LRA
Labour Relations Act, 1995 (Act No. 66 of 1995)
What an employer must be able to prove when an employment relationship ends, and who the employer actually is when a labour broker, a fixed term contract or a part time arrangement stands between the business and the person doing the work.
Sections
12
Duties
39
Questions
90
Assessment from
R 43 700
What it covers
Section 185 gives every employee the right not to be unfairly dismissed. There is no qualifying period and no minimum length of service, and it is the employer, not the employee, who carries the onus: section 192(2) says that once the employee proves there was a dismissal, the employer must prove it was fair. Fair means two things at once, and section 188(1) requires both. There must be a fair reason, which can only be the employee's conduct, the employee's capacity, or the employer's operational requirements, and the dismissal must have been effected in accordance with a fair procedure. Failing either one makes the dismissal unfair, so a business with an unanswerable reason and no hearing loses, and so does a business with an immaculate hearing and no reason. Section 188(2) then brings in the Code of Good Practice: Dismissal in Schedule 8, which anybody deciding fairness must take into account. That is where the practical standard lives: disciplinary rules that employees can actually read, progressive discipline rather than dismissal for a first offence, allegations put in writing in a language the employee understands, a reasonable time to prepare, the right to be assisted by a union representative or a fellow employee, consistency with how the same offence was treated before, and a disciplinary record kept for each employee. Section 186 decides what counts as a dismissal in the first place, and it is wider than firing somebody. A resignation can be a dismissal if the employer made continued employment intolerable. Refusing to let an employee return after parental leave is a dismissal. Re-employing some of the people you retrenched and not others is a dismissal of the ones you left out. And section 186(1)(b) is the provision that catches a business running fixed term contracts: if the employee reasonably expected renewal on the same terms, or reasonably expected to be kept on indefinitely, then not renewing is a dismissal the employer has to justify like any other. Section 187 lists the reasons that make a dismissal automatically unfair, where there is no procedural defence available at all and compensation runs up to 24 months' remuneration. Dismissing somebody for refusing to accept a change to their terms of employment is on that list, which is what makes a retrenchment used to force a pay cut such an expensive mistake. Sections 189 and 189A govern retrenchment. Section 189 is a consultation duty that starts when the employer CONTEMPLATES the dismissals, not when it has decided: a written invitation to consult, written disclosure of ten specified things including the alternatives considered and why each was rejected, a genuine attempt at consensus, a written response to written representations, and selection criteria that are either agreed or demonstrably fair and objective. Section 189A adds, for employers of more than 50 people retrenching above a sliding threshold, CCMA facilitation and a waiting period before notice of termination may be given at all. Sections 198A to 198D are the provisions most often discovered too late. A worker placed by a temporary employment service who is not performing a genuinely temporary service, which the Act defines as not more than three months, is deemed to be the employee of the client and employed indefinitely by the client. A fixed term contract running longer than three months without a justifiable reason is deemed to be of indefinite duration. A part time employee must be treated on the whole no less favourably than a comparable full time employee. None of these deemings requires any decision by anybody: they happen by operation of the section.
Does this apply to you?
This applies to you if anybody works for you, and it may apply to people you do not think work for you.
Start with who is an employee. Section 200A presumes a person is an employee, regardless of the form of the contract, if any one of seven factors is present: their hours are controlled by somebody else, they form part of the organisation, they have worked an average of 40 hours a month over the last three months, they are economically dependent, they are provided with their tools, or they work for only one person. The presumption applies to anybody earning under the section 6(3) BCEA threshold, and it is yours to rebut rather than theirs to prove. The identical presumption is assessed in this library's Basic Conditions of Employment Act record at section 83A, and it is not asked again here, but a business with drivers, installers or couriers on contracts calling them independent should answer every question in this record for those people.
Sections 198A, 198B and 198C apply only to employees earning below the threshold determined by the Minister under section 6(3) of the Basic Conditions of Employment Act. That threshold was R261 748.45 a year, about R21 812.37 a month, with effect from 1 April 2025 by notice in Gazette 52232 of 7 March 2025. It is revised by notice and must be checked against the current determination before you rely on it; this record does not carry it as law.
Sections 198B and 198C also exclude a small employer, but read the exclusion carefully because it is narrower than it looks. It covers an employer with fewer than 10 employees, or fewer than 50 employees where the business has been in operation for less than two years, and it falls away entirely if you conduct more than one business, or if your business was formed by the division or dissolution of an existing one. A group that split one operation into three companies does not qualify.
Section 198A has no small employer exclusion at all. A client of a labour broker is caught by the three month deeming provision whatever its size.
Section 189A applies only if you employ more than 50 people and the number you contemplate dismissing reaches a sliding threshold, counted together with everybody dismissed for operational reasons in the preceding 12 months. Section 189 applies to every retrenchment of even one person, by every employer, with no threshold at all.
If a bargaining council collective agreement covers your sector, it may set a procedure or a severance figure better than this Act, and where it does the better term is the one that applies. Road freight, passenger transport, motor, building and metal are all heavily covered, so check before you assume this Act is your ceiling.
Where this text comes from
Transcribed 2026-10-20. Check the provision against the source before relying on it in a filing.
What non-compliance costs
Nothing in this part of the Act is a criminal offence. The exposure is money and reinstatement, and it is larger than most employers expect.
Section 193(1) gives the CCMA or the Labour Court three remedies for an unfair dismissal: reinstatement, re-employment, or compensation. Section 193(2) makes reinstatement the DEFAULT. The arbitrator must order the employee reinstated unless the employee does not want it, the circumstances make the relationship intolerable, it is not reasonably practicable, or the dismissal was unfair only because of the procedure. Reinstatement can be ordered retrospectively to the date of dismissal, which means back pay for the whole period the dispute took to run.
Section 194 caps compensation. For an ordinary unfair dismissal it is up to 12 months' remuneration. For an AUTOMATICALLY unfair dismissal under section 187 it is up to 24 months' remuneration, and section 195 says that compensation is in addition to any other amount the employee is owed, so the severance pay and notice pay do not come off it.
Section 192(2) is why the paperwork matters more than the merits. Once the employee establishes the existence of the dismissal, the employer must prove it was fair. An employer that cannot produce the notice of allegations, the minutes, the outcome letter or the disciplinary record has not discharged that onus, whatever actually happened.
The deeming provisions produce liabilities nobody budgeted for. Where section 198A(3)(b) deems a placed worker to be your employee, that worker is employed by you on an indefinite basis from that moment, and section 198(4A) lets the employee, or a labour inspector, proceed against you directly as if you were the employer, and lets any award be enforced against you. Where section 198B(5) deems a fixed term contract to be of indefinite duration, the end date in the contract stops being a lawful way to end it, so letting it run out is a dismissal with no reason and no procedure: the worst case there is.
Section 200B makes associated or related entities jointly and severally liable for an employer's obligations where the intent or effect of the arrangement was to defeat the purposes of this Act or any other employment law. An operating company with no assets does not shelter the group.
Under section 189A(13) a consulting party can go to the Labour Court before the retrenchment happens and get an order compelling a fair procedure, interdicting the dismissals, or reinstating employees until the procedure is complied with. That is the only place in this Act where the process can be stopped rather than paid for.
What the assessment covers
The assessment works through 90 questions across 39 duties, scored out of 606. Each answer generates the specific actions needed to close or prove that duty, and a “yes” only counts once its evidence is in, which is what makes the score defensible rather than self-declared.
The questions themselves are part of the assessment.
Find out where you stand on LRA
Run the assessment, get your score, and get the exact list of what to fix, with the evidence trail an auditor will ask for.