Theme 4 Common Law Contract of Employment

Definition A contract of employment is a reciprocal contract in terms of which an employee places his services at the disposal of another person or organisation, as employer, at a determined or determinable remuneration in such a way that the employer is clothed with authority over the employee and exercises supervision regarding the rendering of the employee’s services.

Employment contract must be distinguished from a contract of letting and hiring of work from an independent contractor and a contract of mandate. Important feature is that the employee is subject to the authority and supervision of the employer. Dominant impression test is applied. Factors indicating the existence of an employment relationship: Services must be rendered personally. Fixed hours and wage/salary. Entitled to benefits. Degree of control by the employer.

Presumption as to who is an employee s83 Basic Conditions of Employment Act s200A Labour Relations Act: A person who works for, or renders services to, any other person is presumed, until the contrary is proved to be an employee, regardless of the form of the contract, if any or more of the factors are present..... The person’s hours of work and the way in which he works are subject to the control of another; Integral part of an organisation; Worked for at least an average of 40 hours per month for the last 3 months; Economically dependant upon the other person; Given the tools of trade; Works only for the other person.

Conclusion of the contract Must comply with the basic requirements for a valid contract. Essentialia: Specified work Agreement must be reached on the work the employee will be required to perform. Must be legal. Employee required to perform a different task which constitutes a reduction in status - Employee can resile from the contract and claim damages. Remuneration Payable remuneration must be agreed, as well as if payment is in cash or kind. Parties are free to determine the date/time period when remuneration will be payable.

Duties of the Employer To accept the employee into his service. Results in material breach if employer fails to take employee into his service as rendering of services is a prerequisite for payment. To provide the employee with work. Work must be provided if the employee’s income is based on the amount of work he does. If failure to work brings about reduction in the status of the employee. Where the employer has made an undertaking to train the employee in a certain profession. Pay the agreed remuneration. Law states payment will take place at the end of the period of service, or on a regular basis if employee is working for an undetermined period. Trade usage will be an indicator.

Provide safe working conditions. Pay a quantum meruit. Non completion or abandoning of work before completion – no remuneration payable. Pro rata payment if the employee was bona fide in not completing the work. Provide safe working conditions. Employer must take reasonable steps to ensure the safety of its employees. Should failure to do so lead to the injury of the employee, the employer will be held liable delictually. Volenti non fit iniuria: If EE knows of a dangerous situation, realises the nature thereof and nonetheless subjects to this situation freely – the ER cannot be held liable. Comply with statutory duties. Obligations in terms of legislation. - BCEA

Employee’s remedies Cancellation of the employment contract Breach of contract by ER Claiming specific performance Re-employment/reinstatement Claiming damages Amount he would had if not for breach. Refusal to work “no pay – no work” Statutory remedies

Employee’s duties To make services available. Personal services are made available. “No work No Pay” Absence without reason or consent = breach of contract. To warrant his competence/reasonable efficiency. Tacit agreement that he is suitable for work = implied warranty of reasonable efficiency or competence. Probation period. To obey the employer. Employer is in a position of authority in relation to the employee. Obey all reasonable instructions punctually. Disobedience = breach of contract.

To be subordinate to the employer. Employee is obliged to be subordinate to the employer and show him due respect. To maintain bona fides. Employee must act in good faith towards the employer. Duty of good faith. Theft, dishonesty, disclosing sensitive info = breach of contract To exercise reasonable care when using the employer’s property. Negligent behaviour resulting in damage constitutes breach of contract. To refrain from misconduct. Employee must act in accordance with acceptable practices and standards and policies of his employer. Insubordination, theft, dishonesty, intoxication, gross negligence = misconduct = breach of contract

The employer’s remedies Summary dismissal. Termination of employee’s services without giving the prescribed notice. Gross misconduct incapacity Specific performance. Damages. Statutory remedies.

Termination of the contract of employment By notice By effluxion of time – fixed term contracts By agreement Death of the parties Insolvency of the parties Illness of the employee Impossibility of performance Cancellation Redundancy of a post Completing of specific task.

Employer’s delictual liability Employer is held liable for the delicts of the employee. Requirements: Employment relationship Scope of employment Employee occupied with the execution of his duties. Acting in scope of employment within or after working hours. Even if employee is committing an illegal act. Act committed was prohibited by employer. Only partially occupied with interests of employer. Delict – 5 elements

Liability of delicts of an independent contractor: Restraint of Trade After termination of contract, EE may not start a similar business than that of his previous employer / work for the latter’s competitors for a specified period & within a specified area. Liability of delicts of an independent contractor: Where the employer gave incomplete instructions. Where the employer gave instructions which he himself was not authorised to do. Employer gave an unlawful instruction or ratified such an act. Where acts are potentially dangerous and employee neglects to take precautionary steps.

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