An acquaintance recently called me to seek guidance regarding challenges he was experiencing at his place of employment. I duly listened to his narration of events, leading up to the dispute. I then cautioned him that, before I could offer any form of advice, I would naturally have to go through critical documents which would ordinarily form part of his employment file. Among others, I requested copies of his Letter of Offer, Contract of Employment, and Resignation Letter.

To my shock and horror, he had none of these. I then proceeded to ask, how, in this day in age, could some of his age, education, social awareness etc., and wake up and dedicate their 2 years of their lives to working for someone without as much as a Letter of Offer and a contract. Sadly, this is not an isolated case.

There are many out there who, through sheer desperation and ignorance find themselves in similar situations. Unscrupulous employers, aided and abetted by their Human Resource units should, in my humble opinion shoulder greater blame for this sad state of affairs.

The latter, in their defence, usually cite the often-repeated argument that South Africa’s labour legislation is complex and makes it difficult to create jobs. That argument, I am afraid, doesn’t hold water. If anything, our labour legislation seeks, among others, to create much-needed certainty, which in turn, protects both an employer and an employee.

I want to briefly look at what the legal requirements are in order to have a valid employment contract, be it of a fixed or a permanent nature.
Historically, according to (Grogan, 2005) with reference to common law, parties are not required to observe any formalities when concluding a contract of employment. He posits that once there is an agreement on the nature of employee’s duties and the remuneration, the contact becomes operative.

Furthermore, there is a no common law requirement that the contract of employment must be in writing. He does, however, and rightly so, advice that it is advisable that contract of employment must be in writing, (a) for the sake of clarity, and (b) to avoid and to resolve future disputes. Thankfully, the Basic Conditions of Employment Act, as do a number of other statutes, require that employments contracts be in writing.

Before we venture into what are deemed as essential elements of a contract of employment, we briefly outline the most important general principles of the law of contract.

Firstly, there must exists, at the time of concluding a contract, intention on both parties to create mutual rights, duties, obligations and benefits. Parties must be aware that this intention, in turn, creates mutual obligations, which are legally binding;

Secondly, and perhaps most importantly, parties must have the legal capacity of performing that which they are expected to delivering based on their mutual obligations towards each other. To put it simply, the employee must be able to perform the outlined duties, whilst the employer must be in a position to remunerate the employee for the duties rendered

Thirdly, the rights, duties, obligations must be permitted under law. For an example, a contract that stipulates that an employee would steal certain items, in exchange for being remunerated is illegal, that renders the contract null and void from the word go.

Fourthly, a voluntary agreement, in other words, neither party should feel compelled, whether by circumstances or otherwise to enter into an employment contract;

The employee agrees to perform specified and implied duties. It is vital at this point to pause and briefly explain what the word implied means. In the normal course of work, it is often not necessary to spell out in exact detail what an employee must do. To cite an example, it would be a given and expected that a meat cutter, once they are done with cutting the meat, would clean their machine in order to keep in it a good working order. This is reasonable and does not have to be spelled out.

A permanent contract is one which is indefinite. However, this also need to be qualified. It is indefinite only in a sense that, unlike a fixed term contract, it does not expire on a specified date.

It may however expire where an employee reaches a mandatory retirement age, it may also cease if by consensus, usually through resignation, or if one of the parties commits a fundamental breach of the contract, or if an employee passes on. It may also expire if en employees commits misconduct, and following a disciplinary process, such a contract is then terminated.

A permanent contract may also be terminated for operational reasons, through which an employer follows the prescribed processes to terminate such a contract.

A fixed term contract, on the other hand, is one which terminates on a specified date or occurrence, for an example, a conclusion of a particular project or task. My experience though has been in that in certain instances, employers, in trying to avoid making employees permanent, then resort to breaking up what is essentially a permanent job into small, time-bound projects.

The net result is that, in such instances, these fixed term contract end up being extended repeatedly, which, in turn, creates a legitimate expectation on the part of the employee that a particular contract would invariably be extended. The point here is that the onus lies with the employer to prove that indeed, the work to be done warrants or justifies a fixed term contract.

The Labour Relations Act provides that an employee who earns below the earnings threshold of R205, 433.30 per annum can only be employed on fixed term contract for a maximum period of 3 months. The Act allows for an extension beyond three months only in the following instances:

The volume of the initial work has increased, but is not expected to go beyond 12 (twelve) months; In cases of Learnerships or Internships; A project which is expected to go beyond 3 months. The caveat here is that such a project must be genuine and have a defined duration; In cases of non-citizens who has been granted a work permit for a defined period; Seasonal work which goes beyond 3 months; An official public works scheme or similar public job creation scheme; A fixed term position which is funded by an external source for a limited period; Permanent employees who have reached the normal or agreed retirement age applicable in the employer’s business.

Lastly, irrespective of the nature of the contract, the Basic Conditions of Employment Act requires that each contract shall have the following essential elements:

Full name and address of the employer; Name and occupation of the employee, or a brief description of the work for which the employee is employed; Place of work, and whether the employee is required or permitted to work at various places; the date on which the employment began; the employee’s ordinary hours and days of work; the employee’s wage or the rate and method of calculating wages; the rate of pay for overtime work; any other cash payments to which the employee is entitled; any payment in kind that the employee is entitled to and the value of the payment in kind; how frequently remuneration will be paid; any deductions to be made from the employee’s remuneration; the leave to which the employee is entitled; the period of notice required to terminate employment, or if employment is for a specified period, the date when employment is to terminate; a description of any council or sectoral determination which covers the employer’s business; any period of employment with a previous employer that counts towards the employee’s period of employment.

A list of any other documents that form part of the contract of employment, indicating a place that is reasonably accessible to the employee where a copy of each may be obtained.