Regulate the employment relationship

Regulate the employment relationship – The employment relationship is a relationship of trust based on mutual benefits and respect. As a business owner, the employer should always anticipate what can go wrong with regards to the employment relationship, in order to be best positioned going forward and mitigating risk. Poor work performance, conflict, misconduct and a breach of trust can place this relationship in jeopardy and employers should take proactive steps to regulate the employment relationship and protect their rights. Key elements to do so include the employment contract and enforcing discipline in the workplace.

Regulate: Employment contract

The employment contract can be of immense value to the employer if used effectively. Making a mind shift regarding employment contracts from an “administrative burden” to “risk mitigating tool” can save employers a lot of time and money in the long run.

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.  A written employment contract creates clarity by confirming the terms and conditions of employment agreed upon and protects the employer in terms of the employment relationship going forward.  Take note that labour legislation applies to all employers and employees, irrespective of how the employment relationship is recorded (via an oral or written agreement), or the term thereof.

Instead of a generic employment contract, employers should rather opt for a purpose-built option that addresses an employer’s specific needs.  A purpose-built employment contract should tick the following boxes:

  • Comply with all applicable labour legislation relevant to the specific industry.
  • Include proactive clauses to protect the business and mitigate risk by addressing possible future disputes between the employer and employee.  These clauses include:
    • Reference 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.
  • Add annexures to the contract 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.

Regulate: Discipline in the workplace

Discipline in the workplace is aimed at adjusting and improving behaviour through corrective action, consultations and warnings, rather than punishing or dismissing an employee.  Every workplace must have a relevant disciplinary code. The disciplinary code is essential in ensuring that there are clear rules in the workplace, with appropriate sanctions, that employees can follow. When these rules are violated, the employer can apply progressive discipline. In cases of serious misconduct employers can directly proceed with a disciplinary hearing.  It is vital to always follow the correct procedure, as in failing to do so can lead to a CCMA-case with dire consequences and a huge financial impact.

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.

Check the employment contracts to determine if any changes need to be made. Note that unilateral amendments constitutes unfair labour practices and pose a significant risk to the employer. Obtain the employee’s written consent to avoid unilateral changes of terms and conditions.



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