Recent blitz inspections by the Department of Home Affairs (DHA) and other enforcement authorities have placed employers under increasing pressure to address non-compliance with immigration laws. Where inspections reveal that foreign national employees lack valid work authorisation, employers may be compelled to take immediate remedial action, including terminating employment relationships that have become unlawful.
This issue was considered by the commission for Conciliation, Mediation and Arbitration (CCMA) in Sibanda and Others v Roots Butchery (2025) 46 ILJ 2969 (CCMA). The matter arose after enforcement action revealed that several Zimbabwean asylum seekers were employed without valid work authorisation. Despite being aware that asylum status does not permit indefinite employment since 2022 and following repeated requests and consultations, the employees failed to apply for appropriate long-term work visas. The employer thereafter convened incapacity hearings and dismissed the employees. The CCMA confirmed that the dismissals were fair and that, in these circumstances, dismissal for incapacity, rather than retrenchment based on operational requirements, was the appropriate legal response.
The Commissioner clarified that although “illegal incapacity” is not expressly defined in legislation, it falls within the concept of incapacity as contemplated in the Code of Good Practice: Dismissal, issued under the Labour Relations Act (LRA). Where continued employment would be unlawful due to the absence of valid work visas, employees are legally unable to perform their duties.
Importantly, the CCMA distinguished incapacity from retrenchment. Retrenchment applies where dismissals are driven by business needs such as restructuring or economic pressure. In this matter, the employer’s business remained viable, no positions were rendered redundant, and the dismissals were linked solely to the employees’ legal inability to work.
This distinction is significant. Retrenchment triggers severance pay and section 189 consultation obligations under the LRA, whereas incapacity requires a fair investigation, consultation, reasonable time to comply, and a hearing, but does not attract severance pay. However, incapacity is not a shortcut to dismissal.
South African employers must still follow a fair process, which includes (i) investigating the legal impediment, such as verifying visa status; (ii) consulting with affected employees and explaining the legal requirements; (iii) allowing reasonable time to remedy the non-compliance; (iv) assisting where possible and requesting proof of compliance; (v) considering alternatives to dismissal; and (vi) holding fair incapacity hearings before an independent chairperson.
South African employers should therefore (i) verify work visas at the point of hiring and monitor expiry dates; (ii) communicate legal requirements clearly and in writing; (iii) act promptly when non-compliance is identified; (iv) carefully distinguish between incapacity and retrenchment; and (v) keep detailed records of consultations and compliance efforts.
HR policies should clearly differentiate between dismissals arising from individual legal incapacity and those driven by operational requirements. Getting this distinction right protects both employers’ interests and employees’ rights under the LRA.
The Roots Butchery decision confirms that where foreign nationals are unable to work legally due to the absence of valid work visas, dismissal for incapacity, and not retrenchment, is the appropriate legal route.
On 12 February 2026, the President of South Africa stated in his 2026 State of the Nation Address that the South African Police Service, DHA, and Labour Inspectors will continue working together to combat non-compliance with immigration, labour, and related legislation. He further noted that employers who hire foreign nationals without the necessary work authorisation will face stringent legal consequences. To enhance enforcement efforts, an additional 10 000 labour inspectors will be appointed this year. This significant increase in enforcement capacity means that employers can expect a substantially higher frequency of workplace inspections and should prepare accordingly.
It is therefore prudent for employers to conduct regular due diligence and verification processes to ensure that all employees hold valid authorisation to work in South Africa. Failure to comply with the Immigration Act may result in criminal sanctions, including fines or imprisonment of up to one year. At the same time, employers must ensure that foreign national employees are afforded the same procedural fairness as South African employees, which may include offering assistance where a work visa has expired or is nearing expiry.
