The following scenario is commonplace:
- An interested candidate applies for a job;
- The interview concludes successfully;
- The employer offers the prospective candidate an offer of employment;
What is less commonplace, is the situation where the employer, despite the offer being to the satisfaction of both the employer and prospective employee, retracts the offer of employment, prior to the prospective candidate commencing work.
A few questions arise:
- Could this amount to unfair dismissal in terms of the Labour Relations Act?
- Is the employer bound to the offer of employment?
Section 213 of the Labour Relations Act defines an employee as follows;
“a) any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration;
- b) and any other person who in any manner assists in carrying on or conducting the business of an employer”
In furtherance hereof, the employment contract forms the basis of the relationship between the employer and the employee.
It is of the utmost importance to first establish if a contract of employment exists between the employer and the employee.
In applying the aforesaid to the scenario, it is imperative that the prospective employee is only deemed an ‘employee’ on the first day of the prospective employee physically attending work.
Our Courts, however, have differed on the aforesaid application.
Our Courts have found that the employer has a legal obligation towards a prospective employee/candidate, and that by application of the law, the prospective employee is protected as soon as the offer of employment is concluded (accepted), and that the material terms thereof have been agreed upon (such as the employment contract).
The aforesaid protection can be applied prior to the prospective employee commencing work, and can apply irrespective of whether the employment contract, or terms thereof, are entered into orally or in writing.
An offer of employment creates a legally binding contract and a later withdrawal thereof could possibly amount to a dismissal, especially if the dismissal is found to be unfair or unreasonable.
It should be noted that this would be decided on a case by case basis, and would be dependent on the relevant circumstances.
In considering the case of Young v The Barnes group (2017)26 CCMA 7.1.13:
Young was interviewed for a position and he claimed he was offered a sales position in one of the company’s subsidiaries.
Young submitted that after having been offered the position, the managing director changed his mind and withdrew the offer.
Young submitted that this amounted to an unfair dismissal.
The CCMA stated that in order for an employment contract to be valid, the following should exist;
- An intention to create a legal relationship therefrom;
- An offer and an acceptance and;
- Parties should agree on the material terms thereof.
The CCMA used section 186(1)(a) of the LRA which defines dismissal as follows:
“an employer has terminated a contract of employment with or without notice”.
The CCMA held that Young had been dismissed.
The CCMA held that a valid contract of employment had been concluded between the parties and the termination thereof constituted a dismissal.
The CCMA awarded Young with two month’s salary at the rate offered in the retracted contract of employment.
It is clear that the aforesaid canvasses numerous grey areas, and requires a technical underpinning of the relevant principles – feel free to contact us should you have any queries herein, or require further assistance herein.
Written by Lunga Ndima (Candidate Attorney) and Keegan Elliott (Attorney)