1. A key change proposed by Labour Law Amendment Bill, 2025 is the introduction of section 77B into the Basic Condition of Employment Act, 75 of 1997 (BCEA). The proposed change is of particular importance to employers as it seeks to tackle a long-standing challenge concerning unpaid pension and provident fund contributions to pension funds regulated by the Pension Funds Act, 24 of 1956 (PFA).
2. Section 77B of the BCEA aims to address concerns regarding employers who fail to pay a contribution to a pension or provident fund on behalf of an employee in terms of any law, collective agreement or contract of employment. In this regard, section 77B seeks to empower the Labour Court, CCMA or bargaining council to which a dispute concerning the failure by an employer to pay a contribution to a pension or provident fund is referred must, in respect of any amount found to be outstanding, make an order or award that:
2.1 directs payment of all outstanding contributions to the fund on behalf of the employee, setting out the specified timelines and on such other terms as may be specified in the order or award; and
2.2 directs the employer to pay interest on the outstanding amount at the interest rate prescribed in terms of section 13A of the PFA.
3. Importantly, section 77B of the BCEA regulates the relationship between the various statutory bodies adjudicating over pension fund contribution disputes. Accordingly, the Labour Court, CCMA or bargaining council may not exercise jurisdiction if the Pension Funds Adjudicator has already issued a determination in terms of section 30M of the PFA or any other tribunal or court of law having jurisdiction has made a ruling on the matter. This avoids multiple processes and brings clarity to enforcement.
4. The introduction of section 77B of the BCEA further encourages employers to take practical steps to safeguard employees’ interests by ensuring that all contributions are paid and that the necessary mechanisms are in place in order to effect payment. Such mechanisms may include reviewing payroll systems to ensure timely and accurate contribution payments for employees, conducting internal audits to identify and remedy any historical arrear contributions, strengthen record keeping for employee contributions and confirming that all contributions required by any law, contract, collective agreement are properly administered.
5. It is clear that the proposed introduction of section 77B in the BCEA represents a proactive step to tighten compliance frameworks for retirement fund contributions. As such, by broadening the enforcement powers of the Labour Court, CCMA and bargaining councils, the amendment enhances employee protections and alternative avenues for recovery of unpaid contributions whilst increasing employer liability where contributions for employees remain unpaid.