The Employment Contract - Part 3 of 3

Last week we looked at part 2 of 3 of the employment contract which dealt with Obligations of the parties to the contract of employment" and "Conditions of employment"  This week we will be looking at part 3 of 3 which deals with the "Formation of the contract" and "Types and duration of contracts of employment".

Formation of the contract

Contracts of employment need not be in writing to be legally enforceable.  It is, however, easier to prove the existence of an agreement and its intentions when it appears in writing.

           Contracts of employment entered into verbally or which are inferred from the actions of the parties are valid and can be enforced in a Court.  However, to prove in Court the existence of such contracts could present a problem if not recorded in writing and signed by both parties.

           The more detailed the written contract of employment, the more difficult it will be for either party to claim that there was verbal agreement on points not mentioned therein, or to draw inferences from conduct.  The Law does not permit more to be "read into" a document than what is actually written down.

All employees at all levels must be aware of and comply with the conditions of employment.

Types and duration of contracts of employment

·      Temporary Fixed term contracts

The duration of a fixed term contract is determined by the specification of both a commencement date and a completion date.  Where no completion date is stipulated, the inference will be that the contract was not intended to be of a fixed duration.

In some circumstances it may not be possible to specify an actual date of completion, such as where the employees are employed for the duration of a specific project and it is uncertain when precisely the work on the contract will be completed.  In such circumstances the completion date should be tied to the happening of a certain and ascertainable event, for example:  "Upon the actual date of the completion of the manufacture of product being supplied to the XYZ Shop Fitment Contract at ABC Shopping Centre; in any event, at least 14 days clear notice in writing shall be given to the employee that the contract of employment shall terminate on X date".

Employers sometimes use the method of "rolling over" or continuously "renewing" fixed term contracts on termination date in order to avoid retrenching employees when no longer required, or to retain what they believe to be the flexibility to get rid of employees who might be trouble makers, without having to comply with the requirement imposed by the Labour Relations Act.

The Labour Court is looking beyond the terms of the contract and is recognising and giving effect to the real nature of the employment relationship.  In other words, where fixed term contracts are "rolled over" or continuously renewed, the Labour Court will rule that the relationship is a long-term relationship.  If an employee is being assessed during a temporary contract, the relevant disciplinary process must be followed to avoid subjectivity and unfair practices.

·      Full time service

                       This agreement of service is used when the services of the employee is not limited to any specific period or not limited to completion of a specific job and is permanent of nature.

As can be noted over the last three weeks, the contract of employment is vital for any business where there is an agreement between the employer and the employee. Should you not be comfortable with your current employment  contract, please contact Master Retailing at info@mretailing.co.za for assistance.

Good luck and happy trading

The Master Retailing Team