{"id":834231,"date":"2025-08-07T08:38:41","date_gmt":"2025-08-07T06:38:41","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=834231"},"modified":"2025-08-07T08:38:41","modified_gmt":"2025-08-07T06:38:41","slug":"big-changes-for-high-earning-employees-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/834231\/big-changes-for-high-earning-employees-in-south-africa\/","title":{"rendered":"Big changes for high-earning employees in South Africa"},"content":{"rendered":"\n

Proposed amendments to South Africa’s labour laws could see high-earning employees\u2014those pulling in more than R150,000 a month\u2014prevented from being reinstated to their positions when unfairly dismissed.<\/p>\n\n\n\n

The proposed amendments introduce a new section to the Labour Relations Act (LRA) that stipulates that employees earning above R1.8 million per year will no longer be entitled to certain remedies for unfair dismissal.<\/p>\n\n\n\n

This includes reinstatement or re-employment, and compensation above the set threshold.<\/p>\n\n\n\n

However, this is only in cases where the dismissal isn’t “automatically unfair”. In cases of automatically unfair dismissals, reinstatement, re-employment, and uncapped compensation will remain available.<\/p>\n\n\n\n

Automatically unfair dismissals are often related to infringing a fundamental right granted by the LRA or other laws in South Africa.<\/p>\n\n\n\n

However, in the case of all other unfair dismissals, high-earning employees will lose access to the remedy of being reappointed to their position, and compensation awarded for unfair labour practices will also be capped.<\/p>\n\n\n\n

According to law firm Webber Wentzel, these changes may directly impact both employers, particularly at the executive level, and high-income employees.<\/p>\n\n\n\n

It warned that the changes could also carry broader implications for litigation risk, employment policy design, and dispute resolution strategy.<\/p>\n\n\n\n

Notably, the firm said that the proposed changes would fundamentally shift how companies manage executive exits and change how they assess the risks related to dismissing senior employees.<\/p>\n\n\n\n

Webber Wentzel noted that the reinstatement of senior roles is often impractical due to irreparable damage to trust relationships. The courts and mediators have long questioned the feasibility of this remedy.<\/p>\n\n\n\n

South Africa has some notable examples<\/strong><\/a> of how high-level executive dismissals can go wrong, and how litigation can run into years of costly legal battles with no way to practically reverse the exit.<\/p>\n\n\n\n

While the proposed changes could address this, it also means that new challenges could be introduced.<\/p>\n\n\n\n

For example, unfairly dismissed employees could try to maximise their compensation claim, and then, where applicable, pursue whistleblower-based claims to circumvent the cap.<\/p>\n\n\n\n

The proposals also raise questions of fairness.<\/p>\n\n\n\n

With highly paid employees, limiting compensation claims appears fair. However, there are constitutional guarantees of equal treatment and fair labour practices for all.<\/p>\n\n\n\n

“Differentiating remedies based on income could amount to socio-economic discrimination, undermining the universality of labour rights,” the legal experts said.<\/p>\n\n\n\n

“There is also a risk that employers may abuse the regime, knowing their exposure is capped unless the dismissal is automatically unfair.”<\/p>\n\n\n\n

If implemented, Webber Wenzel said this would signal a “philosophical shift” in South Africa, where labour rights are no longer universal protections but potentially tiered entitlements.<\/p>\n\n\n\n

“The constitutional validity of this approach may well be tested,” it said.<\/p>\n\n\n\n

What it means for businesses and employees<\/h2>\n\n\n\n
\"\"<\/a>
The legal experts: Kenneth Coster (Partner), Hassan Mahlawe (Trainee Attorney), Megan Wilkinson (Candidate Attorney) at Webber Wentzel<\/figcaption><\/figure>\n\n\n\n

For employees earning above the threshold, the loss of the reinstatement remedy could be viewed as a reduction in labour protections.<\/p>\n\n\n\n

The legal experts noted that reinstatement usually offers economic redress and reputational vindication.<\/p>\n\n\n\n

The absence of this remedy could also result in unfair dismissals becoming more routine, as employers will only face capped compensation even where the dismissal lacks merit.<\/p>\n\n\n\n

However, more positively, employers may benefit from the increased certainty brought about by the removal of reinstatement.<\/p>\n\n\n\n

“Fewer reinstatement hearings mean reduced procedural complexity and cost,” the firm said.<\/p>\n\n\n\n

“Ultimately, the amendments may help build a more predictable and commercially aligned labour law framework.”<\/p>\n\n\n\n

For employees, some consolation may lie in the finality of what capped compensation brings.<\/p>\n\n\n\n

“In executive-level dismissals, a return to the organisation is often undesirable for both parties. The cap may enable faster resolutions, reduced reputational harm, and more constructive settlement negotiations.”<\/p>\n\n\n\n

According to Webber Wentzel, in balancing the pros and cons, the proposed amendments may foster a more predictable and less adversarial system.<\/p>\n\n\n\n

However, the firm warned that the risk of diminished equality and protection remains.<\/p>\n","protected":false},"excerpt":{"rendered":"

Proposed amendments to South Africa’s labour laws could see high-earning employees lose certain protections and capped compensation in dismissal fights.<\/p>\n","protected":false},"author":10,"featured_media":788368,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[9455],"class_list":["post-834231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-webber-wentzel"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834231","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=834231"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834231\/revisions"}],"predecessor-version":[{"id":834254,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/834231\/revisions\/834254"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/788368"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=834231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=834231"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=834231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}