What is an employment contract and how does it protect your rights?

Oct 29th, 2015

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By Madelein van der Watt, Development Manager at Sage Pastel Payroll & HR

When a company hires you, it should give you a fair and understandable employment contract that sets out the terms and conditions of your employment. This document can be something as simple as a one-page letter or a formal document that outlines these terms and conditions in extensive detail.

Why is it important that your company provides you with an employment contract?

The law (in the Basic Conditions of Employment Act) states that employers must give all employees a document containing information about the conditions of their employment. That applies whether they are full-time, contractors or temporary workers.

From your perspective, a contract helps you understand what is expected of you at work in terms of responsibilities and what you can expect in terms of working conditions. It also gives you clarity about your remuneration and benefits. A lack of a contract could lead to disputes and misunderstandings further down the line.

What information should an employment contract include?

  • Details for employer and employee: full name, address, employee’s occupation or tasks
  • Employment details: dates, places of work and working hours
  • Payment details: monthly salary or the rate and method of calculating wages, rate for overtime, allowances and benefits, bonuses, deductions and frequency of payments
  • Leave: leave the worker is entitled to
  • Notice period
  • If the you are a contractor, the period of the contract

Get it in writing

Ask your employer to sign the document and sign it yourself. Insist that the contract needs to be changed if your terms of employment change – for example, if your boss has verbally agreed that you can start working flexible hours, or if your benefits or working conditions change.

Don’t be casual about contract work 

Remember that employers may no longer treat fixed-term contracts as casually as they did in the past.  If your contract for a fixed period (say, three months) is up, your employer must extend it with a new one. If he or she fails to do so, you are within your rights to insist on being appointed in a permanent position. The employer’s lack of action may be interpreted under South African law as an intention to make you a permanent employee.

Also remember

The Basic Conditions of Employment Act sets out certain rights to which every employee in South Africa is entitled – for example, it governs leave, sick leave, working hours, and overtime. You cannot sign away any of these rights in your employment contract – if it sets conditions which are less favourable than prescribed by the Act, it will be considered invalid. Be sure to familiarise yourself with this law.


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