Labour Law Consultant Insight
Babel Falls: Labour Department Raid Shakes Up Johannesburg's Trendy Restaurant
Author: Matthew Schoonraad
Admitted attorney who is passionate about labour law and the balance between employer and employee. Matthew is also a skilled facilitator, offering workplace and HR workshops across various topics including diversity and inclusion training.
A Warning to Employers
A warning shot has been fired against one of South Africa’s most well-known and renowned restaurants within the hospitality industry – Babel in Johannesburg. This has come as a shock to the industry and as a caveat to all employers who are non-compliant and avoid mandatory labour law principles. Our Labour Law Consultant and Specialist Matthew breaks it down for us.
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Authorities conducted a sting operation at Babel restaurant in Menlyn, Pretoria East, resulting in the arrest of three people, including the owner and two undocumented staff members.
The raid followed a viral TikTok video by a former employee, who exposed exploitative labour practices at the upscale eatery.
Allegations included the absence of formal contracts, the requirement for employees to pay for their uniforms and equipment, no basic salary, and mandatory daily fees for breakages.
The Department of Labour, Home Affairs, and police took swift action, with the undocumented staff set for deportation and the owner facing legal consequences.
Further details are expected from the Department of Labour within the week; however, authorities have confirmed that this will not be the only operation and/or unannounced inspection for restaurants and other hospitality businesses.
In South Africa, the relationship between employers and employees is governed by a comprehensive set of labour laws designed to protect the rights of employees and maintain fairness in the workplace. Non-compliance with these laws is not only a violation of employee rights but can also result in severe legal and financial consequences for employers. In particular, employers who fail to comply with general labour law principles face potential fines, business closures, and even personal or criminal liability (as in the Babel case and the 3 arrests made).
This is also one of the main reasons employers acquire the services of labour lawyers to offer labour law consulting services.
Where did it go Wrong?
Given the raid on Babel and the proactive approach being taken by authorities, this should serve as a critical warning to employers who neglect their legal obligations. Below we have broken down some of the main issues and areas of non-compliance taken from the Babel case, to ensure that employers are aware of their importance and the consequences of material non-compliance.
Failure to Provide Employment Contracts
Under South African law, it is essential that every employee is provided with a signed employment contract.
Section 29 of the Basic Conditions of Employment Act (BCEA) requires employers to provide employees with written particulars of employment within the first day of starting work. This document serves as a foundational record of the employment relationship and is critical in managing disputes. Without an employment contract, employers are vulnerable to claims of unfair labour practices, and employees may be unsure of their rights, creating unnecessary risks for both parties.
Failure to provide such a contract could lead to the Department of Labour (DoL) intervening, with penalties imposed for non-compliance. In some cases, an employer could be held personally liable for breaches, especially where a pattern of negligence is established.
Employers believe that they mitigate their risk of appointing permanent employees by not issuing employment contracts. However, they do not realize that, according to law, when a person works for 24 hours or more, they are regarded as a permanent employee.
Neglecting to Ensure Proper Working Visas and Permits
Employers must ensure that all employees, especially foreign nationals, have the necessary visas or work permits to be lawfully employed in South Africa. Hiring undocumented workers or those without valid work permits violates both immigration laws and labour regulations.
Under the Immigration Act (No. 13 of 2002), employers may face severe fines or imprisonment for employing individuals without valid permits. Additionally, the Department of Home Affairs could take further action by closing down the business if the violation is significant. Employers must therefore conduct due diligence to confirm the legal status of foreign workers before engaging them in any employment
Neglecting to Ensure Proper Working Visas and Permits
Workplace Dignity and Non-Discrimination
Section 23 of the South African Constitution guarantees every worker the right to fair labour practices. This includes the right to be treated with dignity, free from discrimination, harassment, or unfair treatment within the workplace. Employers must create a work environment that respects the inherent dignity of every individual, as set out in the Employment Equity Act (No. 55 of 1998).
Negligent employers who allow a culture of abuse, harassment, or inequality in the workplace may face litigation from affected employees. Furthermore, case law such as Esterhuizen v SOS Children’s Village (2012) demonstrates that employers who fail to address unfair treatment may be held vicariously liable for the actions of their employees, resulting in both reputational and financial harm.
Provision of Uniform and Equipment
It is unlawful for employers to require employees to purchase their own uniforms or equipment necessary for their job. Section 33A of the Basic Conditions of Employment Act specifically prohibits employers from making unlawful deductions or imposing costs on employees for essential work-related items.
If an employer is found guilty of violating this section, they may face penalties, and in some cases, employees may be entitled to reimbursement for out-of-pocket expenses.
In The Minister of Labour v Bloemfontein Abattoir, the court emphasized that employers must bear the cost of providing necessary tools for employees to perform their duties. Any deviation from this standard could result in fines and orders to compensate affected employees.
Provision of Uniform and Equipment
Ensuring Compliance with Minimum Standards
The BCEA sets out minimum conditions of employment, including working hours, overtime, leave entitlements, and remuneration.
Employers are legally obligated to adhere to these minimum standards, and failure to do so may result in fines or other punitive measures by the Department of Labour.
For example, Section 65 of the BCEA authorizes labour inspectors to conduct inspections and issue compliance orders to ensure that employers meet these standards.
If non-compliance persists, employers may face increased fines, business closure, and, in extreme cases, personal liability for violating employment laws. The case of NUMSA obo Fohlisa and Others v Hendor Mining Supplies (A Division of Marschalk Beleggings) (Pty) Ltd (2017) serves as a stark reminder of the consequences of non-compliance, where the court found the employer personally liable for failing to meet minimum employment conditions.
Consequences of Non-Compliance:
Fines, Closure, and Personal Liability
The consequences of ignoring labour law obligations can be catastrophic for employers. Non-compliance with the BCEA and other applicable legislation could lead to fines imposed by the Department of Labour or the Labour Court. In serious cases, businesses may be forced to cease operations until compliance is restored.
Moreover, in terms of Section 93 of the BCEA, employers can be held personally liable for their company’s failure to adhere to labour law requirements, particularly if the employer’s actions demonstrate willful negligence or deliberate disregard for employee rights.
Consequences of Non-Compliance:
Conclusions on this matter
Employers who neglect their legal obligations toward their employees’ risk significant legal, financial, and reputational damage Compliance with labour law is not optional—it is a legal requirement that protects both employers and employees.
Failure to meet these obligations can result in severe consequences, including fines, business closures, and personal liability for transgressions.
Employers must ensure that they are familiar with and comply with the provisions of the Basic Conditions of Employment Act, the Immigration Act, and other relevant laws, to avoid the risks of non-compliance and the associated penalties.
Ignorance of the law will not shield employers from accountability, and the costs of non-compliance far outweigh the effort required to maintain lawful employment practices. It is in every employer’s best interest to review their labour practices regularly, seek legal advice where necessary, and ensure they remain in good standing with both the Department of Labour and the courts.
Reach out to your labour law consultant today to ensure your adhere to the Labour Departments requirements.