Foreign Nationals: When Does Immigration Non-Compliance Affect the Employment Relationship

1. Introduction

Employing foreign nationals requires employers to consider two legal frameworks simultaneously. Employers must comply with South Africa’s immigration laws and ensure that foreign nationals are authorised to perform the work for which they are employed. At the same time, foreign nationals employed in South Africa may enjoy the protections afforded by South African labour legislation. The difficulty arises when these frameworks appear to conflict.

What happens when an employee’s work authorisation expires? What if the employee is working outside the conditions of their visa? Does the employment relationship automatically become invalid, or can the employer simply terminate the employee’s employment?

The answer depends on what exactly is unlawful and what legal consequences flow from that irregularity. Section 38 of the Immigration Act 13 of 2002 prohibits an employer from employing an illegal foreigner or a foreigner in a position or on conditions not permitted by their visa or work authorisation. It also requires employers to make a good-faith effort to verify and monitor the immigration status of employees.

However, immigration non-compliance does not automatically place an individual outside the protection of the Labour Relations Act 66 of 1995 (LRA), nor does it necessarily bring the employment relationship to an immediate end. Case law shows that employers must distinguish between different forms of illegality before deciding how to respond.

2. The Legal Framework

Section 38 of the Immigration Act places clear obligations on employers. A foreign national must be appropriately authorised to work, and the work performed must fall within the scope of that authorisation. But an employer’s immigration-law obligations and an employee’s labour-law rights are separate questions.

The case law identifies three particularly important situations:

• The employee does not have the required immigration authorisation to work;
• A legal prohibition prevents the employee from lawfully performing the work, creating a potential incapacity issue; or
• The appointment itself was unlawful because the employer lacked the statutory authority to make it.

Although each situation involves some form of illegality, the legal consequences are not necessarily the same. The starting point for an employer should therefore be to identify the source and nature of the illegality before deciding on the remedy.

3. Discovery Health: Immigration Non-Compliance Does Not Automatically End Employment

One of the leading authorities is Discovery Health Ltd v CCMA and Others (JR 2877/06) [2008] ZALC 24.

The Labour Court rejected the argument that a foreign national without the required work authorisation could not qualify as an employee under the LRA merely because the employment contract was alleged to be invalid. The Court recognised that the Immigration Act did not expressly render the employment contract void and that the definition of an employee in section 213 of the LRA is not necessarily dependent on the existence of a valid and enforceable common-law contract.

The importance of Discovery Health is not that it permits employers to disregard immigration legislation. It does not. Rather, it confirms that immigration non-compliance does not automatically terminate an employment relationship or remove an employee from the protection of labour legislation. This approach was subsequently followed in Sithole v Metal and Engineering Industries Bargaining Council and Others (JR318/15) [2017] ZALCJHB 434.

For employers, the lesson is straightforward: a lack of appropriate work authorisation may require action, but immediate termination should not be treated as the automatic or only response. The employer must first establish the legal position and then follow an appropriate and fair process.

4. Nyakudya: When Immigration Status Creates Incapacity

A different issue arises when an employee’s immigration status creates a legal prohibition that prevents them from continuing to perform their duties. This was considered in Nyakudya v O.R. Tambo District Municipality (862/2024) [2025] ZAECMHC 40.

The employee was a foreign national whose work authorisation had expired, leaving him legally unable to continue performing his duties. The municipality terminated his employment on the basis that the employment relationship had become unlawful. The Court did not treat the existence of the legal prohibition as automatically terminating the employment relationship. Instead, the circumstances had to be considered within the appropriate legal framework.

This is consistent with Samancor Tubatse Ferrochrome v Metal and Engineering Industries Bargaining Council and Others (JA57/08) [2010] ZALAC 7, where the Labour Appeal Court recognised that incapacity is not confined to ill health or poor performance. It may also arise where a legal prohibition prevents an employee from performing their work. This distinction matters because the issue may not be misconduct. The employee may be genuinely unable to perform the work because the law prevents them from doing so.

An employer should therefore consider, among other things:

• the nature and duration of the legal prohibition;
• whether the position can be remedied;
• whether the employee can obtain or renew the necessary authorisation;
• whether alternative work is available; and
• whether dismissal can reasonably be avoided.

The fact that an employee cannot presently work lawfully does not necessarily mean that the employer can terminate the relationship without further enquiry.

5. Njibu: When the Appointment Itself Is Unlawful

Njibu and Others v Member of the Executive Council for Health, Eastern Cape Province and Others (CA 20/2024) [2025] ZAECBHC 1 (21 January 2025) illustrates a materially different situation. The case concerned foreign medical practitioners who had been permanently appointed by the Eastern Cape Department of Health despite not being South African citizens or permanent residents.

Section 10 of the Public Service Act 103 of 1994 restricts permanent appointments to departmental posts to South African citizens and permanent residents. The issue in Njibu was therefore not simply whether the employees had appropriate immigration status. The more fundamental question was whether the appointments themselves were legally authorised.

The Court found the appointment decisions to be unlawful administrative action. This distinction is important. Labour-law principles cannot necessarily cure an appointment that the employer was never legally authorised to make. However, Njibu should not be understood as establishing that foreign nationals in the public sector are generally deprived of labour-law protection. Its significance lies in the narrower proposition that where legislation restricts an employer’s power to make a particular appointment, the legality of the appointment itself may become the central issue.

Even then, the consequences of unlawfulness are not necessarily automatic. The Court suspended the declaration of invalidity and preserved the employees’ accrued remuneration and benefits, demonstrating that factors such as prejudice, delay and the interests of justice may influence the appropriate remedy.

6. The Importance of the Gcaba Distinction

Gcaba v Minister for Safety and Security and Others (CCT64/08) [2009] ZACC 26 reinforces the importance of identifying the nature of the dispute before determining the applicable legal framework.

Ordinary employment disputes generally fall within labour law, while challenges concerning the lawful exercise of public power may engage administrative-law principles. This distinction is particularly important in the public sector. A public employer cannot necessarily treat every dispute involving an employee as an ordinary employment matter if the underlying issue is whether the employer lawfully exercised its statutory power to make the appointment.

Conversely, an immigration irregularity does not automatically transform an employment dispute into an administrative-law matter. The legal character of the underlying problem must first be established. The lesson for employers is simple: First identify the legal problem. Then identify the legal framework. Only then determine the appropriate remedy.

7. A Reconciled Approach for Employers

Taken together, these authorities provide a useful framework.

If an employee’s immigration status prevents them from lawfully continuing to perform their duties, the employer may be dealing with incapacity arising from a legal prohibition. The reasoning in Discovery Health, Samancor and Nyakudya indicates that labour-law principles remain relevant and that an appropriate incapacity process may be required.

The position differs where the employer never had the legal authority to make the appointment. This is particularly relevant in the public sector, where legislation may restrict who may be appointed and on what terms. The question then shifts from: “Can this employee continue working?” to: “Did the employer have the legal authority to make this appointment in the first place?”

That may require a separate legality enquiry and, depending on the circumstances, administrative-law or review proceedings.

Situation	Central Question	Potential Legal Approach
Immigration non-compliance	Is the employee lawfully authorised to work?	Address the immigration irregularity while recognising applicable labour-law protections.
Legal incapacity	Does a legal prohibition prevent the employee from performing the work?	Consider incapacity, remediation and alternatives before dismissal.
Unlawful appointment	Was the employer legally authorised to make the appointment?	Consider legality, administrative-law principles and appropriate corrective relief.

The central principle is therefore clear: the legal response must match the legal problem.

8. Practical Steps for Employers

Employers should address foreign-national compliance proactively rather than waiting for an irregularity to become a dispute.

• Verify immigration status before employment.
• Confirm that the work matches the authorisation.
• Monitor immigration documentation.
• Do not treat every irregularity as an automatic termination event.
• Consider whether the position can be remedied.
• Consider incapacity where the law prevents continued work.
• Exercise additional caution with public-sector appointments.
• Obtain advice where the legal position is unclear.

9. Key Takeaways / Conclusion

Employers should not treat every form of illegality involving a foreign-national employee as having the same legal consequences.

• Discovery Health confirms that immigration non-compliance does not automatically remove a foreign national from the protection of the LRA or render the employment relationship void.
• Samancor and Nyakudya demonstrate that a legal prohibition preventing an employee from performing their duties may create incapacity, but the employer must still consider the appropriate process and whether the problem can be remedied.
• Njibu illustrates a different situation, where the appointment itself was unlawful because the public employer had acted contrary to legislation regulating its power to make the appointment.

These are different legal problems and should not be treated interchangeably. The most important question for an employer is therefore not simply: “Is this employee’s immigration status irregular?” It is: “What is the source of the illegality, and what legal consequences flow from it?”

Employers must comply with immigration legislation and should make a good-faith effort to verify and monitor the immigration status of foreign-national employees. At the same time, they should avoid assuming that immigration non-compliance automatically ends the employment relationship.

The appropriate response depends on the facts, the nature of the irregularity, and the legal framework engaged. The key is simple: identify the problem before deciding on the remedy.

Article By Keotshepile Kodisang

Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)