Employee Contracts: What You Need to Know
Please note that this article aims to objectively breakdown and explain the information required in an employee contract. We are by no means suggesting an employer is incompetent; we simply want to discuss the requirements, address issues and provide answers to common questions that we have received from clients in the past.
So, you’ve just landed your ideal job. That’s fantastic, but has your new employer promised to send you an employee contract? If the company asks you to start work two weeks before the contract is ready – don’t.
South African law states that “Every employer is required by law (Basic Conditions of Employment Act – section 29) to provide the employee with a written contract of employment not later than the first day of commencement of employment. Failure to do so could land the employer in jail for a term of imprisonment (section 93 of the BCEA) or to liability for a hefty fine (schedule 2 – BCEA).”
Furthermore, your employer should give you a couple of days to read through the contract. It’s your job to ensure you’re happy with all the clauses. If there are any clauses in the contract you don’t understand, speak to a human resources specialist or attorney before you sign the document.
What is an employee contract?
An employee contract is a legal document that outlines an agreement between a prospective employee and an employer. It establishes both the rights and responsibilities of the two parties. The contract also regulates the terms and conditions between the employer and employee.
Information required in an employment contract
Employee details: Full name, address, employee’s occupation, etc.
Job Description, duties and responsibilities: The job description outlines the main duties and key performance areas (KPIs) applicable to the requirements of the post.
Validity of the contract: If the employee neglects to inform the employer of any circumstances which may have affected the employer’s decision to employ or not to employ the employee, then the contract shall immediately be rendered null and void.
Probation: This is a specific period during which the employer will monitor the employee’s ability to perform the job requirements and performance standards.
Hours of work: The standard work days are five days per week (Monday to Friday inclusive) The normal working hours shouldn’t not exceed 45 hours per week. From time to time, there may be a requirement to carry out work outside of normal working hours. The employee is expected to complete the requested work.
Benefits: This can include but isn’t limited to medical aid scheme, provident and pension fund, shares in the company of employment.
Remuneration: The sum of money the employee is being paid to perform their role. This should include the following information: Salary or the rate and method of calculating wages, rate for overtime, bonuses, deductions, frequency of payment, e.g. monthly or weekly.
Leave: The amount of annual, sick, maternity and family responsibility leave which the employee is allowed.
Conflict of interest: The employee accepts that during the period of their employment with the company not to be directly or indirectly engaged with any other businesses, either on a full-time or part-time basis for which they receive remuneration.
Company Policies and Procedures: It is the responsibility of the employee to make themselves familiar with the content of all company policies and procedures. If you are unsure of any of them, speak to a business consultancy that has access to a full-service HR department.
Amendments, additions or deletions to the employment contract: The employer reserves the right to make any amendment, addition or deletion to the contract at any time, for any reason recognised complying with South African labour laws.
Confidentiality & Restraint of Trade: The employee will build a relationship with the clients in the course of his/her duties, have access to all confidential information. The employee is prohibited, both during the duration of the employment contract, and for a period of unlimited duration after termination of the employment contract from revealing or conversing about any information.
Termination of Employment
The Basic Conditions of Employment Act – section 37 prescribes notice periods not less than:
- One week, if the employee has been employed for six months or less;
- Two weeks, if the employee has been employed for more than six months but not more than one year
- Four weeks, if the employee has been employed for one year or more.
- Employers aren’t necessarily required to accept a longer notice period than the agreed upon timeframe established in the contract.
Process of dismissal based on unsatisfactory performance
One of the most widely misunderstood and contentious issues between an employer and employee is the processes that need to take place before a staff member can actually be dismissed for poor work performance.
If, for some reason, you get into a heated argument with your employer about work performance and they yell, “you’re fired” and you are asked to leave straight away, you could take the employer to the CCMA for unfair dismissal. This is how the process of dismissal works according to South African law:
After probation, an employee should not be dismissed for unsatisfactory performance unless the employer has
- Given the employee a proper evaluation, provided instruction, training, guidance or counselling.
- Given the employee a realistic period for improvement, but the employee continues to perform poorly.
- Failing this, the procedure leading to dismissal should include an investigation to establish the reasons for the substandard performance and the employer should consider other ways, short of dismissal, to remedy the situation.
- The employee should have the right to be heard and to be assisted by a trade union representative or fellow employee.
Only once all these processes have taken place and been officially documented, can the employee be formally dismissed.
An employer can never claim that they “didn’t know the processes of dismissal” because it’s part of South African employment legislation. If you are running a start-up and hiring your first employee(s), ensure you speak to a human resources company; they can draw up employee contracts as well as educate you about your rights and responsibilities to your employee(s)
As mentioned earlier, we’ve seen many clients who need assistance with fully understanding their employment contract. We can explain any clauses with which you may be struggling. We want to see you thrive!