Mr C A Bailie

0715041358
ca@bailiebrand.co.za

SECTION B: THE EMPLOYMENT RELATIONSHIP –

EXCLUSIVE PROTECTION FOR EMPLOYEES IN TERMS OF

LEGISLATION AND

THE IMPACT OF THE COMMON LAW ON THE CONTRACT

OF EMPLOYMENT

Unit 2 – The employment relationship

This unit summarises the legal position in so far as it relates to the common law contract of
employment. It defines the contract of employment, the employer and employee. It further
explains the rights and duties of each party in the employment relationship and highlights
the most important terms and conditions relevant to the employment contract. It
investigates the principle of vicarious liability and restraint of trade agreements. Finally it
gives an overview of the legal principles relating to breach of an employment contract.

When you have completed this unit, you will be able to:

 Define the employment contract with regards to the essential

elements
 Discuss the relevance of the element of control
 Define an “employee”
 Distinguish between an “employee” and “independent contractor”
 Identify an employee by applying the relevant tests formulated by the
Courts
 Identify and discuss the contractual duties of the employer and
employee
 Identify and discuss vicarious liability
 Identify and discuss the legality of restraint of trade agreements
 Identify forms of breach of contract and applicable remedies
 Briefly discuss the impact of the Constitution on the common law
contract of employment

2.1 The importance of the employment contract

 McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
p. 33 - 34.

The employment contract serves as the foundation for the relationship between an
employee and his employer. The labour law rules can only be applied once the
employment relationship is created through the employment contract.

Although labour law legislation and collective agreements play a more important role today
than the contract of employment, it still forms the basis for the employment
relationship and contains the basic rights and duties of the parties thereto.

South African law regards the employment contract as a type of letting and hiring i.e. the
employee is seen as letting his or her personal services to the employer in exchange for
remuneration. It reflects both Roman law origins and English law influences.

Now answer the following questions:

(a) What forms the basis of the employment relationship?

(b) Briefly discuss whether these contractual rights and duties

set out in the contract of employment are set in stone.

2.2 The definition of the employment contract

Here is one way to define the contract of employment:

EMPLOYER  CONTRACT OF EMPLOYMENT EMPLOYEE

 
is an agreement between 2 parties in terms
of which
 one party (employee) places his or her


labour potential
at the disposal of the other party (the

employer)
 in exchange for remuneration

Element of control - From the above definition it is clear that the element of control or
subordination is an important concept and at one point was considered to be the most
distinguishing feature between a contract of employment and a contract of the
independent contractor. We do, however, have to ask ourselves whether control is still the

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distinguishing feature given the nature of modern employment relationships. Often
employers have very little control over the manner in which the employees perform their
duties, specifically where the employees are highly skilled and bear a fair amount of
responsibility.

Discuss what is meant by “control” in today's highly specialised

world? What if the employee is highly skilled and bears a fair
amount of responsibility?

Now answer the following questions:

(a) Define the contract of employment.

(b) May changes be made to the contractual rights and duties or

are they set in stone?

(c) What is meant by “control” in the context of the modern

employment contract?

2.3 Who is an employee?

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
p. 15 - 17.

Labour Laws are protective in nature and can be pictured as an umbrella that only covers
those standing under it, i.e. employees! Workers who are not employees fall outside the
scope of most Labour Laws, and need to seek protection elsewhere.

Why is it important to distinguish between employees and independent contractors?

1. Most South African labour legislation applies only to "employees" or persons who
work for others in terms of a contract of employment. See the definition of an
“employee” in the Labour Relations Act 1995 (LRA), Occupational Health and Safety
Act, 1995 etc.

2. There can only be vicarious liability if there was an employment contract.

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When studying this section of the work it is important to notice the difference between
parts (a) and (b) of the definition of “employee” and to understand the relevance thereof.

In terms of S213 of the LRA (Labour Relations Act) an employee means:

a. any person, excluding an b. any other person, who in any other

independent contractor, who works manner assists in carrying on or
for another person or for the State, conducting the business of an
and who receives, or is entitled to employer...
receive, any remuneration; and

This definition is also used in other labour legislation as discussed in your textbook. Note
the discussion in this regard.

Now answer the following questions:

(a) Define an “employee” for purposes of the LRA (and BCEA,

EEA and SDA).

(b) Why is it vital to distinguish between employees and

independent contractors?

(c) Distinguish between part (a) and (b) of the definition of

employee.

2.4 Guidelines to distinguish between employees and independent

contractors.

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
p. 17 - 20.

Basson et al. (2009), Essential Labour Law, 5th edition, Labour Law
Publications, p. 24 - 37.

Drawing the distinction between an employee and an independent contractor has always
been one of the most difficult questions in our law. Our courts have over the years,
formulated a number of tests for the purposes of distinguishing between employment
contracts and other types of contracts:

TEST DISTINGUISHING FEATURES USEFULNESS

CONTROL  The court tries to establish whether or  Difficult to apply in
not the one party (employer) exercises modern industrial
control over the activities of the other society as reliable.
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 party.  E.g. doctors, ship
 I.e. worker is subject to the command captains, pilots.
and control of the employer regarding
the manner in which work is done.
INTEGRATION  Is the person part and parcel of the  Court dismissed test
(Organisation organisation? as being too vague -
test)  Looks at extent to which a person not always possible to
(worker) is integrated (made part) into measure the extent of
the organisation or whether person is the integration, which
performing work inside the would be sufficient for
organisation of another. someone to qualify as
worker or employee.
DOMINANT  Currently the standard test used in our  Sometimes very
IMPRESSION courts. difficult for court to
 It considers the employment relationship gain a dominant
as a whole and relies on various impression.
indications (factors) to determine
whether or not the contract in question is
a contract of service:
1. Employer's right to supervision.
2. Dependency of worker on employer
in performance duties.
3. May employee work for another?
4. Is worker required to devote a
specific time to his or her work?
5. Is the worker obliged to perform his
or her duties personally?
6. Payment: Fixed rate or commission?
7. Does worker provide his own tools
and equipment?
8. Right to discipline worker.

 All the factors together create a

dominant impression - i.e. the court
ways up all the factors and then sees
whether or not it obtains the dominant
impression that the person performing
these duties is a worker or not.
 Study discussion of Smit v Workmen’s
Compensation Commissioner 1979 (1)
SA 51 (A) – productive capacity test.
The employee places his capacity to
work at the disposal of another whereas
an independent contractor delivers, not
his productive capacity, but rather the
product of that capacity.

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The rebuttable presumption of employment:

A statutory presumption is contained in section 200A (Labour relations Act) and

section 83A (Basic conditions of employment Act) and is aimed at protecting
vulnerable workers.

The presumption exists if various factors are present:

1. The manner in which the person works is subject to the control and
direction of another.
2. The person’s hours are subject to control by another.
3. If the person works for an organization, they form part of it.
4. The person has worked for that person for an average of 40 hours over
3 months.
5. The person is economically dependent on the other person for whom he
works or renders services
6. The person is provided with tools of trade or work implements or
7. The person only works for or renders service to one person.

Section 200A and 83A should be read in conjunction with the Code: Who is an
Employee? The Code incorporates the three tests and provides guidelines for possible
interpretation and application in the modern context.

Study the discussion in McGregor p. 17- 19 and the table comparing employees and
independent contractors, set out on p. 19.

As stated above, it is often very difficult to establish whether a contract concluded between
parties thereto, is a contract of employment or independent contracting. Parties also
usually do not agree on the nature of their contract when a dispute arises.

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 Discuss the following in class:

Why would an employee and employer sometimes prefer to

structure the relationship in the way that it is not that of
employment, but of independent contracting (e.g. consultancy
agreement)?

CASE LAW:
 CMS Support Services (Pty) Ltd v Briggs (1997) 5 BLLR 533
(LAC)
 Hunt v ICC Car Importers Services Co (Pty) Ltd (1999) 20 ILJ
364 (LC)

Now answer the following questions:

(a) Name and discuss the three tests the Courts use to
determine whether a person is an employee or independent
contractor.

(b) Discuss the impact of the presumption of employment as set

out in Section 200A (LRA) and 83A (BCEA).

(c) Distinguish between an employee and an independent

contractor.

(d) Briefly discuss the changes set out in the Labour Relations
Amendments of 1 August 2015 regarding the definitions of
employee and independent contractor.

2.5 Categories of employees

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
p. 20 - 21.

It is important to distinguish between different categories of employees, as some of these

may be confused with independent contractors. Ensure that you can identify the different
categories of employees.

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 Refer to McGregor, p. 20 – 21 and distinguish between the
following:

 Permanent employees
 Temporary employees
 Probationary employees
 Casual employees

NB:- SECTION 198B, 198C AND 198D of the Amended Labour

Relations Act recognises unconventional employment:

 Fixed Term / Temporary employees

 Part Time employees

Now answer the following questions:

(a) Distinguish between permanent, temporary, casual and part-

time employment.

(b) What is meant by “atypical workers”?

(c) Briefly discuss the proposed changes set out in the Labour
Relations Amendment Bill (N 1112, GG 33873, dated 17
December 2012) regarding the definition of employee
specifically regarding fixed-term employees and fixed-term
contracts of employment.

2.6 Unprotected workers

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
workers
p. 21 - 24.

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This section covers the position of illegal workers and workers excluded from the scope of
the LRA by statute. You must study this discussion in your textbook in detail!

Study the following case law:

 Kylie v CCMA & others [2008] 9 BLLR 870 (LC)

 Kylie v CCMA & others [2010] 31 ILJ 1600 (LAC)
 Discovery Health Limited v Commission for Conciliation, Mediation and
Arbitration & others (2008) 29 ILJ 1480 (LC)

Now answer the following questions:

(a) What is the legal impact of an unlawful contract in general?

(b) With reference to case law, discuss the distinction between

protection in terms of the Constitution and the LRA with
reference to illegal workers.

(c) Name the categories of employees that are specifically

excluded from the scope of the definition of “employee” in
the LRA.

2.7 The identity of the employer

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
p. 24 – 26.

Basson et al. (2009), Essential Labour Law, 5th edition, Labour Law
Publications, p. 37 – 39.

Usually the question as to who the employer is and whether there is an employment
relationship between the parties will arise in the case of dismissal. The employee would
want to allege that he was dismissed while the “employer” would want to argue that he is
not an employer and that there is no employment relationship or that another party is in
fact the real employer.

The court sometimes will look at the real relationship and not merely accept the parties'
arrangement at face value, if parties structured the relationship e.g. to be one of
independent contractor for tax purposes or to avoid application of the LRA. The courts
therefore lift the so-called corporate veil.

Study the discussion in your textbook regarding the identification of the employer. In this
regard you must specifically note the legal position of labour brokers.

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Now answer the following questions:

(a) Define “employer”.

(b) Discuss the legal position of the labour broker / TES.

(c) Briefly discuss why trade unions are generally against labour
brokering?

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2.8 The employment contract

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
p. 29 – 34.

Requirements for a valid employment contract

Explain the requirements for a valid contract of employment:

 Agreement or consensus
 Lawfulness
 Capacity to contract
 Performance and obligation must be possible.
 Formalities

Parties to the contract: The parties to the employment contract are the employer and
employee:

THE EMPLOYER THE EMPLOYEE

 Employer may be a natural person -  As a rule only natural persons can be
with necessary capacity to contract. employees.
 Often is a juristic person - company,  Juristic person e.g. company not
close corporation (or partnership, but normally employee. If contract were
partnership is not juristic). concluded with company - company
would probably be regarded as
independent contractor.
 Limitations on employment of natural
persons: No child under 15 years.
 Legislation changed common-law
position re discrimination based on race,
sex, religion etc.

Relationship of inequality:

It is often said that the relationship between employee and employer

is one of inequality.

Discuss this statement in your groups.

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The conclusion of the contract:
The parties may negotiate before the employment contract is actually concluded. The
worker often signs a standard form contract. Very often, after conclusion of the contract,
the worker receives a letter of employment.
Period of employment:
Parties to an employment contract must reach consensus about the period of employment.
DIFFERENT PERIODS OF EMPLOYMENT
FIXED TERM  Will be expressly stated in the
EMPLOYMENT contract (but there may be a

tacit agreement).
 May be for a specified period
or for a certain project.
 Breach of contract if
employer dismisses the
employee without cause or
the employee leaves his work
before the period of the
contract has expired.
 After expiry, if employee
continues working for the
employer and employer
continues to remunerate -
contract is tacitly renewed.
INDEFINITE PERIOD  If no specific period, it will be

presumed that it is for an
indefinite period.
 Contract may be terminated
by one party giving notice of
termination to the other party.
PROBATIONARY  It is common for employers to
PERIOD engage employees for a

probationary period.
 Period may be negotiated in
the contract.
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NOTICE PERIODS
 Contract may not be
terminated by means of
notice before the period in
contract has expired or
project has been
completed.
 Parties can, however,
agree on termination by
means of notice.
 Normally contract
automatically expires at
end of period and no notice
is needed.
 Notice period may be
stipulated in the contract.
 If no period stipulated,
party may give reasonable
notice (which will depend
on circumstances of the
case).
 After expiry of the period,
the employer is entitled to
decide whether to retain
the services of the
employee on a permanent
basis.
 Sometimes the probation
period may be extended if
employer is uncertain that
employee is suitable for the
job.
Page 12
Now answer the following questions:

(a) Define the contract of employment.

(b) Discuss the requirements for a valid contract of employment.

(c) Distinguish between fixed-term contracts, indefinite term

contracts and probationary contracts.

2.9 The contractual duties of the employer and employee

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
p. 33 – 34.

In the following section we will set out the rights and duties of both employee and
employer.

DUTIES OF EMPLOYER
Remuneration: Is the primary duty of the employer in terms of the contract.

Collective agreements may establish minimum standards regarding

salary.

What are the consequences of a contract in which the parties

have not discussed the remuneration to be received? The court
may either held that there is no contract, as an essentialia of the
contract of employment is absent, alternatively the court can argue that
the employer has to pay a ‘reasonable wage” which will depend on the
circumstances.

In terms of the common law, the "no work, no pay" rule determines that
there is no provision for paid leave. The BCEA, however, specifically
provides for paid leave.

What do we mean by 'payment in kind' and when may an employer

conduct an amount from the employee's wages? Normally salary is
paid in cash but may also be paid in kind i.e. something else in the
place of cash. The employer may only deduct amounts from
remuneration paid to the employee in exceptional circumstances.

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Duty to  Generally an employer doesn’t have to provide the employee with
provide work: work to do and simply needs to accept the employee into service.
 In exceptional circumstances the employer must provide work e.g.
where the employees wage is dependent on work being provided,
where skills need to be maintained etc. Does the employer have a
duty to provide the employee with work to do (i.e. if employee is left
sitting idle)?
 Can you think of some examples?

Safe working Depending on the nature of employment, the employer must provide
conditions: the employee with protective devices, safety equipment and proper
supervision. Refer to your textbook for a more detailed discussion.

To deal fairly In terms of the constitutional right to fair labour practices, employees
with the are protected against unfair treatment during the time of employment.
employee: But this duty is wide enough to also include common-law duties such
as the duty to receive the employee into service and to comply with
other statutory obligations.

CASE LAW:
 Murray v Minister of Defence (2008) 6 BLLR 513 (SCA)

Now answer the following questions:

(a) Discuss the common law duties of the employer.

(b) Explain the duty to deal fairly with the employee.

DUTIES OF EMPLOYEE

To enter into It is the primary duty of the employee to begin doing the work on the
service & agreed date i.e. to place his labour potential at the disposal and under
render the control of the employer.
services:
To work Employee must perform his task competently and without negligence.
competently
and diligently: What are the consequences if a worker is incompetent or negligent (of
a sufficiently serious nature)? Employee guarantees that he can do the
work and therefore it will be a breach of contract.

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To obey lawful This refers to the right of the employer to control the manner in which
and the employee works the place and other relevant matters.
reasonable
instructions: In terms of the common law all employees must obey the lawful and
reasonable instructions of the employer.

Could insubordination constitute a breach of contract, and if so, what

criteria would need to be met before a breach of contract may justify
termination of a contract or disciplinary action?
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________

To serve the This is a common law duty inherent in every contract of employment
employer’s whether the parties agree to it or not, but can also expressly be made a
interest and contractual duty.
act in good
faith: Aspects of this duty:

CONFIDENTIAL INFORMATION:
 Employee may not divulge, for personal benefit, confidential info
obtained as a result of information.
 But, employee may make use of any general knowledge acquired in
the course of his employment.
 Is breach of good faith, whether info was divulged during or after
the period for which the employee's service contract is valid.

PROMOTING THE EMPLOYER’S BUSINESS:

 Employee must devote hours to doing the employer's business.
 The employee may not work for another employer at the same time
if there is a conflict of interest.

NO COMPETITION WITH THE EMPLOYER

 Employee may not compete with his employer.
 What about a mechanic repairing a friend's car after hours?
_____________________________________________________
 What about an employee who sells products of another competing
employer?
_____________________________________________________

DISHONESTY
 Dishonesty regarding the affairs of the employer will be breach of
good faith.
 Secret commissions.
 The result thereof will entitle an employer to summarily dismiss an
employee and sue for damages.

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 (a) Discuss the employee’s common law duties.

(b) Discuss the duty of the employee to obey all lawful and
reasonable commands.

(c) Discuss the employee’s common law duty of good faith

(bona fides).

2.10 Doctrine of vicarious liability

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink
CC, p. 31 – 33.

Basson et al. (2009), Essential Labour Law, 5th edition, Labour Law
Publications, p. 52 – 53.

What is vicarious liability?

A principle in our law that an employer can be held liable for the unlawful acts
(delictual acts) performed by its employees in the course of their duties or service
e.g. policeman causing a collision and damaging B's car, while acting in course and
scope of his duties with the SAP.

Ensure that you can identify and discuss the principle of vicarious liability in the context of labour
law.

Think of some examples where vicarious liability may be relevant in

the workplace.

Study case law discussed in your textbook as examples of vicarious liability.

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Now answer the following questions:

(a) Define vicarious liability.

(b) Discuss the requirements that must be met before the

employer can be held vicariously liable for the delictual
wrongs of the employee.

(c) How do we determine whether an employee acted in “course

and scope” of his duties?

2.11 Restraint of trade agreements

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink
CC, p. 35 – 36.

This section introduces terms and conditions of employment commonly found in the
employment contract.

You must study this section in order to gain insight into the concepts of contractual
freedom and freedom of association. The discussion below will focus on the “Restraint of
Trade clause” and “Vicarious liability” as key concepts.

What is a restraint of trade clause?

A restraint of trade is a clause in a contract, which prevents an

employee from exercising his trade, or profession, or engaging in
the same business venture as the employer for a specified period
or within a specified area after leaving employment.

The courts balance two interests – public interest requires that parties comply with their
contractual obligations even if they are unreasonable or unfair, whereas all persons, in the
interests of society, should be permitted to engage in their trade. I.e. it is detrimental to
society if an unreasonable limitation is placed on your freedom to trade.

The courts look at whether or not the restraint is reasonable or against public policy
when they decide whether to enforce it. They also take into account factors such as the
nature, extent and duration of the restraint.
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All contracts are on the face of it valid and enforceable, until the employee can prove that
it is contrary to public policy.

In Magna Alloys & Research (Pty) Ltd 1984 , still the leading case in point, the court held
that:

 All contracts in restraint of trade are on the face of it valid and enforceable.
 Any contract, which is unreasonable or contrary to public policy, is unenforceable.

Study the discussion in your textbook on p. 35 – 36.

Now answer the following questions:

(a) Define a restraint of trade agreement.

(b) What factors should one consider when determining the

validity of a restraint clause?

(c) What are the two competing interests that we should

consider in this regard?

(d) Are restraint of trade agreements generally valid and binding

in South African law?

(e) Discuss Magna Alloys & Research SA (Pty) Ltd v Ellis

1984 (4) SA 874 (A).

2.12 Breach of the employment contract and contractual remedies

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink CC,
p. 34 – 35.

Basson et al. (2009), Essential Labour Law, 5th edition, Labour Law
Publications, p. 53 – 56.

A party who fails to perform his or her duties in terms of the contract of employment, or
who performs his or her duties unsatisfactorily, is guilty of breach of contract.

When may the employer dismiss the employee summarily? When the breach is of a
sufficiently serious nature.

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Remember that the breach must have been of a serious nature and must have been in
respect of a fundamental term of the contract.

Parties to an employment contract may also condone breach of contract and thereby loses
their remedy for breach.

If a party to a contract of employment fails to carry out his or her obligations in terms of
contract, that party is guilty of a breach of contract.

It is important to distinguish between serious breach of contract and less serious

breach.

Remedies for breach of contract:

If one of the parties to an employment contract fails to carry out the duties required of
them, either in terms of the contract itself or the common-law or legislation, then the
innocent party is entitled to a remedy.

The remedy available will depend on the circumstances of the breach and whether the
breach was serious and fundamental.

In some cases the innocent party is entitled to more than one remedy e.g. a party may be
able to sue not only for specific performance but also for damages. Below follows a short
summary of the main remedies for breach of the employment contract

REMEDY REQUIREMENTS
Termination If breach of contract (breach) amount to a fundamental
(cancellation) malperformance of the duties of that party, the innocent party


has a choice either to cancel the contract or to continue with it,
despite the breach.

Fundamental malperformance refers to a breach of one of

the fundamental duties of the contract and relates to serious
breach of contract.

When may the employer / employee cancel the contract

summarily? If the breach is serious enough i.e. a serious breach
of a contractual term.

Summary termination means that no notice is given i.e. the

termination takes immediate effect despite any notice periods in
the contract. The relationship between parties can end in case of
both fixed term and indefinite term contracts.

Can you think of some examples in common-law where summary

termination is justified?

Specific performance In the case of fundamental malperformance of a duty, the

innocent party has a choice whether to cancel the contract or

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 
continue with it.


What is an order for specific performance? It is a court order
in terms of which the party committing the breach is ordered by
the court to fulfill the contractual obligation.

Can you think of an example? “The Shop” employs John as a

collections clerk. “The Shop” summarily terminates John’s
contract, even though John did not breach any duties in
terms of the contract. John is given no notice, nor any pay in
lieu of notice. John is very upset as he does not wish to see
the employment contract terminated. John can ask for the
remedy of specific performance i.e. reinstatement in his job.

The courts will not always order specific performance.

Damages Who may claim damages? The innocent party who suffered a


loss, irrespective of whether or not she elects to cancel or uphold
the contract.

When can damages be claimed? When the innocent party

suffered a loss, irrespective of whether or not she elects to cancel
the contract or not.

How will the court measure the extent of the damages (i.e.
how are damages calculated?) Damages awarded to the
innocent party must place that party in the position she would
have been in, had the other party complied with the contract, i.e.
to its positive interest.

Example: If Jo dismissed Lisa and the dismissal was unlawful

in that Jo did not give Lisa the necessary notice of
termination, then Lisa could claim damages amounting to the
amount of money Lisa would have earned for the unexpired
period of the contract.

This is easy to calculate in the case of fixed-term employment

contract. If the contract was for an indefinite period the calculation
it is more complicated.

What is the position if Lisa finds other employment 2 months later

after dismissal?

Lisa has a duty to mitigate her loss and therefore cannot just sit
at home all day and play Sony Play station. She has to make an
effort to look for work as the court will take this into account.

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 Interdict What is an interdict?


____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________

Example: Court granted an employer an interdict

restraining a former employee from using confidential
information, which the employee had gained in the course
of his employment with the employer while in the service
of another employer.

Now answer the following questions:

(a) Name and briefly discuss the remedies for breach of contract.

(b) In order to provide an easier, cheaper and better way of

resolving breach of employment contract disputes, the LRA
has largely replaced the processes provided by the common
law of contract. Discuss this statement.

(c) Can an employee choose between common law remedies for

breach of contract and remedies in terms of the LRA?

2.13 Changes to contractual terms and conditions of employment

McGregor M et al. (2012). Labour Law Rules! 1st edition. Siber Ink
CC, p. 36 - 37.

Contractual terms of the employment relationship may be changed under certain

conditions. Study this section and ensure that you know the ways in which an existing
contract of employment can be changed.

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Now answer the following questions:

(a) Name and briefly discuss the ways in which contractual

terms and conditions of employment may be changed.

2.14 The Constitution

Basson et al. (2009), Essential Labour Law, 5th edition, Labour Law
Publications, p. 53 – 56.

The Supreme Court of Appeal has considered the impact of constitutionally protected
rights on the contract of employment. Fair contractual terms and conditions, as agreed to
by the employer and the employee retain their legal force and effect, and they can be
enforced by the employee if the employer breaches a contractual term.

Sec. 23(1) of the Constitution introduced an implied duty on both the employer and the
employee to act fairly – this implied duty could soften the harsh and unfair terms of the
employment contract or it could supplement terms and conditions of employment i.e. serve
as an additional source of rules between the employer and employee. However, in cases
where the terms and conditions of employment as agreed between the parties are fair, the
constitutional rights do not have the effect of canceling out or even diminishing the legal
force and effect of the contractually agreed rights and duties of the employer and the
employee.

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2.15 Test your knowledge

Activities

1. Do all the self-assessment questions on p. 27 and 37 of your textbook.

2. Identify the CORRECT statement:

(1) Independent contractors are protected by the Labour Relations Act.

(2) Applicants for employment are protected against unfair dismissal by the Labour
Relations Act.
(3) As long as a person is an employee, they will always be protected by the Labour
Relations Act.
(4) The Labour Relations Act does not protect the following employees from unfair
dismissal: members of the National Defence Force, members of the National
Intelligence Agency and members of the SA Secret Service.
[2]

3. Identify the CORRECT statement:

(1) An employer is obliged to provide an employee with work to do on a day to day

basis.
(2) An employer is never obliged to provide the employer with work to do on a day to
day basis.
(3) An employer may be obliged to provide an employee with work to do where the
employer has contracted to train an employee in a particular profession.
(4) An employer is not obliged to provide the employee with work to do where
remuneration is based on commission on work done.
[2]

4. Distinguish between an employee and an independent contractor and name three

tests that the courts use to try to determine whether a person is an employee.
[7]

5. Discuss the employee’s duty to act in good faith and to promote the business of the
employer.
[6]

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2.16 Terminology list (Vocabulary list)

Employee

Employer

Independent
contractor
Inter alia Amongst other things

Rebuttable
presumption
Atypical worker

Void contract

Voidable
contract
Statutory

TES Temporary employment service (labour broker)

De facto On the face of it

Remunerate

Fairness

Lawfulness

Vicarious liability

Restraint of
trade

Are there any words in this unit that you need to clarify for yourself? Write them
down and research the meaning thereof.

Remember, without vocabulary there can be no understanding!

This concludes unit 2.

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