Elements of a basic permanent employment contract

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Written by Christo Bester

Complying with legislation is not a luxury but a necessity and poses a huge business risk for employers. By addressing labour risks proactively, employers can hugely contribute towards their business’s sustainability and profitability and ensure a working environment characterised by reduced conflict, friction and misunderstandings, which in turn creates a structured environment receptive to growth.

An employment contract is crucial in managing labour relations, as it forms the basis of the relationship between the employer and the employee. It is the most important document in the workplace and defines the terms and conditions agreed upon by the parties, and regulates their relationship. No part of the employment contract may be amended unilaterally and without consulting the employee.

When drafting an employment contract, the employer must take care to ensure that the contract complies with all applicable labour legislation for the specific industry. Sectoral Determination 13 regulates labour relations in the agricultural sector and places certain legal obligations on the farmer as the employer. Farm workers include workers who are employed mainly for or in connection with farming activities, but also domestic workers working in a house on a farm.

Basic requirements of the contract

The Basic Conditions of Employment Act, 1997 (Act 75 of 1997 or BCEA) stipulates that when employment commences, employers must provide an employee with Written Particulars of Employment containing the following:

  • Employer and employee details – the employer’s full name and address, as well as the employee’s name and occupation or a brief description of the work.
  • Employment details – place/s of work, starting date of employment, working hours and days of work.
  • Payment details – salary/wage or the rate and method of calculating wages, overtime rate, any other cash payments, any payments in kind and their value, frequency of payment and any deductions.
  • Leave details – any leave to which the employee is entitled.
  • Notice period required for termination of the employment contract.
  • Contract period of the employment contract – is the position of a permanent/indefinite nature? Or is the position of a temporary nature, for a specific period or for a specific project? Disguising what is actually permanent employment in the form of a fixed term contract, is illegal.

Proactive clauses to include

Employers can use labour law to their advantage to protect their businesses by including proactive clauses in the employment contract to eliminate possible future disputes. It will also put the employer in the best position regarding the employment relationship.

Proactive clauses may include:

  • Reference to policies, procedures and a disciplinary code that describe rules and procedures the employer and employees must adhere to.
  • Time periods – probation period, retirement age, lunch breaks, etc.
  • Consent – medical testing, alcohol and drug testing.
  • Consent – deductions for damages, training, etc.

Add annexures to the contract

In addition to the employment contract, the employer can add annexures to further protect the business. Typical annexures include:

  • Declaration of duties – what is expected from the employee regarding duties and the employer’s fixed standard.
  • Restraint of trade and confidentiality agreement – this is crucial for more specialised farming activities to prevent competition and protect confidential information, unique methods and procedures, patents, etc.

The LWO Employers Organisation assists employers to comply with labour law, and to use it to their advantage to protect their business. As a registered employers’ organisation with the Department of Labour, the LWO has the right to represent members at the CCMA. Contact the LWO at 086 110 1828 or ansofie@lwo.co.za.

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