The need for an employee may be urgent as commercial reality dictates. However, employers become warier to employ due to the complex labour laws that apply in South Africa. Employers are forced to decide and to make that decision quickly. As numerous court decisions indicate, the needs of the employer may not always be considered in, so far as the legitimacy of a contract is concerned.
An employer faced with the need to employ urgently will not always have the time to undertake vetting and verification processes which may be more time consuming than employing a person. Therefore, the law of contract allows the employer to insert a ‘suspensive’ or ‘resolutive’ clause in the contract which will make the contract of employment dependent on some uncertain condition.
For example, where a courier company requires a driver urgently and must be certain that the candidate has a valid driver’s license or where a security company requires an officer but has to be sure that he or she has the necessary security clearance. A suspensive condition will mean that the contract of employment will only take effect once the relevant condition has been satisfied, so when the candidate is able to prove that he has a driver’s license. A resolutive condition will mean that the officer may be employed and start work until such time his or her security clearance has been established. If, for example, the officer’s security vetting reveals that the officer has a previous case the contract will automatically terminate due to the resolutive condition.
Similarly, the case of Nogcantsi v Mnquma Local Municipality & Others (2017) 38 ILJ 595 (LAC) dealt with this very interesting and complicated question. The employee, in this case, was offered a contract to be a bodyguard. The contract would continue if the employee’s security vetting revealed that he was clear. If it was found to the contrary, his contract stipulated that it will automatically terminate. The security check revealed that the employee was engaged in “dishonesty” with his previous employer and his contract accordingly terminated. The employee was aggrieved by this and sought remedy from the bargaining council and the courts.
The bargaining council, the Labour Court and the Labour Appeal Court consistently found that the resolutive condition in the employee’s contract was valid. It was not the employer’s action to bring the contract to an end. It wasn’t the employee’s intention to bring the contract to an end either. It was the fact that the condition of the contract stipulated that if the employee did not get security clearance that brought the contract to an end automatically.
This case is important as it holds that a suspensive or resolutive condition in a contract of employment is not tantamount to a dismissal. Importantly the Labour Appeal Court said that a contract must be clear and unambiguous about the suspensive or resolutive condition. Therefore, employers are urged to be extremely cautious when including clauses of this nature in employment contracts. If employees refer matters to the CCMA or bargaining councils, such clauses must be clear and unambiguous for the employer to succeed. It is also encouraging that the Labour Appeal Court, in this case, took into account the realities of business, knowing that it will never always be practical to employ after having the necessary checks done in advance.
Article by: Shakti Jainarain
Dispute Resolution Official – KZN