It's a Deal! - Contract of Employment Basics


The Basic Conditions of Employment Act (BCEA), section 29 requires an employer to provide an employee with certain written terms of employment not later than the first day of commencement of employment. This in itself does not mean that there has to be a written contract but it is in everyone’s interests to have one.

An employment contract can be described as:  “an agreement between two or more legal persons, in terms of which one of the parties (the employee) undertakes to place his or her personal services at the disposal of the other party (the employer) for an agreed period in return for a fixed or ascertainable wage, and which entitles the employer to define the employee’s duties and to supervise the manner in which the employee discharges them.” (Grogan J, Workplace Law, 10th ed.)

There are a number of requirements for a legally binding employment contract:The parties must have capacity to contract. In a nutshell, the employee should be over eighteen years of age, of sound mind and s/he must be sober when they sign. If the person is between the ages of fifteen and eighteen, the guardian’s consent is required, unless s/he is emancipated. This applies equally to family-run businesses. The contract must be legal and capable of performance. For example, it is illegal to employ a minor in a bar and a person who cannot swim is incapable of being employed as a lifeguard.

The parties should have the intention to contract and be in agreement as to the terms and purpose of the contract. While there is a muddy pool of court opinion on whether or not particular employment contracts are binding, a clearly written contract which spells out the terms is plain good business. The duration of the contract is the main differentiator between a fixed-term contract and an indefinite or ‘permanent’ employment contract. Fixed-terms specify a start and end date, for example, waitrons employed for the summer season only. Where no end date is specified, then the employment is assumed to run indefinitely, unless and until terminated, in accordance with the law and the agreement itself. While a fixed-term contract may be renewed, the courts frown on using rolling fixed-term contracts to avoid the obligations of labour law.


In addition, S29 of the BCEA requires the following in writing:

(a)      full name and address of the employer

(b)      name and job title of the employee, or a brief description of the work

(c)      the place/s of work

(d)      date of employment

(e)      ordinary hours of work and days of work

(f)      wage/salary or the rate and method of calculating remuneration and overtime and the frequency (weekly or monthly)

(g)      any other cash payments, payments in kind or benefits e.g. accommodation or medical aid

(i)       any deductions

(l)       leave entitlement (annual, sick and family responsibility)

(m)     period of notice or period of the contract

(n)      description of any council or sectoral determination which covers the employer’s business

(o)      period of employment with a previous employer that counts towards the period of employment

(p)      list of any other documents that form part of the contract, indicating a place where a copy of each may be obtained.

It is advisable to refer to the BCEA for information on the minimum requirements such as leave and working hours, so as to remain compliant. However, the contract is supposed to be a written record of what both parties have agreed. It should be in simple language and easily understood. Where necessary, an interpreter should be used to ensure mutual understanding.

The employment contract can be seen as being the foundation document - job profiles, standards, procedures, policies and codes of conduct are the walls and support columns of a healthy employment relationship. A written contract is very necessary to ensure that both parties know what is expected of the employment relationship. Keep it simple and practical and ensure the employee understands it.

Author: Janet Askew


Janet Askew

Janet is a trainer, coach, speaker and writer who is passionate about promoting women in business and SMME development. In addition to her consulting work, she is a director of Essentially Natural and serves on the board of the Wot-If? Trust.



Was this article helpful?
1 out of 1 found this helpful
Return to top
1 comment
  • I have people working for us, but there is no contract. Please advise are we safe to carry on like this?

    Comment actions Permalink