THE EFFECT OF AN UNSIGNED EMPLOYMENT CONTRACT

Currently, there is no requirement in terms of labour legislation that an employer and employee must enter into a written contract of employment in order for an employment relationship to exist. However, section 29 of the Basic Conditions of Employment Act, 75 of 1997 (“the Act”), provides that certain written particulars must be disclosed to an employee regarding their employment relationship.

But how do employers deal with employees who refuse to sign an employment contract? Recently, the effect of refusing to sign an employment contract came before the CCMA and was taken on review at the Labour Court. In Naidoo v National Lotteries Commission & Others the Labour Court reviewed an award where a CCMA commissioner had found that it lacked jurisdiction to arbitrate a claim of unfair dismissal, essentially on the grounds that the parties had failed to enter into a contract of employment and therefore no dismissal had taken place.

The employee in this matter had accepted an offer of employment but thereafter refused to sign an employment contract. After several months, the employer terminated the applicants employment on the basis that he had repudiated the employment relationship. As previously mentioned, there is currently no requirement in labour legislation that the dismissal of an employee must be preceded by a formal contract of employment. Conversely, section 186(1)(a) of the Act defines dismissal as a “termination of employment” with or without notice. This definition is obviously wide enough to cover an instance where the employer had accepted the repudiation of a contract of employment by the employee and terminated the contract, as exemplified in this present instance.

Thus, should an employee have been presented with an employment contract prior to commencement of employment and refused to sign the contract, then no agreement was reached, and the employee will not work for the employer and will therefore not be considered to be an employee of the employer.

However, should the employee commence employment in the absence of a signed employment contract and refuse to sign the employment contract without any valid reasons, the employee may be dismissed for insubordination. 

Further, it should be noted that there does not need to be a signed employment contract in place in order for an employment relationship to exist. Employers must tread carefully, however, not to dismiss an employee who refuses to sign based on their objection to specific provisions in the contract where the reasons advanced are valid. 

Author: Gershwin Boonzaaier

 

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