Proactive clauses in employment contracts
The South African economic landscape is more often than not can be a highly challenging environment where the employer must manage labour matters as a business risk in order to ensure the productivity and sustainability in business .
An employment contract is crucial in managing labour relations as it is the basis of the relationship between the employer and the employee. It defines the terms and conditions as agreed upon between the parties and regulates their relationship. Furthermore, the employment contract describes rules and responsibilities to be adhered to by both the employer and the employee. The employment contract is vital to keep confusion and discontent in the working relationship to a minimum.
Labour legislation prescribes certain basic requirements that must be complied with in the employment contract and which is not negotiable. However, the employer can use legislation to his/her benefit in the drafting of employment contracts. This entails implementing additional clauses in the employment contract to empower the employer by using labour legislation to eliminate possible future disputes between the employer and the employee.
THE BASIC REQUIREMENTS THAT MUST BE COMPLIED WITH IN THE EMPLOYMENT CONTRACT:
The Basic Conditions of Employment Act, Act 75 of 1997, stipulates that at the start of employment, employers must provide an employee with Written Particulars of Employment containing the following information:
- Employer and employee details – the employer’s full name and address as well as the employee’s name and occupation or a brief description of the work
- Employment details – place/s of work, date of employment, working hours and days of work
- Payment details – salary/wage or the rate and method of calculating wages, rate for overtime, any other cash payments, any payments in kind and their value, frequency of payment and any deductions
- Leave details – any leave to which the employee is entitled
- Notice and contract period – period of notice required for termination of the contract and period of the contract
Furthermore the employer is obliged to have a description of any Council or Sectoral Determination under which the employer’s business resides available for employees – an example would be Sectoral Determination 13 in the case of farming activities.
Additional clauses to empower the employer:
| Time periods | Employee’s consent | Other |
|---|---|---|
| Retirement age | Additional deductions | Confidentiality |
| Short time | Subtraction of training cost when employee resigns | Restraint of trade |
| Daily rest period | Alcohol testing | |
| Probation period | Medical testing | |
| | Cameras in the workplace | |
| | Searching of personal belongings |
Time periods
Very few employers and employees think about retirement when they start a new job. When no retirement age is specified in the employment contract, an employee’s services cannot just be terminated when the employee reaches normal retirement age, but a whole procedure and consultation process has to be followed. Had the employer implemented a proactive clause regulating the retirement age at for instance 60 years in the employment contract, the employment contract will automatically terminate in the month/year of the employee’s 60th birthday, depending on the wording of the contract. If the employee is still able to perform his/her duties and both parties are agreeable, the employer can provide the employee with a fixed term contract.
Short time:
If an employer is unable to employ his/her employees for the ordinary hours of work per week due to slackness of trade, shortage of raw materials, a general breakdown of plant or machinery caused by an accident or any other unforeseen emergency, the employer may implement short time during, but not exceeding the period of unforeseen circumstances, if employees had agreed to it in their contract. For the period of short time the employees are only remunerated for the hours worked, an on condition that employee is paid at least the applicable minimum daily wage, where the employee works less. Where practically possible, written notice regarding the implementation of short time must be given to the trade union representative and/or the employees in writing at least 24 hours prior to, or less if the circumstances are more urgent, the date on which short time will be implemented.
Why is short time important? Employers who don’t have this clause in their contracts have to compensate employees for the time at work even though the employees are unable to perform their duties. This can be very costly for employers, since employees have to be paid for their unproductive time.
Daily rest period:
By consent the daily rest period of one hour can be reduced to half an hour.
The length of a probation period, is not regulated but normally entails three months to six months of evaluation where the employer can determine if the employee is suited for the job. If not the case, the employer can terminate the employee’s services after the probation period subject to regular consultations, evaluations and the disciplinary process. Without a probation period clause in the employment contract normal poor work performance consultation procedure has to be followed which is a timely and costly procedure.
Consent
According to the Basic Conditions of Employment Act an employer is not allowed to deduct any money form an employee’s salary without the employee’s written consent or unless the deduction is required or permitted in terms of law, collective agreement, court order or arbitration award. Additional deductions that can be made with the employee’s consent include housing, repayment of training costs where an employee leaves shortly thereafter, etc. If this clause is set out in the employment contract the employer can immediately make these deductions as they arise without then trying to get the employee’s consent.
Employees can be requested to undergo medical testing as well as to be tested for alcohol during working hours, but only if their consent is obtained through their employment contracts or in an alcohol or drug related workplace policy, or if the employee has given his/her permission. If the employee has not given his/her permission, the employer cannot force the employee to undergo medical/alcohol testing.
Cameras in the workplace / Searching of personal belongings:
These clauses are vital to manage theft and/or misconduct in the workplace. If this clause is set out in the employment contract and the employer suspects theft and/or misconduct, he/she can immediately install cameras in the workplace and/or search employees’ personal belongings without then trying to obtain the employee’s consent which can possibly alert the offender.
Other
Confidentiality and restraint of trade:
This clause may seem unnecessary but can protect the employer’s protectable business interests in future as his/her business develops.
We strongly advise employers to make use of proactive clauses in the employment contract and follow correct procedures with regards to all labour matters, especially dismissal, retrenchment and general discipline in the workplace, by acting pro-actively.
Contact the LWO for advice and assistance in this matter.
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