Common law and
statutory conditions of
employment
Chapter 5
WEEK 2
1. Intro
Background
• One of the main purposes of new labour laws was to streamline dispute
resolution
• Legislation as a source (most NB source).
• However, concurrent jurisdiction in many matters (e.g. constitutional issues)
• Concurrent remedies in statute law, contract and admin law (sometimes also
constitutional law) has led to so-called ‘forum-shopping’
• Jurisdictional issues therefore complex
• All contracts create obligations; therefore, employment contracts are no
different – obligations, rights and duties are created between the parties.
Common Law
2. Obligations of the employee
1. To report to duty and render competent services
a. Diligently and with due care
b. Level of competency: capacity, experience and
seniority
2. To be respectful and obey lawful instructions
3. To render services in good faith
DUTY ONE: To report to duty and render competent
services
(1)Diligently and with due care
(2)Level of competency: capacity, experience and
seniority
To tender his services to the employer:
• This is the employees primary duty as described in the definition in section
213 of the LRA. Placing ones labour potential at the disposal or control of
the employer.
To work competently and diligently.
• Upon entering into employment contract, employee guarantees he’s
capable of doing the work.
• Our courts have accepted that the employment contract contains an
implied term that the employee is competent.
• Lying about qualifications or competence may lead to termination of
employment
• If the EE does not act in this way, and their incompetence / inefficiency
causes financial loss, the ER may claim from the EE ito contract or delict.
Vicarious liability
Where the EE in their insufficient performance, causes damage to a 3 rd party, the
3rd party can claim through vicarious liability (common law)
The EE had to be acting within the course and scope of their employment, even
if they were totally at fault, the 3rd party may still claim VL.
Vicarious liability is great because (a) gives 3rd parties the option to claim against
a person (the er) who has more money and (b) it incentivizes the ER to take
positive steps to prevent damage caused by their EEs.
K v Min of S & S (Constitutional Court)
• Facts: K needed help, found 3 policemen, the 3 policemen raped her. She
wanted to claim from the Minister of Safety and Security (vicarious liability) but
the question then became whether or not the policemen were acting in the
course and scope of their duties??
Second test looks
• Scope of vicarious liability under our common law the court adapted the at objectivity ito
common law approach (s39(2)) so that it better encumbered our BOR. the constitutional
norms and
• “an unfaithful servant, instead of devoting time to his master’s service, follows a reasonableness in
society
pursuit of his own, a variety of situations may arise with different legal
consequences”
• Looked at a 2 fold test: (a) what were the employees SUBJECTIVELY
thinking (intent to rape) and (b) OBJECTIVE test as to whether or not their
actions were sufficiently connected to their occupation (the employer’s
concern) Minister of Police v Rabie
• Policemen were on duty - General duty to ensure safety and to prevent crime
• The court found that although the policemen were acting on their own with
dangerous intent, there was a sufficiently close link between their conduct and
their employment as policemen. Requirement (b) is thus thee most
important
Flows from a traditional idea of an employment relationship where the ER
has power and authority over the EE, the EE has a duty to respect this
power and authority.
This duty is implied and need not be in the contract.
The ER is entitled to set lawful times and places and particulars of how
work should be done.
DUTY TWO: To be respectful and obey lawful
instructions
Gross insubordination = ground for termination of the contract.
DUTY THREE: To render service in good faith
Fiduciary relationship between
an ee and er
Common law principle obligating EEs to provide services in good faith by furthering the ER’s
business interests
Employers, for various reasons, still make use of a contract of employment as foundations for
claims against employees. As a result of this contract, a fiduciary relationship of trust and
confidence arises. This duty is known as the duty of good faith/fiduciary duty and contains the
prohibition of secret profits and conflict of interests. (restraint of trade = 1 e.g.)
This prohibition forms part of the implied terms of the contract of employment. This has the
effect that these terms form part of every contract of employment even in the absence of an
express agreement. A transgression of these terms would usually be treated as misconduct and
the employer then has the option of dismissing the employee or claiming damages.
Phillips v Fieldstone Africa (Pty) Ltd & another (2004) 25 ILJ 1005 (SCA) breach of
a fiduciary duty
• Ers business to raise capital for clients
• ER often paid by shares given to him from his clients
• Phillips = ee at Feildstone Africa (investment bank)
• Phillips bought shares of one of the clients (in his own name) even though the
ER wanted some of those shares
• Phillips resold the shares for a big profit.
• The court had to look at the common law duty of good faith and said:
o There are almost no exceptions to the rule that an ee cant make secret
profit from the business and that the ee must declare a conflict of interest
o Not only actual conflicts of interest but ones that are a real sensible
probability (the er sometimes attained shares from clients, real possibility
that the er would want shares in this client’s business)
o Hardly any justifications for this breach, only consent by the er.
The SCA said the ee had been acting with misconduct – reason to dismiss
Restraint of trade:
A restraint of trade is a contractual agreement in terms of which an employer seeks to
protect his business interests (these interests include the goodwill of the business and
customer connections) during employment and after termination.
A restraint of trade agreement usually provides that upon termination of the contract of
employment (on any grounds), the employee is prohibited from performing similar work in
competition with his former employer within a defined area for a specific period of time.
In Magna alloys v Ellis it was held that such agreements are valid and prima facie
enforceable provided that it is not contrary to public policy. The court further stated
that the central criterion for determining whether such clause is consistent with public
policy is reasonableness.
All rights can be
Restraint of trade clauses limited ito s 36, thus
restraint of trade
needs to meet the s
Contractual agreement 36 criteria
• Proprietary interests (employer’s goodwill and customer connections)
protected by providing that after termination, for certain area, for certain time,
prohibition on competing services in competition with old employer
Basson (1993 A) the court noted that the legitimate interests of an employer
needs protection, however, these interests should be balanced against the
interests of the employee in not being economically active.
– reasonableness 4 factors to consider
• Legitimate interest that needs protection?
• Is the interest being prejudiced?
• Outweighing economic activity
• Public policy on whether the restraint should be applicable
• Reddy (2007 SCA) – reasonableness entails value judgment & 5th factor – does
the restraint go further than necessary to protect the interest?
What is the effect of unfair/unlawful termination of employment on restraint of
trade agreements?
AKA if you were wrongfully terminated, can you get out of your restraint of trade
clause?
This particular question is not settled law as yet. In Info DB Computers the HC relied
on English law and found that in such an instance, the employer could then not rely
on such restraint. In the Reeves case the court doubted the approach of the court in
Info DB Computers but nonetheless considered the circumstances surrounding the
termination of employment as one of the factors. A contract may have been
breached only on a technical level in which case that breach might not outweigh
the ER’s rights ito their proprietary interests.
As said in Reddy, its going to be assessed on a value judgement
Always a
Reasonableness will be determined with reference to the interest of both the
balancing
employer and the employee, public policy and surrounding circumstances of interests
Common law
3. Obligations of the employer
1. Remunerate
2. safe working environment
3. Dignity and respect
1. To remunerate
• Primary obligation
• There is no general statutory minimum wage – leaves room to bargain ito
salary / wage (collective bargaining main tool by the LRA to balance process)
• The BCEA and the Minister of Labour set minimum wage amounts for sectors
not covered by sectoral agreements of bargaining council minimums (i.e.
domestic and farm workers)
• The ER being declared insolvent means all his business contracts (and
employment contracts) are suspended – the Ees don’t have to work and
aren’t entitled to pay – unless the trustee has arranged for them to continue
working.
2. Provide safe working conditions
• Common law duty on Ers
• Safe machinery and equipment
• Origin in law of delict or contract
• Breach of this duty = claim damages,
• injury = definite delict,
• failure to provide safety clothing = contractual
• S35(1) COIDA (The Compensation for Occupational Injuries and Diseases Act, No 130
of 1993 )– Ers protected against certain delict claims statutory insurance scheme
• COIDA wont cover all harm Media 24 case of sexual harassment in the workplace,
said this fell outside of the employee in her role as an employee and thus fell under a
common law claim for failure to provide a safe working environment
3. Treat the EE with Respect and dignity
• Is acting in good faith a reciprocal duty? Implied duty on ers not to ruin the ee – er
relationship.
• Easier to claim breach of reciprocal duties under contract than to find a labour law
remedy
• Impairment of personality ( respect or dignity is denied ) claim ito the actio
iniuriarum.
• Section 23 of the constitution grants this right of fair dealings to every employee.
4. termination, breach of
contract and remedies
Ito the common law
Termination of
employment
• Contacts terminate in many
ways
• “fixed – term contracts”
terminate without further
notice
• Contracts concluded for
indefinite periods of time
terminate at retirement age
• Most contracts allow for
termination with mutual
agreement
• The BCEA and LRA have both
created adaptions of the • Contract ends when the employee dies
common law, such as increasing • The employees right to not be unfairly dismissed
notice periods (BCEA) unfair (LRA) is more NB than the employer’s common
dismissals (LRA). law right to freely terminate a contract.
Find these cases page 102 TB
Breach of contract and
common-law remedies
Serious breach of contract (material) i.e breach of fiduciary duties summary termination (no
notice)
Less serious breaches (i.e. late coming) do not allow for summary termination
Claims: specific performance, cancellation or damages
• These CL remedies = outdated, enforcing specific performance and calculating damages = extremely
difficult
• LRA better regulates remedies for breach (will be discussed later in the semester). The primary
remedy in the LRA = reinstatement
Fedlife Assurance Ltd v Wolaardt (2001) 12 BLLR 1301 (SCA)
• Stated that the Constitution has brought about the right not to be unfairly dismissed into the CL.
SA Maritime Safety Authority v McKenzi (2010) 5 BLLR 488 (SCA) SA Commercial Catering & Allied
workers Union obo Africa & Swartz v Bredasdorp Spar (1998) 19 ILJ 947 (CCMA)
• The CL hasn’t been developed to mean that an employee is entitled to a pre-termination hearing
• CL remedies haven't disappeared since the enactment of the LRA and BCEA thus we are left with the
“forum-shopping” problem.
5. Contractual agreement and variation of
contractual terms
The contract of employment is based on consensus between the parties thereto. It is
legally binding and may only be varied through mutual consent. The contract may provide
the procedure for variation. Bilateral act.
The BCEA only requires written particulars of employment; however, the contract may even
be oral or implied. Some terms are brought in by reference (i.e. a contract will state: the
BCEA is applicable to this section)
In this regard, it is important to distinguish between terms and conditions of work and work
practices (i.e. a Christmas function).
The latter may be varied without prior consent.
Employer’s cant unilaterally vary terms and conditions within the contract.
It is NB to note that the remedies for breach of contract may be less advantageous to
employees than statutory ones.
NB homework on the National
Minimum Wage Act
6. Statutory conditions of
employment (BCEA)
THE BCEA 75 OF 1997
• How is the Act enforced?
Contracts of employment are enforced through civil or labour courts
(S77); appeal to labour courts (S77A); enforcement through labour
inspectors or the Director General of Labour.
• How should the Act be read?
Together with wage-regulating measures and the collective agreements
applicable
When do the basic conditions of the Act apply?
A basic condition of employment constitutes a term of any contract of
employment (S 4) except if; there exists more beneficial conditions
in terms of any law; it has been replaced, varied or excluded in terms
of an Act of parliament; or a term of the contract of employment is
more favorable.
The BCEA – REGULATED FLEXIBILITY (its an underlying framework
adapted to any situation and left out if less favourable)
What is the purpose of the BCEA?
The purpose of the BCEA is to advance economic development and
social justice by establishing and enforcing minimum conditions of
employment.
The Act provides a minimum floor of rights.
As a result, if there is a more beneficial term in the collective
agreement or contract of employment then that term will apply.
There is a wide scope of the application of the Act, however, the Act
does provide some express exclusions.
Example of how the BCEA works:
If your contract says you have 1 day of leave and the BCEA says you have
5, then you have 5 and vice versa to give the ee the best outcomes.
BCEA exclusions:
• Independent contractors,
• Unpaid volunteers working for charity,
• Undergoing vocational training,
• People employed at sea on vessels,
• National Defence Force,
• National Intelligence Agency, or
• South African Secret Service; or
Chapter 2 of the Act deals with the
provisions related to working hours:
Which persons are excluded from the
provisions regulating working hours?
• In terms of S 6 of the Act, the provisions of
the BCEA regulation working time do not
apply to senior managerial employees, sales
staff who travel to the premises of
customers, and employees who work less
than 24 hours a month for an employer. In
addition, employees earning above the
prescribed threshold (which currently stands
at R205 433, 30) are excluded from the
statutory protections in respect of maximum
working hours, overtime, meal intervals,
daily and weekly rest periods, pay for Sunday
and night work)
Normal hours of work
S 9 provides that an employer may not require or permit an
employee to work more than 45 hours in any week, and 9
hours in a day (if the employee works 5 days or fewer in a
week) or 8 hours in a day (if the employee works for more
than 5 days a week).
Where the employee serves the public, the ordinary hours
can be extended by up to 15 minutes per day, but not more
than 60 minutes in a week.
OVERTIME
S 10 provides that overtime work is work that is performed in excess
of ordinary hours. An employee may not work more than 10 hours
overtime a week, and then only in accordance with an agreement.
A collective agreement may extend overtime hours to 15 hours a week
provided that the agreement may not apply for more than 2 months in
a 12 month period.
The minimum rate to be paid for overtime is one and a half times the
normal wage, unless the employee agrees to time off for overtime
worked.
o Rest period – an employee is entitled to a daily rest period of
at least 12 consecutive hours and a weekly rest period of 36
hours
o Sunday work & Public holidays – work performed on a Sunday
or public holiday attract a payment at double the employees
wage
o Meal intervals – at least one continuous hour after every 5
hours of continuous work. By agreement, the meal interval may
be reduced to 30 minutes, or dispensed with if the employee
works less than 6 hours a day
And in school we thought “breaks” were for us.
Compressed work:
work up to 12 hours in a day (including a meal interval) without receiving
overtime pay.
CONDITIONS
the employee does not work more than 45 hours in any week,
more than 10 hours overtime in any week, or
more than five days in a week
Chapter 3 – leave
S 20 – Annual leave (for
every leave cycle an
employee is entitled to at
least 21 consecutive paid
leave days). By agreement,
an employee can be
granted 1 days paid leave
for every 17 days
worked (doesn’t include
public holidays)
This amounts to 15 working
days
Additional paid and unpaid
leave is to be agreed
between the parties
S 22 – sick leave after an employee has completed 6
months of service, he or she is entitled to as many days
sick leave, on full pay, as he would work in a 6 week
period. Sick leave is granted on 36 months three year
cycles.
• If an employee works five days a week, he/she would
work 30 days in six weeks and that would entitle
him/her to 30days sick leave in three years
• Need medical proof if 2 consecutive days missed or sick
twice in 8 weeks.
S 25 – maternity leave (an employee is entitled to at least
4 months unpaid maternity leave) Starts 4 weeks before
expected date of birth and goes for 6 weeks thereafter. If
an ee miscarries / still birth (still entitled to the 6 weeks)
• Paid or unpaid depending on the agreement.
• If unpaid, one can claim UIF.
• Cant be dismissed during this time.
https://www.news24.com/SouthAfrica/News/working-dads
-can-now-take-paternity-leave-for-10-days-20181127
10 days for fathers
S 27 – family responsibility leave (after 4 months of service, an
employee who works for longer than 4 days per week, is entitled
to 3 days paid leave per cycle – 12 months) (e.g. sick child or
family death)
Exceptions:
Employees who work less than 24 hours a month for an employer
–s19
Such workers will be entitled to leave agreed upon between
employer and employee
The BCEA and wages:
• Employees must be paid in
South African currency
• daily, weekly, Fortnightly or
monthly
• In cash, cheque or EFT
•The ee must be given in
writing, details about their pay
and any deductions.
•BCEA doesn’t require a written
contract but the terms of
employment must be given to
the ee (including payment
specifications)
Terminantion of With notice IN WRITING
employment
1 week if working less than
6 months,
2 weeks if over 6 months of
work
4 weeks if working more
than a year,
exception re domestic
workers and farm workers
(Sectoral determinations)
• Ee receives a certificate of
service after being
terminated (the ee can
select whether or not they
want the certificate to state
the reason for terminations)
SEVERANCE PAY:
When an employee is dismissed based in the operational requirements of
the employer in terms of the LRA ,the employer must pay the employee:
Severance equal to at least one week’s pay for each completed year of
continuous service with the employer
An employee, who unreasonably refuses to accept an offer of alternative
employment with that employer or any other employer, is not entitled to
severance pay
Child labour
• Children under the age of 15 years may
not be employed.
• Children younger than 15 years are
allowed to perform
in advertising, sporting, artistic and
cultural activities,
• But only in terms of regulations issued by
the Minister or a ministerial or sectoral
determination.
• Contravention of this section constitutes
a criminal offence
• Goal = protect children from
exploitation and work that is
inappropriate for their age
Forced labour
FORCED LABOR is prohibited under the BCEA, contravention of this section
constitutes a criminal offence.
EXPLOITATIVE PRACTICES [ill treating , taking advantage of employees]by
employers are prohibited. E.g. the employer may not:
Require or accept any payment by an employee or potential employee.
Require employees to purchase goods, services or products from the employer
to secure work.
ENFORCEMENT OF THE BCEA
The Labour Court has exclusive jurisdiction in respect of all matters concerning
the BCEA.
Concurrent jurisdiction with the high court to grant civil relief in some cases.
Variations of the BCEA
Can’t be varied:
1.maximum working hours
2.provisions relating to night work
3.provisions relating to sick leave
4.4 months maternity leave
5.not less than 2 weeks annual leave
A collective agreement between trade unions and employers may change conditions
of work, provided such collective agreement is consistent with the purposes of the
Act. It may replace or exclude basic conditions of employment only to the extent
permitted by the Act or a sectoral determination
VARIATION BY WAY OF A MINISTERIAL DETERMINATION:
A ministerial determination primarily replaces or excludes basic minimum
conditions of employment in respect of any category of employees or
categories of employers, but generally does not set minimum wages.
Such determinations may vary maximum ordinary weekly hours if:
•the determination has been agreed to in a collective agreement
•the operational requirements of the sector necessitates this, or
•the majority of employees are not members of a (registered) trade union
A ministerial determination may relate to:
•hours of work
•overtime
•meal intervals
•daily and weekly rest periods
•annual leave
but must on the whole be more favourable to employees than those
conditions set out in the BCEA
Variation by way of sectoral determination:
Another way of establishing conditions of employment is by way of a
sectoral determination by the Minister in terms of the BCEA
Such determination primarily establishes and regulates minimum
wages, but could also include other conditions of employment:
• such a determination may be made only after an investigation has
been done (by the Director-General)
• at the initiative of the Minister or
• as requested by an employer’s or employees’ organisation into a
particular sector or area for consideration of representations by
the public, and preparation of a report
K v Minister of Safety and Security (2005) 8 BLLR
749 (CC)
Application for leave to appeal against an order of the SCA. The applicant
had instituted an action for damages in delict against the Minister,
seeking to hold him vicariously liable for her rape at the hands of three
policemen, employees of the respondent. O'Regan J, for the Court, held
that the common law of vicarious liability must be applied by the courts
in such a way that it is consistent with the terms of the Constitution as
well as the spirit, purport and objects of the Bill of Rights. She concluded
that although the rape was a deviation from the employment duties of
the policemen, there was a sufficiently close connection between their
employment and the wrongful conduct. The Minister was found to be
vicariously liable. The matter was referred back to the Johannesburg High
Court for determination of quantum of damages
