Illegal employees have rights in terms of the Labour Relations Act

The case of Sithole v Metal and Engineering Industries Bargaining and Others (2018) and why an employment contract is still valid without a work permit.

This briefing has been published by Owethu Mbambo of Fasken, South Africa, who has agreed to Simmons & Simmons making it available to elexica subscribers.

In Sithole v Metal and Engineering Industries Bargaining and Others (2018) 39 ILJ 472 (LC) the Labour Court reaffirmed the issue of whether a foreign national working in South Africa in the absence of a valid work permit is entitled to the protections afforded to employees in terms of the Labour Relations Act (“LRA”).

Section 38(1) of the Immigration Act (“the Act”) states that no person shall employ an illegal foreigner; a foreigner whose status does not authorise him or her to be employed by such person; or a foreigner on terms, terms and conditions or in a capacity different from those contemplated in such foreigner's status.

In this case, Mr Sithole was a Zambian national employed by Spray System Specialists (Pty) Ltd as a general worker. Mr Sithole had problems with his application for a work permit and his employer gave him three days to resolve such problems. The department of Home Affairs required more information to process his application. Spray System Specialists refused to help Mr Sithole and told him not to return to work.

The Labour Court relied on the previous judgment in the matter of Discovery Health Limited v Commission for Conciliation, Mediation and Arbitration and Others [2008] 7 BLLR 633 (LC) in which it was held that an employment contract in contravention of section 38(1) of the Act is nonetheless valid because rendering such a contract void would lead to inequitable consequences.

The court further found that a foreign national employed without a valid work permit was nonetheless an employee as defined in section 213 of the LRA “because a contract of employment is not the sole ticket for admission into the golden circle reserved for employees”.

In this case, the Labour Court held that section 38(1) of the Act was never intended to shield employers who knowingly or unknowingly employ a person in breach of the provision from the legal consequences of terminating such contract.
The court aligned itself with the ruling in Discovery and found that Mr Sithole was indeed an employee and was dismissed for his failure to secure a work permit despite his endeavours to do so. The court held that Mr Sithole’s dismissal was substantively and procedurally unfair.

In conclusion, a contract of employment concluded between an employer and a foreign national without a work permit is not invalid. The foreign national will be regarded as an “employee” as defined in the LRA and will enjoy rights of recourse to the LRA and the Basic Conditions of Employment Act, 75 of 1997.

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