The proposed changes to the Basic Conditions of Employment Act (BCEA) have raised concerns over pension fund payouts for members.
Nicolette van Vuuren and Amy King from Webber Wentzel noted that two developments have reshaped the enforcement of retirement fund contribution obligations in South Africa.
The first development is already in effect, while the second was just open for public comment ahead of its formal introduction to Parliament.
In January 2026, the Minister of Employment and Labour withdrew a variation notice published in December 2003.
That notice had excluded contributions payable to benefit funds regulated under the Pension Funds Act from the application of section 34A of the BCEA.
Labour inspectors are empowered to enforce Section 34A, which requires employers to pay employee contributions to a benefit fund within seven days of deduction.
This is done in conjunction with the employer’s contributions being paid within seven days of the end of the month.
“This enforcement power is already operative and does not depend on the proposed amendments set out in the Employment Laws Amendment Bill, 2025,” the experts said.
“The Bill, which proposes to insert new sections 62B and 77B into the BCEA, has not yet commenced.”
If the Bill is enacted in its current form, these provisions will expand beyond the current enforcement framework.
It would empower the Labour Court, the CCMA, and bargaining councils to issue mandatory orders and regulate the jurisdictional interplay among these bodies and Pension Funds Adjudicators.
Section 62B states that an employer’s failure to pay contributions to a benefit fund for an employee must be treated the same as a failure to pay any amount owing to an employee.
“The practical effect is that non-payment of benefit fund contributions will attract the same enforcement consequences as non-payment of wages or other statutory entitlements,” the legal experts said.
Upon enactment, retirement funds will benefit from multiple concurrent enforcement channels, compliance orders and awards and determinations from official state bodies.
This will make it easier for pension funds to collect monies owed to members from their employers following non-payment.
Section 13A(8) also imposes personal liability on, among others, directors regularly involved in the management of a company’s financial affairs.
Major question remains
However, the experts noted that a major unresolved question remains over the misalignment of due dates for employee contributions under the two statutes.
Section 34A of the BCEA and section 13A of the Pension Funds Act both require employer contributions to be paid within seven days after the end of the month.
That said, provisions differ over employee contributions. Section 34A of the BCEA requires that these employee contributions be paid within seven days of deduction.
However, Section 13A of the Pension Funds Act requires payment within seven days after the end of the month for which contributions are due.
“Given the variation in payroll dates and pay frequencies across employers, this discrepancy creates material compliance risk,” the experts said.
Section 77B of the BCEA regulates the jurisdiction of the Labour Court, the CCMA, and bargaining councils over issues regarding an employer’s failure to pay contributions under the Pension Funds Act.
This is regardless of whether the obligation arises under statute, a collective agreement, or a contract of employment.
“Where a contribution is found to be outstanding, the adjudicating body must direct payment to the fund within a specified period, together with prescribed interest.”
“Jurisdiction is excluded if the Pension Funds Adjudicator has already issued a determination under section 30M of the Pension Funds Act, or if another tribunal or court of competent jurisdiction has adjudicated the matter.”
The Bill also proposed amending Schedule 3 to the BCEA so that sections 62B and 77B apply immediately upon commencement to all unresolved disputes, irrespective of when they were referred.
Although the historical exclusion of Pension Funds Act contributions from Labour Inspector oversight has been removed, the enforcement landscape has now been changed.
Employers are now subject to enforcement action for the failure to pay contributions on time, and should the BCEA’s current amendments be enacted, the enforcement framework will be further strengthened.
“Employers are therefore advised to ensure strict compliance with all contribution obligations and to seek legal advice promptly where any dispute has been referred or is contemplated.”
Submissions for public comment on the new employment laws closed on 28 March, and the experts said that the technical concern over payments warrants engagement at the pre-parliamentary stage.