Crafting an Employment Contract: Best Practices and Legal Requirements

With April behind us the nation has officially, and perhaps begrudgingly, returned to work. Which is a good thing. Someone needs to pay for the extra security features required by the First Family. And thus it is that we find, oddly enough, a common ground shared by our government and business-owners alike: the desire for businesses to grow, make money, and put an end to the economic-woes that have been dogging us for far too long. While the First Wives eye out shopping sprees and luxury vehicles, and business-owners set their hearts on a sleek new set of wheels, they set the whip cracking to achieve their objectives. Lest we forget, however, the key to growing a successful business is the humble employee. Finding the right employee, appointing the right employee, and keeping the right employee: success in these areas often spells success for the growing business. And yet, in the course of our dealings with businesses, we have often come across instances where an employer has appointed staff without letters of appointment or Employment Contracts. Or they can’t find the employee’s written terms of employment when are asked to produce them.

The Basic Conditions of Employment Act states that an employer must provide all employees with the terms and conditions of their employment in writing. This document can be in the form of a letter of appointment, or it can be a more formal Contract of Employment. What is important is the content of this letter or contract. In order to meet the requirements of Section 29 of the BCEA, an employer must supply the employee with the following particulars, in writing, when the employee commences employment:

  • the full name and address of the employer;
  • the name and occupation of the employee, or a brief description of the work for which the employee is employed;
  • the place of work, and, where the employee is required or permitted to work at various places, an indication of this;
  • the date on which the employment begins;
  • the employee’s ordinary hours of work and days of work;
  • the employee’s wage or the rate and method of calculating wages;
  • the rate of pay for overtime work;
  • any other cash payments that the employee is entitled to;
  • any payment in kind that the employee is entitled to and the value of the payment in kind;
  • how frequently remuneration will be paid;
  • any deductions to be made from the employee’s remuneration;
  • the leave to which the employee is entitled;
  • the period of notice required to terminate employment, or if employment is for a specified period, the date when employment is to terminate;
  • a description of any council or sectoral determination that covers the employer’s business;
  • any period of employment with a previous employer that counts towards the employee’s period of employment;
  • a list of any other documents that form part of the contract of employment, identifying the location where a copy of each may be obtained (being a place that is reasonably accessible to the employee.)

If an employee is not able to understand the written terms of appointment, the BCEA requires the employer to explain the terms to the employee in a language and in a manner that the employee understands. Getting the employee to sign the letter or contract, preferably at the commencement of employment, is recommended as this can help to avoid disputes further down the line. If, however, the employee refuses to sign it, it doesn’t invalidate the employment relationship – although you may wish to explore why the employee refuses to sign.

If any of the matters listed above change, the terms of appointment need to be revised in order to reflect the change, such as when there are changes in the employee’s terms of employment, when the employee’s remuneration increases, or when there are changes in the employee’s job specifications. You are also cautioned to ensure your filing and record-keeping processes are in order. Because the letter or contract must be retained by the employer for a period of three years after the employee’s termination of employment.

In summary: Ensure that you and your employee sign a proper Letter of Appointment or Employment Contract when you employ a new staff member, at a minimum setting out the issues required in terms of the BCEA.

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.