2025 Labour Law Changes South Africa: What CEOs Must Know

07 Oct 2025

2025 Labour Law Changes: South Africa’s Labour Law Landscape

South Africa’s labour laws are evolving rapidly in 2025, and keeping up can be a challenge for many SMEs. Recent reforms, including the new Code of Good Practice on Dismissal, binding employment equity targets, and greater protections for vulnerable workers, arrive at a time when businesses are already navigating talent scarcity, attraction and retention and economic strain.

According to The 2025 Working Women in South Africa Report, rigid return-to-office mandates are one of the key reasons skilled women leave their roles. Against this backdrop, the message for CEOs and HR leaders is clear: adopting fair, transparent, and inclusive labour practices isn’t only about compliance, it’s a smart retention strategy that protects your business from legal risk and strengthens your workforce.

Embracing Modern Employment Realities

This year, South Africa responds boldly to evolving labour market developments by updating laws protecting traditional employees and the growing gig and platform workers segment. The National Economic Development and Labour Council (NEDLAC) has steered comprehensive amendments, including 47 changes to the Labour Relations Act (LRA), 13 to the Basic Conditions of Employment Act (BCEA), and enhancements to the Employment Equity Act (EEA) and National Minimum Wage Act (NMWA). While some proposals are still undergoing parliamentary processes, the intent is clear: balance worker protections with employer flexibility to foster growth and job creation.

Key updates include:

National Minimum Wage Increase: From 1 March 2025, the hourly minimum wage increased to R28.79, directly uplifting over six million workers, including farm and domestic staff, with protections extending to learners and contract workers.
Expanding Rights for Gig and On-call Workers: Over two million South Africans earn through the gig economy. Proposed amendments extend minimum wages, fair dismissal protection, and statutory fund contributions to these workers, broadening the safety net.
Simplifying Dismissal Procedures: The new Code of Good Practice on Dismissal (effective 4 September 2025) modernises procedures by recognising incompatibility as a fair ground for termination, allowing more flexibility for small businesses, and introducing a three-month probation period with more straightforward rules.
Binding Sectoral Employment Equity Targets: Regulations now require employers to meet sector-specific diversity targets, or justify deviations to qualify for government business.

Notable Legal Validation and Court Impact

Recent court rulings provide CEOs with clarity and confidence on how these reforms will be enforced:

Employment Equity Targets Upheld: In August 2025, the Gauteng High Court dismissed challenges to the new sectoral targets, affirming that the regulations are lawful, consultative, and constitutional.
Dismissal for Refusing to Return to Office: In Medici Energy v Bennet NO (2025), the Labour Court found dismissal substantively and procedurally unfair when an employee refused to return to office. The court stressed that return-to-office mandates must be reasonable, properly consulted, and fairly implemented—a ruling aligned with workforce sentiment reflected in the Working Women Report.
Fair Pay Differentiation: A Labour Appeal Court decision confirmed that differentiated pay during retrenchment consultations, if rational and aligned with equity goals, does not amount to unfair discrimination.
Enhanced Parental Leave Policy: The 2025 update to the BCEA introduces extended parental leave entitlements, providing eligible employees with increased paid leave to support family bonding and caregiving responsibilities, reflecting the country’s commitment to gender equality and work-life balance.

Align Workplaces for the Future

Rather than being seen as regulatory burdens, the 2025 reforms offer CEOs a framework to build fair, inclusive, and competitive workplaces. To lead effectively:

Ensure wage structures and contracts are in line with legislation. Ask us if you need an experienced HR consultant to assist you. Or hire a fractional HR manager to remove your HR burden without the full-time cost.
Align equity strategies with sector-specific targets to qualify for government opportunities and build diverse teams.
Revise dismissal and probation policies per the new Code of Good Practice, ensuring fair and transparent processes.
Approach back-to-office decisions cautiously, ensuring consultation and reasonableness to avoid legal disputes and unnecessary attrition.

Need help to stay abreast of Labour Law changes?

Do you require HR assistance to keep your contracts compliant and in line with continued labour law changes? We have several hiring options to build your HR leadership capacity:

Hire a fractional HR Manager who works on your business as a part-time executive and does the work for you at a fraction of the cost of a full-time employee. A contractor that is committed to your business growth.
Hire an HR Consultant as an Independent contractor to give you the guidance you need.
Hire an HR manager as a part-time or full-time employee to manage all your HR and compliance matters.

Ask us about the flexible hiring options to assist you in your HR and compliance requirements.

In closing, South Africa’s 2025 labour law changes reflect a shift toward inclusivity, fairness, and modernisation. For CEOs, proactive compliance avoids penalties and positions organisations as employers of choice. By aligning policies with the law while responding to workforce realities, leaders can strengthen talent attraction and retention, enhance loyalty, and secure long-term stability in a changing economic landscape.