When Does South African Labour Law Apply Abroad? A Landmark Ruling for Cross-Border Employment

In today’s world of international assignments and remote work, the boundaries of employment law are being tested like never before. For South African employers with a global footprint, a pressing question often arises: does South African labour law still apply when an employee is working abroad?

A recent Labour Court decision has brought much-needed clarity, reaffirming that jurisdiction depends not on where the employee works but on who the employer is and which law governs the relationship.

The Case: Naidoo v Khosa NO and Others (JR1346/22) [2025] ZALCJHB 46 (18 March 2025)

Ms Reena Naidoo, a long-serving employee of the Department of International Relations and Cooperation (DIRCO) was posted to the South African Mission in New York. When her post was abolished and her employment brought to an end, she referred an unfair dismissal dispute to a South African bargaining council, arguing that the termination was for operational reasons without compliance with section 189 of the LRA.

DIRCO argued that because she was living and working in the United States, the South African forum lacked jurisdiction. The commissioner agreed but the Labour Court set aside that decision, holding that:

• The Mission in New York was not an independent employer, it operated under DIRCO’s authority in Pretoria;
• The Court found no evidence that her contract was governed by local U.S. law and, relying on the Foreign Service Act, held that her employment relationship fell under South African law;
• Her work, though abroad, was performed on behalf of a South African department using South African funds.

Why This Matters for Multinationals

Although the case involved public service, its implications extend far beyond. Private employers sending South African staff abroad or managing hybrid international teams must take note:

• Always specify governing law and jurisdiction in contracts.
• If reporting lines, payroll, or decision-making remain South African, local law may still apply.
• Consider bespoke clauses for cross-border contexts.
• Be prepared to meet both South African and host-country obligations.
• The central takeaway? Jurisdiction follows the substance of the relationship, not geography.

What Employers Should Do Next

• Audit your cross-border employment contracts.
• Align operational structures with intended legal frameworks.
• Review dispute resolution provisions.
• Seek proactive legal advice before expanding international assignments.

Conclusion

The Naidoo judgment is a timely reminder. A South African employment relationship does not lose its legal character at the border. For businesses, early planning and clear structuring are the best safeguards against costly jurisdictional disputes.

At Spencer West Inc., we help multinationals and South African employers navigate the complexities of cross-border employment law. If your organisation is deploying staff abroad or considering remote international hires reach out to us for tailored advice on structuring contracts, mitigating risks, and ensuring compliance.

Contact us: [email protected]