Contracts in South Africa

Overview by

The Active Population in Figures

Main Indicators 2004200520062007 (Estimated)
Labor Force 15,807,00016,190,00016,726,00017,178,000  
Labor Force (Annual Growth, %) -38.002.363.202.60
Rate of Activity (%) 39.140.340.341.7
Unemployment Rate (%) 27.926.525.623.0

Source: South African Department of Labour

Employed Persons, by Occupation (% of Total Labor Force) 2006
Agriculture 10.6%
Mining and quarrying 3.2%
Manufacturing 13.9%
Utilities 0.8%
Construction 6.9%
Wholesale and retail trade 24.1%
Transport 4.5%
Finance 9.6%
Services 17.5%
Private Households 8.7%
Unspecified / others 0.2%

Source: South African Department of Labour

For Further Statistics
Statistics South Africa
For Further Information About the Labor Market
South Africa Labour Law Profile

Management of Human Resources



Method of Recruitment
The various methods of recruitment used by companies in South Africa are :
1. Advertising
2. Direct recruitment
3. Employment Exchanges
4. Educational Institutions
Recruitment Agencies
There are mainly three types of recruitment agencies available in South Africa :

- Employment Exchanges (Public)

- Employment Agencies (Private)

- Labour Contractors ( Private )

Recruitment Websites

The Contract

Type of Contract
Employment is mainly regulated by the law of contract and by Labour Relations Act (LRA),1995. The contract should clearly mention : maximum hours of work, overtime rates, minimum periods of annual leave, notice of termination, organizational rights in respect of trade unions, strike law, rights and responsibilities of employers and workers in the event of retrenchments, insolvency and transfers of businesses, protection from unfair dismissal and the prohibition of unfair discrimination.
Breach of Contracts
  • Retirement
It can take several forms : general resignation, resignation for one’s own convenience, resignation by agreement, resignation by employee’s request, voluntary retirement, etc.
  • Dismissals
Dismissals are tightly controlled by regulations like LRA and Basic Conditions of Employment Act (BCEA). Employees’ contracts cannot be terminated simply by the giving of notice and every employee has the right to be fairly dismissed.

Broadly, three reasons are recognized as fair reasons for dismissal, namely misconduct on the part of the employee, incapacity (poor work performance or inability to perform due to ill-health or injury) and the operational requirements of the employer.

  • Other Possible Methods
- Collective dismissals due to economic reasons.

- Resignation as per the terms of contract.

Labor Laws
South Africa Labour Law Guide
Labour Protect
Department of Labour , South Africa

Dispute Settlement


Conciliation Process

Cases of Dispute
Dismissal, harassment, poor working conditions, conflict over salary payments, retirement issues, etc.
  • Legal Framework
LRA has formulated a body called Commission for Conciliation, Mediation and Arbitration (CCMA), which has far-reaching powers to order re-instatement and/or compensation.
  • Procedure
Labour Relations Act (LRA),1995

Judicial Structures

  • Legal Framework
Labour Relations Act (LRA),1995
  • Competent Legal Body
Labour Court ( (which has High Court status)
Labour Appeal Court

Social Partners

Social Dialogue and Involvement of Social Partners
For effective bargaining, South Africa has Bargaining Council system. Bargaining takes place between the employers and trade unions under the auspices of the Bargaining Council. The collective agreements concluded in the Bargaining Council bind only the parties to the Bargaining Council.

The Congress of South African Trade Unions (COSATU) is the largest and most effective trade union in South Africa. It is affiliated with the African National Congress (ANC) and the South African Communist Party. COSATU represents 21 national industrial affiliates.

Unionization Rate
30% (approximately)
COSATU (Congress of South African Trade Unions)
FEDUSA (Federation of Unions of South Africa)
Regulation Bodies
Department of Labour, Government of South Africa

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