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For the employment of a foreigner to be “legal”, the person must have permission to live and work in South Africa; for example, be in possession of a valid work permit or have refugee status. There could be several reasons for employers ending up having “illegal” foreigners in their employ. The illegal employment of a foreigner is expressly prohibited by the Immigration Act, Act 13 of 2002 (“the Immigration Act”). But summarily dismissing such an employee, is not the way to go.

Employing and dismissing foreigners

What does an employer do if a work permit is due to expire, or already expired, or if the person was employed without having a work permit in the first place? Does the person enjoy employee status? May the employee be dismissed and, if so, how does one go about it?

Using a fixed-term contract

The Labour Relations Act provides a list of “justifiable reasons” for employing someone on a fixed-term contract. The employment of “a non-citizen who has been granted a temporary work permit” is one of the justifiable reasons listed in the Act. Employment would then automatically terminate upon expiry of the temporary work permit.

But not every foreigner is employed on a fixed-term contract. So, where does it leave the employer, who has employed a foreigner on an indefinite basis and whose work permit then expires, or an employee who did not have a valid work permit in the first place?

Effect of illegal employment

The first aspect to consider is the legal status of someone who does not have a valid work permit. For many years, employers assumed that “illegal” immigrants did not enjoy any protection in terms of our labour law. The issue arose in the Labour Court case of Discovery Health Limited v CCMA & others (2008). When the employee’s temporary work permit expired, the company informed him as follows: "It has come to our attention that your work visa, allowing you to work in South Africa, has expired. Accordingly, we regret there is no longer a legal basis for your employment at Discovery. As such, your employment at Discovery must terminate with immediate effect."

The court acknowledged that, in terms of Section 38(1)(a) of the Immigration Act, there is a prohibition on the employment of –

“(a) an illegal foreigner;

 (b) a foreigner whose status does not authorise him or her to be employed by such person; and

 (c) a foreigner on terms, conditions or in a capacity different from those contemplated in such foreigner's status".

The Immigration Act provides for a transgressing employer to be met with a hefty fine or imprisonment.

The Labour Court found that, by criminalising only the conduct of an employer who employs a foreign national without a work permit, the legislature did not intend to invalidate the underlying contract. The court concluded that, not only was there a valid contract of employment, but foreign employees also enjoyed protection against unfair dismissal despite being illegally employed. In this particular case the matter was referred back to the CCMA to decide on the procedural and substantive fairness of the dismissal. The court did not give guidelines on how an employer should go about terminating employment in these circumstances. So, what does an employer do?

Termination procedures

What the Labour Court case has shown, is that – once a work permit has expired – one may not dismiss the employee without following a fair procedure.

However, depending on the circumstances, there could be various approaches to terminating employment.


If the employee has deceived the employer, for example, by presenting a falsified work permit or promising to provide the employer with the paperwork when there is none, the employee could be dismissed for misconduct (after following due process).

Expiry of permit

In a more innocent situation such as the expiry of a valid work permit, the answer is less straightforward. Such a situation does not fit neatly into any of the acknowledged “no fault” grounds for termination of employment.

One approach would be to treat it as incapacity. But, unlike a classic case of incapacity that typically involves certain employee attributes (such as incompetence or a medical condition), one is dealing with an external factor – the fact the employer may not legally employ the person.

Another approach is to take a view that an employee without a work permit does not meet the operational requirements of the employer, i.e., to retain only legally employed persons in its employ – in which case one may deal with the matter in terms of the retrenchment process. This approach has the consequence of the employee being entitled to severance pay.

In our view the incapacity process is the better fit.

Whichever approach is adopted, the employer will have to engage with the employee before terminating employment. Both processes require that the parties explore ways to avoid dismissal. This would include assisting the employee to obtain an extension or other form of work permit or visa.

Jan Truter for

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