,Chapter 2
The Contract of Employment and its Relationship with Labour
Legislation
If there is no employment relationship between the parties of a contract, the rules of
labour law do not apply to that relationship.
Employee: the person providing the services for renumeration.
The contract of employment remains an important source of terms and conditions of
employment of any employee. Labour legislation limits the freedom of the employer and
employee to agree on terms and conditions of employment. This is done through the
BCEA.
In cases where a statutory right coincides with an employee’s contractual right the
employee will usually be entitled to elect to enforce either the statutory right or the
contractual right.
The contract of employment: an agreement between two parties in terms of which one
party (the employee) works for another party (the employer) in exchange for
renumeration.
The contract also has to comply with the general requirements of our law for a valid
contract (contract law). If the employment contract does not comply with these
requirements, it is not binding and enforceable in law.
The contract of employment = a reciprocal contract. One promise is made in exchange
for another, and one obligation is incurred in exchange for another.
How to define a contract of employment for assignment/exam: (pg 30 of textbook)
The contract of employment is a voluntary agreement between two parties in terms of which
one party (the employee) places his/her personal services or labour potential to perform a
certain task or tasks at the disposal and under the control of the other party (the employer)
in exchange for some form of renumeration, which may include money and/or payment in
kind.
,Requirements for a valid employment contract
1. The conclusion and the objectives of the contract must be lawful.
2. The parties must reach consensus. The parties must agree on the terms of the
contract and that the parties intend to conclude a binding employment contract.
3. The parties’ performance of their obligations must be possible. Thus, it must be
possible for the employee to perform his/her obligations in terms of the contract.
4. Both parties to the contract must have the necessary capacity to conclude a
contract.
5. The parties must reach a consensus (agree on the same thing).
Employment contract need not be in writing. Some statutes require that the
employment contract be in writing.
Legislation provides that termination of a contract of employment by the employer also
constitutes a dismissal and requires dismissals to be fair. A lawful termination is not
necessarily a fair dismissal.
The common law contractual duties of the employee
First duty of employee: to tender his/her services to the employer as and when required
by the contract. The employee complies with his/her primary contractual duty if he/she
tenders or offers his/her services as soon as services are offered the employee is
entitled to renumeration.
Second duty: to work competently and diligently. Competence – employees’ ability to
do the job. Failure to comply with this duty can take 3 forms.
1st form: if the employee is capable of doing the agreed work but intentionally fails to do
the work or do the work properly. Misconduct.
2nd form: if the employee is capable of doing the agreed work but negligently fails to
perform the agreed duties or performs the duties in a negligent manner. Misconduct.
3rd form: if the employee is incapable of doing the work despite agreeing to do the work.
Incapacity.
Third duty: to obey lawful and reasonable instructions of the employer. This pertains to
the right of the employer to control the manner in which the employee works, the place
at which the employee works etc.
Fourth duty: to serve the employer’s interests and act in good faith. There is a
contractual duty on every employee to in good faith and to promote the interests of the
employer. This duty often relates to theft, corruption etc.
, The contractual duties of the employer
First duty: to remunerate the employee. Payment of wages is the primary duty of the
employer. Amount is determined by employment contract. Collective agreements and
sectoral determinations usually determine the minimum renumeration for specific
position. Can go higher but not lower.
Second duty: to provide work. Where the employee’s wage depends on work being
provided by the employer, the employee must be provided with work and a failure on
the part of the employer to provide work will amount to a breach of contract.
Third duty: safe working conditions. Employer must provide a safe working environment
and the tools/instruments to acquire this.
Fourth duty: general duty of fair dealing with employees.
Collective bargaining: the process through which employers and trade unions bargain
about terms and conditions of employment.
An employee has the duty (even after employment has been terminated) to not
disclose the employer’s confidential information.
A clause in restraint of trade is one that prevents an employee from exercising his/her
trade in the same venture as the employer for a specified period and within a specified
area after leaving employment.
A restraint of trade clause must be judged by the criterion of public policy. A restraint
will only be enforced if it serves to protect an interest which deserves protection
(confidential info and trade secrets/connections).
Onus of proof is on the employee in a restraint of trade clause case. Employee must
prove that the clause is against public policy (contra bones mores).
Vicarious liability – the employer may be held legally liable for the wrongful acts
(delicts) of its employees committed in the course and scope of their duties.
Two questions to be asked to determine vicarious liability.
1st: Whether the wrongful acts were done solely for the purposes of the employee.
2nd: Whether even though the acts done have been done solely for the purpose of the
employee, there is nevertheless a sufficiently close link between the employee’s acts
for his own interests and the purposes and the business of the employer.
If a party to a contract of employment fails to carry out his/her obligations in terms of
the contract, that party is guilty of a breach of contract. Distinctions between serious
and less serious breaches.
Serious breach is sometimes called a fundamental breach or a breach of a material
term of the contract. This is when the breach goes to the heart of the employment
contract.
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