The 2025 SONA and South Africa’s Economic Landscape: Employment, Inclusion, and Legislative Reforms

The President celebrated the State's public employment programmes in creating employment but also acknowledged the stark reality of South Africa’s unemployment crisis indicating that "more than 28 million unemployed and vulnerable people receive social grants." The official unemployment rate as at mid-2024 stands at 41.9%.

Within this context, certain changes in the employment law landscape align with these considerations. The increase in the national minimum wage, effective from 1 March 2025 reinforces government's commitment to ensuring fair compensation and with the expanded number of labour inspectors, there is an indication that the Department of Employment and Labour will monitor compliance more closely in this regard and more generally in relation to employment law obligations.

The amendments to the Employment Equity Act, effective 1 January 2025, empowers the Minister of Employment and Labour to set sector numerical targets to ensure more expeditious progress in workplace transformation and representation in relation to race, gender and disability.

The government has also attempted to reduce the burden on small employers by removing employers who employ less than 50 people, irrespective of turnover, from the definition of a designated employer in the Employment Equity Act, thus removing the obligation to comply with the relevant affirmative action provisions of the legislation. The Draft Code of Good Practice on Dismissals also recognises that small business may require simpler dismissal procedures while maintaining fair labour standards to avoid lengthy and formalistic processes.

The ongoing challenges for government and business is the urgency in addressing South Africa’s unemployment crisis while ensuring inclusive and sustainable economic growth. While infrastructure investments and legislative reforms are a step in the right direction, the success of creating a stable, inclusive and dynamic employment landscape will depend on effective implementation of legislation and policy decisions that enhances economic growth and job creation.