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Employment contracts are built on reciprocal obligations: The employee undertakes to make their services available, while the employer undertakes to remunerate the employee. But what happens when an unexpected event makes it impossible for one of the parties to perform?

In South African law, the answer may lie in the doctrine of supervening impossibility of performance. Its application in employment relationships, however, is shaped not only by the common law of contract, but also by the constitutional right to fair labour practices and the protections contained in labour legislation.

Knowing how these principles work together is essential for any employer facing an unexpected disruption to its operations.

What the Doctrine Requires

Supervening impossibility arises when the performance of a contractual obligation becomes objectively impossible after the contract has been entered into, through no fault of either party. The event must generally be unavoidable, unforeseen or not reasonably foreseeable. Mere difficulty, inconvenience, increased expense or financial hardship is not enough, as performance must have become impossible, rather than simply more burdensome. In other words, the impossibility should prevent anyone in the same position from performing, rather than being a problem peculiar to the individual concerned. The contract must also be examined because the parties may have allocated the relevant risk through a force majeure clause or another contractual provision.

In an employment context, impossibility may affect either party. An employee may be physically or legally unable to tender services, or an employer may be legally prevented from operating and accepting those services. Because the obligations to work and to pay are reciprocal, the temporary impossibility of one performance may suspend the corresponding obligation. If the impossibility is permanent, it may justify termination of the contractual relationship. Employment law nevertheless adds an important qualification: Even where ordinary contractual principles permit termination, a dismissal must still be substantively and procedurally fair under the Labour Relations Act 66 of 1995.

When Circumstances Take Over

The clearest recent example of the doctrine in action was the prohibition of certain economic activity during the COVID-19 lockdown. Where regulations legally prevented a business from operating and employees could not lawfully perform their duties, performance could be objectively impossible. This, however, did not necessarily apply where employees could work remotely, perform alternative duties or lawfully continue working as part of an essential service.

In Solidarity obo Members v Sahara African Aviation Operations (Pty) Ltd, the Labour Court considered lay-offs and salary reductions arising from the COVID-19 restrictions. It found that the impossibility was not self-created, attributable to the employer’s fault or reasonably foreseeable. Because the employment contract involved reciprocal obligations, the employees’ inability to work meant that the employer was absolved from paying remuneration during the period of genuine impossibility.

Other events that may make performance impossible include the destruction of the only workplace or of essential equipment by an unavoidable disaster, a legal prohibition that prevents particular work from being performed, and the loss of a statutory licence without which an employee may not lawfully carry out the job. Imprisonment or detention and may also give rise to impossibility and are discussed in more detail below. Each situation remains fact-specific. Before relying on impossibility, the employer must investigate whether the barrier is temporary, whether alternative work or another workplace is available, and whether the obstacle could reasonably be overcome.

A lack of money within a business will not ordinarily qualify. While financial difficulty makes paying salaries more difficult, it does not make it objectively impossible. Similarly, an employee cannot avoid contractual obligations merely because changed personal circumstances make performance inconvenient or financially unattractive.

Detention and Third-Party Barriers to Work

The leading authority concerning an employee’s personal inability to work is the case of National Union of Mineworkers and Another v Samancor Ltd (Tubatse Ferrochrome) and Others. The employee, a furnace operator, was arrested and detained on suspicion of a robbery committed outside of the workplace, and was consequently unable to report for work. The employer terminated his employment for incapacity after only ten days, although he ultimately remained in detention for approximately 140 days.

The Supreme Court of Appeal accepted that an employee’s inability to present themselves for work can engage ordinary contractual principles. It stressed, however, that this does not resolve the employment-law question. The employer must still establish that it was fair to terminate employment. Relevant considerations include the anticipated duration of the absence, the importance of the employee’s position, the impact on the business, the feasibility of appointing a temporary replacement and whether the employee was at fault. In Samancor, the employee’s lack of fault was relevant, but was not by itself decisive. The employer was not automatically entitled to dismiss merely because performance had become impossible.

A similar approach applies where a third party bars an employee from a workplace. In Silver Solutions Security (Pty) Ltd v Saayman NO and Others, a client instructed a security company to remove an employee from its site. The Labour Court upheld the conclusion that the dismissal was unfair because the employer had not produced adequate evidence of meaningful attempts to persuade the client to reconsider or of a thorough search for alternatives. A client’s demand does not give the employer an automatic right to dismiss. The employer must investigate the demand, engage with the client and consider redeployment or other reasonable alternatives.

The Question of Pay

Whether an employee must still be paid depends on the circumstances. If the employee is objectively unable to tender services because of imprisonment, a legal prohibition or another genuine supervening event, the employer’s reciprocal obligation to pay remuneration will usually be suspended for the corresponding period. This is not a disciplinary penalty but follows from the fact that the employee cannot make the contractually required services available.

The position is different where the employee tenders services, and is able and willing to work, but the employer chooses not to use those services. An employer cannot manufacture impossibility by closing a viable operation, removing the employee’s tools or simply instructing an employee to stay at home. In Buys v Oasis Group Holdings, the employee had tendered his services during his contractual notice period, but the employer removed his laptop and placed him on unpaid leave. The Labour Court held that the employer remained bound by the contractual notice arrangement and awarded the outstanding remuneration.

Some uncertainty arose from Macsteel Service Centres SA (Pty) Ltd v NUMSA, where the Labour Court stated that employees who rendered no services during the COVID lockdown, through no fault of their own, were not entitled to remuneration. In Buys, however, the Court regarded this remark as incidental to the actual decision in Macsteel and considered an unqualified application of the “no work, no pay” principle to be incorrect. The better approach is therefore not to rely on the principle mechanically, but to ask whether performance was truly impossible, whether the employee validly tendered services, who assumed the risk under the contract and whether the employer prevented performance.

Ordinary illness or injury must also be distinguished from impossibility of this kind. Employees who are temporarily unable to work because of illness may be entitled to paid sick leave under the Basic Conditions of Employment Act 75 of 1997, subject to the statutory sick-leave cycle and proof requirements. Once paid sick leave is exhausted, continued absence may be unpaid unless the contract, a collective agreement or an employer policy provides more favorable benefits.

A Fair and Cautious Response

The doctrine does not give an employer an effortless route to unpaid lay-off or dismissal. The employer should identify the precise obligation that has become impossible, establish that the obstacle is objective rather than self-created, determine whether it is temporary or permanent, and explore alternatives such as remote work, temporary replacement, redeployment, adjusted duties or agreed leave.

Where termination is contemplated, the employee must be given a meaningful opportunity to make representations, even when this must occur in writing or through a representative. The final decision should take account of the duration and consequences of the incapacity, the needs of the business and the availability of less drastic measures.

Supervening impossibility may suspend contractual obligations, including the obligation to pay, but fairness remains the controlling principle when the employer considers ending the employment relationship.