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The risks of incorporating employment policies into the employment contract.

Employment contracts frequently refer to the employer’s codes and policies in one way or another. It is very important to know HOW this should be done, as there may be very different consequences.

  • Employment policies are usually broadly framed documents to serve as guidelines from which the employer may deviate in occasion (if done fairly and lawfully) or which may be amended from time to time.

  • Contractual terms and conditions bind both parties to the employment contract, and cannot be changed unilaterally by one party without consent.

Referring to policies or a disciplinary code in the contract in such a way that they are incorporated as terms and conditions of employment, means that the parties are contractually bound by those and they cannot be amended without negotiations and consent. Deviation from those policies would also constitute a breach of contract which can be pursued in civil court or under s77 of the BCEA in the Labour Court.

A successful claim for breach of contract by an employee can lead to an order for specific performance against the employer, or damages to be awarded in favour of the employee, if such can be proved.

In Wereley v Productivity SA & another (2020) 41 ILJ 997 (LC), the Labour Court held that the following wording indicated that the employer's disciplinary code had been incorporated into the employment contract:

“The parties agree that all terms and conditions of employment are:

  • as specified in this contract,

  • those conditions of employment not specified in this agreement shall be in terms of the employer’s rules, regulations and procedures, and

  • should the employment contract and also the employer’s rules, regulations and procedures be silent on any specific point any relevant labour legislation shall apply”

See also Mpane v Passenger Rail Agency of South Africa (PRASA) and Others (J 3745/18) [2020] ZALCJHB 173.

So – whilst the employer’s policies, disciplinary code and the like can (and should) certainly be referred to in the employment contract and employees should know that they are subject to those, the wording in the contract should be carefully crafted to ensure that the employer does not inadvertently incorporate those policies as terms and conditions of employment to which the employee would be contractually entitled.

© Judith Griessel


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