South African Labour Law makes it difficult to dismiss employees and the process can be a long, time-consuming and costly one. Employment contracts provide the key to avoiding such disputes and to protecting you and the employee. According to the Basic Conditions of Employment Act, Section 29, there is certain information that you as an employer are legally obliged to provide new employees with. This includes: businesses that employ more than five staff will also need to include information pertaining to:
- Any period of employment with a previous employer that counts towards the period of employment
- List of any other documents that form part of the contract and details of where the worker can get copies
- Description of any council or sectoral determination that covers the employer’s business
Many small business owners make the mistake of believing that they can ‘get around’ the labour law by employing people on a contract basis, instead of as permanent employees. It is true that contractors are not entitled to annual leave, sick leave or the right to claim unfair dismissal. However, the Labour Relations Act and the Basic Conditions of Employment Act are extremely specific in their definition of an employee and a contractor.
Irrespective of the contract you might have with a worker, the law deems them to be an employee if they fit one or more of the following criteria:
- Another person has control or direction over the manner in which they work
- Their working hours are subject to the control or direction of another person
- They form part of the organisation
- They have worked for your company for an average of at least forty hours per month over a three-month period
- They are economically dependent on your business
- Your business provides them with work equipment
- You are their only ‘client’
Ultimately, your contract of employment should be as specific as possible, outlining your expectations in detail and the company’s policies on things such as smoke breaks, email and use of the Internet. Sean Snyman, Director at Labournet, explains that there are four company specific clauses that should be included:
Company Specific Clauses
1. Employer & Worker Details
- Employer’s full name
- Employer’s address
- Worker’s name
- Worker’s occupation, or a brief description of the work
2. Employment Details
- Place/s of work
- Date of employment
- Working hours and days of work
3. Payment Details
- Salary or wage, or the rate and method of calculating wages
- Rate for overtime
- Any other cash payments
- Any payments in kind and their value
- Frequency of payment
- Any deductions
4. Leave Details
- Any leave to which the worker is entitled
- Notice/Contract Period
- Period of notice required for termination
- Period of contract
5. Other clauses to consider
- A confidentiality undertaking to keep company information confidential
- A restraint of trade
- Indentions clause: any systems or procedures generated by staff during their employment belong to the company