The importance of the Employment Contract or Letter of Appointment

“If you can’t walk away from a negotiation.

Then you’re aren’t negotiating.

You’re just working out the terms of your slavery.”

 – Artist, Star Slinger

Introduction

One of the fundamentals of any employment relationship is the agreement between the employer and the employee on the terms and conditions of employment, as well as the corresponding rights and obligations on parties, as a result of this relationship. Hence, the employment contract is a crucial part of any employment relationship.

However, what is surprising in this modern dispensation is that there are still employees today that have been employed for years already, not having signed employment contracts!

Section 29 of the Basic Conditions of Employment Act, 75 of 1997 (BCEA), provides that:  

“An employer must supply an employee, when the employee commences employment, with the following particulars in writing – (a) to (p)” (own emphasis).

Clause 3.2 of the Motor Industry Bargaining Council (MIBCO) Main Collective Agreement provides as follows:

• “Every employer shall, in respect of every employee, upon commencement of employment prepare written particulars of employment by way of either an employment contract or a letter of employment as prescribed in section 29 of the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997).”

Types of Contracts of Employment

In essence, there are two types of employment contracts: on the one hand, you have the indefinite or “permanent” contract and on the other hand, you have a fixed term or temporary contract.

The distinction is self-evident: one is of a permanent nature, and the other is for a defined, limited duration, for example seasonal work or being employed for a specific project.

The starting point would be to make sure that you have a copy of your employment contract or letter of appointment, so that the terms of your employment are clearly defined. It is important that the employer is aware of their duties and obligations towards their employees; and you, as an employee, is in turn aware of your duties and responsibilities.

However, it does not stop there. Most employees do not read their contracts properly. It is just another document that is signed during their induction. Most often, this can be out of pure desperation or wanting to finalize the paperwork as quickly as possible, and as such, employees simply sign the documents presented. It is notable to also mention, that the power struggle between the Employer and Employee is real. Employees feel that they do not have the power to negotiate and because they are in desperate need of employment, they don’t have a choice but to accept what is on the table.

Even if that is the case, we appeal to you, MISA members – “Knowledge is Power”. You need to be aware of the terms and conditions of employment so that you are not left surprised when situations arise.

One such example, would be to be aware of your retirement age.

Retirement

• Does your contract of employment make provision for a retirement age?
• Does your employer have a policy in the workplace dictating what will happen when you reach a certain age, deemed to be an industry standard for retirement age?
• What is the situation if your contract does not make provision for such?

In the case of Theunissen v Legal Aid South Africa (C279/2017) [2018] ZALCCT, the applicant sought an order declaring his retirement age to be 65 and that the termination of his contract of employment when he turned 60, constituted a breach of contract. The Respondent, at some point changed the retirement age from 65 to 60 and subsequently terminated the Applicant’s employment when he turned 60 years old. The Applicant argued that his contract provided that his retirement age would be 65. The Labour Court (LC) awarded the Applicant retrospective reinstatement on the grounds that he was entitled to retire at the age of 65 and that the Respondent breached the Applicant’s contract of employment by terminating his employment on turning 60 years old.

The matter was taken on appeal and the Labour Appeal Court (LAC) upheld the appeal and set aside the order of the LC. The LAC found that the change of retirement age from 65 to 60 was applicable to the Employee, due to a policy in the workplace, which was linked to the Employees contract of employment and therefore did not amount to a unilateral change. His termination was therefore not in breach of his contract and it was held that the Employer was entitled to terminate as per the contract or letter of employment.

Most employment related issues that may arise in the workplace would inevitably find application in the employment contract. If, however, the contract is silent on certain terms and conditions, then the employee will have recourse to rely on the MIBCO Main Collective Agreement and in some instances the BCEA. Therefore, it is important to have a copy of your employment contract or letter of employment ready and available. 

Conclusion

Members are encouraged to ensure that they request a copy of their Contract of Employment or Letter of Appointment, to familiarize themselves with the terms and conditions thereof, thereby empowering themselves.

If you are in doubt, remember MISA – Just a phone call or an e-mail away!

Kindly utilise the following e-mail addresses and links for assistance during this time:

Legal/Labour-related enquiries                      Legal@ms.org.za  

Legal Reception                                                011 476 3920

MISA Benefit claim-related enquiries            Claims@misa.org.za   

Any other enquiries                                          Info@ms.org.za  

Website                                                              www.misa.org.za    

Mobile App                                                        https://onelink.to/w9a7ku