Under common law, employees are protected by labour law from the moment the employment contract is concluded. Such contracts can be legally concluded in writing or orally.
In the case of Wyeth SA (Pty) Ltd vs Manqele & others 2005, 6 BLLR 523) the parties concluded a written contract of employment in terms of which the employee 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.
Manqele took the matter to the CCMA where the arbitrator ruled that he had become an employee the moment he accepted Wyeth’s offer of employment. Wyeth took the arbitrator on review at the Labour Court and, on losing there, appealed to the Labour Appeal Court.
That is, Wyeth argued that Manqele did not become an employee merely because of the employment contract. This argument is supported by an earlier Labour Court finding in the case of Whitehead vs Woolworths (Pty) Ltd (1999 20 ILJ 2133). In that case, the Court found, according to the report, that a person who is party to a contract of employment but who has not yet commenced employment is not an employee for the purposes of the LRA.
However, despite the Woolworths case finding the Labour Appeal Court, in the Manqele case found that, as a party to a valid and binding contract of employment, Manqele was an employee for the purposes of the LRA.
This decision poses a number of concerns for employers.
- Firstly, the fact that two different benches of Labour Appeal Court judges (Woolworths on the one hand and Wyeth on the other) made two such diametrically opposed decisions on a matter as fundamental as this one creates major uncertainty as regards the law.
- Secondly, employers are now confused as to whether they are or are not entitled to cancel employment contracts prior to commencement of work.
- Thirdly, where the parties have agreed in principle that the employee will get the job it is now not clear whether a disagreement on the terms of the employment does or does not delay the legal validity of the contract of employment.
In the light of these dangers employers should:
- Avoid entering into employment agreements until all the terms and conditions have been dealt with thoroughly and the employer is sure that it is willing and able to employ the candidate
- Make it clear that the discussion of the terms and conditions of a contract in no way constitutes an offer of employment.
- Never employ, contract with or cancel the employment contract of any person without involving a labour law expert experienced in dealing with these tricky issues.
To book for our 18 November seminar on CHANGES AND DANGERS IN LABOUR LAW please phone Lee on 0824568247 or 787-5445.
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