Employment law update – Does a suspensive condition in employment contract apply to offer of employment?

June 1st, 2017

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

Du Preez v SALGBC and Others (unreported case no C147/15, 29-3-2017) (Lagrange J)

While an employer may rely on a suspensive condition in an employment contract to terminate the employment relationship, can an employer rely on the same suspensive condition to withdraw an offer of employment, after an employment relationship had been concluded, but before the employee commences work with his or her employer?

The applicant applied for a position at the Eden District Municipality in 2013. On the application form he signed a clause which read:

‘I hereby declare that the information given on this form is true and correct. I accept that, in the event of my application been successful, any information to the contrary will lead to immediate dismissal.’

After considering the applicant the most suitable candidate, the municipality, on 16 September 2014 formally offered him the post he applied for.

In accepting the offer, the applicant indicated to the municipality that he would be in a positon to commence work on 13 October 2014.

However, before the applicant started work and prior to the parties entering into a formal written contract, the municipality became aware of certain discrepancies in the applicant’s employment history. The applicant indicated he held the position of Head of Supply Chain Management at his previous employment and had left because of a labour dispute, whereas the municipality ascertained he was an administrative officer who had been dismissed by his erstwhile employer. In a letter dated 10 October 2014 the municipality requested the applicant to furnish it with the necessary proof substantiating his assertions in respect of his prior employment within seven days. In the same letter the municipality advised the applicant that failure to provide this proof would lead to the job offer being withdrawn.

In a further letter dated 28 October 2014 and headed: ‘Withdrawn: Offer of employment…’ the municipality informed the applicant that due to his dishonesty and on the strength of the clause he signed when applying for the post, it was withdrawing its job offer made to him.

The applicant referred an unfair dismissal dispute to the bargaining council and in a jurisdictional ruling, the arbitrator found that the applicant was never an employee of the municipality.

It was this ruling that served before the court on review.

The applicant argued that when he accepted the offer on 16 September 2014, he effectively entered into a contract of employment with the municipality. The municipality agreed with the fact that the parties entered into a contractual relationship on 16 September, however, argued that the contract contained a suspensive condition that allowed the municipality to withdraw the offer before the applicant started work if the information he provided when applying for the position, turned out to be incorrect.

While the court accepted that the applicant’s employment was subject to a suspensive condition, the argument raised by the municipality sought to ask the question of whether or not the offer itself, was subject to the suspensive condition. If so found then the municipality would be within its rights to withdraw the offer as it so did.

Initially the court considered the municipality’s argument an appealing one – if the employment contract could be terminated because the applicant tendered inaccurate information, then it would be more of a reason to agree with the proposition that the offer itself could be withdrawn before the applicant commenced his duties.

However, on further consideration in respect of the wording of the suspensive condition and the sequence of events that followed, the court adopted a different view and held:

‘The difficulty this argument presents is that, the offer was not withdrawn before the applicant had formally accepted it and it would appear that in invoking the suspensive condition contained in the application form, the municipality could only have done so on the basis that the applicant had been employed as a buyer. That provision clearly envisaged a situation where the application for employment had been successful and the applicant had consequently been employed. I have little doubt on the facts as they appear that the municipality would have been contractually entitled to invoke the suspensive condition but that contractual entitlement was the right to terminate an appointment, which had already been made. In my view, it would be an artificial reading of the factual situation to suggest that the parties had not agreed on the applicant’s appointment and that the termination in terms of the suspensive condition was the termination of an appointment not the withdrawal of a still pending offer of employment. It would also be an interpretation of the suspensive condition which the language of that provision would have to be severely strained to sustain.’

Following this the court concurred with the applicant when finding his employment relationship with the municipality had been terminated and the alleged withdrawal of the offer by the municipality was tantamount to a dismissal.

In setting aside the jurisdictional ruling the court remitted the matter to the bargaining council to be heard on the merits of his dismissal dispute. The court did note that the applicant’s victory may well be short lived having regard to the facts of the case. The municipality was ordered to pay the applicant’s costs.

This article was first published in De Rebus in 2017 (June) DR 56.