CONTRACTS, POLICIES & PROCEDURES

WORKSHOP NOTES
Purpose of Workshop

The purpose of this workshop is to provide business owners, managers and HR/IR managers with guidance
regarding contracting with employees and regulating employee behavior through policies and procedures.

Workshop Objectives

The objectives include providing delegates with an understanding of:

 Employment contracts;
 Temporary employment services;
 Part-time employment;
 Policies and procedures.

Discussion outline

1. Employment Contracts:
a. importance of employment contracts;
b. categories of employment contracts;
i. permanent;
ii. fixed term;
c. content: written particulars of employment – Section 29 of the Basic Conditions of Employment
Act;
d. pro-employer contractual clauses;
e. termination of employment contract;
f. refusal to sign employment contract.
2. Temporary Employment Services;
3. Part-time Employment;
4. Policies and procedures.

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 1. EMPLOYMENT CONTRACTS

IMPORTANCE OF EMPLOYMENT CONTRACTS

Employment contracts are important as they regulate the terms and conditions of employment
between the employer and the employee. It specifies what the employee is entitled to receive in
terms of company policy, company benefits, and labour legislation.

Furthermore, employment contracts regulate the behaviour of the employee in the workplace as all
company policies and procedures, as well as the company’s disciplinary code, form part of the
employment contract.

WRITTEN VS VERBAL CONTRACTS OF EMPLOYMENT CONTRACTS

In terms of Labour Legislation, there is no requirement that an employer and employee must enter
into a written contract of employment in order for an employment relationship to exist. All that is
required is an offer of employment and the acceptance of such an offer. In other words the intention
to enter into a contract of employment must be present between the parties.

Thus where an employment contract comes into existence verbally, i.e. where the offer of
employment is made by the employer verbally and the employee verbally accepts that offer, the
employee will be protected under labour legislation, even if no terms has been put into writing.

Section 29 of the Basic Conditions of Employment Act 75 of 1997 (hereafter “BCEA”) however
requires an employer to present employees with certain particulars regarding the employment
relationship. The contents of these particulars will be discussed in detail below.

The Labour Appeal Court in Minister of Justice & Constitutional Development v Myburgh1 held that
“writing is not essential to contractual validity and so if a written document is mentioned, it will be
assumed that it was merely to aid proof of the verbal agreement, unless it was clearly intended that
writing should embody the contract”.

1
JA46/15.

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CATEGORIES OF EMPLOYMENT CONTRACTS

PERMANENT CONTRACTS

Permanent contracts are the most common form of employment contract. Permanent employment
contracts are concluded with the intention that there will be an on-going employment relationship
between the employer and employee until termination thereof for reasons related to misconduct,
incapacity, operational requirements or death. Permanent contracts of employment can be part-
time or full time (i.e. no end date).

In terms of section 37 of the BCEA, a contract of employment is also terminable at the instance of
a party to the contract on notice, which notice periods will be discussed in more detail below.
However, please be advised that even though section 37 alludes thereto that employers may
terminate the employment contract on notice, this is not the case. A contract may only be
terminated at the instance of the employer for reasons related to the employee’s misconduct,
incapacity or the employer’s operational requirements as per section 186, 187 and 188 of the Labour
Relations Act 66 of 1995 (hereafter “LRA”) read with Schedule 8 thereto. Please be advised that
dismissal in terms of these sections have been dealt with in previous workshops and will not be
discussed here.

FIXED TERM CONTRACTS

A fixed term contract is defined in section 198B (1) of the LRA as a contract of employment that
terminates on:

a) the occurrence of a specified event;

b) the completion of a specified task or project; or
c) a fixed date other than an employee’s normal or agreed retirement age.

Thus, fixed term contracts are NOT:

 an alternative means of getting around the probation period – e.g. “Let’s put this person on
a fixed term contract and if they work out, we’ll employ them permanently”;
 a solution to avoiding retrenchment in the future – e.g. “Let’s put this person on a fixed term
contract and see whether or not we need this role on an on-going basis”.

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In terms of Section 198B (3), a fixed term contract or successive fixed term contracts for longer than
3 months, can only be used in the following circumstances:
1. When the nature of the work for which the employee is employed is of limited or definite
duration; or
2. The employer can demonstrate any other justifiable reason for fixing the terms of the
contract such as:
a. replacing another employee who is temporarily absent from work;
b. a temporary increase in work volume which is not expected to endure beyond 12
months;
c. a student or recent graduate who is employed to undergo training or gain work
experience;
d. exclusive work on a specific project that has a limited / definite duration;
e. a non-citizen who has been granted a temporary work permit;
f. seasonal work;
g. an official public work scheme or similar public creation scheme;
h. the position is funded by an external source for a limited duration;
i. the employment of a person beyond the normal or agreed retirement age.

Implications for utilizing a fixed term contract for longer than 3 months

A person employed on a fixed term contract for longer than 3 months:

 may not be treated less favorably than an employee employed on a permanent basis and
who performs the same and / or similar work, unless there is a justifiable reason for different
treatment;
 must be given equal access to opportunities to apply for vacancies;
 would be entitled to severance pay upon termination of the fixed term contract if the fixed
term contract exceeds 24 months. The severance pay would be calculated at 1 weeks
remuneration for each completed year of the contract.

Where the employer has failed to renew a fixed term contract where there was a reasonable
expectation of such renewal (or where the employer offered to renew it on less favorable terms),
the basis for an unfair dismissal claim has been extended to also include an expectation of indefinite
employment. This deeming provision is expressly set out in section 198B(5) of the LRA and will be
discussed in more detail immediately below.

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The term “rolling over”

The danger of making use of a fixed term contract arises when the employer continues to renew
the contract every time it expires; i.e. using successive fixed term contacts. The use of successive
fixed term contracts is also commonly known as "rolling over" the contract.

After the contract has been rolled over, the employee could have what is known as "the right of
expectation of renewal." This means that, because the employer has introduced the practice of
"rolling over" the contract every time it expires, the employee now has the right to expect that such
a situation will continue. Thus, when the employer suddenly fails to roll over the contract for the
umpteenth time, the employee will be deemed to be unfairly dismissed, unless the employer can
prove the contrary.

The court in Dierks v University of South Africa2 set out a test to establish whether or not the
employer created such a right to expectation of renewal. The test is as follows: “Are there facts that,
in the ordinary course, would lead a reasonable person to anticipate renewal”? Note that the
expectation must be reasonable given the circumstances, thus, on an evaluation of all the
surrounding circumstances; including the significance or otherwise of the contractual stipulation,
agreements, undertakings by the employer, or practice or custom in regard to renewal or re-
employment, the availability of the post, the purpose of, or reason for concluding the fixed term
contract, inconsistent conduct, failure to give reasonable notice and the nature of the employer's
business, are all criteria that must be included in the evaluation of whether or not a right of
expectation was created by the employer.

Employers/Employees that are excluded from section 198B of the LRA:

1. Employees who earn in excess of the threshold prescribed by the Minister of Labour in terms of
section 6(3) of the BCEA, currently being R205 433.30 per annum;
2. Employees employed in terms of a fixed term contract/successive fixed term contract which is
permitted by any statute, sectoral determination or collective agreement;
3. Employers who employ less than 10 employees;
4. Employers who employ less than 50 employees and whose business has been in operation for
less than two years, unless:
a. The employer conducts more than one business;
b. The business was formed by the division or dissolution for any reason of an existing
business.

2
(J399/98) [1998] ZALC 126 (14 December 1998).

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A fixed term contract must:

 be in writing;
 set out the reasons for utilising a fixed term contract (the nature of work/other justifiable reason
as discussed above);
 set out the time period OR specific project for which the employee is employed;
 must record the employee’s rights, such as a right to paid leave (within the formula set by
section 20(2)(b) of Basic Conditions of Employment Act – one day for every 17 days worked);
 must record the exact functions and / or tasks required of the employee;
 state that the contract will not be renewed and that the employee has no right of expectation
regarding renewal;
 that no notice of termination is required and that the contract will expire on the end date as
stipulated in the contract.

Termination of a fixed term contract

As mentioned previously, a fixed term contract expires on the occurrence of a specified event; the
completion of a specified task or project or on a fixed date other than the employee’s normal or
agreed retirement age.

Please be advised that the employer may not terminate the contract before the end date. The
employee may however resign before the date of termination, or can be found guilty of serious
misconduct or incapacity and can be dismissed after the correct procedures for such dismissals has
been followed. The employee may also be retrenched before the end date where the employer’s
operational requirements require same (retrenchments).

CONTENT: WRITTEN PARTICULARS OF EMPLOYMENT – SECTION 29 OF THE

BCEA

Section 29 of the BCEA requires employers to supply employees with certain particulars of the
employment relationship, which particulars must be put in writing and given to the employee upon
the commencement of employment. Usually these particulars are included in a written contract of
employment (permanent or fixed term); however it does not need to take the form of an
employment contract.

Please contact our NEASA Hotline on 08601 NEASA (63272) or [email protected] for a pro
forma written particulars of employment.

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The following particulars must be supplied:

 Employer and worker details:

o the full name and address of the employer;
o the name and occupation of the employee, or a brief description of the work for which
the employee is employed.
 Employment details:
o the place of work and where the employee is required or permitted to work at various
places;
o the date on which the employment will begin/began;
o the employee's ordinary hours of work and days of work.
 Payment details:
o the employee's wage or the rate and method of calculating wages;
o the rate of pay for overtime work;
o any other cash payments that the employee is entitled to;
o any payment in kind that the employee is entitled to and the value of the payment in
kind;
o how frequently remuneration will be paid;
o any deductions to be made from the employee's remuneration.
 Leave details:
o the leave to which the employee is entitled.
 Notice/contract period:
o the period of notice required to terminate employment, or if employment is for a
specified period, the date when employment is to terminate.
 Other (not for employers with less than five employees):
 a description of any council or sectoral determination which covers the employer's
business;
 whether the time the employee worked for a previous employer counts as part of the
employee’s period of service with the current employer, for example where a company
was sold as a going concern and employment contracts transferred;
 a list of any other documents that form part of the contract of employment e.g.: medical
aid rules, company policies and procedures (discussed in detail later) and an indication
of the place which is reasonably accessible to the employee where a copy of each
document may be obtained.

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Changes in Particulars:

Where any of the particular as listed above changes, the written particulars must be revised to
reflect the change(s) and the employee must be supplied with a copy of the document reflecting
the change(s).

Illiterate Employees:

Where an employee is not able to understand the written particulars, the employer must ensure
that they are explained to the employee in a language and in a manner that the employee
understands.

Record Keeping:

Please be advised that the written particulars must be kept by the employer for a period of three
years after the termination of employment.

Other

Matters such as transport/allowances/bonuses/increases are not regulated by the BCEA and are
thus open to negotiation between the parties. We suggest that employers do not bind themselves
to terms in this regard by making provision therefore in the employment contract but to rather
regulate same on a discretionary basis in terms of company policy.

EXAMPLES OF PRO-EMPLOYER CONTRACTUAL CLAUSES

CLAUSES REGARDING TIME PERIODS

Hours of work

 “The employee will work 45 (forty five) hours per week, from Monday to Friday, according to the
work schedule determined by the employer from time to time. The employee can be expected to
work on Saturdays in case of emergency and when requested by the employer with the provision
that reasonable notice will be given in advance”.

 “The employee shall be entitled to a meal interval of 60 (sixty) minutes as mutually agreed upon,
after 5 (five) consecutive hours of work, unless the employee works for fewer than 6 (six) hours on
a day. The employee will not be remunerated during the meal interval, unless the employee is
required to work during the meal interval to perform duties that cannot be left unattended and
cannot be performed by another employee”.

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 “The employee undertakes to work up to 12 (twelve) hours in a day, inclusive of meal and tea
intervals, without receiving overtime pay, subject to the maximum of 45 (forty five) ordinary hours
and a maximum of 10 (ten) hours overtime per week, alternatively 3 hours per day, if so required
by the employer. The employer shall allow the employee a daily rest period of 12 (twelve) hours
and a weekly rest period of 36 (thirty six) consecutive hours. Alternatively, the employer may
allow the employee a rest period of 60 (sixty) consecutive hours every 2 (two) weeks or a weekly
rest period of 28 (twenty eight) hours in the first week and 44 (forty four) hours in the following
week”.

Sunday Work

 “The employee undertakes to work on Sundays, in case of emergency and if so required by the
employer”.

 “If the employee normally works on Sundays, the employee will be remunerated at 1,5 (one and a
half) times his/her hourly salary/wage for each hour worked”.

 “If the employee does not normally work on Sundays, the employee will be paid double his/her
hourly wage for each hour worked, alternatively the employer may grant the employee paid time
off equivalent to the difference in value between the employee's wage and the pay that the
employee is entitled to for working on the Sunday. The paid time off shall be granted within 1
(one) months of the employee becoming entitled to”.

Public – Holidays

 Side note: Please be advised that an employer may not require an employee to work on a public
holiday except in accordance with an agreement.

 “If a public holiday falls on a day on which an employee would ordinarily work, an employer must
pay:
o an employee who does not work on the public holiday, at least the wage that the employee
would ordinarily have received for work on that day;
o an employee who does work on the public holiday:-
 at least double the amount referred to in paragraph (a); or
 if it is greater, the amount referred to in paragraph (a) plus the amount earned by
the employee for the time worked on that day”.

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 “If an employee works on a public holiday on which the employee would not ordinarily work, the
employer must pay that employee an amount equal to:
o the employee’s ordinary daily wage; plus
o the amount earned by the employee for the work performed that day, whether calculated
by reference to time worked or any other method”.

 “An employer must pay an employee for a public holiday on the employee’s usual pay day”.

 “If a shift worked by an employee falls on a public holiday and another day, the whole shift is
deemed to have been worked on the public holiday, but if the greater portion of the shift was
worked on the other day, the whole shift is deemed to have been worked on the other day.”

 “a public holiday is exchangeable for any other day which is fixed by agreement or agreed to
between the employer and the employee”.

 “The employee shall be entitled to the following paid public holidays: New Years Day, Human
Rights Day, Good Friday, Family Day, Freedom Day, Worker's Day, Youth Day, National
Women's Day, Heritage Day, Day of Reconciliation, Christmas Day, Day of Goodwill or any other
day so declared in terms of the Public Holiday Act.”

Averaging Working Hours

 “an employer may not require or permit an employee who is bound by a collective agreement to
work more than:
o an average of 45 ordinary hours of work in a week over the agreed period;
o an average of five hours’ overtime in a week over the agreed period”.

 “An employee’s ordinary hours of work may by agreement be extended by up to 15 minutes in a

day but not more than 60 minutes in a week to enable an employee whose duties include serving
members of the public to continue performing those duties after the completion of ordinary hours
of work”.

Short Time

 A Short time clauses is very important as employers who don’t have this clause in their contracts
will not be able to implement short time without the employees consent and will have to
compensate employees for the time at work even though the employees are unable to perform
their duties. This can be very costly for employers, since employees have to be paid for their
unproductive time.

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 “If an employer is unable to employ his/her employees for the ordinary hours of work per week due
to slackness of trade, shortage of raw materials, a general breakdown of plant or machinery
caused by an accident or any other unforeseen emergency, the employee herewith agrees that the
employer may implement short time during this time”. For the period of short time the employees
are remunerated for the hours worked. Where practically possible, written notice regarding the
implementation of short time will be given to the trade union representative and/or the employees
in writing at least 24 hours prior to, or less if the circumstances are more urgent, the date on which
short time will be implemented”.

 OR “The employee hereby agrees that the employer may implement a system of short time under
circumstances of reduction of work due to circumstances not within the control of the employer,
on condition that the employer gives one clear day notice to the employee and inform the employee
of the reason for implementing short time. The employee shall be entitled to payment only for
hours worked during said short time.”

Over-time

 “The employee agrees to work overtime if the nature of the business requires such overtime and if
so as may be required by the employer on reasonable notice. Time worked in excess of normal
working hours and exceeding 45 (forty five) hours will be deemed to be overtime only if the
employee was required by the employer to work such overtime”.

 “The rate of pay for overtime worked (except on Sundays and Public Holidays), will be 1,5 (one and
a half) times the employee's hourly salary/wage, alternatively the employee's ordinary wage plus
30 (thirty) minutes paid time off for every hour of overtime worked, alternatively 90 (ninety)
minutes paid time off for each hour of overtime worked, at the discretion of the employer. The
employer shall grant the employee the paid time off within 12 (twelve) months of the employee
becoming entitled to it. The employee will not be entitled to any remuneration for overtime if
his/her gross remuneration package exceeds the threshold for overtime payment as set out in The
Basic Conditions of Employment Act, 1997, as determined from time to time by the Minister from
in the Government Gazette.”

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Night work

 “night work” means work performed after 18:00 and before 06:00 the next day;
 An employer may only require or permit an employee to perform night work, if so agreed, and
if :
o the employee is compensated by the payment of an allowance, which may be a shift
allowance, or by a reduction of working hours; and
o transportation is available between the employee’s place of residence and the workplace
at the commencement and conclusion of the employee’s shift.
 An employer who requires an employee to perform work on a regular basis after 23:00 and
before 06:00 the next day must:
o inform the employee in writing, or orally if the employee is not able to understand a
written communication, in a language that the employee understands:
 of any health and safety hazards associated with the work that the employee is
required to perform; and
 of the employee’s right to undergo a medical examination.
o at the request of the employee, enable the employee to undergo a medical examination,
for the account of the employer, concerning those hazards,
 before the employee starts, or within a reasonable period of the employee
starting, such work; and
 at appropriate intervals while the employee continues to perform such work;
and,
o transfer the employee to suitable day work within a reasonable time if -
 the employee suffers from a health condition associated with the performance
of night work; and
 it is practicable for the employer to do so.
 an employee works on a regular basis if the employee works for a period of longer than one.
 “The employee undertakes to work at night, if and when so required by the employer”.

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EXAMPLES OF CLAUSES REGARDING CONSENT

Medical & Alcohol Testing

 Employees can be requested to undergo medical testing as well as to be tested for alcohol during
working hours, but only if this is so stipulated in their employment contracts or in an alcohol
policy, or if the employee has given his/her permission. If the employee has not given his/her
permission, the employer cannot force the employee to undergo medical/alcohol testing.

 “The Employee agrees to undergo any medical examination or examination by means of apparatus
especially designed for this purpose of testing under the influence of liquor or a narcotic substance
in the event of any suspension by the Employer or supervisor of such Employee being influenced
or effected.” The Employee accepts the admissibility of such testing and result of such testing, and
the submission of such report or result of testing will be sufficient proof of the state of influencing
of such an Employee on time of testing”.

Polygraph Testing

 “The employee hereby consents to undergo a polygraph test at management’s discretion whenever
they see fit. If the employee refuses to undergo such a test it will be seen as a breach of contract
and may lead to the employee’s dismissal.”

Additional Deductions

 According to the Basic Conditions of Employment Act an employer is not allowed to deduct
any money form an employee’s salary without the employee’s written consent or unless the
deduction is required or permitted in terms of law, collective agreement, court order or
arbitration award. Additional deductions that can be made with the employee’s consent include
housing, failure to give statutory notice, training costs, rations, etc. If this clause is set out in
the employment contract the employer can immediately make these deductions as they arise
without trying to get the employee’s consent.

Business Vehicles

 “If the employee as driver of the business vehicle be involved in an accident caused by the
negligent, willful or unlawful conduct of the employee, the employer reserves the right to recover
such loss or damage directly from the employee.”

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 “In the event of the employee incurring traffic fines as a driver in the course and scope of his/her
employment, he/she agrees to deduction of the value thereof from his/her salary or wage provided
that such deduction may not exceed 25% of the ordinary salary or wage during any one time, only
after an enquiry into the circumstances of the incident has been held and not if the offence relates
to the maintenance of the vehicle.”

 “Business vehicles may under no circumstances be used for private purposes, and under no
circumstances may any private persons be transported in or on such vehicle. The employer is
indemnified against any action due to an employee’s failure to comply with this provision”.

Loss Control- Cameras in the Workplace / Searching of Personal belongings

 These clauses are vital to manage theft and/or misconduct in the workplace. If this clause is set
out in the employment contract and the employer suspect theft and/or misconduct, he/she can
immediately install cameras in the workplace and/or search employees’ personal belongings
without then trying to obtain the employee’s consent which can possibly alert the offender.

 “The employee hereby consents to his/her person, property and vehicle being searched while on
the premises of the employer and during work hours, by the employer or his/her nominated
representative, provided that female employees shall be searched by female persons and male
employees by male persons”.

 “The employee acknowledges and associates him/herself with the fact that close circuit television
and other camera surveillance equipment will be used in the workplace to monitor and control
theft and other losses. The employee also agrees that visual material obtained in this fashion
could be used as exhibits.”

OTHER NB CLAUSES

Confidentiality

 “All information supplied to you by the company shall be treated with the utmost of confidence,
and may not be disclosed by you to any unauthorized person, nor to any person not authorized in
writing to receive any such information, including any member of your family. This
Confidentiality Clause is applicable indefinitely, and applies even after you leave the employment
of the employer”.

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 “The employee undertakes not to disclose any confidential information to any third party or entity
during the operation of this agreement or after its termination, unless the employer specifically
agrees.”

Restraint of Trade

 “The employee undertakes not to be engaged in any other business be it direct or indirect in
competition or as a shareholder, partner, member of a Close Corporation, director of a company
or in any other capacity within one year after termination of this agreement in the area known as
WESTERN CAPE.”

 “The employee acknowledges and agrees that the aforesaid restraint is fair, reasonable and
necessary for the protection of his employer, his employer’s trade name and the goodwill attached
thereto.”

 “Without prejudice to any other rights which the employer may have in law, the employee
acknowledges that the agreed damages due to his/her employer will be an amount of R50 000-00
in respect of each calendar month during which any breach of the aforesaid restraint continues,
and that the employer shall be entitled to recover such amount, and any associated recovery costs,
from the employee in respect of such breach.”

Disclosure of Information

 “Should it be revealed at any time after the commencement of employment that the employee has
failed to disclose any information relative to the following, or has failed to disclose any
information that may have influenced the employer’s decision regarding employment, whether
inadvertently or not, or has disclosed incorrect or false information of any sort relative to the
employment, such omission or commission shall constitute grounds for the summary dismissal
of the employee.”

Retirement Age

 When no retirement age is specified in the employment contract, an employee’s services cannot
just be terminated when the employee reaches normal retirement age, but a whole procedure
and consultation process then has to be followed. Where the employer implements a proactive
clause regulating the retirement age at for instance 60 years in the employment contract, the
employment contract will automatically terminate in the month/year of the employee’s 60th
birthday. If the employee is still able to perform his/her duties and both parties are agreeable,
the employer can provide the employee with a fixed term contract.

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 “An employee may upon reaching the age of 55 (fifty five), give notice to the employer of his
intention to retire but will be obliged to retire upon reaching the age of 60 (sixty), upon which
this contract will automatically expire at the end of that calendar month”.

Use of telephone, fax & internet facilities

 “The employee is not entitled to use business telephones, fax machines, e-mail and Internet facilities
for private purposes without the employer’s permission, unless an emergency exists which
necessitates the use thereof. The employee acknowledges and associates him/herself with the fact
that all telecommunications, e-mail and Internet traffic are monitored by the employer.”

TERMINATION OF CONTRACT

The contract of employment will terminate under the following circumstances:

1. Upon Completion of fixed term contracts - contract automatically ends once period agreed
to has expired or where the project has completed.

2. Termination by Agreement – where the employer and employee enters into a mutual
agreement that the contract will come to an end.

3. Termination on insolvency of employer – the sequestration of the employer suspends all

contracts of employment but contracts may only be terminated by liquidator or trustee that
has consulted with employees, their Trade Unions or their representatives. The LRA
provides for suspension & revival of employment contracts where the insolvent business is
transferred as a going concern.

4. Termination as a result of breach by employee (summary termination/cancellation) -

where the employee fails to perform his/her duties in terms of the contract or where
he/she performs his/her duties unsatisfactorily, he/she is guilty of breach of contract.
Under these circumstances the employer can dismiss the employee summarily if the
breach is a sufficient serious nature e.g.: negligence/incompetence, absence from work,
failure to obey reasonable and lawful instruction or misconduct. If employer terminates
without notice it is a dismissal. If there is a dismissal, it must substantively and
procedurally fair:
 substance is about the fairness of the reason which reason must related to the
employee’s misconduct or incapacity or to the employer’s operational
requirements.

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  procedure is about the procedure prescribed prior to dismissal in terms of
Schedule 8 of the LRA.

5. Termination on Notice:
 By employee = resignation
 Keep in mind instances of constructive dismissal where the employee resigns
because his/her employer has made the continued employment intolerable.
 By employer
 if employer terminates lawfully by giving notice in terms of the contract or
BCEA, the termination will be a dismissal and must be substantively and
procedurally fair.

 Notice periods in terms of the BCEA (must be in writing)

 6 months or less = 1 weeks’ notice;
 6 months to 1 year = 2 weeks;
 1 year + = 4 weeks.

6. Summary Termination = no notice is given to employee by employer and the termination

takes immediate effect.

7. Termination Upon death of either party

 The contract of employment terminates automatically upon the death of either the
employer (sole proprietor) or employee.

Payments on termination

 Paid time off: the employer must pay an employee for any paid time off that the employee is
entitled to or that the employee has not taken;
 Leave pay – the employee must remunerate the employer for any period of annual leave which
is due to the employee and which he/she has not taken;
 Salary - the employee’s remuneration at date of termination.

PAGE 17
REFUSAL TO SIGN EMPLOYMENT CONTRACT

Where an individual is presented with a contract of employment prior to the commencement of

employment and the individual refuses to sign the contract, then no agreement has been reached
between the parties and the individual cannot be considered to be an employee of the employer.

However, if the individual was presented with a contract after the commencement of employment
and the employee refused to sign the contract, then the employee cannot be forced to sign the
contract nor can the employee be disciplined for failure to comply with a lawful instruction. The
employee should be given a copy of the contract and it must be recorded on the copy that the
employee refused to sign and a witness must sign the copy.

Employers must also take note that they cannot dismiss an employee by reason that they refused
to sign an employment contract if the employee for instance objected to a specific provisions in the
contract.

Another approach may be to remind the employee of the contract that must be signed, instructs
the employee to sign the contract within a reasonable period of time and invite the employee to
submit reasons for his / her failure to sign the contract. If the employee does not raise any objections
in terms of the contents of the contract he / she may now be disciplined for refusal to adhere to a
valid instruction.

2. TEMPORARY EMPLOYMENT SERVICES (TES) – SECTION 198 LRA

What is a temporary service?

A “temporary service” means work for a client by an employee:

 for a period not exceeding three months;

 as a substitute for an employee of the client who is temporarily absent; or
 in a category of work and for any period of time which is determined to be a temporary
service by a collective agreement concluded in a bargaining council, a sectoral
determination.

Temporary employment is generally obtained by the employer (client) through a Temporary

Employment Service, also often referred to as a Labour broker.

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Is the Employee an employee of the labour broker or the client?

Employees falling under the ambit of “temporary services” as defined will be regarded to be the
employees of the temporary employment service itself. Employees that fall outside the ambit of the
definition are deemed to be employees of the client of the temporary employment service and not
employees of the temporary employment service. In other words, a labour broker supplies the
employer (the client) with an employee and this employee does not fall within the above definition
but will be deemed to be a permanent employee, irrespective of the agreement between the
employer and the labour broker.

Who is liable the labour broker or the Employer (client)?

An employee has recourse to refer both the employer (the client) and the Labour Broker to the
CCMA or Labour Court regarding any labour disputes. In other words, should an employee be
employed for a period longer than 3 months by a Labour Broker by the employer (the client), and
the employee is subsequently dismissed, the employee would be able to institute action against
both the employer (the client) and the labour broker.

Implications of a temporary service contract exceeding 3 months

An employee employed through a labour broker or an employee on a fixed term contract exceeding
3 months would have to receive the same benefits (Pension, Medical, Leave Conditions, Bonuses,
and any other benefit given to employees due to their association with the company) as received
by permanent employees of the client.

Employees that are excluded

Those employees who earn more than the relevant threshold as determined by the Minister from
time to time, which is currently R205 433.30 per annum are excluded from the aforementioned.

Recent Amendments to the LRA in respect of TES

Amendments to the Labour Relations Act, 66 of 1995 (“LRA”), which came into force in January of
2017, introduced important and controversial provisions dealing with temporary employment
services (“TES”), commonly known as labour brokers.

The most important of these provisions is found in the newly-enacted section 198A, which makes a
distinction between what can be regarded as the “acceptable” use of a TES services and the
“unacceptable” use of its services.

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Acceptable use is described as the provision of a “temporary service” and is defined as the following,
namely if:

 a TES employee is assigned to a client for a period of less than three months;
 a TES employee is assigned to a client as a substitute for an employee who is temporarily absent;
 a TES employee is assigned to a client to perform a category of work which is determined to be
a temporary service by a collective agreement concluded in a bargaining council, a sectoral
determination or a notice published in the Government Gazette by the Minister of Labour.

This provision is clearly aimed at discouraging the use of the employees of a TES on a long-term
basis to avoid the costs of the employment of permanent employees. The sanction it imposes if a
client makes use of a TES in circumstances that fall outside the definition of a temporary service is
an interesting one and consists of two parts:

 the first is that the employee assigned to the client is “deemed” to be the employee of the
client, for the purposes of the LRA and is employed on an indefinite basis by the client;
 the second is that the client must treat the deemed employee “on the whole not less favourably”
than an ordinary employee who performs the same or similar work, unless there is a justifiable
reason for not doing so.

The deemed employment provisions only apply if the employee earns less than the threshold
prescribed by the Minister in terms of section 6(3) of the Basic Conditions of Employment Act, 75
of 1997. At present, this is R205 433.30 per annum.

There has been much debate whether the operation of the deemed employment provision results
in the client being regarded as the sole employer or whether the TES also remains the employer. If
the latter scenario applied, the employee assigned to the client would, in effect, have two employers,
at least for the purposes of the LRA.

The CCMA and bargaining councils have been called upon to consider this issue in at least two
arbitration proceedings. In both awards, the client was regarded as the sole employer. In Assign
Services (Pty) Ltd v CCMA & others3 the Labour Court was required to consider an application to
review and set aside an award where it was held that the client became the sole employer for the
purposes of the LRA.

3
(Unreported JR 1230/15 8 September 2015).

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The Court found that the commissioner had erred and came to the conclusion that the employment
relationship between the TES and the assigned employee continued to exist for the purposes of the
LRA. It did so in the following terms:

“[12] So (and once again I repeat) the only issue, on the stated case at any rate, is whether the
TES continues to be an employer of the worker and, by reason of this fact, is concurrently vested
with the statutory rights/obligations and powers/duties that the Act generates. I see no reason
why this should not be so. There seems no reason, in principle or practice, why the TES should be
relieved of its statutory rights and obligations towards the worker because the client has acquired
a parallel set of such rights and obligations. The worker, in contracting with the TES, became
entitled to the statutory protections that automatically resulted from his or her engagement and
there seem to be no public policy considerations, such as pertain under the LRA’s transfer of
business provisions (s 197), why he or she should be expected to sacrifice them on the fact that
the TES has found a placement with a client, especially when (as is normally so) the designation
of the client is within the sole discretion of the TES.”

The Constitutional Court has confirmed the ‘single employer’ interpretation. Whilst the TES has
obligations in terms of the LRA after 3 months, these end when the TES ends their relationship with
the employee.

3. PART-TIME EMPLOYMENT

What is a part time employee?

A part-time employee is an employee who is remunerated wholly or partly by reference to the time
that the employee works and who works less hours than a comparable full-time employee.

A comparable full-time employee is an employee who is remunerated wholly or partly by reference

to the time that the employee works and who is identifiable as a full-time employee in terms of the
custom and practice of the employer of that employee; and does not include a full-time employee
whose hours of work are temporarily reduced for operational requirements as a result of an
agreement.

Employees who are excluded:

 Employees who earn more than the relevant threshold determined by the Minister from time to
time;
 Employee who ordinarily works less than 24 hours a month for an employer; and
 During an employee‘s first three months of continuous employment with an employer.

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Employers that are excluded

Employers that employ less than 10 employees or that employ less than 50 employees and whose
business has been in operation for less than two years, unless—

 the employer conducts more than one business; or

 the business was formed by the division or dissolution, for any reason, of an existing
business;

Implications of part time employment exceeding 3 months

Taking into account the working hours of a part-time employee, irrespective of when the part-time
employee was employed, an employer must—

 treat a part-time employee on the whole not less favourably than a comparable full-
time employee doing the same or similar work, unless there is a justifiable reason for
different treatment; and
 provide a part-time employee with access to training and skills development on the
whole not less favourable than the access applicable to a comparable full-time
employee.
 an employer must provide a part-time employee with the same access to opportunities
to apply for vacancies as it provides to fulltime employees.

4. POLICIES AND PROCEDURES

1) ALCOHOL AND DRUG ABUSE POLICY

The policy should be clear – when necessary, zero tolerance. Secondly, the policy must stipulate
your test procedure. For example, a breathalyser test for alcohol may be required - or a urine test
for drugs. The policy must state that note will be taken of circumstantial evidence, such as
bloodshot eyes, slurred speech, the smell of alcohol on the breath, unsteadiness on his feet,
dishevelled appearance, aggressive or abusive or arrogant or out of character behaviour, and the
inability to walk a 10 metre straight line with the arms held out horizontally.

The employer's rules regarding alcohol or drug consumption whilst on duty, or off duty before
coming to work, must be very specific and must warn employees that should the rule be

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contravened, disciplinary action will follow which may result in dismissal. The policy must also
make mention of the regulations in the Occupational Health and Safety Act regarding this Issue.

2) ATTENDANCE OR ABSENTEEISM POLICY

#1 State that your employee is required to fill in a leave form for any sick or other leave taken so
you're aware of when your employees are absent from duty.

#2: Make it clear that your employee must produce a medical certificate for any sick leave taken.
Try to encourage employees to bring medical certificates even if they've just taken one day off.

#3: Indicate that your employee must contact his manager within a reasonable period of time if he'll
be absent from work and he must advise how long he'll be away from work.

#4: Define what you regard as a reasonable level of absenteeism. State that if an employee's absence
exceeds that level, you'll start a counselling process to investigate and address the reasons he's
absent.

#5: Indicate what steps you'll take to support an employee who's trying to remedy unacceptable
levels of absence.

#6: Include incentives or rewards for substantial improvements in levels of attendance or for full
attendance over specified periods.

#7: Indicate that if your employee continues to be frequently absent after you've given him a
reasonable period for improvement, you may dismiss him.

3) HIV & AIDS POLICY

What should the Workplace Policy cover?

 The organisation’s position on HIV/AIDS;

 Details on employment policies (e.g. position regarding HIV testing, employee benefits,
performance management and procedures to be followed to determine medical incapacity
and dismissal);
 Standards of behaviour expected of employers and employees and appropriate measures to
deal with deviations from these standards;
 The means of communication within the organisation on HIV/AIDS issues;
 Details of employee assistance available to persons affected by HIV/AIDS;

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  Details of implementation and co-ordination responsibilities;
 Monitoring and evaluation mechanisms.

4) SMOKING POLICY

Smoking is not regulated by Labour Law but by the Tabacco Products Control Act and thus there
is no obligation on employers to provide smoke breaks to employees.

Employers can ban smoking at the workplace entirely and should state in their policy that the best
and only workable smoking policy is that smoking is prohibited completely on the workplace, and
that smokers may only smoke during their tea break and their lunch break - and at no other time.

The Policy should state that a proper smoking area will be designated for that purpose, and smokers
can smoke only in that smoking area and nowhere else.

5) SEXUAL HARASSMENT POLICY

All employees have the right to work in an environment that is free of sexual harassment, free of
victimization and free of unfair discrimination, and to be treated with dignity and respect.

The policy should define what sexual harassment is eg “The unwelcome or unwanted attention of
a sexual nature that causes discomfort, humiliation, offence or distress, and/or interferes with the
work. This includes all such actions and practices of a sexual nature by a person or a group directed
at one or more staff members. Sexual harassment may take a verbal or physical form, a written form
in any format, or may be by means of pictures, photographs, jokes, innuendoes etc.”

The Policy should set out what the procedure is to be followed when there is a report of sexual
harassment eg: bringing the harassment to the attention of an appropriate supervisor or manager
or following the company’s grievance procedure.

The Policy should set out what action will be taken against a person who is found guilty of sexual
harassment such as dismissal and that the dismissal is non-negotiable.

The policy should state that anonymous complaints of sexual harassment cannot be addressed since
the complainant will be unknown and without a complainant, there is no case to answer.

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6) PERSONAL CELLPHONE – ELECTRONIC AND OTHER COMMUNICATION DEVICES
POLICY

To provide guidelines for the use of personal cell phones, electronic and other communication
device by employees in the workplace.

Policy should define what Cell phones and electronic or other communication devices are for
purposes of the policy.

Policy should state when the devices can be used, eg prohibited during working hours and only
used during lunch or tea breaks, before or after hours.

Policy can deal with the procedure for requesting authorisation for the use of the devices during
working hours and can limit the purposes for which the devices can be used during working hours
with authorisation.

Policy should state what the consequences will be for not adhering to the policy such as disciplinary
action

Please contact our NEASA Hotline on 08601 NEASA (63272) or [email protected] for pro
forma policies in this regard.

HOW TO IMPLEMENT POLICIES AND PROCEDURES

Current policies and procedures upon commencement of employment:

Employers should bring all new policies and procedures to the attention of the employee upon
commencing employment and have the employee sign the policies and procedures. A copy should
be placed in the employee’s personnel file.

If employee is illiterate, have a witness present who can attest thereto that the policy was explained
in a language and manner which the employee understands.

Copies of all policies and procedures should be readily accessible to all employees and a copy
preferably placed on the notice board or in the employee break room.

PAGE 25
New policies and procedures implemented during employment:
Employers should call for a staff meeting and have all employees sign an attendance register. The
policies should then be brought to the attention of all employees by reading the policies to the
employees and having a translator present where necessary.
Employees should be furnished with a copy to sign. If they refuse to sign, record same on the policy
and have a witness sign along with a record of the date. The policy should then be placed in the
Employees personnel files.

Copies of all policies and procedures should be readily accessible to all employees and a copy
preferably placed on the notice board or in the employee break room.

*END*

If you are not yet a NEASA member and are

interested in our services, or require more
information, please contact me on 021 910 0220 or
[email protected] in order to arrange for an
appointment to explain the packages and the
services we offer in more detail.

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