Unsigned employment contracts

It happens that an employee is hired, but the employment contract is simply not signed. Employees are often under the mistaken impression that if the employment contract is not signed, he/she cannot be bound by the same rules and regulations as other employees who have signed the employment contract.

The employer-employee relationship is established when the employee and employer agree on terms of employment. The employee can therefore still be disciplined if the workplace rules and disciplinary code are violated, provided that the employer can prove that the rules existed, were reasonable, were consistently applied, the employee broke the rules and the employee had reasonable knowledge of the rules and regulations in the workplace.

What does the law say?

According to the Basic Conditions of Employment Act, Act 75 of 1997 as amended (BCEA), an employee must be notified in writing on the first day of employment of the details of the employment relationship. The BCEA also provides a detailed list of what must be included in this notice.

A written employment contract that is signed by both parties formalises the relationship and gives clarity to all parties. Without an employment contract, it can be difficult to prove that the employee agreed to certain terms such as shortened mealtimes, or even the period in cases of fixed-term employment contracts where the contract was only intended for a specific time/project.

Where do I start as an employer?

Resolve the situation by following these steps:

• Consult with the employee who does not want to sign the employment contract to explain the contract to him/her again and obtain reasons for the refusal;
• Give the employee a reasonable time to submit written reasons why he/she does not want to sign the contract, or to sign the contract if there is no reason not to sign it;
• If no reason/objection is given why the contract is not signed, the employer may request the employee to sign the contract again.
• If reasons can be provided, this can be discussed between the employee and employer.

The employer may take further steps to confirm the employment relationship and the rights of the employee concerned in terms of the BCEA by addressing a letter to the employee confirming the terms and conditions as prescribed in the BCEA. The employer will comply with the provisions of the BCEA if he provides the employee with a copy of the draft contract with a note that the employee has refused to sign it.

We always recommend that employers keep an attendance register and minutes for all consultations indicating that the employer followed a fair process and that the employee continued to work according to the terms of the contract, even if the contract was not signed. Should the employee verbally acknowledge his/her rights, an employment relationship is established and the person is then considered to be an employee.

Please note that an employer cannot simply dismiss an employee because he/she did not want to sign the employment contract. If an employer terminates the employment contract, whether concluded verbally or in writing, this may result in a referral of an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). The employee may then be entitled to reinstatement or compensation, even if they have not yet started working. However, if the correct processes are followed, the situation can easily be rectified and/or avoided.

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