Are you looking for an employment contract template for South Africa that you can use to sign with your employees? It is important that there is a written record of the relationship between employers and employees for various reasons. Your employment contracts must comply with (and be up-to-date with) the Labour Relations Act (LRA), Employment Equity Act (EEA) and Basic Conditions of Employment Act (BCEA) as they are amended from time to time.
Employment contracts are also the best way to ensure that you have a positive and fair relationship with your employees. Having a written employment contract with each employee also helps you to avoid misunderstandings and disputes.
At the same time, you don’t want the employment contract to restrict your relationship and your ability to respond to changes in the way your organisation operates, as well as to changes in the economy and the law. The employment contract needs to be flexible. This is why we suggest that you separate the employment contract into different parts. The employment relationship is governed by particulars, terms, rules, policies, procedures and practices. Some are binding, others are non-binding. Employers can change some unilaterally, others only by agreement. Some apply only to one employee, while others apply to all employees. This is why it is important to group them together and deal with them in separate documents or parts.
If you are already using an employment contract template, you can check whether it is legally sound and up-to-date with the latest law by asking us to review it.
The purpose of an employment contract
- Determine the nature and extent of the employment relationship.
- Comply with sec 29 of the Basic Conditions of Employment Act.
- Comply with the Employment Equity Act.
- Determine when agreement is needed for any changes.
- Provide a general framework and guidelines to prevent discriminatory practices.
- Ensure that employees know and understand the expected standards of performance and conduct.
- Ensure fair and consistent treatment of all employees.
- Incorporate the principles of fairness.
- Prevent unfair or unlawful treatment of employees.
Michalsons Employment Contract Template Solution
We recommend at a minimum that you need the following documents to govern the contractual relationship. To comply with the labour and employment legislation, more particularly the Employment Equity Act, we believe it is essential for all organisations to have a set of standard documents that apply uniformly to all persons who either work for, or who do work for them.
The letter of appointment (LOA) is the essential basis of the employment relationship and contains the particulars that are relevant to each specific individual employee. Once signed, these particulars can only be changed with the agreement of the employee. It should be short, and in plain and clear language so that it is easy to understand. We find that employees are happier to sign a letter rather than enter into what they perceive as a formal contract. The template includes:
- Rewards by way of remuneration and benefits.
- Occupational levels and job grades within the enterprise [job description].
There is one template for new employees and another for existing employees. The one for all existing employees informs them of the changes so that you are able to achieve a situation where the Personnel Handbook (discussed below) applies to everyone and only the letters of appointment contain some specific variations or exceptions.
If you have different kinds of employees (like fixed term and indefinite), you can have multiple letter of appointment templates.
The letter of appointment incorporates the binding terms of the Personnel Handbook by reference and draws attention to the non-binding rules. This enables the employer and employee to sign a short letter without having to include all the contractual provisions.
The personnel handbook includes all generic particulars that apply to all workers, including employees. This will ensure standard employment provisions that will be applied equally and fairly to all workers, except where there are valid grounds to ‘differentiate’ in a non-discriminatory way based on the inherent requirements of the job or the work to be done.
The personnel handbook can start with general statements concerning values and other related matters. It is made up of two parts, being the binding terms and the non-binding rules. The terms can only be changed by agreement with the employees, whilst the employer can unilaterally change the rules when necessary because they are not part of the employment contract. This is why it is important to have two parts, one dealing with binding terms and the other dealing with non-binding rules.
1. Binding terms
These are the terms and conditions of employment and include:
- What is expected during a trial or probationary period
- Whether employment will thereafter be indefinite, and the agreed notice period.
- That fixed-term employment may be linked to projects or operational requirements.
- Essential particulars of employment as required by the BCEA.
- Nature and extent of confidentiality during and after employment.
- Lawful termination of employment for a valid and fair reason.
- Need to impose restraints against unfair competition.
- Who owns the intellectual property they may create.
2. Non-binding rules
The rules relate to the rights and obligations of employees. The rules include:
- applicable rules and standards of conduct and performance, and
- the nature and extent of privileges and responsibilities.
Depending on the complexity of your organisation, you may also need the following optional extras. These can either be separate documents or they can be included in the Personnel Handbook so that they are all in one place.
These policies are written for employees and set out the organisations policy on different subject matters. They are sometimes referred to as HR policies. They apply to all employees and the employer can change them unilaterally because they do not form part of the employment contract. They should be capable of being separate documents because you might want to email just it to all employees or put it up as a poster. Examples include:
- Social Media Policy
- Harassment Policy (dealing with all forms of harassment like sexual, racial and bullying)
- HIV and AIDS Policy
- BYOD Policy
- Acceptable use of IT Policy (IT includes use of email, Internet and phones. IT also includes information which includes personal information. Some people call these information security policies)
- Anti Bribery and Corruption Policy
Procedures fall under policies and take various forms. You get general procedures, procedures to be followed by management (for example, a disciplinary procedure that is not intended to punish employees but to protect the business), and procedures to be followed by workers (for example, a grievance procedure to alert senior management to various issues and avoid unhappiness that could result in unrest).
Procedures should not be confused with standards for management and employees. Standards need to be set relating to many matters including privacy and data protection. Whether this is done by codes, policies or procedures does not really matter provided it is clear what needs to be understood and what has to be done about it.
- Benefit from our years of experience and insight. Our senior associate Graham Giles has exceptional knowledge and experience acquired over more than 50 years of practising law as an attorney, notary public and advocate and lecturing at various universities.
- Manage your risks by being up to date. Graham created and manages GilesFiles so that he is completely up-to-date with the latest court judgments. He monitors and summarises all important judgments, including the Constitutional Court, High Court and Labour Courts and also decisions relating to the Bill of Rights.
- Reduce disputes. We draft in plain language. This means both management and employees understand what they are agreeing to. No legalese.