South Africa’s proposed Labour Law Amendment Bill, 2025 introduces far-reaching changes affecting contracts, staffing models, severance pay, and enforcement. Employers should act now to mitigate risk and prepare for compliance.

The Bill, published for public comment on 26 February 2026, amends four key statutes: the Basic Conditions of Employment Act, 1997 (“BCEA”), the Employment Equity Act, 1998 (“EEA”), the Unemployment Insurance Act, 2001 (“UIA”), and the National Minimum Wage Act, 2018 (“NMWA”).

Although not yet in force, its trajectory is clear. This article highlights the four changes with the most immediate cost and compliance implications.

On-call arrangements must be formalised

The most immediate contractual impact concerns on-call work arrangements. These are known as employees who work only when the employer makes work available, zero-hours workers, min-max workers, or if-and-when workers. 

A new section 9B of the BCEA requires employers to specify in writing:

maximum available hours,
• required availability periods,
• notice periods for reporting to work, and
• notice periods for cancellation.

If an employer cancels work without proper notice, it must pay for the cancelled hours. Likewise, employees cannot be required to report for duty without adequate notice.

These provisions apply to employees earning below the BCEA threshold and exclude employers with fewer than ten employees.

Employers relying on flexible staffing models, particularly in retail, hospitality, healthcare, and logistics, will need to audit and revise contracts. Flexibility remains permissible but must now be clearly structured and documented.

Increased severance pay and long-term cost exposure

The Bill proposes doubling statutory severance pay under section 41 of the BCEA from one week to two weeks’ remuneration per completed year of service.

The increase applies prospectively only, but the long-term cost implications are significant. For example, an employee with ten years’ post-commencement service would be entitled to 20 weeks’ pay, rather than 10 weeks as it currently stands.

Employers relying on current severance projections risk materially understating future liabilities. Workforce planning and restructuring models should therefore be updated to account for the split between pre- and post-commencement service.

Expanded definition of “employee”

The Bill broadens the definition of “employee” for enforcement purposes through a new section 50A in the BCEA.

Any person providing work or services, unless genuinely operating an independent business, will be presumed to be an employee. The burden shifts to the employer to prove otherwise, including demonstrating lack of control, organisational integration, and dependence.

This significantly increases misclassification risk. Independent contractor arrangements would need to be reviewed, as the shift moves beyond the traditional “dominant impression” test toward a stricter, statutory framework.

Stricter enforcement of benefit fund contributions

Proposed insertion of section 62B into the BCEA:

An employer’s failure to pay a contribution to a benefit fund on behalf of an employee in terms of section 34A of this Act must be treated on the same basis as a failure by an employer to pay any amount owing to an employee in terms of this Act, except that in any compliance order, court order or arbitration award the employer must be directed to make the outstanding payment to the benefit fund concerned.

Under the proposed section 77B of the BCEA:

• enforcement bodies (Labour Court, CCMA, bargaining councils) may order payment of outstanding contributions; and
• interest will accrue at the rate prescribed in terms of the Pension Funds Act.

This strengthens enforcement against employers who deduct contributions but fail to remit them, exposing them to the same consequences that apply to unpaid amounts owing to employees.

Additional amendments

The Bill also introduces broader enforcement and procedural changes, including:

• stricter rules for compliance order disputes (including security requirements),
• expanded CCMA and bargaining council powers,
• trade union participation in labour inspections,
• broader unfair harassment claims under the EEA,
• streamlined employment equity compliance certification, and
• clarification that deferred payments under the NMWA are excluded from minimum wage calculations.

The Bill has not yet commenced, but the direction of reform is clear. The required adjustments to contracts, workforce models, payroll systems, and compliance processes cannot be implemented at short notice. Employers who delay preparation risk both legal exposure and operational disruption in the future, and proactive review and planning will ensure readiness for these changes.


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