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Taurai Musakaruka People Issues
A contract of employment is an agreement entered into between an employer and an employee at the time the employee is hired that outlines the exact nature of their business relationship, specifically what compensation the employee will receive in exchange for specific work performed. It is an oral or written, express or implied agreement specifying terms and conditions under which a person consents to perform certain duties as directed and controlled by an employer in return for an agreed upon wage or salary.
Whether stated or not in the contract, both the employee and the employer owe the duty of mutual confidence and trust, and to make only lawful and reasonable demands on each other. Every employee is under the obligation to carry assigned duties, or the employer’s instructions to the best of his or her abilities.
The employer is under the obligation to protect the employee from harm or injury, and make fair compensation for any loss or damage resulting from any job-related accident or facilitate the same.
Employment contracts take many different forms. All employees at a company may be asked to sign the same form contract or each employee may have a contract with the employer that is applicable just to his or her employment agreement.
An employer and an employee may simply have an oral agreement regarding the kind of work the employee will do, for how long, and at what rate of pay.
Sometimes there is no written or oral agreement but the behaviour of the employer and the employee can be viewed as an implied employment contract. These are all legal arrangements in terms of the Labour Act Chapter 28:01, section 12(1) which clearly states that . . . “every person who is employed by or working for any other person and receiving or entitled to receive any remuneration in respect of such employment or work shall be deemed to be under a contract of employment with that other person, whether such contract is reduced to writing or not”.
The agreement must comply with the general formalities or features of a contract at common law as was ruled in Southampton Assurance Company of Zimbabwe v Mutuma 1990 (1) ZLR. Offer and acceptance are the first stages in establishing an agreement that may form a legally binding contract. The terms that will bind the parties are included here.
Offer is an expression on willingness to be bound on terms. Terms established by the offeror here – and only those included at this stage form part of the contract. The party(ies) to whom the offer has been made communicates a full and unconditional acceptance of the terms of the offer, Monteiro v Wankie Colliery Co Ltd HH-100-95.
The offer has to express the willingness of a party to enter a bargain or a contract. The offer usually has a date until it is valid. However, if the date is not present, then it is valid until accepted or rejected. Once rejected, the offer is not valid any more.
Parties to any employment contract should have the legal capacity to act. Legal capacity refers to the ability to perform valid juristic acts. Any person above the age of 18 can enter into a contract but there are certain persons who, in the eyes of the law have limited legal capacity and which in a way prevents or limit them from entering into contracts. Such person includes minors, insolvents, mentally ill, drunkard, prohibited immigrant or specified persons.
General content and variation terms are essential. In terms of the Act section 12, the following details should be contained in any employment contract: a) the name and address of the employer; (b) the period of time, if limited, for which the employee is engaged;(c) the terms of probation, if any; (d) the terms of any employment code; (e) particulars of the employee’s remuneration, its manner of calculation and the intervals at which it will be paid; (f) particulars of the benefits receivable in the event of sickness or pregnancy; (g) hours of work; (h) particulars of any bonus or incentive production scheme; (i) particulars of vacation leave and vacation pay; (j) particulars of any other benefits provided under the contract of employment.
Section 12 (3) of the Act further stipulates that, a contract of employment that does not specify its duration or date of termination, other than a contract for casual work or seasonal work or for the performance of some specific service, shall be deemed to be a contract without limit of time: Provided that a casual worker shall be deemed to have become an employee on a contract of employment without limit of time on the day that his period of engagement with a particular employer exceeds a total of six weeks in any four consecutive months.
Section 12 (4) also provide for notice clauses to be included in terms of termination as follows and I quote: “Except where a longer period of notice has been provided for under a contract of employment or in any relevant enactment, and subject to subsections (5), (6) and (7), notice of termination of the contract of employment to be given by either party shall be — (a) three months in the case of a contract without limit of time or a contract for a period of two years or more; (b) two months in the case of a contract for a period of one year or more but less than two years; (c) one month in the case of a contract for a period of six months or more but less than one year; (d) two weeks in the case of a contract for a period of three months or more but less than six months; (e) one day in the case of a contract for a period of less than three months or in the case of casual work or seasonal work”.
In terms of the Act, the contract is required to spell out the terms of probation and any other general issues related or connected to employment.
Basically, it must be lawful and must not be in any way violates statutes, public policy or morality. In Mutandiro v PTC – HH-43-01, an agreement to ignore the labour laws of the land was held invalid as was an agreement tainted by corruption in Babbage & Galloway v Electroreps S-241-95 (Gwisai, Labour and Employment Law in Zimbabwe 2006).
Consideration-
This is the bargain element of the contract, also known as “the price of a promise”. A simple contract may be a bad bargain, but it must be a bargain to be enforceable. “Legal relations” means that the parties view the agreement as a legally enforceable contract and a breach of the contract could result in a remedy being sought.
Intention
The parties must intend that the agreement is to establish a legally binding contract rather than simply a social/domestic arrangement.
Certainty
The terms of the contact must be clear and certain and not vague or ambiguous on the essential features – Carthew Gabriel and Fox and Carney (Pvt) Ltd 1978 (1) SA 598 (RAD).
Absence of critical information on critical issues such as remuneration may render contracts invalid, unless this could be reasonably inferred. In addition to the above, performance is also critical.
The contract must be physically and lawfully capable of performance. A contract whereby one can employ someone to perform dirty work like stealing cars on his behalf is capable of performance physically but unlawful.
Conclusively, a contract of employment should carry the following elements:
a) Offer: There must be a definite, clearly stated offer to do something;
b) Acceptance: Only what is offered can be accepted.
This means that the offer must be accepted exactly as offered without conditions. If any new terms are suggested this is regarded as a counter offer which can be accepted or rejected. There can be many offers and counter offers before there is an agreement.
It is not important who makes the final offer, it is the acceptance of that offer that brings the negotiations to an end by establishing the terms and conditions of the contract;
c) Intention of legal consequences: A contract requires that the parties intend to enter into a legally binding agreement. That is, the parties entering into the contract must intend to create legal relations and must understand that the agreement can be enforced by law.
The intention to create legal relations is presumed, so the contract doesn’t have to expressly state that you understand and intend legal consequences to follow, and finally;
d) Consideration: In order for a contract to be binding it must be supported by valuable consideration. That is to say, one party promises to do something in return for a promise from the other party to provide a benefit of value (the consideration).
Consideration is what each party gives to the other as the agreed price for the other’s promises. Usually the consideration is the payment of money but it need not be; it can be anything of value including the promise not to do something, or to refrain from exercising some right.
Disclaimer: I do not accept any liability for any damages or losses suffered as a result of actions taken based on information contained herein. The information contained herein does not serve as alternative to legal advice.
Taurai Musakaruka is a human resources practitioner. For feedback e-mail to [email protected] or [email protected]
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