Validity Of Automatic Dismissal Clauses

SATAWU (on behalf of DUBE) took Fidelity Supercare Cleaning Services Group (Pty) Ltd, to Court recently. Several persons, employed by Fidelity to provide cleaning services to Wits University, brought the action for what they perceived to be the unlawful termination of their employment agreements.

What led to the litigation was the following: Wits University had concluded a service agreement with Fidelity, in terms of which Fidelity would provide cleaning services to it.Pursuant to the conclusion of this agreement, and as is quite customary, Wits engaged the services of several employees on the basis that the contracts would come to an end either on date of retirement University or the date the contract between Fidelity and the University terminated, whichever occurred first.

Sometime thereafter, Wits cancelled its agreement with Fidelity, and later equivocated and retained Fidelity’s services, this time on a much smaller scale. Fidelity then invited all affected Employees to apply for the available positions at Wits University, which invitation they neglected to accept.

This matter was then referred to Court on the basis that the employees were dismissed for operational reasons without severance pay. The court had to decide whether the clause – stipulating the termination based on the occurrence of an event -was valid, which it confirmed in the affirmative.

This finding is in line with Item 11 of the Code of Good Practice which provides ‘If an employee either accepted or unreasonably refused to accept an offer of alternative employment, the employees statutory right to severance pay is forfeited’. In cases such as these, termination is by operation of law.

This judgment aligns itself with the employment demands of companies whose employee requirements are dynamic, particularly those providing services on a fixed term contractual basis.

Read the judgment here:

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