Is a foreign national employed in South Africa, in the absence of a work permit, considered an employee in terms of the Labour Relations Act No 66 of 1995 (LRA)?

Both employers and foreign nationals are often faced with the threat of a lapsed work permit in view of the provisions of the Immigration Act No 13 of 2002. The Abrahams & Gross labour law team recently unpacked the merits of such a matter before the Cape Town Labour Court.

What the Immigration Act says

The Immigration Act, specifically section 38(1) thereof, provides as follows:

“No person shall employ:

a) an illegal foreigner;

b) a foreigner whose status does not authorise him or her to be employed by such person; or

c) a foreigner on terms, conditions or in a capacity different from those contemplated in such foreigner’s status”

Furthermore Section 49 of the Immigration Act provides that anyone “who knowingly employs an illegal foreigner or a foreigner in violation of this Act, shall be guilty of an offence”.

Discovery Health case highlights fair labour practice

This complex and controversial question in the law was addressed in the matter of Discovery Health Ltd v CCMA (2008) 29 ILJ 1480 (LC) (hereafter the “Discovery Health case”).

In its interpretation of the Discovery Health case, the Labour Court concluded that a person without a valid work permit is still considered as an employee in terms of the LRA as this is the view deemed to be consistent with the provisions of the Constitution of South Africa Act No 1 of 1996. As such, the provisions imposed in terms of Section 38 of the Immigration Act would not render the employment contract invalid.

Judge Van Niekerk’s judgment

The Court held as follows at paragraph 30 of Van Niekerk A’s judgment:

“There is a sound policy reason for adopting a construction of s38(1) that does not limit the right to fair labour practices. If s38(1) were to render a contract of employment concluded with a foreign national who does not possess a work permit void, it is not difficult to imagine the inequitable consequences that might flow from a provision to that effect. An unscrupulous employer, prepared to risk criminal sanction under s38, might employ a foreign national and at the end of the payment period simply refuse to pay her the remuneration due on the basis of the invalidity of the contract. In these circumstances, the employee would be deprived of a remedy in contract, and if Discovery Health’s contention is correct, she would be without a remedy in terms of labour legislation. The same employer might take advantage of an employee by requiring work to be performed in breach of the BCEA, for example, by requiring the employee to work hours in excess of the statutory maximum and by denying her the required time off and rights to annual leave, sick leave and family responsibility leave”.

Constitution grants the right to fair labour practices

It is further recorded by the learned Judge in paragraph 31:

“Far from defeating the purposes of the Immigration Act, to sanction a claim of contractual invalidity in these circumstances would defeat the primary purpose of section 23(1) of the Constitution which is to give effect, through the medium of labour legislation, to the right to fair labour practices.”

A foreign national with an lapsed work permit is still an employee

Consequently, the Cape Town Labour Court concurred on the above aspect followed by the Honourable Justice Van Niekerk and held that the foreign national, despite not being in possession of a valid work permit, was for all purposes considered as an “employee” in terms of the LRA.

The Respondent however has been granted leave to appeal and the matter is set to be adjudicated by the Labour Appeal Court.

To ensure you are adequately protected and fairly treated in terms of South African labour legislation contact the Abrahams and Gross Labour team for expert advice and opinion.

For all matters related to Labour and Employment Law

Jeremy Simon          

Wesley Scheepers  



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