Contracts of Employment (“CoE”)

What is a Contract of Employment?

It is an agreement (verbally or written) entered into between two parties, namely the employer and employee which states what the terms of the agreement will be for the duration of the employment with the company / individual.

Why is it beneficial for the company to have up to date contracts in place?

When an employee is employed by a company or individual the terms of the agreement will be regulated by the agreement that the parties has entered into, it will also give each party guidance on what is expected of the parties.

All agreements should have the following in place as per the BCEA legislation but is also dependant on the type of agreement:

·??????The company or employer details (Name, registration number, address of business, contact information etc)

·??????Details of where the employee will be situated.

·??????Details of the start of the contract, which includes start date, whom the employee will be reporting to.

·??????Details such as working times, lunch intervals, leave information, Termination periods etc.

·??????Remuneration and mandatory deductions need to be added to the contract.

Types of leave an employee is entitled to by law. Or what the process are when an employee is terminated or if they resign.

An agreement provides the parties of the conditions and terms by which a company operates. Should there be no agreement in place the LRA and BCEA takes precedence in terms of the law. This entails that nor the employee nor the employer may do what they want, there is by law aspects that need to be followed and adhered to.

There are a few types of employee agreements that the employer can have in place. These agreement terms are directly aligned with the work or project that an employer has and an employee is needed for.

1.?????????????Permanent contract – these contracts does not have an end date attached to the contract and will only be terminated should the employee resign, be terminated (dismissed, retrenched etc), or they retire due to reaching retirement age.

2.?????????????Fixed term contract / Part time contract – these contracts are usually used when a company has a short-term position open, like with a maternity opening for example, which is only for a short period, they are normally no longer than 3-Months.

3.?????????????Project based contracts- these contracts are very often used when a company solely rely on short term projects that they receive from their clients on working sites / or work areas, these contracts has an expiry date linked to the project end date.

4.?????????????Freelancer agreements – these types of agreements are used when someone who is working for themselves contracts themselves out to a company, it entails that the company cannot be held liable for the contractors PAYE, UIF etc, they themselves takes responsibility for that, but an employer needs to be vigilant in using this type of agreement.

5.?????????????Casual workers agreements - a person rendering or conducting services based on a period of less than 24-hours a month.

All contracts can be measured against terms of contracts in the LRA 200A (7 factors) – which states that should one of the conditions be met the person will be considered an employee of the company irrespective of the type of agreement that is in place between the parties.

All employers need to note that no provisions of an agreement may be changed or amended without consultations with the employees, as this will constitute unilateral change of conditions. All consultations need to be recorded with the outcome of such consultations.

As the law changes amendments need to be made to agreements. We are looking at a period in which it is no longer strange to see companies being operated remotely, but how will this then affect the work performance, and what will the terms be what a employee need to meet.

Amendments to the contracts need to be made to include change in working times, confidentiality of company information, conflict of interest etc.

Should your company be in need of reviewing the current contracts or should it be necessary to do consultations with the employees to amend the current contracts contact us for assistance at 010?054 5111 or email us at [email protected]