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Distinguish Between Essentialia and Contract of Employment

Info: 4930 words (20 pages) Essay
Published: 8th Aug 2019

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Jurisdiction / Tag(s): South African Law

A contract of employment is an agreement between two legal personae (parties) in terms of which one of the parties (the employee) undertakes to place his or her personal services at the disposal of the other party (the employer) for an indefinite or determined period in return for a fixed or ascertainable remuneration, and which entitles the employer to define the employee’s duties and to control the manner in which the employee discharges them (Grogan, 2010, p. 29)

The following essential elements can be identified from the above mentioned definition:

It is a voluntary agreement.

There are two legal parties.

The employee agrees to carry out certain specified and or implied duties for the employer.

The agreement endures for an indefinite or specified period of time.

The employer agrees to pay a permanent or ascertainable compensation to the employee.

The employer gains a right to command the employee as to the manner in which he or she carries out his or her duties. (Grogan, 2010, p. 29)

The following elements make up the formalities of a contract of employment:

The parties or not by law required to observe any formalities when entering into a contract of employment

The contract arises when the employee accepts the employers offer unconditionally.

The contract comes into being once either express or implied agreement has been reached on the nature of the employee’s duties and on remuneration.

The Basic Conditions of Employment Act 75 of 1997 (BCEA) now requires any person who employs more than five people to conclude agreement setting out particulars of employment. However failure to record the contract in writing does not render it void.

Where the parties wish to altar the BCEA they must do so in writing.

The BCEA requires employers to provide employees with certain information in writing which, once done would amount in a written contract of employment. (Grogan, 2010, p. 30)

Question 2

With reference to the BCEA explain the ten (10) basic conditions that you will include in the conditions of service with a brief description of each? (20)


The contract between an employee and employer creates rights and obligations between the two parties. Under the common law the parties could enter into an agreement of whatever terms and conditions they wanted, but over the years the legislature has increasingly limited the contractual freedom of the parties, by legislation that prescribed minimum conditions with which both parties must act in accordance with. In South Africa the Basic Condition of Employment Act 75 of 1997 (BCEA) provides the foundation of basic condition of employment in South Africa, and as the Head of the Human Resource (HR) department of Bongwani Tiles and Textiles, I was ask by our Manager Mr. Praveen Dhludlu to draft the conditions of service for the employees of our company. We are a newly registered company and in this easy I will look at and discus the BCEA, this includes Remuneration, Working hours, Annual leave, Sick leave, Maternity leave, Family responsibility leave, Sunday and Public holidays, Notice of termination of employment, Payment on termination and Certificate of service. Our company wants to have their grand opening on the 20th of May and all our HR related contracts and condition must be in place on the 10th of May.


As long as employees tender their services, they are entitle to be paid their earnings and other benefits as and when they are due to according to their contractual agreement, sectoral determination or collective agreement with their employers. Only non-performance by the employees of the contractual obligation, other than during sick or annual leave or after hours, entitles the employer to withhold their earnings. For example a strike is considered non-performance as far as remuneration is concerned (Grogan, 2010, p. 59)

Working hours

The common law leaves the parties free to regulate their own working hours. If the contractual agreement makes no provision for maximum hours of work, the time during which the employee must render service is regulated by practice and custom. Even when maximum hours are stipulated in the contract or work agreement, the employer may require additional working hours when circumstances so requires. Working hours are made up of maximum hours, overtime, night work and meals and rest breaks. (Grogan, 2010, p. 60)

Annual leave

With the exception of those who work lest than 24 hours, all employees, irrespective of status or remuneration are entitled to at least 21 days of annual leave in a 12 month cycle commencing on employment or end of previous leave cycle. Annual leave must be full normal pay, and may in the absence of agreement, to the contrary be granted at a time specified by the employer, except that leave must be taken within six months of the completion of the previous leave cycle. If a public holiday falls within the employees leave period, it must be extended by one day. (Grogan, 2010, p. 63)

Sick leave

Employees are entitled to one day’s paid sick leave for every 26 days worked during the first four months of employment, and thereafter to the number of days they normally work in six weeks during each 36-month cycle. Employees on sick leave must be paid their full salaries. If they are absent for more than 2 days, or for more than one day if more than two absences occurred in a space of eight weeks, they must if the employer insist produce a medical certificate. (Grogan, 2010, p. 64)

Maternity leave

The current BCEA allows a mother four months unpaid maternity leave. This leave may commence anytime from four weeks before expected time of delivery or from a date when a medical practitioner or midwife certifies that the leave is necessary for the well being of the expected mother or unborn child. The employees my not start work before six weeks had passed since delivery whether or not the child is born alive or miscarried unless a medical practitioner or midwife notifies the employer that the employee is ready to return to work. The wages of new or expectant mothers on maternity leave are supplemented in part by the state in terms of section 24 of the Unemployment Insurance Act 63 of 2001.

Family responsibility leave

Employees who have been working for more than four months and who work four days or more for the employer are entitled to three days paid family responsibility leave every 12 month cycle in certain circumstances i.e. when the employee’s child is born or falls sick, the death of a spouse, child, or life partner, parent, adoptive parent, grandparents, adopted child, grand child or sibling. The leaves expire after the 12 months cycle is completed. (Grogan, 2010, p. 66)

Sundays and public Holidays

Under normal conditions Sundays and public holidays are rest days for employees. Sunday work must therefore be remunerated at double the normal rate, or one and a half time if the employee ordinarily works on Sundays. If the greater part of a shift worked, falls on the Sunday it is considered Sunday time. If employees work on Public holidays that fall on ordinary working days, they must be paid at double their ordinary rate. If the Holiday falls on a day when the employee does not normally work they must be paid normal rate. (Grogan, 2010, p. 66)

Notice of termination of employment

All employees working for more than 24 hours a month for an employer is entitled to a notice of termination provided for in their contracts. If there is no notice period provided for in the contract then at least one week notice if the employee has been employed for longer than six months or less. Two weeks if the employee has been employed for six months but less than a year, and four weeks’ notice thereafter. (Grogan, 2010, p. 67)

Payments on Termination

On termination of employment, employees must be paid for any overtime and Sunday work that was exchanged for days off but not yet taken, for accrued annual leave due and, if the employee has worked for the employer for longer than four months, also for his or her annual leave entitlement during the incomplete annual leave cycle at the rate at least of one day’s remuneration for every 17 days on which the employee was entitled to be paid. If the employee is dismiss on the employer’s job requirement conditions he or she must be paid severance pay of at least one week remuneration for every completed year of continues service. (Grogan, 2010, p. 69)

Certificate or Service

The BCEA requires the employers to provide the employee with a certificate of service on termination of their employment. The certificate must reflect the full name of the employee and the employer, description of any bargaining council or sectoral employment standard by which the employer’s business is covered, the date of commencement and termination, the title of the employees former job, the remuneration at the time of termination, and the reason for termination of the employee. Permanent and casual employees are entitled to a certificate of service. (Grogan, 2010, p. 70)

Question 3

Critically analyze the difference in legal position in Whitehead v Woolworths regarding principle “inherent requirement of a job”? (15)

Section 6(2) (b) of the EEA provides that it is not unjust to differentiate, reject or favor any person on the basis of a requirement of a job. The words inherent suggest that the possession of a particular personal characteristic must be needed for effectively carrying out duties attached to a specific position. The owner of a business has the right to employ a person who they feel will fit best and also cope and carry out the duties associated with the specific job. The employers decision to limit the job to a specific group identified by one of the ‘arbitrary grounds’ is suspect when the justification for the limitation rest on nothing more than a broad generalization regarding some purported attribute of that group for example if only male or younger people possess the physical strength for a specific work environment.

The plea that discrimination is related to the inherent requirements of a job is illustrated in Whitehead v Woolworths Pty (Ltd). I will look at the difference in legal position in Whitehead v Woolworths, analyzing both parties involved.


The Labour Court (LC) held up that Whiteheads ability to work continuous for 12 months was irrelevant. The LC acknowledge that the requirement for uninterrupted job continuity, that applied to all applicant was rational and commercially supportable, and that Whiteheads condition was not the main reason for Woolworths to end her contract. The main reason was simply that Whitehead would not be able to work for that specific 12 month period when her skills and services were urgently required. The result of this requirement may have been discriminating toward Whitehead, but the reason was not arbitrary. Woolworths was relying on the operational reasons to support their case. In Whiteheads case the Judge ruled that the requirement of continuous employment was neither objectively justified nor reasonable. The Judge ruled in favor of Whitehead from the principle of unforeseen events or circumstances. According to the Judge the requirement of continuous employment is reasonable only if the incumbent would ‘no matter what fate befalls on him or her continue with his/her employment uninterrupted for at least 12 months’. The court held that to suggest at the time of the offer of employment is made, there must be no encumbrance upon the incumbent to satisfy the condition, defeated the very objective of that condition. The ruling agreed that for any person to be employed under this condition is impossible because no person will be able to pre determine their fate in the future. In the Whitehead v Woolworths ruling it was determined that the reason for ending Whiteheads contract was not that she will not be able to work for 12 months, but due to the fact that she was discriminated against because she was pregnant.


The Woolworths judgment was reversed on appeal, but the majority held for the company for different reasons. On judgment the one Judge agreed that the reason why Whitehead was not employed was the fact that Woolworth found a better more suitable candidate for the post. The second Judge found that the considering of profit might not be conclusive. But they nevertheless remained relevant. In Whiteheads case they were relevant because she was in a highly paid position that required her to constantly monitor the detail of her work. At a rate, the consideration of continuity of employment was compelling enough to prove that Woolworth’s overriding consideration was not an aversion to appointing pregnant woman. It was accordingly then not possible to blame Whiteheads pregnancy as the main and only reason why she was not offer permanent post employment.


The importance to employ the right person for the right position is very important for the success of a company. The inherent requirements of a job give the employer more freedom to choose the most suitable person for the job, irrelevant of gender, physical build and appearance, or disability. The line between discrimination and choosing the most appropriate person is a fine line and companies must make sure that all their homework is done before advertising or appointing a candidate. This includes proper screening, ability, disability, willingness the work and many more. The Case of Whitehead vs. Woolworths shows that although the judicial system is correct, interpretation of the laws varies from person to person, both Whitehead and Woolworths had reasonable grounds to sew each other and both of them had success in different ways.

Question 4

Explain the concept constructive dismissal with specific reference to the onus of proof, intolerable working conditions, failure of the employee to make use of the employer’s grievance procedures and unilateral variation of condition of service as a justification for constructive dismissal? (15)

Constructive dismissal makes up part of statutory dismissal process. This dismissal is when the employee resigns due to the fact that the employer makes continued employment intolerable for the employee. This basically means that the employee resigns or terminates his or her contract due to the employers conduct towards them. The first requirement for a constructive dismissal is that there must be an employment relationship that exists at the time the employee leaves the employer’s service. The second is that the employee must have brought the relationship to an end.

To discharge the onus of proving that the employee was constructively dismissed, they must prove that it would have been ‘intolerable’ for them to continue in employment of the employer. The employee must prove that under the current working conditions they had to leave, or resign in order to protect the employee’s interests. There must be some nexus between the employers conduct and the circumstances that induced the employee to resign. Such circumstances may be brought on by an act or omission of the employer. For Joe Soap to succeed in the constructive dismissal process he must prove that he complained to the relevant persons and that he tried every possible way to make use of the employers grievance procedure. Mere unhappiness at work is not enough to proof constructive dismissal. If the management is prejudice towards the employee like in the case of Joe Soap, the lodging of an internal grievance is not required. If an employer does not use an available grievance procedure, the employer will obviously be deprived of the opportunity to rectify the situation of which the employee is complaining about. For an employee to have greater success in the process of resigning under the constructive dismissal process the employee had to make use of the internal grievance process and they had to make sure that the grievance had gone the full course. For Joe to have a proper chance to prove that the Managing Director (MD) made live intolerable for him to continue working for the company, he must prove that he pursued all avenues in the companies grievance process, and that he was refused help due to the fact that the other employees was too scared to go against the MD of the company.

A unilateral variation of the contract by the employer will not in itself justify a claim of constructive dismissal. The variation must be such as to evidence an intention on the employer’s part to repudiate the contract, if it is to warrant the conclusion that the employee could not be reasonably be expected to endure the situation, or be such as to go to the root of the employment relationship. If the employer’s conduct renders it impossible for the employee to work, a constructive dismissal will have taken place.

Once a constructive dismissal is proved, the onus shifts to the employer to prove that the dismissal of the employee was fair. The question is whether the conduct of the employer prompted the employee to resign was fair or unfair. In other words the constructive dismissal is not inherently unfair a court will consider the circumstances with a view to establishing whether the employer’s actions were justified.

Question 5

5.1 Distinguish between dispute of right and dispute of interest and give two examples of each? (5)

Dispute of Interest

The Labour Relations Act (LRA) sets out structures and processes which can be used to resolve disputes of interest. The outcome of disputes of interest will depend on the relative strength of employees and employers. Each party may use different strategies to win what they want. Employees can take industrial action over disputes of interest, like strikes, work stoppages and go-slows once they have complied with prescribed dispute procedures. Employees cannot strike over disputes of rights under the LRA (e.g. unfair labour practices and unfair dismissals).The LRA governs the procedures that must be followed before industrial action can be taken by employees or by the employer. (ETU, 2008)

Dispute of right

Where there is no bargaining council: If it is a dispute about enforcing a right under the Basic Conditions of Employment Act (BCEA), collective agreement under the BCEA, a sectoral determination or a Wage Determination or the Occupational Health and Safety Act, then a complaint can be sent to the Department of Labour. The complaint can include a request for a ‘Compliance order’ which is issued by an inspector of the Department. If it is a matter of enforcing a right or a dispute of rights under the Labour Relations Act (LRA) (for example, an alleged unfair dismissal) where no bargaining council exists in that sector then the matter should be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) for conciliation. If conciliation fails then refer the dispute to arbitration within 30 days of receiving the certificate of failed conciliation from the CCMA) The CCMA will hear disputes over a BCEA issue if it is related to a matter which is being arbitrated by the CCMA (for example, a claim of unfair dismissal is before the CCMA together with a claim for unpaid leave pay).

Where there is a bargaining council: If it is a dispute of rights under a Bargaining Council Agreement then the problem should be referred to the Bargaining Council for enforcement or conciliation. If conciliation fails then refer the dispute to arbitration within 30 days of receiving the certificate of failed conciliation from the Bargaining Council. (ETU, 2008)

5.2 Discuss the requirements for a fair hearing? (20)

In the so called rules of natural justice the most important is to “hear the other side”. This means that any employer is not allowed to take any disciplinary action against an employee without giving him or her fair hearing. The requirement for a fair hearing will be discussed below.

1. Adequate notice

The employer must inform the employee in easily understandable language about the allegations against them. The employee must be given sufficient time to plan for hearings and be notified of the charges they are required to meet. These charges must be specified in sufficient fine points to enable the employee to reply to them.

2. The employee must be made aware of the charge(s)

Employers should warn employees of the specific charges they are required to answer in advance of the hearing. This requirement flows from the need for adequate preparation. The charge should be formulated in a simple understandable way for the employee to understand the charges against them. It should also be made clear that there is possibility of dismissal should the employee be found guilty.

3. 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 assertion of their accusers before an undesirable verdict is taken and a sham hearing follows. It is noticeably unfair if the decision is taken first and a misleading hearing follows.

4. The hearing must not be unreasonably delayed

A hearing must be convened as soon as possible after the incident which led to the action. This will ensure that the facts are still fresh in the minds of the parties and witnesses. If the employer delays a hearing it may be deemed that the employer waived its right to dismiss for the charge alleged. If the employee needs time to prepare for the hearing or arrange legal representation, he or she should be given enough time to do so, but this time must also be reasonable for all parties involved

5. The employee should be present at the hearing

If the disciplinary hearing is held in the absence of the accused employee it will be deemed unfair in most circumstances. The employer may continue with the hearing in the absence of the employee if that employee refuses to attend or take part in the hearing without good reason, or if the employee has deserted and their whereabouts are not known. The presence of the accused is essential to the fairness of the hearing, and all effort should be made that the employee is comfortable with the proceedings, for example a translator might be needed to assist the accused.

6. The employee must be permitted representation

Employees are entitled to be represented or assisted at a disciplinary enquiry. The Labour Relations Act provides union representatives the right to assist employees in disciplinary proceedings at the employee’s request. It must be noted that legal representation is not a right according to the labour court and that representation should remain in the form of a Shop Steward or fellow workers.

7. The employee must be allowed to call and question witnesses

A fundamental requirement of a fair hearing is that the accused is permitted to call witnesses in his or her defense or in alleviation and to cross examine witnesses called by the employer. Likewise the employer is allowed to cross examine the employee’s witnesses. It is unfair to rely on claims from a person in writing when such a person is not testifying at the disciplinary proceedings.

8. The presiding officers should keep minutes

Internal disciplinary inquiries do not have to be recorded although the presiding officer or an appointed person should keep notes of the proceedings. Presiding officer’s notes are for their own use. Should a presiding officer be unable to continue the proceedings it is a gross irregularity if he/ she hands notes to the presiding officer taking over the case. Satisfactory notes are predominantly important when the disciplinary procedure allows for a right of appeal.

9. The presiding officer should be impartial

The whole point of a disciplinary procedure is to enable the presiding officer to weigh the evidence for and against the employee and to make a knowledgeable and well thought-out decision. Presiding officers should therefore keep an open mind throughout the proceedings. Presiding officers that attend a hearing should not only be impartial, but there should be no grounds for even suspecting that extraneous factors influence their decisions. Decisions of administrative tribunals have been set aside simply because the person charged suspected the presiding officer to be biased. It should be noted that proceedings and hearings must be conducted in such a method that the progression as a whole is placed above suspicion of impartiality.

10. The decision

Similar to criminal proceedings, the decision of the presiding officer should be made in two different stages. First, the guilt of the accused employee has to be determined on the evidence, without reference to the employee’s disciplinary record. Secondly, after the verdict is certain, a sentence should be determined which is fitting to the offence and the particular employee. It is only at this point that the presiding officer should refer to the employee’s record. Some disciplinary codes offer that the presiding officer can make a recommendation or suggestions to a higher level of authority that then either accepts or rejects the recommendation. The code of good practice is that dismissal confirms that it is not required for a decision taken to provide reasons for the decision. A presiding officer should, although the code does not specify it, give written reasons for their verdicts. These reasons are essential if an employee wish to implement their right of appeal, where it is afforded in the disciplinary code.

5.3 Briefly explain the roles and responsibilities of the following dispute resolution forums? (15)

5.3.1 CCMA

The Commission for Conciliation, Mediation and Arbitration plays a central role in the statutory dispute-resolution process. Almost all the dispute not handled by private procedures or accredited councils or agencies must be referred to the CCMA for conciliation before it can be referred for arbitration or adjudication. The CCMA is a state funded independent body with jurisdiction throughout the Republic of South Africa (RSA). The functions of the CCMA are set out in section 115(1) and (2) of the LRA. Prime among these is the resolution of disputes by conciliation and arbitration. In addition to its dispute resolution function, the CCMA is also charged with advisory functions, overseeing unions ballots, publishing guidelines, internal disciplinary procedures and deal with sexual harassment to name a few.

5.3.2 Labour Court

The Labour Court (LC) consists of a Judge President, a Deputy Judge President and Judges. The LC has exclusive jurisdiction in respect of all matters reserved by the LRA, and its judgments are subject to appeal only to the Labour Appeal Court (LAC). The LC is court of both law and equity in terms of 1998 amendment to the LRA. The powers of the LC are set out in section 158(1). These include granting urgent interim relief or final interdicts, making declaratory orders, and awarding compensation or damages or cost. In addition the court may order the performance any particular act which will remedy a wrong and give effect to the primary object of this Act.

5.3.3 Labour Appeal Court

The Labour Appeal Court (LAC) was established as a ‘court of law and equity’, and is the final court of appeal in respect of all judgments and orders of the LC. The Constitutional Court has ruled that appeals from the Labour Appeals Court to the Supreme Court are permissible in cases involving constitutional matters. The LRA expressly renders judgment of the LAC binding on the LC. Appeals to the LAC are noted by filing a notice of Appeal with the Registrar. The notice must set out the facts of the appeal, the findings of fact, and the conclusion of law that are appealed against, and call upon the person responsible to respond with a written record within 21 days of the delivery of the notice of appeal. Should leave be denied then a party may petition the Judge President, whose decision is final, subject only to review by the Constitutional Court (CC).

5.3.4 Labour inspectors

Labour Inspectors, who are appointed under the BCEA and the EEA, play a significant role in the resolution of disputes arising under that Labour legislation. Their functions are to try to make certain that obedience is obtained with an employment law by securing actions or issuing of conformity guiding principle. They are given power of entry, cross-examination and inspection, and are determined to secure written undertaking by a headstrong employer to comply with a provision of the Act. Any objections encountered are then lodged with the Director within 21 days and the Director may vary, enforce them in part or cancel them. Appeals from decisions of the Director may be lodged with the Labour Court within a further 21 days, and they may be made orders of the Labour Court.

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