There are different legal requirements for amending terms of employment and employment policies. An employee`s consent is required in order for an employer to amend a term of employment, whilst an employer is only required to consult an employee prior to amending a code or policy if that the amendment is made in good faith.

The difficulty arises where reference to an employer’s employment code, policy and procedure is made in the employment contract. The question is then whether this reference results in the code or policy being incorporated into the employment contract making it a contractual term of employment which can then only be amended by agreement.

The court, in Gallagher v Norman’s Transport Lines (Pty) Ltd 1992 (3) SA 500 W in dealing with the distinction between contractual terms of employment and employment policies determined that, polices which are referenced in employment contracts such as disciplinary codes are not binding contract terms and serve as flexible guidelines that employees should comply with.

However, the Supreme Court of Appeal in Denel (PTY) (Ltd) Vorster [2004] 4 SA 481(SCA) held that the employer had terminated the employee`s employment in breach of the terms and conditions of employment in which it failed to adhere to the terms of its own disciplinary code and procedure “which  were expressly incorporated in the conditions of employment of each employee with the result that they assumed contractual effect.”

In Raseroka v SA Airways (SOC) Ltd (2020) 41 ILJ 978 (LC) the court explained that mere reference to disciplinary codes in contracts of employment does not give rise to the codes being binding unless there is a proven intention of the employer to incorporate the terms of the polices as contractual terms.

In order to avoid potential disputes and allow flexibility to amend its employment policies unilaterally, employers are advised to specify in contracts of employment that the reference to disciplinary codes and procedures and employment policies in the agreement does not create contractual terms and conditions of employment but are guideline documents that can be unilaterally amended by the employer at its sole and absolute discretion.

This blog was co-authored by Francisco Andrade- Nobrega, Candidate Attorney.