Employment contracts and policies – What employers operating in South Africa need to know

Clients often ask us the following: (1) Can’t you just do a 2-page employment contract for me; or (2) What employment policies must I have to be compliant with the law? Our response, in typical lawyer-speak, is that it depends on what you want to achieve. Let’s unpack this.

Employment contracts

If your purpose with an employment contract is just to inform the employee of the basics, i.e. their position, whom they report to, their rate of pay, and their basic duties, then s29 of the Basic Conditions of Employment Act is your guide, where the minimum written information to be provided to an employee upon commencing employment, is stipulated. 

So, this can absolutely be a one- or two-page document, and you can probably do this yourself, with no real drafting skills or legal insight involved.

If, however, you are attuned to the complexities of employment, legal risk exposure and strategic management, then you will know and appreciate that a one-dimensional informational document is not going to tick all the boxes. A properly drafted employment contract, on the other hand, sets the stage for the employment relationship, and is a balanced document that sets out the rights, responsibilities and expectations of both parties from the start. It pre-empts typical issues and allows the parties to take informed decisions about what they agree on or not, before starting the employment relationship.

What should be covered in the contract, apart from the normal clauses about remuneration, responsibilities, working hours, duration of employment, and so on? Here are a few examples:

• Probation – If this is included, the terms and duration thereof must be stipulated in the contract. 

• If it is a limited duration contract, and especially if the employee earns less than the earnings threshold under the BCEA, then the reason for fixing the duration of the contract must be stipulated in the contract.

• POPIA – Reference to the s18 privacy statement applicable to collecting and processing the employee’s personal information.

• Clearances and integrity checks – if employment is conditional and subject to a successful vetting process, this should be clearly stated. 

• Confidentiality obligations, and possibly restraint of trade conditions.

• Intellectual property applications for products or systems developed during the employee’s employment.

• Security, risk management, loss control – consent for searches, breathalyser tests, etc.

• Warranties by the employee confirming their ability to do what they sign up for and the truthfulness of their declarations about aspects such as qualifications, experience, health, accreditations, etc. 

• Termination of employment – Retirement age, specific notice requirements.

The law also states that new employees should be informed about the policies that apply to the employment relationship, and that it should be clearly stated what those are and how these can be accessed by the employee. 

This could be done by attaching a schedule / list of applicable policies to the employment contract, with directions for accessing those. Policy documents should however at most be cross-referenced, and not be incorporated into the employment contract itself (as part of the terms and conditions of employment). From a legal perspective, if a policy is incorporated into the contract, it becomes a contractual term which requires both parties to agree to any changes thereto in future. That does not align with the purpose of a workplace policy – which is in its nature a guidance document that should be adaptable and flexible as the working environment changes. So, while employees can be expected to undertake to adhere to applicable employment policies, the actual policies should be dealt with separately. 

Employment policies

Generally speaking, there is no universal prescribed list of employment policies that all employers must have in place. (Exceptions may exist in the case of Accountable Institutions, or the Public Service, etc.) While there are a few policies that an employer must have in place in terms of specific statutes, any further policies should serve a purpose in your workplace. This also means that the size of the employer and its available resources, should be considered when establishing and implementing policies that will be workable for the particular environment. A small retail store will not require the same policy infrastructure as a large, global company, and it makes no sense to have voluminous documents with comprehensive procedural requirements when it is totally unpractical for the specific workplace.

Our best practice approach, for employers of all sizes, is the following:

• Start with a basic policy manual / employee handbook which contains most of the employment policies applicable to all staff. This could cover aspects such as leave, dress code, ethics, training, time and attendance, use of company property, vehicle use, retirement, bonus schemes, benefits such as medical aid/pension, general rules of conduct, acceptable use principles for social media and AI, etc.

Attached to or included in this, should also be references to:

• Internal whistleblowers procedures (as required by the Protected Disclosures Amendment Act, 2017) 

• Workplace harassment / anti-discrimination policy and procedures (as required by the Code of Good Practice on the Prevention and Elimination of Workplace Harassment)

• POPIA – privacy policy and related documents

In addition, separate, more detailed policies/procedures may be required and cross-referenced from your Policy Manual, according to your specific workplace needs or applicable to specific departments. These may include:

• Disciplinary Code and Procedure

• Grievance Procedure

• Internet and electronic communications

• Employment Equity

• Financial policies

• Procurement / Operational policies 

• Health and Safety

• Recruitment

Conclusion

Employers should understand the difference between ‘compliance’ and strategic employment relations management. Minimum compliance in respect of statutory employment obligations may prevent a fine or a compliance order, but it will not necessarily assist you with risk mitigation and other types of legal exposure. 

© Judith Griessel