Labour Lawyers

How Labour Lawyers Can Help to Avoid Pitfalls with Employment Contracts

Employers benefit from making use of labour lawyers regarding conflict resolution, compliance with the labour laws of the country, and for drafting of fair employment contracts, as well as disciplinary codes. Of course, labour lawyers assist with many other issues and can represent employees as well.

For the purpose of this article, we look at the many risks of limited duration contracts, helping you to understand how labour lawyers can help you draft appropriate contracts for permanent or temporary employment, in order to ensure compliance with the law and to avoid disputes further down the line.

Many employers do not want to appoint permanent staff because they fear that once permanently employed, the performance of employees may drop. They also prefer limited-period employment contracts because they want to avoid situations where they have to pay severance, should they need to retrench employees.

However, as our labour lawyers will explain, employers cannot rely on limited-period employment contracts to avoid labour law issues regarding permanently employed staff. Employees are protected against the practice of multiple renewals of limited-duration employment contracts. Indeed, the Basic Conditions of Employment Act is clear about the issue. According to the stipulations of the act, an employer cannot present an employee with a contract that lessens the rights of the employee. Any type of limited-duration contract must state the end date of the employment agreement.

Although the law does not stipulate the maximum number of times that an employer can renew limited duration contracts, employers should be careful when it comes to the continuous renewal of employment agreements. The employees can, based on such on-going renewals, expect renewals to take place in future. If they reasonably expect a renewal, they have the right to claim compensation should the renewal not be done.

What is seen as a reasonable expectation for renewal is not stipulated in the act, but if an employee has worked at a company through several such renewals, he/she can have a reasonable expectation for renewal of their contract. An employee may very well claim unfair dismissal if a contract is not renewed when the employee has a reasonable expectation for renewal.

Does this mean that you should never have limited-duration employment contracts? Certainly not. However, should you need to appoint an employee in a temporary capacity, it is imperative to ensure that the employee is aware of such right from the start. As our labour lawyers will explain, it is even better to advertise the position as of limited duration, as candidates responding to the ads will then understand that the position is for a limited time. We recommend the drafting of limited-duration contracts with the help of experienced labour lawyers to ensure accuracy and compliance with the legal requirements.

Avoid any clauses that can cause confusion. For such contracts, it is better to stay with basic agreements. Also, limit the legal terminology to ensure that the employees understand the contracts and implications of signing such.

Avoid being vague about the end of employment date. The date should be specific and if you appoint an employee for a specific project or tender, include the number of the project or tender. If there is no order number, be sure to include a definite description of the tender or project at the date for start of employment and the date for ending of employment.

If you are not sure about the exact date that a project will be completed, rather have a shorter duration employment contract than a longer one. Avoid pitfalls with such and other types of employment contracts by making use of the contract drafting services of experienced labour lawyers.Call us on +27 (011) 234 2125 for labour law services in South Africa.


Disclaimer: This article is for information purposes only and does not constitute legal advice. Call on our attorneys for legal advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing – August 2018.

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