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 of The Labour Consultancy. TFollowing on from the Labour Guides article on domestic workers (Labour laws force madams into legal minefield), we were inundated with e-mail and phone calls from readers wanting to know where they could get a contract for their domestic workers. In response to this, Rael Solomon of Labour Guides has written an article on contracts of employment. Labour Guides, in association with the Labour Consultancy, will also be making available handbooks on labour law specifically for madams which will retail for R30 excluding handling. Please e-mail us at btimes@tml.co.za if you are interested in purchasing a copy. Employment contracts hide host of legal landminesDrawing up contracts has turned into a nightmare for unwary employers, writes RAEL SOLOMONDespite the warnings, employers continue to shoot themselves in the footON A daily basis, employers are inundated with articles and news items relating to the labour legislation protecting the rights of employees. The one instrument, the employment contract, which is drawn by the employer often results in the employee using the very contract as evidence against the employer in a conflict situation. Despite all the hype and warnings, employers continue to shoot themselves in the foot by not taking action to protect themselves.
Contract law is in itself complex and employment contracts are no exception. Compounding the problem for the employer is that statutory labour laws take precedence over the common law. Where there is a conflict with the common law involving conditions of employment, the labour legislation will prevail.
The Basic Conditions of Employment Act requires that all employment contracts are reduced to writing. When in doubt, a simple letter of employment stating that the employer's contract is covered by the conditions outlined in the current labour legislation is often preferable to a detailed contract giving the employer a false sense of security if it has not been drawn with professional advice. To help employers protect themselves we address typical situations which have been found to cost employers the most in time and money.
A three-month notice period is often specified for senior employees. If the employee wants to leave, the employer is confronted with a situation where they may have an unproductive employee for a further three months. If the employer decides to rather pay the employee in lieu of notice, the employer faces a three-month salary bill, even if the employee had only been employed for a short while. If the employer wishes to dismiss the employee, he again loses out.
Many small businesses that use a contract with an elaborate disciplinary code and procedure often get into trouble. At the time of disciplining or dismissing their employee, the code is not followed as the small businessman reverts to his typically informal style. The employee then goes to the Commission for Conciliation, Mediation and Arbitration (CCMA) and uses the employer's contract to prove his case.
Many employers think that if various terms and conditions are contained in a contract, that the employee is bound by them. This is one area where freedom of contract does not have the final say. Employment contracts that differ from the minimum conditions provided for by the labour legislation are not valid.
Many contracts have a probationary period where a typical clause states that either party may give 24 hours notice during the first three months (or one month) of employment. The law requires one week in the first month, two weeks in the first year and one month thereafter. Should the employer dismiss the employee during the contracted probationary period without following the required procedures, a claim for unfair dismissal may be referred to the CCMA with a demand for up to 12 months remuneration as compensation.
Fixed-term contracts also bring problems for the employer. A fixed-term contract that is renewed more than once by an employer can lead to a claim by the employee that he had a reasonable perception of permanent employment. If the contract is not extended, the employee may claim that he has in fact been dismissed.
The effect of employment law is not confined to employment contracts. For example, should a company purchase a business as a going concern, the Labour Relations Act states that the new owners are bound by the prevailing terms and conditions of employment. Should the seller agree to retrench certain employees to satisfy the purchaser, and does not follow the required procedures, the new owner may be held responsible for an unfair labour practice.
Most employers believe that the employment relationship has been terminated when the employee formally hands in a written notice of resignation. The Labour Relations Act states, however, that if an employee resigns because the employer made his continued employment intolerable, this could be tantamount to an unfair dismissal. As a result of this clause, many employers are demanding exit reports from employees who resign.
In today's climate, anyone who thinks that being an employer is the easy way to go better have a rethink.
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