In the recent decision of the Western Cape High Court in Mukuru Financial Services (Pty) Ltd (“Mukuru”) and Another v Department of Employment and Labour, the Court considered whether a South Africa employer’s intention to employ foreign nationals rather than South African citizens or permanent residents could constitute unfair discrimination.
Jacqui Reed joined South African news programme eNCA on 28 June 2022 to provide clarity on the decision of the High Court and shed some light on what this may mean for businesses operating within South Africa.
In brief, Mukuru, a financial services provider that uses mobile technology to transfer money across Africa and Asian countries, applied for a corporate visa that would permit them to employ foreign nationals. In order to obtain such a certificate, it was necessary for Mukuru to obtain a certificate from the Department of Employment and Labour (DEL). In order to obtain the certificate, Mukuru needed to have shown that despite conducting a diligent search to find suitable employees that were either South African citizens or permanent residency holders, it was not able to do so. The DEL refused to issue the certificate because it was not satisfied with Mukuru’s attempts to employ South Africans which prompted Mukuru to take this decision on review. The High Court was not persuaded by Mukuru’s explanation for why it could not employ South Africans and found that South Africans were unfairly excluded from employment opportunities which constituted unfair discrimination on various constitutional grounds.
Impact of the decision
Whilst this decision did not emanate from a South African alleging that there was unfair discrimination by an employer who employed a foreign national as opposed to the South African citizen, it does highlight that there may be circumstances under which the employment of a foreign national rather than a South African may constitute unfair discrimination. It is evident from this decision that South African employers will need to justify the employment of foreign nationals in favour of South Africans. Whether an employer can do so, will depend on the facts of each case.
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For further information, please contact:
Jacqui Reed, Herbert Smith Freehills