The Extension of Security of Tenure Act 1997 (ESTA) distinguishes between individuals whose right of residence arises solely from the employment agreement and those whose right arises from the general consent of the owner of the land. Only in the former instance can the right of residence be terminated on termination of employment.

In the matter of Monde v Viljoen NO & Others, the court held that the termination of an individual’s right of residence on a farm was unlawful and invalid, even where his dismissal as a farm worker was fair in accordance with employment legislation. The employer had specifically not tied the right of residence to the employment contract which turned out to be a bad decision from the employer’s point of view.

Given the large scale dislocation caused by apartheid legislation, accommodation is frequently still a term and condition of employment in both urban and rural South Africa. Whilst a reading of the Basic Conditions of Employment Act 1997 creates the impression that such accommodation comes to an end once employment is terminated, the judgment has illustrated that this is not always the case. Be careful that your employment contract refers to this intention or the adult family member of a lawful occupant may get greater occupation rights than employees.

ESTA also provides that the waiver of any rights obtained in terms of ESTA is not valid, unless specifically permitted by ESTA or incorporated into a court order. On the facts of the case, this meant that where the applicant had the general consent of the owner of the land to stay with his mother on the farm prior to his employment, the attempt to limit his right of residence in a subsequent contract of employment would not be valid. He was accordingly allowed to remain in residence after the termination of his employment.

Employers should ensure that accommodation provided to employees is monitored carefully and that the appropriate agreements are put in place when non-employees reside with employees.