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Article 21/2023

What is the quantum of damages suffered by an employee in all cases of the unlawful termination of a contract, including:

  • short notice
  • defective notice
  • giving no notice at all

or some other breach of contract giving rise to an election to terminate?

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  • Unlike in the case of an unfair dismissal, in the case of exercising a contractual right to terminate an employment contract, the reasons or motives for exercising such right are normally irrelevant

(Mutsapha v Receiver of Revenue 1958 (3) SA 343 (A))

  • Where an employer reserves for itself the right to terminate an employment contract, the only potential actionable wrong is the failure to pay the requisite notice or permit the employee to work during such notice period – damages in this regard are limited to what the employee would have earned during the notice period

(Harper v Morgan Guarantee Trust 2004 (3) SA 353 (W), so referred to recently in Khan v MMI                        Holdings (2021) 32 SALLR 44 (LC))

  • The limited damages rule is applicable to all cases of unlawful termination, including short notice, defective notice, no notice given at all, or some other breach of contract giving rise to an election to terminate

(National Entitled Workers Union v CCMA (2007) 28 ILJ 1223 (LAC)

  • In summary, therefore, if an employer lawfully terminates an employment contract (i e giving proper notice or having paid in lieu of such notice, the employee has no further claim for contractual damages)
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We think that everyone understands that an employer is vicariously liable for the wrong committed (an act or omission) by its employee during the course/scope/sphere of employment/engagement in any activity reasonably incidental to it.

But, what is the extent of an employer’s vicarious liability where the employee commits a wrong on his or her own volition?

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If, on the traditional theory of consensus, a party fails to prove an agreement upon which it relies, with reference to Sonap Petroleum SA (Pty) Ltd v Pappadogianis 1992 (3) SA 234 (A), on what basis can a finding be made that quasi-mutual assent exists, founded on the approach that a party is precluded from denying the existence of an agreement based on their own conduct and the circumstances?

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In determining whether an agreement has been reached in the absence of traditional consensus, but on the basis of quasi-mutual assent, what is the extent of the duty on the party wishing to rely on such an agreement to, on the basis of reasonableness, enquire as to the contradictions that exist in the position of the other party so contained in correspondence?

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Where do delictual claims fit into dispute resolution options applicable to employment disputes?