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Terms and Conditions of Employment

12 February 2013

Routledge Modise

In employment law, an employer and employee can agree to the terms and conditions of employment as well as the duration of the employment, preferably before employment commences.

An employee can be employed for a fixed agreed period or an unde­termined period of time (sometimes known as permanent employment). The parties normally also agree on remuneration.

In the event that the employer breaches the contract either by ter­minating the contract prematurely or failing to pay the employee as agreed, the employee is entitled to ask for specific performance or to sue for damages suffered as a result of the breach.

In calculating the damages, the employee would normally claim pay­ment for the balance of the portion of the fixed-term contract.

In the case of Mangope versus the South African Football Association (Safa), the employee's fixed-term contract was prematurely termi­nated for alleged poor performance by Safa without following the pro­cedure set out in the contract before the employee could be dismissed.

The court found that the employer breached the contract by failing to act in accordance with a clause in the contract regarding the proce­dure to be followed before the con­tract could be terminated. The employee sued for damages for the remaining period of the con­tract.

The Labour Court awarded dam­ages equal to the employee's salary for the remainder of the unexpired period of the fixed-term contract. Safa then appealed to the Labour Appeal Court. The Appeal Court had to decide whether the damages awarded by the Labour Court automatically follow upon breach or whether the actual damages suffered by the employee had to be proved irrespective of the fact that the employee's contract of employment was terminated before it could expire.

The Labour Appeal Court held that in such instances, damages do not automatically follow based on the unexpired period of the fixed term contract; but such damages must be proved to the extent that they are reasonable.

In determining a reasonable award of damages, the court relied on the provisions of section 77A (e) of the Basic Conditions of Employ­ment Act, which grants it the powers to make a determination that it con­siders reasonable in contracts of employment including an award for damages.

The Labour Appeal Court also held that the actual damages suf­fered by the employee were the equivalent of 12 months' remuner­ation as opposed to the 33 months of the remainder of the unexpired period of the fixed-term contract.

In arriving at this conclusion, this court also took into account any other collateral earnings received by the employee from when the breach which led to his dismissal occurred.

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