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Post Info TOPIC: Employment Contract while under business rescue
Anonymous

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Employment Contract while under business rescue
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I was employed by a company under a 3 month Probation contract and a month into working at the company it was placed under business rescue. When my 3 months came to an end I was offered a contract on which which had a higher salary attached to it: . My immediate superior and the HR Department had to give elaborations on why they were requesting the higher amount and our CFO + CEO signed off on it, but they never escalated it to the BRP. 

During the Business Rescue procedure one of our suppliers, who has shown interest in buying the company, offered to fund the salaries for that time period.

Skip ahead 4 weeks and I am verbally informed that I will only receive the original salary amount (this was the day before payday) since the funding company refuses to acknowledge my contract that was signed under Business Rescue. This left me in a predicament: I did not have a valid contract but I also did not want to anger the future bosses by Going the CCMA route BEFORE I actually have a written agreement with them. 

Afterwards I was verbally informed that I would get a new contract when the purchase went through and that the higher salary will be on the new contract: they refuse to put this in writing. I've lost over R20k since this has happened and the sale still has not gone through. Can I do anything about it? 



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Anonymous

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This is a very interesting matter.... (Since my phone does not space paragraphs I will start each new paragraph with dots and the first word in capital letters)....... IN order to answer your question, we must first take a look at the "mechanics" or statutory law that will provide our grounds for this matter....... FIRST let's look at the origen of Bussiness Rescue " BR" the origen is found in the Companies Act 71 of 2008 "CA" at chapter 6, the CA at section 136 (1) (a) (ii) state that whilst the company, before or during this process may change terms and conditions of employment in accordance with labour legislation....... THIS said, let us now look at the Labour Relations Act no 66 of 95 "LRA" at section 210 that state when conflict to this act by any other law save for the Constitution of SA, the LRA will prevail........THE LRA state that emloyment conditions may not be altered unilaterally same that will be an unfair labour practice from the employer's side, you must remeber that a contract is an agreement, a promise from one party to another that work will be deliverd and compensation paid, neither party can change the terms as they please without concent from the other party.......NOW the contract was signed and therefore a promise made, although the employer was under bussiness rescue, that contract is valid and encforceable..... NOW that we know what the Act's (law) says regarding bussiness rescue and labour matters, we must now look at the law of contract, a contract require four elements to be legal and binding namely: 1. Offer- there must be a clear offer to do something (you wil work as such employee.....) 2. Acceptance - only what is offered can be accepted 3. Intent - the intent to enter into a contract and ability to perform 4. Consideration - ussualy payment promise but can also a promise not to do something........ NOW the intent lack in your contract since the employer did not have the ability to pay you, however, the nexis or relationship in that contract is between you and the employer and not you and the prospected buyer or money lender....... THEREFORE the employer acted negligently and the contract is of such nature that it can not receive reasonable enforcement therfore the contract is not legal. This however does not leave the employer with no consequences, you can claim damages in light of promissory estoppel - meaning damages you have sufferd as a result of the actions of the employer's promise to you...... THIS must be life changes and you must prove actual damages not potential damages........ IT is my opinion that the courts are reluctant to award contract damages but rather actual damages, however, it does not say that they cannot award contract damages......THE employer did remdy the situation, they have come clean and explain to you that they made a mistake and are willing to make good thereon in future, this will be in their favour, further they attempted to renegotiate terms in order to comply........REMEMBER that negotiations must. Lead to acceptance thus they can reduce salary if you agree but if not they must pay you not less than the origional agreement.....IT will be wise to document their commitments to you, write a letter and detail the commiments such as the promise of a new contract salary and so on, even though they do not respond thereto it will assit you in future matters...... ALWAYS remeber that "a statement that is made and not contradicted is a statement that stand" hope this help......Regards Rautenbach & Associates

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Anonymous

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By default, the employment contract is signing for an indefinite terms. That is whether, until, so far it will be terminated at your desire or at wikipedia.org will of employer. The urgent contract ("urgent" - because that has validity period, but not because that has to be concluded within an hour) is an exception. Cases when work on the contract is limited to certain terms, are accurately stated in the Labour code, in particular:

 

Seasonal work (for example, gathering strawberry in Krasnodar Krai)

Temporary replacement of the employee (who, let us assume, is in the http://risebiz.co.za/ decree)

By an agreement of the parties (for example, the contract with the designer for registration of rooms can be signed for the term of performance of work or the student, getting temporary job in the summer, can sign contract only for vacation)

The main rule – the contract is limited to some period if it is impossible to perform this work constantly.

 

if in the contract it isn't specified that it is signed for a certain term, so it termless;

if contract term already expired, and you continue to work, so your contract turned into the termless;

if the court decides that for conclusion of the urgent contract there were no sufficient bases, it termless.



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Anonymous

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Forgive my ignorance but I donot see any relevance to the matter at hand............ The matter in merits seems to be relatively easy, my understanding is therefore: 1. Employer under business rescue assuming to be bona fida, 2. A prospected buyer advance cash flow to employer to pay salary.......... Reasonableness indicate that no company will do this unless a valid legal binding agreement exist, 3. Employer portray bona fida to employees that a company fund salary (meaning not them as employer) it is reasonably assumed that the employer operate and manage operations but not finances, the purpose of business rescue is to restructure and obtain funds in various ways 4. The employer enter into a agreement with employee pertaining finances to which they have no authority over, assuming the contract only indicate the employer and employee to be parties thereto not the funding company............ The employer and funding company's nexis (in terms of their agreement) probably restrain the employer thereto and the funding company refuse to sign off.......... It is therefore that you can not engage in a legal contract on behalf of someone else or with no intent to follow through, the intent rested on the funding company which is not a party hereto and therefore contract is flawed........5. The origin falls back on the contract established before business rescue and the employer rectify its error and made a promise in future to hounor its commitments as well as the funding company....... Therefore I fail to see reason in your argument...... Please explain. Regards Rautenbach & Associates

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