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Home News Economy

Severance pay set to double under new SA labour Bill

Employment Minister Nomakhosazana Meth confirms 216 public submissions on the Labour Laws Amendment Bill are under review as government recruits 10 000 permanent labour inspectors to enforce the biggest worker law overhaul in more than a decade.

Ezra Labuschagne by Ezra Labuschagne
27 May 2026, 15:43
in Economy, News

What we know so far

South Africa’s most extensive labour law overhaul in more than a decade has cleared its public comment phase and is moving toward parliamentary consideration, with Employment and Labour Minister Nomakhosazana Meth confirming that 216 public submissions are now under review.

The Minister revealed during her Department of Employment and Labour Budget Vote 31 speech in Parliament on 19 May 2026 that the Labour Laws Amendment Bill, 2025, published in Government Gazette 54220 on 26 February 2026, generated extensive engagement during the 30-day comment window. She also announced that government will recruit 10 000 permanent labour inspectors, backed by R5 billion over the medium-term expenditure framework, to enforce the new framework once enacted.

The Bill, together with a companion Labour Relations Amendment Bill, proposes wide-ranging changes to four core statutes: the Labour Relations Act, the Basic Conditions of Employment Act, the National Minimum Wage Act and the Employment Equity Act. Cabinet approved publication of both bills for public comment on 25 February 2026.

The reforms follow more than two years of negotiations through the National Economic Development and Labour Council (Nedlac) between government, organised business and organised labour.

Why it matters

For millions of South African workers, the proposed changes mark the most significant rewrite of statutory employment rights since the post-apartheid labour framework was established in the late 1990s.

According to Minister Meth, the Bills aim to strengthen “protection for vulnerable and non-standard workers while maintaining an appropriate balance with employers’ operational requirements”. The reforms are also intended to align legislation with recent Constitutional Court and Labour Court judgments, including the Van Wyk ruling that required equal parental leave for all parents regardless of gender.

The stakes extend beyond formal-sector employees. The Bill proposes extending statutory protections to gig and platform workers, casual workers, on-call employees and others traditionally excluded from full labour rights. The National Minimum Wage already benefits an estimated six million workers, the Minister told Parliament, and the new framework would broaden that floor of protection.

For employers, particularly larger businesses and those that engage non-standard labour, the cost and compliance implications are material. Sectors that rely heavily on platform-based, casual or seasonal work, including retail, hospitality, security, food delivery and ride-hailing, face the most direct impact.

Key details and figures

Several proposed changes have drawn the most attention from labour lawyers and business advisory firms.

Statutory severance pay is set to rise from one week to two weeks per completed year of service. For organisations engaged in restructuring or retrenchments, the change requires revised workforce-cost modelling and financial planning.

The definition of “employee” will be broadened through a new Schedule 11 to the Labour Relations Act, extending collective bargaining rights to certain platform and non-standard workers. The Bill strengthens the existing presumption of employment under section 200A of the Act, lowering the threshold for individuals engaged through apps, short-term contracts or labour brokers to be treated as employees, with full statutory protections, Unemployment Insurance Fund obligations and unfair-dismissal coverage.

A new section 9B of the Basic Conditions of Employment Act introduces protections for “on-call” workers, including minimum-shift notice, predictable hours notification and guaranteed-hours rules for employers with more than 10 employees. The Minister cited retail, security and hospitality workers, often subjected to irregular hours and last-minute cancellations, as among the intended beneficiaries.

Parental leave will be restructured into a shared model. A single or sole employed parent will be entitled to four months’ leave, while two employed parents will share four months and ten days, with priority given to the birthing mother in the absence of an agreement.

Reinstatement as a remedy in non-automatic unfair dismissal disputes will be subject to an earnings threshold of R1.8 million per annum, capping the remedy for higher-earning employees.

The Department’s enforcement push is equally substantial. By the end of April 2026, approximately 3 800 inspector interns had entered training as part of Project 20 000, with a further 3 500 starting at the end of May and 2 700 at the end of June. The 10 000 permanent inspectors announced by President Cyril Ramaphosa during the 2026 State of the Nation Address will be recruited in place of an originally planned second wave of interns.

Employment equity compliance, by the Department’s own measure, remains low. Of 1 948 employers reviewed during the 2025/26 financial year, only 181, representing 9%, were found compliant. The remaining 1 767 were issued with recommendations for corrective action.

What happens next

The 216 public submissions are currently under review by the Department of Employment and Labour. Once that process is complete, both Bills are expected to be revised, retabled before Cabinet and then introduced into Parliament, where they will move through portfolio committee hearings before being put to a vote.

There is no fixed parliamentary timetable yet for the Bills’ introduction. Stakeholder engagement to date has been most active among labour law firms, industry associations and trade unions, several of which have flagged outstanding concerns, particularly around the cost of reclassifying platform workers, the practical implementation of guaranteed-hours rules and the proposed cap on reinstatement.

Trade union UASA, through spokesperson Abigail Moyo, has publicly supported the doubling of retrenchment pay, the extension of protections to gig workers and the move toward a gender-equitable parental leave system. Some employer bodies have raised concerns about additional compliance costs and the practical workability of certain proposals during the comment phase.

A separate but related Employment Services Amendment Bill, which focuses on regulating the employment of foreign nationals through quotas and sector restrictions, has already been approved by Cabinet and tabled in Parliament. The National Labour Migration Policy provides its policy framework.

Both the Labour Laws Amendment Bill and Labour Relations Amendment Bill remain in draft form. None of the proposed changes will take legal effect until Parliament passes the Bills and the President signs them into law.

Related: SA Labour Bills Head to Parliament After Public Comment Closes

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Source: Statement by the Minister of Employment and Labour
Tags: BCEADepartment of Employment and LabourEmployment EquityLabour Laws Amendment BillLabour Relations Actparental leaveseverance pay
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Ezra Labuschagne

Ezra Labuschagne is the founder, editor, and publisher of Southafriworld, an independent South African digital news publication. Based in Pretoria, South Africa, he leads the publication’s editorial direction, publishing standards, content review, and audience strategy. His work focuses on current affairs, public interest reporting, business, the economy, public policy, and major developments that affect daily life in South Africa. As founder and editor, he is responsible for final editorial oversight, including source review, accuracy, updates, corrections, and publishing standards across Southafriworld.

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