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September 27, 2016

Dismissal for refusing to sign an employment contract?

Employers are often at a loss when an employee refuses to sign a contract of employment. Can the employee be disciplined or dismissed? What other measures are available to the employer?

One of the most common that employers make is to appoint a person without having agreed on all the terms and conditions of employment. When the employee is subsequently required to sign a contract of employment, the employee refuses or fails to sign the contract. This may be due to some misunderstanding or unhappiness with regard to particular provisions in the contract.

Our law states that verbal employment contracts are perfectly binding. But, obviously, it’s better for both employer and employee to enter into a written contract, to record all the pertinent rights and obligations of both parties. This avoids vagueness.

What should an employer do if it does not have a written agreement in place?

It is important to explain to the employee that it is to the benefit of both parties to have a written contract of employment. The provisions of the contract should be explained to the employee and the parties must establish whether there are any areas of disagreement. If there are none, and the employee still refuses to sign the contract, it serves no purpose to attempt to compel the employee to do so.

The Basic Conditions of Employment Act does not require the parties to enter into a written contract of employment. It simply requires the employer to supply the employee with written particulars of employment and it provides that certain items must be included in such particulars. The employer complies with the provisions of the Act if it provides the employee with a copy of the draft contract with a note that the employee has refused to sign it.

A signed written contract does, however, have definite advantages. It brings certainty and reduces the likelihood of disputes. There might also be provisions that are important to the employer, e.g. confidentiality or a restraint of trade undertaking. The enforcement of such provisions would be very difficult, if not impossible, without a signed contract. 

If the employee refuses to agree explicitly with a provision that is reasonable, the employer may embark on a procedure that could lead to the termination of the employee’s services due to operational requirements (retrenchment). 

Professional advice and assistance are recommended in these circumstances.