Labour Law Advice

Labour Law Advice Regarding the Importance of Written Employment Contracts

Stay on the right side of the law when you open a business in South Africa. Get labour law advice regarding aspects such as employment contracts, minimum wages, registration with the Department of Labour, UIF deductions, and more.

The Basic Conditions of Employment Act stipulates that as employer you must provide the employee with a written document that provides the information listed below. This is in effect a type of employment contract. When the employment contract is terminated, you must supply the exiting employee with a letter of service. This is not negotiable and you cannot withhold the letter even if you are upset about the employee’s resignation.

What Should be Included in the Employment Contract?

It should at least include the full name and address of the employer and the details of the employee, as well as the job title of the employee. It must have a short description of the duties and work to be performed by the employee. You also need to state where the employee will work. The starting date of employment must be stipulated in addition to the employee’s normal work hours and which days the employee is expected to work. The remuneration rate or how you calculate wages must also be stipulated.

The contract must stipulate at which rate the employee will be paid for overtime work, and any other payments the employee will receive. You must indicate when remuneration will be paid and at what frequency, such as weekly, biweekly or monthly. You should stipulate the deductions that will be made from the remuneration. Leave days and how they are calculated must be stipulated, including sick leave, compassionate leave, and annual leave. The employment agreement must stipulate the employment termination notice period. If you only employ the worker for a specific period, the contract must state the start and end date of employment.

If your business falls within a sectoral determination or under a bargaining council, you need to state this. Should you count employment with another employer towards the period that the employee works for you, it must be stipulated in the agreement. If any other documents form part of the employment contract, you must provide a list of these, as well as where the employee can access these documents or obtain copies of them.

If any changes are made to the work hours or conditions of employment, you need to update the agreement and provide a copy of it to the employee. You are also required to keep written details of the employment for a minimum period of 36 months. The only exemptions are when the employee works less than 24 hours a month or if you employ five or fewer persons.

What about Fixed-Term Employment?

Don’t mistake fixed term employment for a means to bypass labour laws. If the employee has reason to expect renewal of the fixed-term contract and you don’t renew it, it is a dismissal similar to retrenching or dismissing a permanent employee. The right procedures must be followed in terminating employment or not renewing a contract. Failure to renew the fixed-term employment contract with the same or similar terms when the employee had reason to believe that the terms of employment would stay the same can also provide sufficient reason for the employee to dispute the agreement. We strongly recommend seeking labour law advice on the renewal or non-renewal of a fixed-term employment contract.

Contact us at or on 011 234 2125 for legal advice regarding the setting up of employment contracts, employment termination and other important labour issues.


NB: This article is for information purposes only and does not constitute legal advice. You are advised to consult with us before using/relying on this information.

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