Labour clause not enforceable
ror in law. The Labour Court upheld the review on the basis that the “automatic termination” clause precluded Mahlamu from exercising his right not to be unfairly dismissed in terms of the Labour Relations Act. The court went further to say that the “automatic termination” clause would be invalid unless the Labour Relations Act permitted such contractual provision. In finding that this was not permissible, the court held that “parties to an employment contract cannot contract out of the protection against unfair dismissal afforded to the employee whether through the device of ‘automatic termination’ provisions or otherwise”.
As a result, the court held that the automatic termination of Mahlamu’s contract of employment constituted a dismissal for the purposes of the Labour Relations Act and Mahlamu was granted leave to refer the matter to the Labour Court or CCMA.
This finding has profound and farreaching consequences as regards the enforceability of an “automatic termination” clause included in an employment contract which provides for the automatic termination of the employment contract, should the labour broker no longer require the services of the employee. In terms of this case, this will now constitute a dismissal for the purposes of the Labour Relations Act and the aggrieved party will be entitled to refer the matter to the CCMA or bargaining council on the basis of an unfair dismissal claim.
The effect of this is that labour brokers are now precluded from including, or rather enforcing, these “automatic termination” clauses in employment contracts as this will be considered a dismissal under the Labour Relations Act.