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Informal Employment Does Not Protect Employers

It is a common and erroneous belief amongst employers that they protect themselves by employing staff without a letter or contract. In fact, the converse is true. The law does not make signed employment contracts compulsory but, the Basic Conditions of Employment Act (BCEA) does require employers to inform employees in writing of their particulars of employment such as:

  • The employer’s name and address
  • The employee’s job title or job description
  • Starting date
  • Working hours
  • Remuneration details
  • Leave

The reason that employers need to put such provisions into the form of a contract rather than just a letter and to get it signed is not because the law insists on it, it is rather because the employer needs to prevent the employee from denying that he/she agreed to the terms and conditions contained in the document. A contract signed by both parties prevents such misunderstandings and/or disputes.

Many employers have policies of various types but fail to include these in employment contracts. When the employee breaches the policy and gets dismissed, the employer ends up at the CCMA or at a bargaining council. Should the employee then claim the employer did not have such a policy, and/or that the employee was never made aware of it, then the employer is placed under onus to disprove this claim. Where the policy in question has been included in the employment contract signed by the employee the employer will have little difficulty in discharging this onus.

Even if the policy is not spelt out in the employment contract but is alluded to in the agreement, the employer will have some protection. For example, it is not reasonable for the employer to include its entire disciplinary code in its employment contracts. However, the employer can include in the employment contract clauses such as:

  • The employee agrees to comply with the attached rules of conduct.
  • The employee agrees that he/she will acquaint him/herself with the employer’s disciplinary code available from the HR Department.
  • The employee has read and understood the employer’s disciplinary rules and agrees to comply therewith.

However, employers cannot always take for granted that employees understand the contents of employment contracts. This is especially so where the contract is written in complex legalese or in a language that is not the employee’s home language. In such cases, employers are advised to replace legalese with plain English and to translate the contract into the employee’s home language.

Employers should further understand that the mere presence of a requirement in an employment contract will not always mean that the employee can be forced to honour such a requirement. In the case of Wallace vs Du Toit (2006, 8 BLLR 757), the employer fired the employee for being pregnant. The employer claimed that the employee had agreed that her employment would be terminated if she fell pregnant. The Court found that even if the employee had entered into a contract agreeing to such a thing, such agreement would have been unconstitutional. The employer was ordered to pay the employee one year’s remuneration.

Employers need therefore to:

  • Understand that labour law gives them far fewer rights than obligations.
  • Accept that their labour law obligations are very numerous, complex and extremely heavy.
  • Protect themselves by understanding the law and its ramifications.
  • Design employment contracts that protect them from losing labour disputes.

Source: Labour Law Management Consulting

- Wallace Albertyn is a Senior Associate and Labour Law Practitioner at LabourMan Consultants.