Employment Contracts: Complete Guide for SA Employers
Create BCEA-compliant employment contracts that protect your business. Covers mandatory elements, different contract types, and avoiding common mistakes.
Introduction
A written employment contract is not just good practice - it's a legal requirement in South Africa. The Basic Conditions of Employment Act (BCEA) requires employers to provide written particulars of employment. Getting your contracts right protects both you and your employees, and prevents costly CCMA disputes.
Types of Employment Contracts
Permanent Employment (Most Common)
Open-ended contract with no fixed end date. The default assumption for most employment relationships.
- No automatic termination date
- Employee entitled to full BCEA protections
- Requires fair procedure for dismissal
- Notice periods apply for termination
- Best for: Core staff, ongoing positions
Fixed-Term Contract
Contract for a specific period or project. Must have a justifiable reason - cannot be used to avoid permanent employment.
- Specific end date or event (e.g., project completion)
- Must be justified: seasonal work, project, replacement
- After 3 months, employee has same rights as permanent
- Renewal beyond 3 months may create permanent employment
- Best for: Projects, seasonal work, maternity cover
Part-Time Employment
Works fewer hours than full-time employees. Still entitled to pro-rata benefits and protections.
- Fewer hours than comparable full-time employee
- Entitled to pro-rata benefits (leave, etc.)
- Same hourly rate as full-time counterparts
- Must not be treated less favourably
- Best for: Flexible staffing needs
Independent Contractor (NOT Employment)
A different relationship - not an employee. Be careful about disguised employment.
- Truly independent: controls own work, has other clients
- Provides own tools and equipment
- Bears own risk of profit/loss
- Not entitled to employee benefits
- Caution: Misclassification has serious consequences
Mandatory Contract Elements
Section 29 of the BCEA specifies the minimum information that must be provided in writing.
Full name and address of the employer
Full name of the employee
Job title or brief description of duties
Where the employee will work (or that they work at various places)
Date employment commenced
Hours and days of work
Wage/salary rate, payment frequency, method of calculation
Any other cash or in-kind benefits
Annual leave, sick leave, family responsibility leave
Period of notice required for termination
Reference to any bargaining council or collective agreement
Key Contract Clauses
Working Hours
- Maximum: 45 hours per week (9 hours/day for 5-day week)
- Specify start and end times, lunch breaks
- Overtime: Agreement required, max 10 hours/week
- Overtime rate: 1.5x normal rate (2x on Sundays/public holidays)
- Managers earning above threshold may be excluded from overtime
Remuneration
- Gross salary/wage amount
- Payment frequency: weekly, fortnightly, monthly
- Payment method: EFT, cash, cheque
- Deductions: UIF, tax, pension (specify each)
- Review/increase terms (optional but recommended)
Leave Entitlement
BCEA sets minimum leave requirements that cannot be reduced:
- Annual leave: 21 consecutive days (15 working days for 5-day week)
- Sick leave: 30 days in 3-year cycle (6 weeks)
- Family responsibility leave: 3 days per year (permanent employees)
- Maternity leave: 4 consecutive months (unpaid unless policy provides)
- Public holidays: Paid if they fall on a normal working day
Notice Periods
BCEA minimum notice periods based on length of service:
- 0-6 months service: 1 week notice
- 6-12 months service: 2 weeks notice
- 12+ months service: 4 weeks notice
- Farm/domestic workers: 4 weeks after 6 months
- Contract may provide for longer (not shorter) notice
Probation Period
- Must be reasonable (typically 3 months, maximum 6)
- Purpose: Assess suitability for the role
- Employee still has protections during probation
- Dismissal requires evaluation, feedback, and improvement opportunity
- Cannot be extended indefinitely - must make decision
Recommended Additional Clauses
Beyond BCEA requirements, consider including these clauses to protect your business:
Confidentiality
- Define what information is confidential
- Obligation to protect during and after employment
- Applies to business information, customer lists, pricing
- Reasonable duration after termination (1-2 years typical)
Restraint of Trade
- Limits on working for competitors after leaving
- Must be reasonable: time, geography, scope
- Typically 6-24 months, specific geographic area
- Courts will only enforce if reasonable
- Consider: employee's seniority and access to sensitive info
Intellectual Property
- Work created during employment belongs to employer
- Inventions, designs, content, code ownership
- Assignment of rights clause
- Important for creative and technical employees
Disciplinary Procedure
- Reference to company disciplinary code
- Types of misconduct and consequences
- Right to be heard before disciplinary action
- Appeal process
Company Policies
- Reference to employee handbook/policy manual
- Employee acknowledgment that they've received policies
- Common policies: IT use, vehicle use, expense claims
- Policies form part of the contract of employment
Creating Your Employment Contract
Start with a BCEA-compliant template. Don't create from scratch - there are too many legal requirements to miss. Templates are available from legal providers and the Department of Labour.
Add your business details, job-specific information, and any additional clauses relevant to your industry. Ensure salary and benefits match your offer.
Check that all mandatory BCEA elements are included. Ensure terms don't violate minimum standards. Consider legal review for senior positions or complex terms.
Provide the contract before or on the first day of work. Never let someone start without a signed contract. Keep this deadline strictly.
Explain key terms to the employee. Give them time to read and ask questions. They may take it home to review before signing.
Both parties sign two copies - one for each. Keep your copy securely filed. Consider digital signatures and storage for accessibility.
Contract Variations and Changes
You cannot unilaterally change employment contract terms. Changes require consultation and agreement.
How to Change Contract Terms
- Identify the need for change (business reasons)
- Consult with the employee about the proposed change
- Explain the reasons and impact
- Seek agreement (changes require consent)
- Document the change in writing (addendum to contract)
- Both parties sign the addendum
Common Mistakes to Avoid
- No written contract - exposes you to CCMA disputes
- Missing mandatory information - makes contract invalid
- Terms below BCEA minimums - unenforceable
- Probation without evaluation - dismissal may be unfair
- Using contractor agreements to avoid employment obligations
- Forgetting to update contracts when laws change
- One-size-fits-all contracts without job-specific details
- Not getting employee signature and keeping copies
Special Considerations
Domestic Workers
Domestic workers have specific sectoral determination:
- Minimum wage: R27.58/hour (2025 rate)
- Written contract required under BCEA
- Annual leave: 15 days minimum
- UIF contributions mandatory
- Accommodation deduction limits apply
Casual Employees
- Works less than 24 hours/month for employer
- No sick leave or family responsibility leave
- Still entitled to UIF if working 24+ hours/month
- After 3 months, same hours = no longer casual
Commission-Based Employees
- Commission structure must be clearly documented
- Employee must still receive minimum wage as base
- Commission calculation method and timing specified
- What happens to pending commissions on termination
Resources
- Department of Labour: Free contract templates and guidance
- CCMA: Information on employment rights and disputes
- Legal Aid SA: Assistance for employees and small employers
- SETA (sector education): Industry-specific requirements
Next Steps
- Audit existing employee contracts for compliance
- Obtain or update your employment contract template
- Ensure all current employees have signed contracts on file
- Create a checklist for new employee onboarding
- Consider legal review for complex or senior positions
- Set up a system to track contract renewals and updates
- Train managers on contract requirements and procedures