IS IT LEGAL TO WORK WITHOUT AN EMPLOYMENT CONTRACT?
There is no general requirement in our labour law that an employee must have a formal employment contract which regulates all aspects of the employment relationship.
All persons that are regarded as employees are under the protection of the Basic Conditions of Employment Act and the Labour Relations Act.
It is, however, advisable for a written contract of employment to be issued to an employee upon commencement, regulating the terms and conditions between the parties. All the company-specific policies and procedures, including but not limited to, a disciplinary code should form part of the contract.
If there is no formal employment contract in place, which includes these Policies and action is required to take place against the employee, the employee has the right to conclude the he/she wasn’t aware of it.
The potential benefits far, out-way the pitfalls of having properly drafted employment contracts:
- Termination of written notice of employment contract - this can set parameters and assist in planning with business expenses (retrenchments) and with key individuals that have, unique or special skills that an employer would have difficulty replacing, should they choose to leave suddenly. The notice period could be longer i.e.) 3 months;
- Restraint of trade clause for protection of proprietary interests;
- Private arbitration clause for dispute resolution;
- Setting standards - stating exactly what is expected from an employee in their role, standards of performance and what is deemed acceptable and unacceptable behavior. By communicating this to employees from the outset will reduce the amount of time employers will spend speaking with employees, advising them of the expectations and correcting behaviors;
- Reduces risk - the main advantage of having contracts of employment in place is to reduce the risk of future claims by employees. By ensuring both parties (employer and employee) agree to the terms and conditions, which are then signed, this binding contract serves to reduce the chance that one party will have grounds for legal action later down the line.
There are many benefits to be enjoyed from a well-constructed written employment contract - contact Compliance Hub today to draft your company’s employment contracts.
HR Consultant – Compliance Hub