Essentialia And The Contract Of Employment

Oral or written, express or implied, agreement specifying terms and conditions under which a person consents to perform certain duties as directed and controlled by an employer in return for an agreed upon wage or salary. Whether stated or not in the contract, both the employee and the employer owe the duty of mutual confidence and trust, and to make only lawful and reasonable demands on each other. Every employee is under the obligation to carry assigned duties, or the employer's instructions to the best of his or her abilities. The employer is under the obligation to protect the employee from harm or injury, and make fair compensation for any loss or damage resulting from any job-related accident. Also called contract of service, it generally details the conditions under which it can be lawfully terminated by either party, and the correct procedure to be followed in its termination. Dated: 8 March 2011

Looking at the above definition of an employment contract the essential elements of the contract of employment can be extracted from this.

The agreement is a voluntary agreement

Each party must have the capacity to act in the sense that he or she is legally capable of performing the act which gives rise to the formation of the contract

The rights and duties assumed must be possible to perform

The rights created and duties assumed must be permitted by the law

If formalities are prescribed for the formation of the contract, they must be observed

They should be two legal parties to this contract

The employee agrees to perform specific or implied duties for the employer

Their contract endures for an indefinite or specified time period

The employer agrees to pay a ascertainable remuneration or fixed amount

The employer gains the rights to order the employee to do the job according to his specifications and requirements.

There are no formalities required by a common law to be observed when concluding a contract of employment. A contract of employment arises when an employee accepts the employers offer unconditionally. The contract comes into being wants express or tacit agreement has been reached. The nature of the employee’s duties and remuneration must be clearly specified. Only then the contract comes into being.

Question 2

A newly registered company anticipates employing staff to work in its national offices in SA. You have been appointed as Head: human resources and you are required to draft conditions of service for the employees of the company.

With references to the basic conditions of employment act, explained the 10 basic conditions that you will include in the conditions of service with a brief description of each.

According to the basic conditions of employment act number 75 of 1997 the 10 basic conditions that should be included in the conditions of service are as follows:

Definitions, purpose and application of this act

The regulations of working time


Particulars of employment and remuneration

Termination of employment

Prohibition of employment of children and forced labour

Variation of basic conditions of employment

Sectorial determinations

Employment condition commission

Monitoring, enforcement and legal proceedings


A basic employment contract should also have this standard information example:

Name and address of employer

Name and occupation of the employee or a brief description of the work to be performed

The reporting structure of the company

Must he or she worked overtime if required to do so

Is the employee a required to guarantee the qualification or expertise

The place of work, where he is permitted or are required to work

What areas that are permitted to work or even specific work in areas or conditions

Will relocation be required, the expenses thereof and who will be responsible for it

Date of commencement of employment

When does employment commence

In the case of a fixed period contracts, when as the commencement date, and the end date

Probation periods

When and how may notice of termination be given

What is the prescribed retirement age

Ordinary employment hours and days to be worked

Wages or rates and method of calculation

Fringe benefits example pension, medical aid, Life Insurance, housing or motor car allowances, traveling or an expense account

Other benefits example will the employee enjoy any share options or directorship

Rate of pay for overtime work

Any cash payments the employees are entitled to

Frequency of the remuneration

Deductions to be made from the remuneration


Period of notice are required to terminate employment

And list of documentation NS that form part of the contract of employment

Copyright and patent


In the event of a dispute concerning the interpretation of the contract, will a particular court have jurisdiction?

Employer protection

Will the employee be prevented from working in the same occupation

Will the employee have access to confidential information or trade secrets

Any changes to these contracts should be in writing. Apart from the details specified up top it might also be advisable to cater for at least the following, if applicable, in particular contract of employment.

Question 3

Critically analyse the difference in legal positions in Whitehead v Woolworths (1999)20ILJ2133(LC) and Woolworths(Pty) LTD v Whitehead(2000)21 ILJ571(LAC) regarding the principle" inherent requirement of a job" (p108)

The EEA provides that is not unfairly to distinguish, exclude or prefer any person on the bases of an inherent requirement of a job. The legislature has left it to the labor courts to fashion a test for establishing when the various ‘arbitrary grounds’ listed in section six can be said to be related to an inherent requirements of a job.

In the case of Whitehead v Woolworths the court had three different rulings in this matter. The company contended that attendant problems had to be addressed urgently and that new operational policies had to be developed. One of the problems included the loss of staff. Looking at this problem Woolworths management decided that the incumbent had to remain in the position for at least a year. This was the inherent requirements of the position.

The first court ruling acknowledged the requirement of “uninterrupted job continuity" that had applied to all applicants for the position was rational and commercially supportable. Whitehead’s condition was not the principal reason for the company’s decision to terminate the contract. The main reason was simply that she would not be able to work for the full period when her services would be agent if required. Woolworths was essentially relying on operational reasons to support its case.

The question was whether the requirement of continuous employment was objectively justifiable. The court’s view was that it was not. A conclusion was reached by asking whether the discrimination was such that it would be sustained a’ the respective of that happening or non- happening of any unforeseen event’. According to this test, the requirements of continuous employment is reasonable only if the incumbent would continuity the employment uninterrupted for at least 12 months no matter what fate befalls him or her. That requirement was neither objectively justifiable nor reasonable. Woolworths conscious decision to turn Whitehead down for the permanent position for the sole reason that she could not work continuously for the first 12 months was accordingly nothing other than discrimination against her because she was pregnant.

This judgment was reversed on appeal.

The second decision was that the real reason why Whitehead was not employed was simply that the company had found a better candidate.

The third ruling was that the labor court’s view that continuity of employment did not in the circumstances amount to inherent requirements of the job, and came to the opposite conclusion. According to that ruling considerations of profit might not be conclusive, but they nevertheless remained relevant. The consideration of continuity of employment was compelling enough to prove that Woolworths overriding consideration was not an aversion to appoint pregnant woman. It was accordingly not possible to find that her pregnancy was the dominant reason for the decision not to offer her a permanent position.

Question 4

Explain the concept constructive dismissal with specific references to the following:

The onus of proof

Intolerable working condition 57-90

Failure of the employee to make use of the employer’ grievance procedure

Unilateral variation of conditions of service as a justification for constructive dismissal


In dismissal proceedings, the onus is on the employees to prove that they were in fact dismissed, and on the employer to show that the dismissal was fair. To proof a dismissal took place requires employees to prove on a balance of probabilities that they were employees as defined at that time of the termination of employment relationship.

Looking at the situation of Joe Soap, after reporting financial irregularities Joe Soap must keep a documental trail of all actions within the company. The onus of proof lies with Joe Soap to prove a constructive dismissal. The documentation that is being handed in as proof of the irregularities should also be in direct contrast to the letter of employment signed.

Intolerable working conditions.(p52)

Any misconduct that renders the continuation of the employment relationship in tolerable or unworkable or that undermines trusts and confidence between employer and employee is regarded as sufficient to justify dismissal, provided it is serious enough to offset the importance which the court and arbitrators otherwise attached to the work security of employees.

Intolerable conditions can also be cited as the breakdown in trust between the managing director and himself as chief financial officer. With a report handed in, in regards to financially regularity could also be seen as mistrust between two senior management personnel. The managing director could also see this as an attack on his position.

Failure of the employee to make use of the employer’ grievance procedure.

Grievance procedures are a means of dispute resolution that can be used to address complaints by employees against management or to settle disputes between it a company and its suppliers, customers, or competitors. This grievance procedure is formally outlined in the employee contract.

Joe Soap had followed the correct grievance procedure that was stipulated in his contract. Unfortunately the power of the managing director surpassed the grievance procedure. Unfortunately Joe did not report this matter to the board of directors.

Unilateral variation of conditions of service as a justification for constructive dismissal(87-88)

In the inception of any employer employee contract, the working conditions are clearly stipulated. An employer may not unilaterally amend the terms of a service contract with an employee under the common law. Should an employee’s terms and conditions be changed unilaterally, the employee has an election either to resolve from the contract or to sue for damages in terms of the contract. The prohibition on variation includes lowering the status of employees and changing the nature of the work.

Joe Soap had a reporting structure as well as a grievance structure in place in his working contract. This was changed as soon as he could no longer follow this channel or procedure. By common law this is changing his terms of his service contract. This should give him a good chance to sue for damages done because of this.

Question 5

5.1 Distinguish between dispute of right and dispute of interest and if two examples of each

5.2 discuss the requirements of fair for a hearing

5.3 briefly explain the roles and responsibilities of the following dispute resolution forums


Labor court

Labor appeal court

Labor inspectors

5.1 The new labor relations act of 1995 eliminates the problem of having to distinguish between disputes of rights and interest. Rights disputes of those arising from breaches of rights, all fairness to discharge duties expressly conferred or imposed by the labor relations act, collective agreements, or contract of service.

All other disputes are disputes of interest and non justifiable and to be resolved by industrial action. A dispute of interest arises when one party claims a benefit to which it is not entitled in law which the other party is not prepared to grant. While a rights dispute arises when parties cannot agree with the one of them is legally entitled to the benefit claimed.(329)

Dispute of interest

Eg: Garbage removal personal wants a car allowance to drive BMW’s.

Or Cleaning staff would like to have access to the directors lounge.

Dispute of rights.

E.g. No more discrimination against color, race or gender

Or Equal access to public places.

5.2 requirements of the fair hearing

Adequate notice

An employer is required to notify accused employees of the allegations against them, using language and forms the employee can understand. And adequate notification is considered giving enough time to the employee to prepare for rehearing and that must be notified of the charge that they are to face. These charges must be specified in sufficient detail to enable the employee to answer them.

The employee must be made aware of the charges

Employers should enforce accused employees of the precise charges or charge that they are required to answer in advance of the hearing. This will ensure an adequate preparation. The charges should be formulated in precise and simple terms, and should clearly spell out that the consequences of finding the employee guilty could be dismissal.

The hearing must generally precede the decision

The purpose of disciplinary hearings is to ensure that accused employees have an opportunity to lead evidence in rebuttal of the charge, and to challenge the assertions of their accusers before an adverse decision is taken. It is manifestly unfair if the decision is taken first and a sham hearing follows.

The hearing must not be unreasonably delayed

A hearing must be convened as soon as possible off to the incident so that facts can be fresh in the employees as well as the employer’s minds. Another reason one disciplinary hearings should be held expeditiously is that otherwise the employer may be deemed to have waived its rights to dismiss for the charged alleged.

The employee should be present at the hearing

A hearing without the accused will be deemed unfair in most circumstances, however the employer may be entitled to proceed with a hearing in the absence of the employee if that employee refuses to attend or participate in the hearing without good cause, or if the employee has deserted and his or her whereabouts are unknown.

Meer physical presence of the employee is not enough; the employee must also be able to understand the proceedings. The option of an interpreter should always be provided .Adverse evidence available to the disciplinary officer must be disclosed to the employee so that it can be challenged.

The employee must be permitted representation

Accused employees are entitled to be represented or assisted by a friend at a disciplinary inquiry. The right to representation has been described as an entitlement requiring weighty reasons for it to be denied. The right to representation by a legal practitioner is however different matter.

Under the common legal employees have no right to legal representation in internal disciplinary hearings.

The employee must be allowed to call and question witnesses.

A fundamental requirement of a fair hearing is that the accused employee is permitted to call witnesses in his or her defense or in mitigation and to cross examine witnesses called by the employer. The employee’s witnesses can also be cross examined by the employer. The court and all the tractors are prepared to countenance the year end of evidence in camera or the submission of written statements, provided that satisfactorily arrangements are made for the accused employee to challenge the witness evidence.

The proceeding officer and should keep minutes.

One internal disciplinary inquiry on not matters of record, the presiding officer should keep notes of the proceedings, or ensure that somebody is present to do so. Presiding officer’s notes are for their own use. Adequate notes are particularly important when the disciplinary procedure allows for the right of appeal.

The presiding an officer should be impartial.

The point of the disciplinary hearing is to enable the presiding officer to weigh the evidence for and against the employee and to make an informed and considered decision. The rule against bias emanates from administrative law. Decisions of administrative tribunals have been set aside merely on the ground that the person charged might reasonably suspect that the presiding officer was biased. The presiding officer should not have been involved in the incident which gave rise to the hearing.

Neither should he have any personal interest in the outcome of the dispute.

The decision

As in criminal proceedings, the decision of the presiding officer should be made in two distinct stages. First, the guilt of the accused employee should be determined on the evidence, with a reference to the employee’s disciplinary record. Secondly, and after the verdict is decided, a penalty should be determined which is appropriate to the offense and the particular employee. Only at that stage should the presiding officer refer to the employee’s disciplinary record. However, separation of the inquiries into guilt and sanction is not an obsolete requirement, provided that the overall result is fair.

5.3 Briefly explain the roles and responsibilities of the following dispute resolution forums

Commission for conciliation, mediation and arbitration. (CCMA)

The CCMA plays a central role in the statutory dispute resolution process. Almost all disputes not handled by private procedures or accredited it bargaining council or agencies must be refer to the CCMA for conciliation before they can be referred to arbitration or adjudication. The CCMA is a state funded but independent party with jurisdiction throughout the Republic.

The function of the CCMA is the resolution of the disputes by the conciliation and arbitration. The CCMA has jurisdiction only over those disputes refer to it in terms of the LRA or other legislation. The CCMA is also charged with an advisory function, overseeing the union ballots where requested, publishing guidelines, assisting employees and employers establish collective bargaining structures, internal disciplinary procedures, affirmative action programs and to deal with sexual harassment and with workplace restructuring and the CCMA may also published rules regulating its own procedures.

Labor court

The labor court consist of a judge president, the deputy judge president and the judges. The labor court has exclusive jurisdiction in respect of all matters reserved for it by the LRA. Its judgments are subject to appeal only to the labor appeal court. The labor court is it a court of both law and equity.

When an act requires the labor court to adjudicate a matter no other court has jurisdiction. The labor court powers include agent in trimmed relief or final verdict, making declaratory orders, and awarding compensation, damages or costs. The labor court may also order the performance of any particular act which will remedy are wrong and give effect to the primary objective of this act. The labor court may also commit people for content of court if a willfully disobeying an order of the court.

Labor appeal court

The labor appeal court is the final court of appeal in respect of all judgments and orders of the labor court. The constitutional court has ruled that appeals from the labor appeal court to the supreme court of appeal are permissible in cases involving constitutional matters. Access to the labor appeal court is obtained only with Finley eve of the judge who granted to order or delivered the judgment against which appeal is sought, or with a leave of the judge president on petition.

Labor inspectors

Labor inspectors appointed under the BCEA and the EEA also play as significant role in the resolution of disputes arising under that labor legislation. One of their functions is to endeavor to secure compliance with an employment you’ll buy securing undertakings or issuing compliance orders. The cause of this is that they are given powers of entry, interrogation and inspection, and are enjoined to endeavor to secure and written undertaking by a recalcitrant employer to comply with a provision of the act.