Contracts – The Cornerstone of your employee/ employer relationship

1. Introduction

The Employee Contract is the most important part of the relationship between the employer and employee, and forms the basis for the terms that employee is being employed by.

The Important thing is to look at the Basic Conditions of Employment Act to see the important points that need to be added in writing for the employee to be aware what his/ her responsibilities are, and what is expected of him/ her; as well as what he/ she is entitled to as an employee.

2. The Basics

The basics which have to be displayed are clearly stated in Chapter 4, Section 29.

• The full name and address of the company that will be the employer
• Name, occupation, ID Number and brief description of the duties of the new employee
• Place or places that the employee will be requested to work
• Date of Employment
• Normal Working Hours
• Wage or salary, or the method that remuneration will be calculated
• Rate that overtime will be paid, please take note of the “Overtime Threshold”; where employees are no longer entitled to receive overtime.
• Any other cash payments that will be made to the employee
• Any payments in kind, and the value thereof
• Frequency of remuneration, i.e. weekly wage, salary
• Any deductions that will be made, i.e. Bargaining Council Fees, UIF etc.
• Notice periods or Term of the contract if this is a Fixed Term Contract
• Any Sector or Council Agreements that cover the employer's business
• Periods of employ that are recognised by the employer and count towards the employee's time in employ, refer to S197 transfers
• A list of any documents that form part of the contract and where they can be obtained. Refer to the Disciplinary Code, Grievance Procedure as well as the Policy and Procedure Manual and any other documents that the employee must be aware of.

3. Specific Industry Requirements – Some Examples

We will now look at certain industries and what the specific items which should be added to the employment contract in those industries.

• Restaurants and hospitality
  • Especially with waiters, ensure that the contract they are on is the correct type, i.e. permanent or contract waiter.
  • Ensure that the acquisition of uniforms and equipment is clearly stated, and if they are responsible for their own and you supply them, that an acknowledgement of debt is signed.
  • Ensure that they understand the payment of their commission; this has in our experience been a sticky situation, especially where VAT is due.
  • Ensure further that all your staff understand that there is a Sectoral agreement and that the wages are determined by the bargaining council.

• Manufacturing
• This Industry is pretty basic, as the bargaining councils, especially the Metal & Engineering Industries Bargaining Council is one of the most organised, have all their rules and regulations very clearly stated.
• Important to note in this industry, as well as anywhere where night shift is worked, is the remuneration that employees are entitled to.

• Mining
  • Important to note here is the deduction of tax, research has shown that there is an old agreement between SA and the government of Portugal that Mozambique quotes regarding the deduction of tax, which states that employee tax will not be deducted for Mozambicans working in the mining industry in SA. Research with SARS has shown that there are NO AGREEMENTS between SA and Mozambique at all. There is an agreement in negotiations at present. Be aware, as we all know the one entity we do not anger is SARS.

Please take note that these are just the basics, and every employer needs to do a little research on the industry they operate in, as there are slight differences in every contract.

Feel free to contact us should you have any questions.

Look out for our next Newsletter on Basic Baby care for Winter.