One of the most common mistakes made by employers is to appoint a person without having agreed on all the terms and conditions of employment. When the employee is subsequently required to sign a contract of employment, the employee refuses or fails to sign the contract. This may be due to some misunderstanding or unhappiness with regard to particular provisions in the contract.
In the case of Johannes Kgotso Mocheko vs Powa Props (Pty) Ltd, the employee, Mr Mocheko, was presented with a contract of employment after 7 years’ employment as a cleaner. He refused to sign it for reasons that were not entirely clear. After having ignored two subsequent written warnings to sign the contract of employment, he was dismissed. In the dismissal letter, the employer expressed the view that Mr Mocheko had been employed illegally. The CCMA Commissioner correctly pointed out that, firstly, the absence of a written agreement did not nullify the verbal agreement of employment and, secondly, the relationship existing between them was not illegal. As the dismissal had been for an invalid reason, it was substantively unfair. Mr Mocheko was awarded twelve months’ remuneration as compensation.
What should an employer do in his case like this? Misunderstanding and poor communication are often the reasons for an employee’s reluctance to sign a contract. It is therefore important to explain to the employee that it is to the benefit of both parties to have a written contract of employment. The provisions of the contract should be explained to the employee and the parties must establish whether there are any areas of disagreement. If there are no areas of disagreement and the employee still refuses to sign the contract, it serves no purpose to attempt to compel the employee to sign.
The Basic Conditions of Employment Act does not require the parties to enter into a written contract of employment. It simply requires the employer to supply the employee with written particulars of employment and it provides that certain items must be included in such particulars. The employer complies with the provisions of the Act if it provides the employee with a copy of the draft contract with a note that the employee has refused to sign it.
A signed written contract does, however, have definite advantages. It brings certainty and reduces the likelihood of disputes. There might also be provisions that are important to the employer, e.g. confidentiality or a restraint of trade undertaking. The enforcement of such provisions would be difficult in the absence of a signed contract. If the employee refuses to agree explicitly with a provision that is reasonable, the employer may embark on a procedure that could lead to the termination of the employee’s services due to operational requirements (retrenchment). Professional advice and assistance are advised in these circumstances.