The above statement has, without a doubt, been heard many times in a CCMA or Bargaining Council dispute resolution boardroom. Surely an employment contract is essential? It will make the relationship official, won’t it?
In South Africa, there is no legal requirement for an Employer and Employee to enter into a formal employment contract. According to the Basic Condition of Employment Act Section 29 (1), the employer must provide the employee with written particulars of employment, this includes:
- The full name and address of the employer
- Name and occupation of the employee or brief job description
- The place of work / various places where the employee may perform duties
- Employment commencement date
- Ordinary hours of work and days of work
- The Employees wage or rate
- Overtime rate
- Any other cash payment entitlement
- Any other payment in kind and the value thereof
- When and how remuneration will be paid
- Any deductions to be made
- Leave entitlement
- The required notice period for termination or if employment is for a fixed period, a precise end date
- A description of any sectoral determination or council rules applicable to the sector
- Any period of previous employment with an alternate employer that counts against the employee’s employment
- A list of any other documents forming part of the rules of employment and an indication where such documents can be accessed for perusal, e.g. a disciplinary code.
The employer can be held criminally liable and face jail time or a hefty fine if the above-mentioned particulars are not provided to the employee.
Considering the quite extensive list above it is beneficial drafting the above-mentioned points in the form of a formal contract of employment, this will create room for the employer to add clauses that are unique to their business and requirements.
The contract of employment should not contain any provisions less favourable than those stipulated in the BCEA. The contract of employment can also contain clauses such as a restraint of trade, company vehicle regulations, internet and telephone usage policy or any provision necessary for the employer and for the best interest of their business.
The employment contract can also be beneficial to the employee as they will know exactly what provisions are applicable to the relationship and what is expected of them. An employment contract can be very useful when resolving a dispute as the resolution may lie in what the applicable provision of the signed contract provides for.
On the flip side, should there not be a contract in place the employment relationship will be governed by the Basic Conditions of Employment Act read together with any Sectoral Determination or Bargaining Council agreement applicable for that sector.
Even though entering into a complete/formal employment contract holds many benefits, the employment relationship will not be any less feasible should a formal contract not exist. A gardener without a contract, for example working in a private household, is just as protected by South African labour legislation as an accountant employed by a renowned firm.
In the event where the relationship is intended to be for a specific project or period a contract stipulating this with absolute clarity is essential. This will avoid lengthy disputes or dismissal claims by the employee in the future.
The implementation of a formal employment contract is highly advised to ensure a clear understanding and relationship terms between the employer and employee, and in signing a contract on commencement of employment, future uncertainty and disputes could be completely avoided.
Thus, according to our view and experience, a contract is beneficial to both employers and employees, and the notion some have that if it is not in a contract, it will not exist is a thing of fairy tales.
Article by: Carlene van der Lith
Dispute Resolution Official – Kimberley