Summary

The package of labour law reforms proposed by Nedlac in its Final Nedlac Report on the Labour Law Reform Process includes amendments aimed at making it easier to hire and fire people. This has long been a bugbear of organised business, which argues that the difficulty in firing underperforming employees is a deterrent to hiring and contributes to the high unemployment level.

The minister of employment and labour published the new Code of Good Practice on Dismissal, effective from 4 September 2025. The code aims to refine and clarify standards for dismissals in the workplace. A dismissal is fair if it is based on the conduct of the employee, the capacity of the employee or the operational requirements of the employer’s business. A dismissal is automatically unfair if, among others: it is discriminatory; it infringes on the fundamental rights of employees and trade unions; it is because the employee engaged in a lawful strike; or the employee is pregnant or intends to become pregnant. What is no longer unfair labour practices are disputes over promotions, demotions, probation, training and benefits, and these will no longer fall under the jurisdiction of the CCMA. Small businesses also get more flexibility, given that they typically do not have HR, legal and other resources.

Summary

The package of labour law reforms proposed by Nedlac in its Final Nedlac Report on the Labour Law Reform Process includes amendments aimed at extending labour rights to the estimated two million 'gig' workers in South Africa -- typically ride hailing drivers, food delivery couriers and platform freelancers. The proposed amendment would expand the definition of “employee” to include such independent contractors. This would protect them against unfair dismissal and deactivation from platforms; give them the right to access the CCMA for dispute resolution; make them eligible for basic conditions such as minimum wage, paid leave and rest periods; and protect them from arbitrary treatment or algorithmic discrimination.in late February 2026, employment & labour minister Nomakhosazana Meth gazetted the Labour Laws Amendment Bill, 2025, and the Labour Relations Amendment Bill, 2025. They introduce changes to the Basic Conditions of Employment Act, the Employment Equity Act, and the National Minimum Wage Act, 2018.

Within the overall reform programme, there are four broad categories of reform areas:i) reforms to ease pressures on small businesses;ii) reforms to make it easier to hire and fire workers;iii) reforms to retrenchment processes, including doubling the payout amounts; andiv) strengthening the rights of gig workers.

This process in the culmination of a process that began in 2021, when business and organised labour tabled proposals for labour law reform at Nedlac. In March 2022, Government also tabled proposals.

Summary

Labour reforms took a major step forward in 2025, with wide-ranging proposals published in the Final Nedlac Report on the Labour Law Reform Process, followed by the Department of Employment and Labour proposing more than 60 amendments to labour laws.

To effect these changes, in late February 2026, Employment & labour minister Nomakhosazana Meth gazetted the Labour Laws Amendment Bill, 2025, and the Labour Relations Amendment Bill, 2025. They introduce changes to the Basic Conditions of Employment Act, the Employment Equity Act, and the National Minimum Wage Act, 2018.

Within the overall reform programme, there are four broad categories of reform areas:i) reforms to ease pressures on small businesses;ii) reforms to make it easier to hire and fire workers;iii) reforms to retrenchment processes, including doubling the payout amounts; andiv) strengthening the rights of gig workers.

This process in the culmination of a process that began in 2021, when business and organised labour tabled proposals for labour law reform at Nedlac. In March 2022, Government also tabled proposals. These reforms are at a very early stage and still have to pass state legal vetting, Cabinet approval and parliamentary processes including public consultation. Not all Nedlac parties approved all the amendments, so these processes are not likely to be smooth sailing.

Retrenchment reforms aim to offer greater protection to retrenched workers. A key component is effectively doubling the severance payments to two weeks of salary for every continuous year worked, from one week. This will be effective after promulgation of the legislation and will not be backdated.

Other key reforms include:
- Shifting the authority over facilitation rules for large-scale retrenchments from the minister of employment and labour to the Commission for Conciliation, Mediation and Arbitration (CCMA).
- Allowing all aspects of a retrenchment dismissal to be challenged after the dismissal (shifting from challenges being allowed only prior to retrenchments).
- Disputes involving facilitated retrenchments could also go straight to the Labour Court, bypassing the usual conciliation step.

Summary

Labour reforms took a major step forward in 2025, with wide-ranging proposals published in the Final Nedlac Report on the Labour Law Reform Process, followed by the Department of Employment and Labour proposing more than 60 amendments to labour laws. To effect these changes, in late February 2026, employment & labour minister Nomakhosazana Meth gazetted the Labour Laws Amendment Bill, 2025, and the Labour Relations Amendment Bill, 2025. They introduce changes to the Basic Conditions of Employment Act, the Employment Equity Act, and the National Minimum Wage Act, 2018.

Many of the reforms are aimed at easing pressures on small businesses, with the main one being their exclusion from collective bargaining agreements. Forcing small businesses to adhere to wage hikes and other agreements emanating from bargaining councils between organised business and labour has long been a sticking point, as these are often financially unfeasible.

The proposed amendment seeks to exempt small, start-up businesses -- those that have been in operation for less than two years and have fewer than 50 employees -- from the conditions of employment prescribed by extended bargaining council collective agreements. This excludes businesses acquired through the transfer of a going concern, or businesses formed through the division or dissolution of an existing entity.

Excluding small businesses that are older than two years is problematic and will limit the reform's impact.