Automatic Termination Provisions in Employment Contracts

18 May, 2016

In a recent case, Pecton Outsourcing Solutions CC v Pillemer and Others [2016] 2 BLLR 186 (LC), a court ruled that Pecton, a temporary employment service, was not allowed to give notice of termination of employment to its employees purely based on one of its clients terminating a service agreement with the employment service

This was despite the fact that the employee’s employment contracts provided for automatic termination of employment under these circumstances. The Labour Court held that such a provision is inconsistent with Section 189 of the Labour Relations Act 66 of 1995. This section provides for employees rights with regard to dismissal for operational requirements, including the right to severance pay. No provision in an employment contract can be used to circumvent Labour Legislation.