Where the employment contract incorporates the disciplinary code, and where the employer fails to follow the laid down procedure, there has been a breach of contract by the employer. Contractual damages may be payable where the employee’s position would have been different if the employer had fulfilled its contractual obligations.

After many years of employment the employee was dismissed on 9 September 1996. Aggrieved at his dismissal the employee referred the matter to the old Industrial Court but those proceedings were abandoned before they reached their conclusion. The employee then sued the employer in the Pretoria High Court for damages for breach of his employment contract and for damages for injuria.

There was no dispute that the employer had proper substantive grounds for summarily terminating the employee’s employment. The employee’s complaint was confined to the process that was adopted.

The procedures that had to be followed when disciplinary action was taken against an employee, and the identities of the persons who were authorised to take such disciplinary action, were circumscribed in the employer’s disciplinary code. The terms of the disciplinary code were expressly incorporated in the conditions of employment of each employee with the result that they assumed contractual effect. The employee did not follow the procedures as laid down.

(Para 16) If the new constitutional dispensation did have the effect of introducing into the employment relationship a reciprocal duty to act fairly it does not follow that it deprives contractual terms of their effect. Such implied duties would operate to ameliorate the effect of unfair terms in the contract, or even to supplement the contractual terms where necessary, but not to deprive a fair contract of its legal effect. The procedure provided for in the disciplinary code was clearly a fair one – it would hardly be open to the appellant to suggest that it was not – and the respondent was entitled to insist that the appellant abide by its contractual undertaking to apply it. It is no answer to say that the alternative procedure adopted by the appellant was just as good.

(Para 17) It remains to be determined whether the respondent’s position would have been different if the appellant had fulfilled its contractual obligations – which is the usual basis for determining contractual damages: see for example Trotman & Another v Edwick 1951 (1) SA 443 (A) 449B-C – and if so what value to place upon the loss. Only after that enquiry has been undertaken can it be determined whether the result is unfair (if that is relevant at all).