The validity of automatic termination clauses in employment contracts

Abstract

This study aims to establish the validity of the automatic termination of an employment contract. The automatic termination of an employment contract means that the contract is terminated ex lege and not by an act of the employer. Such termination will therefore not qualify as a dismissal for purposes of section 186 of the LRA. The result is that these employees will not be able to challenge the fairness of such termination based on the unfair dismissal provisions in the LRA. It may be argued that such automatic terminations offer employers the opportunity to effectively circumvent their obligations under the LRA with regards to the fairness of dismissals. Automatic termination provisions are often used by employers as a mechanism to this. The Constitution of the RSA provides that everyone has the right to fair labour practices .1 This constitutionally guaranteed right is given effect to in the LRA2 which provides employees with the right not to be unfairly dismissed.3 By depriving employees of their protection against unfair dismissal, it may be argued that their fundamental rights to fair labour practices are infringed. This study aims to investigate the topic of automatic termination of employment contracts by analysing the provisions of, inter alia, the LRA and the Constitution of the RSA in order to determine the extent of protection afforded to employees against exploitation in circumstances such as these and will consider various findings of courts that may shed light on the matter. The effect of the recent amendments to the LRA in this regard will also be considered.