Beware cancelling concluded employment contracts


lvan lsraelstam | Chief Executive | Labour Law Management Consulting | mail me |

The courts have found that the employee is protected by labour law from the moment the employment contract is concluded even if the employee has not yet started work.

For example, in the case of Wyeth SA (Pty) Ltd vs Manqele (People Dynamics, September 2003 page 39). Manqele was offered a position by the employer as a sales rep. The parties concluded a written contract of employment in terms of which he was to commence work on 1 April.

Prior to Manqele beginning work, he was advised that the employer was no longer prepared to employ him. In terms of the contract of employment, Manqele had been entitled to a company vehicle. The employer believed that Manqele had made a misrepresentation as to the status of the car he had chosen, and on this basis took the view that there was no contract, as the parties had not reached agreement as to the condition of the motor vehicle stipulated in the letter of appointment.

Manqele took the matter to the Commission for Conciliation Mediation and Arbitration (CCMA)where the arbitrator ruled that Manqele had become an employee the moment he accepted Wyeth’s offer of employment. Wyeth took the arbitrator on review at the Labour Court and argued that Manqele did not become an employee merely because of the employment contract.

However, the court found that, as a party to a valid and binding contract of employment, Manqele was an employee for the purposes of the Labour Relations Act (LRA). The Labour Appeal Court (In Wyeth SA (Pty) Ltd vs Manqele & others 2005, 6 BLLR 523) upheld this decision.

In the light of this decision employers should:

  • Avoid entering into employment agreements until all the terms and conditions have been dealt with thoroughly.
  • Not lightly commit themselves to hiring an employee even if such commitment is an oral or tacit one. South African law recognizes agreements made informally and those that are implied by the parties’ actions.
  • Ensure that, before offering anybody a job, there are no obstacles to allowing the candidate to take up the position.
  • Make it clear that the discussion of the terms and conditions of a contract in no way constitutes an offer of employment.
  • Avoid employing, contracting with or cancelling the employment contract of any person without involving a labour law expert experienced in dealing with these tricky issues.



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