Employment Contract Changes & Retrenchments in 2025: Know Your Legal Rights

corpfin1
Jun 18
2 min read

South Africa’s employment environment is evolving. With ongoing economic shifts, restructuring pressures, and hybrid work transitions, both employers and employees are facing complex legal questions, especially around salary changes, reduced hours, and fair retrenchment practices.

This guide highlights the current legal position for 2025 and key considerations to ensure compliance and fairness under South African employment law.

Can Your Employer Unilaterally Change Your Pay or Hours?

No. Unless specifically allowed under your employment contract, company policy, or bargaining council agreement, any adjustment to salary, working hours, responsibilities, or leave entitlements must be agreed upon.

If these changes are imposed without consultation, they may constitute:

A breach of contract
An unfair labour practice
An automatically unfair dismissal (in certain cases)

What Does the Law Require?

South African labour law-anchored by the Labour Relations Act, Basic Conditions of Employment Act, and the Constitution—requires:

Meaningful consultation before any change
Written agreements for reductions or restructuring
Section 189 retrenchment procedures when consensus cannot be reached

Employers may not enforce changes by issuing ultimatums or withholding payment.

When Is Retrenchment Lawful?

If a mutual agreement cannot be reached, employers may consider retrenchment, provided they:

Supply a valid economic, structural, or technological reason
Engage in a full consultative process
Explore reasonable alternatives (e.g. redeployment or short-time)
Comply with severance pay obligations (where applicable)

Employees who reject lawful and reasonable alternatives may forfeit severance benefits.

Emerging Trends in 2025

Remote Work as a Contractual Right
- In some cases, work-from-home arrangements may now form part of your contractual terms. Changes require consultation.
POPIA Compliance in HR Practices
- Contractual changes involving salary or benefits must be processed in line with data privacy regulations.
Mental Health and Employment Equity
- The CCMA is placing greater emphasis on how restructuring affects employee wellness and designated employment equity groups.