Basic Conditions of Employment Act (1997)

The Basic Conditions of Employment Act of South Africa (Act 75 of 1977) stipulated minimum standards of employment that had to be accounted for in all employment contracts. The Act’s objective was to regulate the standards of employment and the

85 constitutional rights of both the employers and employees on entitlement to fair labour practices. The Act set legal guidelines and apportioned responsibility for ensuring achievement of economic development and social justice. The provisions of the Act reflected a compromise between the rights and obligations of both employers and employees. Many of the provisions of the Act had built-in measures of flexibility. This flexibility was realised by including agreements that regulated the very basic conditions of employment. This was often done within narrow parameters (BCEA, 1997).

Leave. By law, employees had to take time off from their work. Some circumstance might require an employee to take leave for the purpose of an annual holiday break, attempting to recover from illness, or tending to a sick child.

Annual leave. Annual leave was often referred to as holiday leave, as an employee was obliged to take leave at least once a year. This practice was duly recommended to keep an employee in good health as well as to promote productivity and personal well-being. Legitimate absence from a workplace, for example, temporarily could shield employees against responding to unreasonable demands by their employers. Any other form of leave, except sick leave, provided for in a contract of employment, was indeed not statutory and was regulated by an agreement between the employer and employee in a way that the two individuals might decide upon. Leave could be accumulated, forfeited, or encashed or traded. The two parties simply had to agree on the rules (Todd, 2001, p. 34).

Sick leave. While the annual leave cycle lasted one year, a sick leave cycle usually covered three years. During each three-year cycle, an employee was entitled to paid sick leave for a number of days, as per contract. If the employee had exhausted his or her sick leave apportionment and still remained sick, the employer was not under any obligation to pay the person for extra time off. If the employee had a protracted illness that seriously affected the employer’s business activities, the employer could not reasonably be expected to keep the employee’s job open. The issue of early termination of the employment contract might arise (Todd, 2001, p. 34).

Maternity leave. Policies on granting of maternity leave were not always uniformly applied throughout the commercial world. Pregnant women were often entitled to

86 four months maternity leave. Most companies considered it as unpaid leave, unless an employer and employee specifically had agreed otherwise.

According to the Labour Relations Act of South Africa (LRA 1994), the dismissal of an executive officer due to pregnancy was considered an unfair labour practice. A dismissal might have been the consequence of the employer’s refusal to allow this executive to resume her work after taking maternity leave. An employee’s dismissal in such circumstances could lead to granting of a court order that made retrospective reinstatement or financial compensation for a period of up to two years’ remuneration compulsory.

Family responsibility. Executives were entitled to take family-responsibility leave. This could be taken by a male or female employee, depending on the role that this person might be required to fulfil at home. This varied from one company to another. The norm in most organisations was five days or one week per annum.

Termination. Entering into an employment contract was easy but terminating it was not a straightforward matter. The law regulating termination of employment contracts permitted a far-reaching intervention in the contractual relationship between the employer and an employee. When a contract stated that either of the parties might terminate employment with one month’s notice, it implied that the employee might bring the contract to an end by giving a month’s notice without offering (or being required to offer) any explanation for having done so.

The required notice period could be done away with by an employer who had a valid and legal reason to dismiss an executive. A summary dismissal was a dismissal without due notice. It was usually only justifiable as response to a most serious breach of any contractual obligation toward an employer. Grave dishonesty would normally constitute a serious breach of contract by the employer. It could possibly influence an executive to terminate the employee’s contract without giving the required notice (Todd, 2001, p. 52). Any notice of termination always had to be a written document. If an employer terminated a contract with or without due notice while this person was not entitled to do so, the dismissed executive could find recourse in the law of unfair dismissal.

87 When an executive manager had failed to give the required notice and immediately took up employment with a competitor, an employer could urgently and successfully apply for an interdict against the executive to prevent this person from working for the competitor for the remainder of the period in which the employee should have served notice. If the executive had resigned and the employer was willing to waive the notice period, the employer had to pay the departing executive for the period of notice unless the latter agreed otherwise. The resigning executive might have been willing not to be paid if he or she was eager to leave the company and preferred to do so without notice-pay rather than working throughout the notice period (Todd, 2001, p. 4).

5.3 Employment Contracts

The scientific objective of the study was an evaluation of whether executives who negotiated Long-Term or Short-Term Employment Contracts differed in leadership styles as well as executive tasks and behaviours, after evaluation with a series of psychometric instruments. Understanding of what employment contracts indeed were and how these agreements affected human conduct at the executive level was a key consideration in the planning and design of the pending research project, and more specifically, in making it operational in order to realize the scientific objectives of the study.