Employment contract – use it wisely…

Labour law sets strict requirements that employers must comply with and the employment contract is the most document in the workplace. Non-compliance holds a serious business risk for employers that is often underestimated and left unaddressed. Arbitration awards against employers have a definite financial impact and also negatively affects the business’s brand name.

Have an employment contract in place

One of the biggest mistakes employers make is not to implement written employment contracts, or to settle for a generic employment contract that offers minimal protection when there is a dispute in the workplace. When drafting an employment contract, the employer must take care to ensure that the contract complies with all applicable labour legislation depending on the specific industry.
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Use the employment contract to your benefit

Employers should use labour law to their advantage to protect the business and limit risk by proactively addressing possible future disputes between the employer and employee. By including proactive clauses in the employment contract, the employer is better positioned with regards to the employment relationship going forward. Include the following proactive clauses:

  • References to policies, procedures and a disciplinary code that describes rules and procedures the employer and employees must adhere to. The disciplinary code serves as a guideline for employers of what the appropriate sanction is for certain offences. The disciplinary code also ensures that all employees are aware of the rules in the workplace as well as the consequences should these rules be broken.
  • Time periods – probation period, retirement age, short time, lunch breaks, etc.
  • Consent – medical testing, alcohol and drug testing
  • Consent – deductions for damages, training, etc.
In addition to the employment contract, the employer can add annexures to further protect the business going forward. Typical annexures include:
  • Declaration of duties – what is expected from the employee with regards to duties and the employer’s fixed operational standard
  • Restraint of trade and confidentiality agreement – this is crucial where specialised business activities take place to protect confidential information, unique methods and procedures, patents, etc. and prevent this sensitive information ending up with the competition.
By addressing labour risk proactively, the employer can greatly contribute towards the business’s sustainability and profitability and ensure a working environment with reduced conflict, friction and misunderstanding, which in turn creates a structured environment receptive to growth.



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