Employers may be faced with a situation where they find that the foreign national employed does not have a valid work permit or same is about to expire. This article will discuss the legal implications of a work permit on the employment relationship.


In our previous article, we mentioned that in terms of the case of Discovery Health Limited v CCMA & Others [2008] 7 BLLR 633 (LC), an employer cannot merely terminate the employment contract by informing the foreign national that because of their illegal status in South Africa their employment is terminated. The employment relationship will still exist even after the employer is aware of the employees expired work permit.


This means the employer must find other avenues of terminating the employment contract without contravening the South African labour law, which is the following:

  1. Dismissal for misconduct

Should the employee have deceived the employer by producing a falsified work permit or promised to provide the employer with a valid work permit, and it is found that there is none, the employee could be dismissed for misconduct. This means the employer must follow the process of dismissal for misconduct against the employee who deceived the employer.


The misconduct may be that of dishonesty which has been traditionally seen as an offence serious enough to warrant dismissal as it could render an employment relationship intolerable. In the case of the employee deceiving the employer about his or her work permit, it can warrant a dismissal. This is because dishonesty damages the employer’s ability to trust the employee.


  1. Dismissal for operational incapacity

Another option that the employer may take to dismiss an employer without a valid work permit is incapacity. Incapacity involves certain employee attributes such as incompetence or a medical condition.


In circumstances such as those of expired work permit, the operational incapacity may be used because the employee is unable to fulfil his or her contractual obligations. Section 188 of the LRA recognises incapacity as a potentially fair reason for a dismissal provided that a fair pre-dismissal procedure was followed.


In Solidarity and another v Armaments Corporation of South Africa (SOC) Ltd and others [2019] 3 BLLR 248 (LAC) (“Solidarity case”), the court considered whether the employee’s inability to render services due to the withdrawal of his security clearance by an outside agency constituted a fair reason for dismissal based on “operational incapacity”.


The principle laid down by the Solidarity case above can be applied in the same facts where an employee’s work permit has expired. Operational incapacity may be applied in this circumstance where an employee is unable to perform his or her contractual obligations due to an expired work permit. This means a legal obstacle, which is the employee’s expired work permit, gives rise to the impossibility of performance.


Although this form of incapacity has recently been recognised by our courts, the approach of operational incapacity is more applicable and should be considered by employers in the event where they consider pursuing dismissal of an employee whose work permit has expired.


The above options can be used by an employer when faced with an employee who does not have a valid work permit, or their work permit has expired. It is also argued that dismissal for operational reasons may also be applicable should the employer want to act against the employee whose work permit has expired. However, section 189 of the LRA, which governs the process and requirements of retrenchment, does not necessarily fit the requirements of retrenchment for operational reasons.


Our contention is supported by the principle we draw from First National Bank, A Division of First Rand Bank Ltd v Commission for Conciliation, Mediation & Arbitration and others [2017] 11 BLLR 1117 (LC) (“FNB case”) the summary of the case is as follows:

The employee was employed as a FAIS representative and was required to satisfy the requirement to be “fit and proper” in terms of the FAIS Act. To this end, the employee had to complete the regulatory examination within the stipulated timeframe. The employee failed to successfully complete the examination and was subsequently dismissed on the grounds of incapacity.


In the FNB case, the Commissioner found that an employee’s failure to attain a standard imposed by law in respect of his continued employment ought to have been dealt with as a dismissal for operational reasons and not as one for incapacity.


The Labour Court set aside the Commissioner’s award, which held that dismissal can be for incapacity, ill health or injury, but it can take other forms, such as imprisonment and military call-ups, which incapacitate the employee from performing his obligations under the contract. The Labour Court drew this principle from the case of Armaments Corporation of South Africa (SOC) Ltd v CCMA and Others (2016) 37 ILJ 1127 (LC) at paragraph 29.


The FNB case makes it clear that legal impediments to the performance of an employee’s duties under the employment contract may constitute grounds for dismissal based on incapacity rather than operational requirements.


In light of the above, should an employer consider retrenching an employee with an expired work permit, it will be a challenge because dismissal for operational reasons must be based on economic, technological, structural or similar needs of an employer. These requirements for retrenchment do not necessarily align with the termination of employment with an employee with an expired work permit.


We encourage the employer to engage with the employee in question before terminating employment, this is to explore ways to avoid dismissal. Some of the things that an employer can do is to give the affected employee with time to make the applications and assist the employee in obtaining an extension.


Article by: Tshepang Makhetha

Dispute Resolution Official – Pretoria