Regulations on Employment of Foreign Nationals by the Department of Labour in South Africa: A Reflection

Earlier this year, the Department of Labor (DoL) requested the public and other stakeholders’ for comments into their draft Regulations, which aim to implement the principal act (Employment Services Act, 4 of 2014) that was gazetted on 7 April 2014. It comes as a welcomed development in bringing both certainty and clarity for corporate South Africa in so far as recruitment and employment of foreign nationals is concerned. It does, however, fall short on details in many respects. Perhaps that is the very purpose that DoL is inviting comments on the Regulations.

The Employment Services Act sought to provide guidance to corporates with regards to instances in which a foreign national may be employed in the Republic. Corporate entities must ensure that all options from the DoL databases, recruitment agency candidates and those from employment institutions have been exhausted in the search to fill existing employment opportunities before a foreign national is both recommended by DoL and employed by a corporate entity.  The Regulations focus on two work visa types, which are supported by DoL during the application stages as also elaborate on the Skills Transfer Plan. There is still a lot more clarity required from DoL in relation to the provisions of Section 8 (1), which does not differentiate on work visas impacted but simply states ‘An employer may not employ a foreign national within the territory of the Republic of South Africa prior to such foreign national producing an applicable and valid work permit, issued in terms of the Immigration Act’. Notably, the definition of work visas in the regulations focus only on the Corporate Work and General Work Visas and leave out the Critical Skills work visas (CSV).

Whilst DoL is not involved in the Critical Skills work visa application processes, they are silent on the transfer of these unique and critical skills, which are in short supply within the South African labour market. By not stipulating that all visa types will be impacted by these Regulations, DoL seems to be keeping the door open for skills transfer plans to be imposed on all work visa types. It is worth noting that the Intra Company Transfer Work visa is excluded in the draft Regulations, when this visa type carries a requirement for a skills transfer plan as a condition of issuance, even though, there is no clarity on how this plan should be designed and which Department is mandated to ensure compliance, verification, and enforcement.

The purpose of the skills transfer plan is presented in brief and envisaged as the means through which South African citizens (SAC) and permanent residents (PR) could benefit from skills possessed by the foreign national. The Regulation is quiet as to how the skills transfer plan must be drafted or for that matter even fails to provide a template for this purpose not to mention clarifying which parties should contract and sign the skills transfer plan. Additionally, there is no clarity on how the skill transfer must be evidenced over the duration of the visa issued to the foreign national. Should the skill recipient leave their employment, the regulations are also silent on what will be the consequence and implication to the foreign national’s status.

There remains a risk that employers of foreign skilled individuals may nominate a South African national or PR holder in a much lower position within the company purely for compliance purposes, even malicious compliance, when the local employee may not be in an appropriate educational, experience and skill level and able to receive the skills transfer from a foreign employee of senior or executive level.  The management levels provided in the Regulations are equally problematic as they do not necessarily correlate to or align with the general and standard levels that may be used and prevalent across different companies/industries. They do not address foreign employees who are at technical and specialist levels but may not be at the management level.

The Regulations and – indeed, the Employment Services Act, particularly the provisions of Section 8, cannot exist and operate outside the provisions of the Immigration Act. It is therefore envisaged that there will be amendments of the Immigration Act to bring the affected aspects of the Act in line with the proposed Regulations of the Employment Services Act. Aligning the two Acts will surely avoid confusion and disruptions for employers of foreign nationals in South Africa.

Taking the above comments into account, DoL will best achieve its intended objective with the Regulations, by ensuring that another publication of the revised regulations is made available for comment by stakeholders after considering the received inputs.  It would be prudent to consider relevant aspects and provide clarifications across the board including publishing the proposed forms and the reporting templates.