5 facts that you must know about employment contracts
1. In South Africa, all people contracted to perform a job, no matter how menial, are considered to be ‘employees’, for the purposes of labour legislation. Only independent contractors are excluded, e.g. a plumber or electrician, who you need to call in from time to time, is an independent contractor.
2. So-called distinctions between ‘permanent’ (full time), ‘casual’ (temporary) or ‘part-time’ employees are academic and non-existent. The gardener from Zimbabwe who has no passport, ID or work permit is equally entitled to the legal protections afforded to South African employees, if he is employed on a full-time or part-time basis.
3. An employee is defined as:
- any person, excluding an independent contractor, who works for another person … and who receives … any remuneration; and
- any other person who in any manner assists in carrying on or conducting the business of an employer.
There is no legal requirement in South Africa to have a written employment contract. A verbal contract is in order provided that the parties have agreed to contract essentials such as:
- Offer and acceptance;
- Agreement on specific tasks to be performed, remuneration, duration and hours of work; and
- Intention to create legal relations.
4. The contract of employment or letter of appointment needs to be specific regarding:
- A description of the parties and the nature of the business;
- The tasks to be performed;
- Basic employment conditions, annual leave, overtime, etc.;
- Salary;
- Pension fund and medical aid (if any);
- Duties of the employee;
- Notice and termination of employment provisions; and
- Restraint of trade (if any).
Simplify contracts, as much as possible, keeping in mind, nevertheless, the contents of the contract may ultimately be used by either party in litigation and legal proceedings.
5. At the heart of the employment relationship or contract is an undisputed economic rationale, i.e. the employee undertakes to perform a task in return for money. This aspect cannot be over stressed. Too often, written contracts neglect to emphasise the mutual benefits (between the employer and employee) which centre on remuneration and profit.
Use one of these 3 clauses in your employment contract to emphasise its mutual economic benefit to you and your employee
1. COMPETENCY GUARANTEE
You implicitly agree and promise that you are competent to perform your contractual obligations and that you will perform your duties in an efficient manner in accordance with Company policy, guidelines and instructions, custom and practice, as well as implied understandings.
2. IMPLIED WARRANTY OF SUITABILITY
You unconditionally guarantee that you are suitable to perform the work for which you were employed and guarantee that you will perform all functions and activities assigned to you to the best of your abilities.
In addition, you guarantee that you will meet the standards of performance and output required by the Company.
You agree that underperformance or inability to achieve set standards could lead to dismissal.
The Company’s policy in respect of poor work performance is one of zero tolerance and employees who do not meet the requisite standards may be dismissed.
3. NATURE OF THE EMPLOYMENT CONTRACT
Both parties (i.e. you and the Company) agree unconditionally that this contract is of a commercial nature based on mutual reciprocity and the economic interests of both parties.
Should it become apparent either to yourself or the Company that there is no mutual benefit that results from this contract or the employment relationship, then either party will be entitled to terminate the contract summarily.
The negotiations to conclude the employment contract are nothing less than a bartering process culminating in an exchange of work for pay.
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Author: Jan Kemp Nel is the CEO of Streetwize Labour Law (Pty) Ltd.. He has a BA(LLB) from the University of Pretoria and a Diploma in Labour Relations from Unisa. With his 30 years’ experience in industrial relations and labour law, he has developed and introduced procedures in industrial relations in all areas He advocates and practises a preventative philosophy regarding industrial relations, recognising that conflict must be dealt with using proactive methods. |
