The Employment Contract

The Employment Contract Overview

Due to numerous requests, we have been requested to shed further light on the “Employment Contract”, both from an employer as well as an employee’s perspective.

 Many problems in today’s business which could have been averted occur between the employer and employee due to the misunderstanding and/or inferior and/or lack of an effective employment contract.

Over the next couple of weeks we will be looking at the employment contract in more detail and focussing on 6 main aspects which include:

1) The essentials of a contract of employment;

2) Contractual capacity;

3) Obligations of the parties to the contract of employment consisting of the duties of both the employer and employee;

4) Conditions of employment;

5) Formation of the contract; and

6) Types and duration of the contracts of employment

Today we will be looking at the first two being:

1) The essentials of a contract of employment; and

2) The contractual capacity.

The Employment Contract

A contract of employment is an agreement, enforceable by law, for future performance entered into by two parties capable of contracting.

The essentials of a contract of employment

For the contract of employment to be legally binding and therefore enforceable by law, it must meet with certain essentials, i.e.

·         There must be two parties - the employer and the employee;

·         The parties must have the capacity to enter into a Contract of Employment;  

·         The parties must have serious intention to enter into the contract and to meet the obligations under the contract;

·         The contract of Employment must be clear, i.e. it must spell out the rights and obligations of both parties;

·         Performance agreed to must be possible;

·         Obligations agreed to must be lawful, i.e. not against public interest, of a criminal nature etc; and

·         The parties must be of the same mind or agree to the subject matter, terms, conditions and obligations of the contract.

Contractual capacity

Some contracts may be held to be void or voidable because one of the contracting parties has exceeded the limit of his contractual capacity by entering into it.  In employment contracts, the limited contractual capacity of a party to the agreement may affect the validity of employment contracts entered into with him.  Examples are:

·         Minor children

Children under age as stipulated in the relevant laws may not be employed.  Persons under 18 require the assistance of their legal guardian.

·         Mental stability

A person, who is mentally defective to the extent that he is incapable of managing his affairs, cannot enter into a binding contract of employment.

Next week we will discuss points three and four being:

3) Obligations of the parties to the contract of employment consisting of the duties of both the employer and    employee; and

4) Conditions of employment.

Should anybody require any assistance in this regard, please contact us on info@mretailing.co.za

The Master Retailing Team