- The significance of employment contracts
Employers normally only issue employees with letters of appointment and erroneously believe that if they do not simultaneously conclude a contract of employment; they protect themselves. They then believe they can then terminate the services of employees at any stage “because there are no contracts”. Even though there is no legal requirement for employees to have a written contract, it is advisable to conclude one to limit the risks that can be imposed on employers at a later stage. The courts have determined that in the absence of a written contract, a verbal contract -or a contract created through conduct will govern the relationship between the parties.
2. The purpose of employment contracts
A contract is the foundation of the employment relationship as it stipulates the agreement between the parties. It stipulates the contractual obligations and rights of both parties and regulates the terms and conditions between the parties. Hence both parties have protection against any breach or unlawful action in terms of the contract.
3. Requirements of employment contracts
Section 48 of the Basic Conditions of Employment Act 75 of 1997 requires that parties must enter into the contract freely and voluntarily as forced labour is prohibited. No person can be forced to work for another and no employer can be compelled to take a person into service.
Section 29 of the Basic Conditions of Employment Act 75 of 1997 requires “written particulars of employment” that employers are legally obliged to provide to employees in writing not later than the first day of employment. This minimum requirement is not sufficient and it is advisable to enter into an employment contract as well.
The parties must agree to the status of employees, the nature as well as the terms and conditions of employment. Employers should ensure that contracts do not entail any unlawful or unconstitutional clauses. Contracts are generally drafted complex, thus employers must ensure that the contents of the contracts are explained to employees in their mother tongue.
Even if a contract is not in writing, it does not imply that it does not exist. It is advisable to ask for legal assistance in terms of the contents of the contract before concluding one with employees. Employers should also ensure that their disciplinary code and all other company policies form part of the contract to regulate employee’s behavior in the workplace.
4. Advantages of employment contracts
For employees, it creates a sense of job security and stability. For employers, it creates structure in the working relationship and limits employers risks. Having contracts in place will benefit the employer in taking correction action against employees. Should a dispute arise in terms of a particular aspect of employment, this document can be used as evidence as employers will have proof that employees accepted the terms and conditions that were offered, thus protecting employers. Contracts are imperative to promote a positive relationship between the parties as both parties will be clear on what their duties and responsibilities entail.
5. What if employees refuse to sign the employment contracts long after they were appointed?
Employers can conclude contracts at any later stage after appointing employees. It is important to stipulate that the signing of the contracts after the commencement of service will not negate any service period or benefits obtained by employees prior to the entering of the agreement. In other words, the employees’ terms and conditions of employment should remain the same.
ABOUT THE AUTHOR
Eleanor du Plessis obtained her LLB degree and Post Graduate Diploma in Labour Law from the University of the Free State. Eleanor du Plessis is a lLegal Advisor from the Bloemfontein SEESA office