Employment begins on date of signature

Employment begins on date of signature

The CCMA, on occasion, has been required to determine when an employment relationship has actually commenced.

For some time there has been little clarity on whether employment commences on date of signature of an employment contract or offer of employment, or indeed only when the person actually commences employment.  This issue was clarified in a Labour Appeal Court Judgment in the matter of Wyeth SA (Pty) Ltd  v  Manqele & others [JA50/03].

The key factors of this case were as follows.  An offer of employment was made per an employment contract which was accepted and signed by the successful appointee.  However, prior to commencing employment on the due date to do so, the employer deemed the appointee to have acted dishonestly in relation to the purchasing of a vehicle, being part of his remuneration.  As a consequence thereof, the employer terminated the contract of employment with the employee prior to him starting employment on the due date.  Notwithstanding this termination the employee reported for duty at which time he was advised that he should go home as he would not be employed by the employer.

The employee deemed this to be an unfair dismissal.  The matter was ultimately heard at arbitration where the employer argued, inter alia, that the CCMA had no jurisdiction as the employment relationship had not come into existence at the time of the termination of the employment contract.  The commissioner held otherwise in ruling that the person in question became an employee “the moment he accepted an offer of employment”.

The employee took this on review to the Labour Court who upheld the Commissioner’s ruling on grounds that the person in question was a party to a valid and binding contract of employment and was therefore an ‘employee’ as contemplated in the LRA.

The LAC held that it is entitled to extend the definition of ‘employee’ to include “a person who has concluded a contract of employment which is to commence at a future date”.  The LAC judgment later draws comparison with the legal position of unborn children who, in law, are endowed with legal rights “by way of a fiction”.

The Court furthermore, quite rightly, referred to section 213 of the LRA which furnishes a definition of ‘employee’ which includes “is entitled to receive any remuneration”; it follows that a person who has signed an employment contract to commence employment at a future date is indeed entitled to receive remuneration, albeit at a later date.

Simply put, this case highlights that a person becomes an employee as early as the date on which they sign an offer of employment, notwithstanding that this may pre-date the actual date on which the person commences their duties in terms of such acceptance.  It follows therefore that any dismissal from date of signature ought to comply with the pre-dismissal procedures of the LRA and be substantively fair.

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