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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)
July 20, 2026

Precautionary suspensions

In the public sector, the Senior Management Service Handbook (SMS Handbook) directly addresses precautionary suspensions and the 60-day time limit.

Clause 2.7(2)(c) of the SMS Handbook provides that ‘If a member is suspended or transferred as a precautionary measure, the employer must hold a disciplinary hearing within 60 days. The chair of the hearing must then decide on any further postponement.’

Regulation 6 of the Local Government: Disciplinary Regulations Senior Managers, 2010 (Regulations) provides for the precautionary suspension of senior municipal employees and Regulation 6(6)(a) provides: ‘If a senior is suspended, a disciplinary hearing must commence within three months after the date of suspension, failing which the suspension will automatically lapse.’

What are the principles governing a determination of the question as to whether or not a senior municipal employee’s suspension automatically lapses in terms of the aforesaid Regulation 6(6)(a)?

Obviously, the answers to the aforesaid question are very relevant in the private sector where, firstly, a collective agreement regulates a similar process or, alternatively, such contractual rights have been created between the parties, to be enforced in terms of s77(3) of the BCEA.

July 13, 2026

In the previous article, we dealt with the consequences of a plant level collective agreement with a definite beginning and end date. We indicated to you that, in line with s23(2) of the LRA, and an analysis of the relevant case law, that, once such a collective agreement reaches its expiry date, it expires and is no longer of any force or effect. In this article, we deal with the scenario where a plant level collective agreement is concluded for an indefinite period and the employer gave notice to terminate same.

What are the consequences when a party to a plant level collective agreement, concluded for an indefinite time period, gives notice to terminate such collective agreement?

July 6, 2026

In terms of s23(2), a collective agreement binds, for the whole period of the collective agreement, every person so bound in terms of s23(1)(c) (the members of a registered trade union and the employers who are members of a registered employers’ organisation who are a party to the collective agreement, if the collective agreement regulates the terms and conditions of employment, or the conduct of the employers and employees) who was a member at the time it became binding, or who becomes a member after it became binding (irrespective of whether or not that person continues to be a member of such trade union or employers’ organisation for the duration of the collective agreement).

What is the relevant case law development as to a plant level collective agreement that has an expiry date, i e does such collective agreement continue to be of force and effect after such expiry date?