REPUDIATION OF A CONTRACT OF EMPLOYMENT

1.    Introduction

In this section, we outline the rules of contract that determine and explain the repudiation of a contract of employment. Repudiation occurs when a party to a contract shows, by omission or conduct, that they are no longer willing to be bound by a contract duly concluded by the parties.[1] It is a breach of contract.[2] The principle emanates from the common law rules upholding the sanctity of any contract.[3] In terms of these common-law rules, persons are bound by the contract that they have with others and as such contractual obligations, as a general rule, cannot be regened from. In Latin words, the rule states “pacta sunt servanda” loosely translated to agreements must be honoured.[4] It is an important aspect of employment law that one cannot afford to ignore. The discussion will also outline some of the common law principles that have been upheld in the course of judicial decision making.

2.    Intention is an important element of repudiation

It has already been mentioned that repudiation occurs when conduct or omission by one party shows an unwillingness to be bound by a contract of employment. The intention not to be bound by a duly agreed contract is thus an important element of this kind of breach. We submit that a mistake on the part of the accused party cannot lead to the repudiation of a contract. The act or conduct in question should leave a reasonable person objectively concluding that a contracting party is no longer willing to be bound by a contract of employment.[5]

The intention element of repudiation on the part of the employer is correctly captured under section 12B(3)(a) which provides for circumstances where an employee is deemed to have been unfairly dismissed. The section states that:

“An employee is deemed to have been unfairly dismissed—

  • if the employee terminated the contract of employment with or without notice because the employer deliberately made continued employment intolerable for the employee…”

The intention element is captioned by the words, “deliberately made” highlighted above. The test is objective, and a reasonable person should conclude that the employer’s actions or omissions went to the core of the employment relationship to warrant the conclusion that repudiation has occurred. It is only when this happens that one is deemed constructively dismissed.

Several court judgements have elaborated on the circumstances that qualify as a repudiation of a contract of employment. These judgements are discussed next.

3.    Tel-One (Private) Limited v Kuyumani Zulu[6]

The major principle emerging from this case is that an employee who is on suspension and who proceeds to accept a job elsewhere repudiates his contract with the employer that suspended him or her.

In terms of the facts, Kuyumani Zulu was put on suspension on 21 February 1996. On 1 September 1997, he was employed by ZIMNAT and was employed there until he was dismissed on 12 February 1998. ZIMNAT terminated the Zulus contract upon being advised that he was still an employee for Telone. Meanwhile, Telone unlawfully dismissed him from employment, founding litigation that culminated in the awarding of damages in favour of Kuyumani Zulu. Dissatisfied with the damages the Supreme Court was called upon by the employer to adjudicate the dispute. In its decisive remarks, the Supreme Court argued:

“Firstly, the Tribunal failed to appreciate the distinction between an employee who is on suspension and an employee who has been dismissed, whether unlawfully or lawfully, and the different legal obligations pertaining to the different employees. An employee who is on suspension is under a legal obligation to avail himself for duty to his employer during the period of suspension and that if such employee takes employment during the period of suspension, he repudiates his contract of employment. See Zimbabwe Sun Hotels (Pvt) Ltd v Lawn 1988 (1) ZLR 143 (S).   In that case, GUBBAY JA (as he then was) said at p 150:”

As a function of the law, therefore, an employee on suspension does not have a duty to mitigate his or her loss by seeking alternative employment. If this happens, on the day he or she takes up new employment, repudiation happens with the effect of ending the contract. According to Tel-One (Private) Limited v Kuyumani Zulu SC 110/04, mitigation of loss is only available to an employee who has been dismissed. As to the effect on the damages payable to the employee who would have repudiated a contract of employment, the court ruled that the employee is entitled to damages from the time his employment was unlawfully terminated to the time he or she repudiated the contract of employment.

4.    Thomas Meikles Stores v Dorris Mwaita and Stella Phiri[7]

This case demonstrates the fact that repudiation also occurs when an employer makes continued employment intolerable for the employee. This may happen because of an unfair demotion effected on an employee.

The employees were buyers for the applicant company and in September 2004, they were advised of a restructuring exercise being implemented by the employer. In terms of this exercise, their responsibilities had been subsumed by other buyers in the company and they had to move to new positions dubbed section manager. In terms of the suggested changes, the employees’ salaries would remain the same. They would however not be entitled to a motor vehicle. They were also advised that if they were unwilling to take up the new positions the employer would pay them an exit package. Aggrieved, the employees refused the new positions and the exit package. Several communications were exchanged between the parties culminating in one letter sent to the employer whose language the employer took exception to. Both employees were charged and dismissed. The Labour Court found that the employees had been constructively dismissed and ordered their reinstatement. Aggrieved, the employer appealed to the Supreme Court.

In concluding that the employer had repudiated the employee’s contracts, the court accepted that the letter that was given to the employees on 30 September 2004 gave the employees only two choices, “to accept either demotion by a certain date or a pre-determined exit package”. No negotiations were to be undertaken. The court further accepted that since they did not report for duty as required, they were deemed to have been dismissed. It realised that the employer was attempting to force the employees to accept a demotion on the pretext of reassignment. The court also made an important finding that given the wording of the letter dated 30 September 2004, disciplinary action against the employees was no longer lawful because they had already been dismissed.

The two cases discussed above provide an insight into the various forms repudiation of an employment contract can happen. Several circumstances other than those already discussed above qualify as a repudiation of a contract of employment. On the employee’s side, repudiation can occur when the employee deserts employment or when the employee deliberately refusing a lawful instruction, to mention a few of such instances.

On the employer’s side, repudiation of a contract can take the form of failing to pay the employee the agreed wages and salaries, withdrawing a contractual benefit without consent, unilateral changes to an employee’s role. Indeed, as noted above, repudiation on the part of the employer may be a ground for constructive dismissal.

5.    Options available when repudiation occurs

Repudiation does not automatically end a contract.[8] On the part of the employee, should an employer show the unwillingness to be bound by the contract two options are available as stated in Tel-One (Private) Limited v Kuyumani Zulu. The employee can decide can enforce his or her rights without leaving employment or can accept the repudiation, end the contract, and sue for damages. In Thomas Meikles Stores v Dorris Mwaita and Stella Phiri, the court cited Joubert, General Principles of the Law of Contract, in which it is also argued that repudiation does not end a contract of employment. The one affected by the repudiation has an option to end the contract and seek legal redress.

On the part of the employer, it is our considered submission that once repudiation happens the employer must accept the repudiation and proceed to follow the necessary procedures in terms of the applicable code of conduct. This may entail engaging in disciplinary action as provided by the applicable code of conduct. In the case of an employee who would have deserted, the employer can still engage in disciplinary action. In such cases, a hearing notification should be sent to the employees last known address and thereafter a disciplinary action can be held in absentia.

6.    Conclusion

It is summarised from the overview above that the repudiation of a contract of employment happens when either an employee or an employer shows an unwillingness to be bound by an employment contract appropriately agreed by the parties. The action or omission by either party should be such that it goes to the root of the employment contract to show that continued employment is no longer tenable. The Labour Act (Chapter 28.01) provides that an employee is deemed unfairly dismissed if the employer makes continued employment intolerable for the employee. It goes without saying that an employee who is under the employ of one employer repudiates his or her contract of employment if he or she gets employed by another employer. This is so even when the employee is on suspension.


[1]           Visser & Potgieter’s Law of Damages 3ed (Juta 2012).

[2]           Hutchison & Pretorius (eds) The Law of Contract in South Africa 3rd ed (2017) Oxford, Cape Town p.

[3]           Hutchison & Pretorius (eds) The Law of Contract in South Africa 3rd ed (2017) Oxford, Cape Town.

[4]           Hutchison & Pretorius (eds) The Law of Contract in South Africa 3rd ed (2017) Oxford, Cape Town.

[5]           Hutchison & Pretorius (eds) The Law of Contract in South Africa 3rd ed (2017) Oxford, Cape Town.

[6]           Tel-One (Private) Limited v Kuyumani Zulu SC 110/04

[8]                Tel-One (Private) Limited v Kuyumani Zulu SC 110/04

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5 thoughts on “REPUDIATION OF A CONTRACT OF EMPLOYMENT”

  1. Very useful information. In fact I have a case of repudiation at the instigation of the employer. The circumstances are that my contract was first terminated on notice when termination on notice had been out lawed. No reasons had been given and neither was I engaged to be given reasons. When I approached the Min of Labour, the employer during the first hearing requested for an out of court settlement and we put I put the statement of claim together but the employer then reneged and went to see the labour officer without our knowledge and claimed that we had abscorded. Surprisingly the employer then send me a letter saying they had withdrawn the termination. Before I could even respond to the letter another letter purportedly notifying me that I had been retrenched, no negotiations were done and the letter did not state the reason for retrenchment. The case took more than three years to get to Labour Court. I went to collect the judgment but the judgment had two case numbers and was printed on bond paper. Judgment number was written in ink. Checked with JSC was told I collected the wrong judgment and yet I have a correct and legitimate receipt. Thank you for the above. Not sure how you can be of help.

  2. In your case the principle of audit alteram pattem was not applied. The proceedings seem to have taken place in ex part. You need a lawyer for this Ntando.

  3. Spikey point of view Tau! Sadly sometimes repudiation is based on incorrectly identifying a repudiation, could you say more on this?

  4. Where an employer has repudiated the contract, and an employee accepts the repudiation and exercises their right to terminate the contract, this will amount to a termination at the employer’s initiative. The question of whether there has been a repudiation of the contract of employment is determined objectively. It is unnecessary to show a subjective intention to repudiate and is a question of fact not law.

  5. Your case Ntando is riddled with corruption that stinks to high heaven. The Judiciary system was captured. It’s not too late to revisit the case though i do not know how. Good luck

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