Suspensive condition – is it a withdrawal of offer or dismissal?

On 29 March 2017, the Labour Court delivered a judgment reviewing and setting aside a bargaining council’s jurisdictional ruling in the matter of JI Du Preez v South African Local Government Bargaining Council and others. The jurisdictional ruling held that the Applicant was not an Employee of the Respondent as a result of the Respondent’s withdrawal of its offer of employment due to the fulfilment of a suspensive condition.

10 Apr 2017 3 min read Employment Alert Article

The facts are briefly as follows, the Applicant applied for a position as a Buyer. The application form contained a suspensive condition which was framed as follows:

“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”.

The employer offered the Applicant employment, which the Applicant duly accepted. However, before the Applicant could start working, it became evident that the Applicant had misrepresented his employment history. The Applicant was asked to submit proof of his references within a specified period and if he failed to do so it would “unfortunately lead to the withdrawal of the initial job offer”.

In a letter to the Applicant headed, “WITHDRAWN: OFFER OF EMPLOYMENT: BUYER (GEORGE)”, the Respondent withdrew the offer of employment on the basis of the suspensive condition as contained in the application form.

At the Labour Court, the primary issue was whether the bargaining council’s jurisdictional ruling that the Applicant was not an Employee of the Respondent was correct. The Applicant’s case was that his employment status was confirmed when he accepted the offer of employment. The Respondent conceded the existence of an employment contract but argued that the undertaking to employ the Applicant was subject to a suspensive condition which allowed it to withdraw the employment offer before the Applicant resumed his duties, if the pre-employment information which he submitted proved to be incorrect.

The Labour Court accepted that the Applicant’s employment was subject to a suspensive condition which entitled the Respondent to terminate the Applicant’s employment relationship if the information provided by the Applicant was established to be inaccurate. The Court, however, stated that that would still mean that the Applicant was employed before the contract was terminated.

The Court held that the Respondent’s letter did not purport to terminate the Applicant’s employment but was withdrawing the offer of employment. The question which therefore arose was whether the offer of employment was itself subject to a suspensive condition, which would permit the Respondent to withdraw the offer of employment even after it had been accepted by the Applicant. The Respondent’s difficulty was that the offer was not withdrawn before its acceptance. Further, the wording of the suspensive condition itself envisaged a situation where the application for employment had been successful and the Applicant had consequently been employed.

The Court was satisfied that on the facts of the matter, the Respondent 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; and not the right to withdraw the offer of employment.

The Court held that when the Respondent purportedly withdrew the offer of employment it was, in fact, terminating an existing employment relationship and therefore dismissing the Applicant. The Court set aside the jurisdictional ruling and referred the matter back to the bargaining council to determine the fairness of the dismissal.

This case speaks to the need to exercise great care in drafting the wording of suspensive conditions and when invoking the rights in terms of a suspensive condition.

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