legislation that came into operation on 4 courthammerJanuary 2015.

The most significant changes are:

  1. The 3 month rule: Temporary employees are now deemed permanent after 3 months, should the employer not have a justifiable reason why they should not be permanent. The onus now lies on the employer to prove that the position is in fact of a temporary nature e.g. maternity leave, construction or IT implementation project, or any project with limited budget or scope.
  2. Equal pay for equal work: temporary and permanent workers shall now be equally remunerated, with temps receiving the same benefits (or the cash equivalent thereof) as permanent workers.
  3. Severance pay: contract workers will now also receive one week severance pay for every year worked if they worked more than 2 years.

 However, these rules only apply to:

  1. Workers earning less than the threshold of R205,433 pa and
  2. Companies with more than 10 workers, or more than 50 workers if the company has been in existence more than 2 years.

More changes were gazetted, but these have the most immediate effect. Read more at

The less than good news is that this can be potentially bad for business: organized business asked for a 2 year temp/contract period before deemed permanent. At Nedlac an agreement was reached on 6 months, but some trade unions managed to enforce 3 months after the fact. We have seen at least one established service provider to the hospitality industry close shop after 22 years because of the 3 month rule, with 500 jobs lost.

What does this mean for employers? South Africa has always been on knife’s edge, and we should be aware of the changing environments. With change comes opportunity, and we will find new ways to do business and still excel.

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