South Africa: Offer Accepted, Protocol Neglected: Ground For Dismissal?

Typically, a contract of employment comes into existence when an employer makes an offer to employ a person and that person accepts the offer. In its recent decision in Road Agency Limpopo (SOC) Ltd v Fosu, the Labour Court considered whether a prospective employee had actually accepted an offer of employment made by the prospective employer. It also considered whether a valid contract had come into existence by virtue of the doctrine of quasi-mutual assent.

FACTUAL BACKGROUND

The applicant (the "employer"), offered the employee the position of Chief Financial Officer for a contract period of six months, which the employee accepted, and a written contract was concluded. This contract was extended for a further six months terminating on 28 February 2018. During this extended six-month period, the employer offered the employee the position of CFO in terms of a five-year fixed-term contract, which would come into effect upon the lapsing of the extended contract. The offer for the five-year fixed-term contract included a mode of acceptance, which required the employee to communicate her acceptance by signing the offer and forwarding a signed copy to the Human Resources Department within 14 days of receipt of the offer letter. The employee was not satisfied with the remuneration package offered and negotiations took place on a suitable offer.

This culminated in the employer making a further offer which had to be accepted or rejected by 15 January 2018. In response, the employee sent an emotionally charged email on 15 January wherein she expressed the following -

"Having reflected upon the offer of R1.8m, the entire negotiation process leading to the email below, I need to state that I am not satisfied with the offer and the entire negotiation process how it unfolded. However, I am accepting the offer".

This reply clearly constituted an intention to accept the offer but it was not signed, nor was a signed copy of the offer sent to the Human Resources Department. Subsequent to this, the employee went on leave and returned to the office after the expiry of the extended contract. She then received a letter from the employer stating that her extended contract had expired on 28 February 2018 but offering a further fixed-term contract of two months. It appears that the employee accepted the offer but was placed on "administrative leave" prior to the contract expiring.

She argued that she had been dismissed and referred an unfair dismissal dispute to the Commission for Conciliation Mediation and Arbitration ("CCMA").

The CCMA

At the arbitration, the employer argued that the employee ceased to be employed on the expiry of the extended six-month contract and could therefore not have been dismissed. There had simply been the expiry of a fixed-term contract. A further five-year contract had not come into effect because there had been no valid acceptance of the offer made by the employer; there had been no signed offer of employment indicating her acceptance sent to the Human Resources Department. The employee argued that the email of 15 January 2018 constituted a valid acceptance of the offer but also argued that a contract had come into existence by virtue of the conduct of the employer. This conduct created the impression that the employer accepted that a valid contract had come into effect, notwithstanding the failure to accept the offer as required by the employer. There had been "quasi-mutual assent".

The commissioner found that the email of 15 January 2018 did not constitute a valid acceptance of the offer but nevertheless accepted the second argument and found that there had been a dismissal and that the dismissal had been unfair. The employer was ordered to pay 12 month's compensation.

The Labour Court

The employer's application to review and set aside the commissioner's award was unsuccessful. The Court found that the commissioner's assessment of the evidence and her conclusion were reasonable. It stated this in the following terms –

"[16] It is apparent that the mode of acceptance was clear in the offer itself and the employee did not comply with the mode of communication. However, the applicant itself did not take issue therewith (i) either in reply to her email of 15 January 2018, (ii) at the meeting on 21 February 2018 or (iii) by Mr Matji in his correspondence post the meeting. Instead, the impression that the employee was left with after the meeting of 21 February and the email from Mr Matji was that all was in order and that she was to receive a contract of employment. There was simply no protestation by the applicant to the mode of communication of the acceptance of the offer by the employee. Had, it done so it would have been on firmer ground to assert that her failure to accept the offer by way of the mode of acceptance stipulated in the offer letter resulted in there being a lapse of the offer and hence no contract. But, the conduct of the applicant was not this and the Commissioner understood this to be the case."

Comment

This decision illustrates the important point that, if an employer prescribes the method in which acceptance of the offer of employment must be made, the employee must utilise this method for a valid acceptance to take effect. But perhaps of more importance is that the employer's conduct during the negotiation (or renegotiation) of a contract could nevertheless result in a valid contract arising from the application of the doctrine of quasi-mutual assent.

Reviewed by Peter le Roux, an Executive Consultant in ENS' employment department

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