n HR Future - Are automatic termination clauses enforceable? - labour law

Volume 2019 Number 8
  • ISSN : 1608-8506


The Labour Appeal Court, in Nogcantsi v Mnquma Local Municipality and Others (2016) 27 SALLR 51 (LAC), considered the following important issues: (a) A suspensive condition is a condition suspending rights and obligations until an uncertain future event occurs. The implication is that the occurrence of such event brings to life the suspended part of the contract or, indeed, the entire contract. On the other hand, whereas the fulfilment of a suspensive condition ‘breathes life’ into otherwise inoperative rights and obligations, the fulfilment of a resolutive condition ends the existence of rights and obligations. With reference to the aforesaid distinction, the following resolutive clause appeared in the relevant contract of employment: ‘Your appointment is subject to a vetting and screening process ... and should the revealed outcomes become negative your contract will automatically be terminated’. According to the Labour Appeal Court in casu, does a negative vetting and screening process automatically bring such contract to an end or, alternatively, is this a case where an employer indeed dismissed the employee?

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