COMMON ERRORS IN RELATION TO EMPLOYMENT CONTRACTS by Abrie Bronkhorst

An employment contract can be of immense value to the employer if used effectively. Making a mind shift regarding employment contracts from seeing them as an ‘administrative burden’ to recognising that they are a ‘risk mitigating tool’ can save employers a lot of time and money in the long run. Take note that labour legislation applies to all employers and employees, irrespective of how the employment relationship is recorded, or the term thereof.

WRITTEN CONTRACTS

The biggest mistake employers make is not to implement written employment contracts, or to settle for a generic employment contract that offers minimal protection and does not necessarily fall within the framework of the specific industry. Employers should never simply take it for granted that their employment contracts are in line with applicable labour law. Sectoral Determination 13 regulates labour relations in the agricultural sector and the terms and conditions of the employment contract must comply with it.

In addition to the fact that it is firstly crucial to implement a written employment contract in the workplace that complies with applicable legislation, it is also important to ensure that the contract is regularly updated and that the correct type of contract is used. The employment contract is also one of the most important aspects that are examined during an inspection by the Department of Employment and Labour.

ARE UPDATES NECESSARY?

Over the past two years, there have been several changes in labour legislation that employers must be aware of, including legislative amendments, COVID-19 regulations issued, Commission for Conciliation, Mediation and Arbitration (CCMA) rulings, etc. Employers must keep abreast of the latest developments on the labour front and update their employment contracts accordingly. Employers can do this through annexures to the contract, by reviewing the contract as a whole, or implementing new policies. An outdated employment contract can cause unnecessary headaches for an employer when a dispute arises.

IS THERE A DIFFERENCE?

Employers must clearly understand that a distinction is made between two types of employment contracts and that to disguise what is actually permanent employment by using a fixed-term contract is illegal. A permanent employment contract is used for a position of permanent or indefinite nature and a fixed-term employment contract is used for a position where employment is not permanent and is of a temporary nature, either for a specific time period or a specific project.

Employees who earn below the earnings threshold and who are employed on a fixed-term basis for longer than three months will be deemed to be permanent employees, unless the fixed-term period is justifiable in terms of section 198B of the Labour Relations Act (66 of 1995) and clearly set out in the employment contract.