The primary purpose of concluding a written contract of employment is to create certainty as to the parties’ respective rights and responsibilities. Expressly defining and explaining the terms and conditions of employment will go a long way in assisting both parties in understanding the terms to which they are agreeing.

Although a well-drafted employment contract will normally incorporate the most important terms and conditions of employment, it frequently occurs that certain conditions of employment are not included in the contract for some or other reason. Terms and conditions which appear in the contract are referred to as express terms. Other forms of terms include tacit and implied terms.

A tacit term is an “unexpressed provision of the contract which derives from the common intention of the parties as inferred from its express terms and the surrounding circumstances”. It is generally accepted that had the parties thought about the term at the time of concluding the contract, they would have included them in the contract. The test used to establish the existence of a tacit term is whether it can confidently be said that, if at the time the contract was being negotiated, someone had said to both parties, for example, “what would happen in such an event?” and both parties would agree on the answer without reservation. Sometimes tacit terms need to be read into the contract to render it effective and workable.

Certain terms are implied in the contract by operation of law. This occurs when a statute overrides the parties’ intention and stipulates that the contents of legislation or a collective agreement will be incorporated into the contract whether the parties like it or not.

The difference between the two was explained eloquently by AJA Corbett in Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration.

“An implied term properly so-called is a term that is introduced into the contract as a matter of course by operation of law, either the common law, trade usage or custom, or statute, as an invariable feature of such a contract, subject only to the parties’ entitlement in certain, but not all, instances to vary it by agreement. Where reliance is placed on such a term, the intention of the parties will not come into the picture, and the issue is the purely legal one of whether in those circumstances in relation to a contract of that particular type the law imposes such a term on the parties as part of their contract. A tacit term is a term that arises from the actual or imputed intention of the parties as representing what they intended should be the contractual position in a particular situation or, where they did not address their minds to that situation, what it is inferred they would have intended had they applied their minds to the question.”

Should the parties conclude a contract of employment and the contract is silent on a particular term or conditions as laid down in applicable legislation or collective agreement, the provision will be “read into” the contract as if the parties had agreed thereto. If, for example, the contract is silent on the entitlement to annual leave, the obligation to grant the employee paid annual leave in terms of the provisions of the BCEA will be incorporated. Section 23 of the Labour Relations Act provides that a collective agreement varies any contract of employment between an employee and employer who are both bound by the collective agreement.

It is therefore important to note that the contract of employment as concluded and agreed to between the parties may vary as a consequence of the abovementioned circumstances. As a general rule, parties may not agree to terms and conditions less favourable to the employee than those contained in relevant labour legislation.

Article by: Stephen Kirsten
Provincial Manager – Cape Town