Transcripts
Venolan Naidoo: Hello and welcome to Fasken perspectives, our series on the new world of work where we explore the
Speaker:evolving landscape of employment law in a globalised world.
Speaker:I'm your host, Venolan Naidoo, and today I'm going to be diving into a topic that's
Speaker:reshaping how we work, hire and regulate employment across borders.
Speaker:Employment in the globalised world of work.
Speaker:Navigating the legal principles of extraterritoriality.
Speaker:From digital nomads to remote workers hired across continents,
Speaker:the world of work has changed and the law is racing to keep up.
Speaker:In 2025, I wrote a piece on this very same topic, exploring the world of work and how workers work across
Speaker:continents and what law should apply.
Speaker:I also presented at the South African Society for Labour Law National Conference on the topic.
Speaker:It was well received, and then I figured, let's do a podcast episode on it.
Speaker:So let's dive in and explore this interesting area of development the changing world of work.
Speaker:Let's start with the transformation itself.
Speaker:The global employment landscape has undergone a profound shift.
Speaker:Flexibility is no longer a perk.
Speaker:It's become more common. Employees are embracing remote work and cross-border opportunities while employers are tapping
Speaker:into global talent pools. We're seeing new categories of work emerge,
Speaker:and I've deduced four overall categories.
Speaker:The first are individuals in South Africa employed by a foreign company to work remotely.
Speaker:Their services are rendered outside of South Africa, although being physically here.
Speaker:The second category, which is somewhat similar to the first,
Speaker:is where the services are rendered by the individual in South Africa,
Speaker:but both inside and outside of South Africa.
Speaker:The third category are South African companies hiring individuals based abroad to work remotely,
Speaker:but where there are services in their country is rendered within South Africa,
Speaker:and the fourth category is the rise of digital nomads.
Speaker:These are foreign individuals working for foreign companies while living abroad,
Speaker:living their best life. With over 45 jurisdictions now offering digital nomad visas,
Speaker:this is not a niche trend, it's a global movement.
Speaker:Cape Town has also been seen as quite the destination for digital nomads,
Speaker:which I think a lot of Capetonians are not happy about given the property prices are now increasing.
Speaker:So let's talk about global employment trends.
Speaker:Let's talk numbers and motivations for employees.
Speaker:Flexibility ranks among the top three priorities when considering new roles.
Speaker:Many are actively pursuing cross-border careers and international work experience on the employer side.
Speaker:74% are willing to hire globally for hard to fill or critical roles.
Speaker:That's according to EUI's data from 2022 to 2024.
Speaker:Companies are prioritising workplace mobility to address talent shortages.
Speaker:But with opportunity comes complexity.
Speaker:Tax. Immigration compliance these are just a few of the legal hurdles that both sides must navigate.
Speaker:But with remote work on a cross-border scale, this, of course,
Speaker:opens up a plethora of opportunity because the aim of it is to avoid sometimes the immigration and compliance issues.
Speaker:Anyone can be anywhere and provide their services.
Speaker:Now let's dive into the more nitty gritty legal aspects.
Speaker:What are the legal principles of extraterritoriality?
Speaker:This refers to the application of a country's laws beyond its borders in employment law.
Speaker:It's about jurisdiction. Thus, South African labour law applied to work done outside of
Speaker:South Africa. Let's explore this through certain landmark cases.
Speaker:So in my research, the following cases I found to be quite interesting.
Speaker:The first is the case of Astral Operations v Parry.
Speaker:It's a 2008 case much before the age of remote work.
Speaker:Parry, the individual, was a South African citizen and employed by Astral's Malawian subsidiary.
Speaker:When the operations shut down, he was repatriated and dismissed.
Speaker:He then referred a claim and was in the Labour Court.
Speaker:The Labour Court ruled in his favour, but the Labour Appeal Court overturned this decision by the
Speaker:Labour Court, and it stated that the South African labour laws do not apply extraterritorially.
Speaker:So what are our key takeaways here?
Speaker:The test for jurisdiction is whether the employer's undertaking their business is carried on inside or outside
Speaker:of South Africa. And if it's within South Africa, absolutely our laws would apply.
Speaker:And if it's carried outside of South Africa, then that's the end of the road for any individual to pursue
Speaker:any claim. The next case is MECS Africa v CCMA.
Speaker:It's a few years after the Astral Operations case, and this was now in 2014.
Speaker:Here a South African labour broker placed an employee with a client in the DRC.
Speaker:And the court found that since MECS Africa recruited and operated in South Africa,
Speaker:the CCMA had jurisdiction. It looked at the labour brokers operations being in South Africa,
Speaker:although the client of the broker was in the DRC and that gave the CCMA,
Speaker:i.e. our labour laws jurisdiction.
Speaker:The third case is Monare versus SA Tourism Board and this is two years after the MECS Africa case.
Speaker:This is now in 2016. Here the employee, also a South African citizen,
Speaker:was working at the SA Tourism Board's London office in the UK.
Speaker:There was a dispute and SA Tourism Board raised that South Africa did not have jurisdiction.
Speaker:Interestingly, the court ruled that the London office was an extension of the South African entity,
Speaker:that being the SA Tourism Board, and if it's an extension of the South African undertaking
Speaker:that's within South Africa. That means our laws would certainly apply.
Speaker:So again, in the Monare case there was CCMA labour court jurisdiction in the Robineau versus Schenker SA case and
Speaker:this is now in the year 2020. The court looked beyond a contract.
Speaker:Now of course in this case the employer said the Mozambican law would apply.
Speaker:And in the facts here were that the employee who signed a contract with the South African entity had to work for its
Speaker:Mozambican arm or branch. And the court, interestingly, had said that the Mozambican branch was not a
Speaker:separate legal entity. It was an extension of the South African entity.
Speaker:So, of course, South African law would apply.
Speaker:Finally, the Sorrell v Petroplan Sub-Saharan Africa case, and this is fairly recent.
Speaker:It's a 2023 case. The court here took a very different approach.
Speaker:Although the Petroplan sub-Saharan Africa entity operated in South Africa,
Speaker:the employee's services were rendered in Mozambique.
Speaker:The court said that one has to look at the workplace, where the employee is rendering their services as an
Speaker:important factor, not only where the business is operated.
Speaker:And so the court found that the workplace here was divorced and separated from the South African operations of
Speaker:Petroplan. Given the workplace is not an extension of the South African operation.
Speaker:It's a separate undertaking. It confirms that South African law did not apply.
Speaker:So where a workplace is also separated with the entity, it's not going to apply.
Speaker:Given the cases I've discussed, what are the principles that have emerged?
Speaker:Well, we can say this South African labour law forums don't automatically have jurisdiction just because the employer is
Speaker:a South African entity or South African undertaking.
Speaker:Our courts will apply a flexible substance over form approach.
Speaker:And as a starting point, I think this is quite important.
Speaker:It looks at whether that undertaking is operated as a distinct entity within South Africa or not.
Speaker:If it's within, clearly South Africa would have jurisdiction.
Speaker:And if it is not, then we wouldn't.
Speaker:A court will also examine where the services are rendered and whether the foreign operation is divorced or
Speaker:interrelated with the South African entity.
Speaker:These are the key considerations that our courts would apply in trying to determine jurisdiction.
Speaker:Every case is judged on the merits of its own facts.
Speaker:So it would depend on these considerations amongst the facts that one is presented with.
Speaker:Now, I mentioned earlier in the beginning of this podcast that we have a new world of work emerging,
Speaker:the various categories of work that I've observed.
Speaker:And given the case law that I've discussed, where does this leave us?
Speaker:Does our legal framework need to evolve?
Speaker:I certainly think it should. I don't think the the legal principles that we have in our law clearly provide certainty
Speaker:and guidance on the remote worker cross-border category.
Speaker:What about hybrid workers rendering their services in multiple jurisdictions?
Speaker:What about South African companies hiring remote workers abroad?
Speaker:How does one regulate digital nomads?
Speaker:It's clear that our current legal authority may need further development to address these new realities.
Speaker:The globalised world of work isn't just a trend, it's becoming part and parcel of employees,
Speaker:and employers make up part of our economy and how we operate.
Speaker:I know that's a lot to take in, but that's a wrap on today's episode and perhaps you can
Speaker:give it some thought. We've explored how globalisation is reshaping employment,
Speaker:how the law is adapting and needs to be adapted, perhaps even regulated,
Speaker:in the future with these forms of work.
Speaker:So if you're an employer, an HR professional, a legal advisor,
Speaker:these cases and principles as a baseline are certainly essential to understand.
Speaker:If there's something more complex and nuanced, feel free to reach out so you understand your rights and
Speaker:obligations. And if you're a remote worker or a digital nomad,
Speaker:know your rights and know where they apply.
Speaker:Thanks for joining me on Perspectives. Until next time, I'm Venolan Naidoo.
