Before one can answer the problematical topical question which on face value may seem trite to labour lawyers and labour consultants, but which in practice is far from being common cause, one must first answer the question of whether foreign employees are considered employees in terms of the Labour Relations Act and if they are, whether they are then liable for contribution towards UIF and accordingly be able to claim same in the unfortunate event of unemployment. Given our current economic climate, this issue is worth ventilating.
According to Section 213 of the Labour Relations Act 66 of 1995, an employee is defined as “(a) any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration and (b) any other person who is any manner assists in carrying on or conducting the business of the employer.”
In Southern Sun Hotel Interests (Pty) Ltd I.R.O. Southern Sun Waterfront Hotel v CCMA and Other the court, having had regard to the Labour Court judgement in Discovery Health Limited v CCMA and others where the arbitrator noted that it is beyond doubt that an illegal foreigner (or undocumented immigrant) is an employee for the purposes of the LRA, found that the respondent in this matter still enjoyed the status of an employee for purposes of the LRA and she was still entitled to the protection offered to employees in terms of the LRA, even though she did not have a valid work permit.
Based on the above definition which says “any person”, and I submit that this reference is all inclusive and encompasses foreigners as well and the dictum above in Southern Sun, we can establish that an individual who, although foreign, works for another person of for the State and who receives remuneration is considered an employee in terms of the LRA. We can further establish from case law that a foreign employee whether legal or not is offered protection in terms the LRA. If a foreign employee enjoys the full benefits of employees then it should, by necessary implication, be trite that they should also be liable in terms of employee obligations which includes making contributions towards the Unemployment Insurance Fund which would subsequently affect their right to claim same.
It should be noted, however, that Section 4(1) (d) of the UIF Contributions Act 4 of 2002 does exclude some foreign employees from contributing towards UIF. These are foreign employees who enter South Africa for a contract of service, apprenticeship or learnership of a fixed duration. On termination of such service or learnership must return to their home country by law or per the contract. It is submitted that these exclusions are logical given that apprenticeships and learnerships do not imply permanent employment and that fixed term contracts, assuming no legitimate expectation of renewal was created, would mean that the employee is in the Republic for a clearly defined period of time or a clearly specified project. Burdening such employees with UIF would be at best impractical and at worse, unfair given that they would not be able to claim same in the event of unemployment as they would thereafter be illegally in the Republic.
The UIF Act does not specifically exclude non-residents and benefits appear to apply to those who make contributions. According to Section 16 of the UIF Act “Subject to section 14, an unemployed contributor is entitled to unemployment benefits contemplated in this Part for any period of unemployment lasting more than 14 days”
We can therefore conclude that foreign employees can contribute towards UIF since they are considered employees for purposes of the LRA and can further claim UIF provided they have made contributions towards it, subject to the exceptions provided by the UIF Act cited supra.
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