GUIDELINE FOR PERMANENT CONTRACT OF EMPLOYMENT

This contract should be used for employees who are employed on an ongoing or indefinite basis, either full time, part time or variable time.

Lunch breaks
• Employers are required to grant a lunch break of one hour after five continuous hours of work.
• This can be reduced to 30 minutes with the agreement of the employee. The lunch break is excluded from the calculation of daily or weekly working hours.

Working Hours – full-time, part-time or variable time
• An employer must regulate the working hours of employees provided that: – o Maximum ordinary working hours per week is 45 hours, and 9 hours per day if the employee works 5 days a week.
o Legislation provides for procedures to reduce this to 40 hours. Employers are advised to consult any applicable sectoral determination in this regard.
o The contract can be for a full-time, part-time or variable time as per the operational requirements of the job. The relevant provisions in this section should be completed and the other provisions deleted.

Statutory deductions
• Employers are required by the law to make deductions from employee salaries and wages and these statutory deductions are: –
o Employee Tax
o Unemployment Insurance Fund contributions (UIF)

Deduction other than statutory deductions
• Deduction other than statutory deductions may only be made with the agreement of the employee.
• This would include union subscriptions, if the employee has signed a stop-order form authorising this and the union has organisational rights to stop-orders.
• Deductions in respect of money owed by the employee to the employer may not exceed 25 % of the employee’s monthly remuneration.

Overtime
• Overtime is only payable to employees earning below the BCEA threshold amount set by the Minister of Employment and Labour. As at 01 March 2023, the threshold is R241 110.59 per annum.
• Overtime is limited to 10 (ten) hours per week and is paid at 1.5 times the normal hourly rate for work from Monday to Saturday.
• Payment for work on Sundays and public holidays is more complicated to calculate, but is essentially paid at double the normal hourly rate unless Sunday is an ordinary day of work in which event it is paid at 1.5 times the normal hourly rate. Some sectors, however, such as retail are covered by sectoral determinations that provide for different Sunday rates when certain conditions are met.
• Refer to sections 16 and 18 of the Basic Conditions of Employment Act 75 of 1997 (BCEA).

Doc 1.2A Info sheet (other) – Terms & conditions of employment

Probation
• Probation is normally between 3 (three) and 6 (six) months, but may be less or more if circumstances require e.g. nature of position and/or level of responsibility.
• Probation serves, on the one hand, to allow for the Employee to determine whether the nature of the job and organisation suits his/her needs, and on the other hand, it allows the Employer to determine the overall suitability of the Employee with reference to performance, conduct and overall fit into the organisation.
• At the end of the probationary period the Employer may confirm the Employee’s employment. Alternatively, the Employer may engage the Employee on extending the probation to allow the Employee more time to adjust or to meet the requirements of the job. Where it is found that the Employee is not suitable for the job, the Employer may opt to not confirm the appointment (for less compelling reasons than a tenured employee) after a fair process was followed which includes giving the Employee an opportunity to give input into the consideration.
• It is important however that an Employer gives the Employee reasonable and appropriate training, guidance, instruction, counselling and evaluation during the probationary period – a “sink or swim” approach should not be adopted.
• Training in company-specific systems, work methods, policies and procedures will be particularly important as the employee cannot be expected to be aware of these.

Doc 3.3A How to guide – probation
Doc 4.2A How to guide – ending employment where employee is on probation

Retirement age
• There is no mandatory retirement age in terms of the Labour Relations Act.
• It is important to specify a retirement age in the contract of employment to avoid disputes in this regard,
• If an employer wants to continue employing the employee past retirement age, this can be done by way of fixed-term contracts specifically provided for in the Labour Relations Act 66 of 1995 (LRA).

[Create hyperlink to 4.12A Info sheet (other) – what happens when an employee retires]

Written Disciplinary Code and Grievance Procedure
• If an employer has a written disciplinary code and grievance procedure, it should be attached to the contract of employment as an annexure.
• It is advisable to request the employee to sign an acknowledgement of receipt of the document.
• If the code and procedure is attached to the contract as an annexure, clause 14.3 can be amended to read as follows: “A copy of the Disciplinary Code and Grievance Procedure is attached hereto as Annexure B.”

Doc 3.1A Info sheet – an overview of workplace discipline
Doc 3.9A How to guide – where the employee has a grievance
Doc 1.2F Model disciplinary code

CONTRACT OF EMPLOYMENT CHECKLIST
1. Is this a permanent contract or a fixed-term contract?
2. Full-time or part-time employee?
(Make sure you are using the correct contract form for the intended employment relationship)
3. For part-time contracts for people who earn the equivalent to or below the earnings threshold set out in the Basic Conditions of Employment Act 75 of 1997, have you checked to see that the contract complies with the requirements as set out in section 198C of the Labour Relations Act 66 of 1995?
4. Have ALL the spaces in the contract been filled in?
5. Have the sections that are not applicable been deleted?
6. For fixed-term contracts for people who earn the equivalent to or below the earnings threshold set out in the Basic Conditions of Employment Act 75 of 1997, have you checked to see that the contract complies with the requirements as set out in section 198B of the Labour Relations Act 66 of 1995?
7. If a fixed-term contract, is the period three months or less?
8. If it is a fixed-term contract for more than three months, or for a project with an unspecified period, have you specified the reason for the fixed-term in the contract?
9. Has the employee signed the contract?
10. Has the employee’s signature been witnessed?
11. Has the contract been signed by an authorised person on behalf of the employer?
12. Has the employer’s signature been witnessed?
13. Have both parties and the witnesses initialled any alterations, including any deletions and each place where a blank space has been completed?
14. Has the employee been given a copy of the signed contact?
15. If applicable, has the employee been given copies of the disciplinary policy / procedure / code / grievance procedure?
16. Did the employee (applicable to those earning above the BCEA threshold) agree to an Inquiry by Arbitrator process, as defined in section 188 of the LRA, in the event that the employer may wish to utilise this process to conduct an inquiry into his/her conduct or capacity?
17. Has the employee been given copies or access to any other applicable policies?
18. Has the employee signed an acknowledgement of receipt for the above policies?
19. Has the employer filed the original contract in a safe place?
20. Has the employer arranged an induction process for the employee?

21. Remember to give the employee appropriate instruction, guidance, counselling, training, and evaluation during the probation period, if a probationary period has been included in the contract.

22. Remember to do a final evaluation before the end of the probation period, and decide whether or not you want to confirm the employee’s appointment.

23. If the employer wants to terminate employment or extend the probation period, first give the employee an opportunity to make representations, with the assistance of a fellow employee or a trade union representative (shop steward). Assistance by a trade union official only applies if a trade union has been granted organizational rights to have elected shop stewards for this purpose. A trade union representative who does not satisfy this criterion may only assist an employee if s/he is a fellow employee.

See Table – Employment Contracts 

See How to guide – Probation 

Different forms of non-standard employment contracts and when they are used

Non-Standard Employment
Sections 198 A-D of the Labour Relations Act 66 of 1995 (LRA) provides specific protection to vulnerable employees employed in non-standard employment contracts who earn below the earnings threshold set from time to time in terms of section 6(3) of the Basic Conditions of Employment Act 75 of 1997 (BCEA). Non-standard employment within this context includes employees employed by a temporary employment services (TES), employees employed on fixed-term contracts and part-time employees.

Employees employed by a temporary employment services (TES) organisation – section 198A of the LRA
Section 198 of the LRA states that a TES refers to any person who procures for or provides to a client other persons who perform work for the client and who are remunerated by the TES.
Section 198A is specific to TES (also known as labour brokers) employees who earn below the BCEA threshold.

The following protections apply to such employees:
1. The client and the TES employer are jointly and severally liable if the TES, in respect of any of its employees, contravenes a collective agreement concluded in a bargaining council, a binding arbitration award that regulates terms and conditions of employment, the BCEA, or a sectoral determination. In terms of the BCEA, as amended in 2018 and the National Minimum Wage Act, 2018, non-compliance with payment of the national minimum wage will be included here.

2. If an employer uses the services of an employee of a TES for a period in excess of three months, other than as a substitute for a temporarily absent employee (for example, where an employee is on maternity leave for a period that exceeds three months) or in certain categories of work specifically determined in a bargaining council collective agreement, sectoral determination or Ministerial determination, the employer, as client of the TES, will run the risk of that employee being deemed to be employed by it on an indefinite basis or for a period of time linked to a fixed-term contract that meets the requirements of section 198B of the LRA (see below). This is known as the “deeming provision”.

3. An employee who is deemed to be an employee of the client must on the whole be treated not less favourably than an employee of the client performing the same or similar work, unless there are justifiable reasons for different treatment. For example, long service.

Employees employed on fixed-term employment contracts – section 198B of the LRA
A fixed-term contract of employment is defined as one which terminates on the occurrence of a specific event, or on the completion of a specific task or project, or on a fixed date (other than a retirement date).

An offer to employ an employee on a fixed-term contract, or to renew or to extend a fixed-term contract must be in writing. The offer must also state the nature of the work and justifiable reasons for fixing the term of the contract. If it becomes necessary, the employer will bear the onus of proving that there was a justifiable reason for fixing the term, and that the term was agreed.

This section does not apply to:
• An employee who earns above the BCEA threshold;
• an employer that employs less than 10 people, or to an employer who employs less than 50 people if the 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 of a previously existing business); and
• an employee employed on a fixed-term contract that is allowed in terms of any law, sectoral determination or collective agreement.

Justifiable reasons for fixing the term of a contract:
Where section 198B is applicable, the fixed-term contract may not exceed three months (including any renewals of the contract) if the nature of the work is of a limited or defined duration, or if the employer cannot demonstrate any other justifiable reason for fixing the term of the contract.

If the contract exceeds three months and the nature of the work is found not to be of a limited or definite duration, or the employer is not able to provide a justifiable reason for fixing the term of the contract, the employee will be deemed to be indefinitely employed.

Justifiable reasons for fixing the term of a contract include:
• the replacement of a temporarily absent worker;
• a temporary increase in the volume of work (not expected to last longer than 12 months);
• a student or recent graduate employed for the purpose of training or to gain work experience;
• limited or defined duration projects;
• employment of a non-citizen who has been granted a work permit for a defined period;
• seasonal work;
• employment in an official public works scheme or similar job creation scheme;
• work funded by an external source for a limited period; and

• post-retirement contracts.

The list is not exhaustive, but any other reason for fixing the term must be justified. Affordability is NOT a justifiable reason, and nor is probation.

An employee must be treated no less favourably
An employee earning below the BCEA threshold and employed on a fixed-term contract exceeding three months must be treated no less favourably than an employee employed on a permanent basis performing the same or similar work, unless there is a justifiable reason for such different treatment.

Justifiable reasons for treating employees differently, include:
• seniority, experience or length of service;
• merit;
• the quality or quantity of work performed; or
• any other criteria of a similar nature.

An employer must provide an employee employed on a fixed-term contract and an employee employed on a permanent basis with equal access to opportunities to apply for vacancies.

Limited entitlement to severance pay
Where an employee is employed on a fixed-term contract for a limited-duration project which exceeds two years, the employee must be paid severance pay of one week’s pay per completed year of service, on the termination of the contract, unless the employer offers or procures employment for the employee, on the same or similar terms, which commences on the expiry of the contract.

Employees employed on part-time employment contracts – section 198C of the LRA
A part-time employee is an employee who is remunerated wholly or partly by reference to the actual time the employee works and who works fewer hours than a comparable full-time employee.

This section does not apply to:
• An employee who earns above the BCEA threshold.
• An employer that employs less than 10 people, or to an employer who employs less than 50 people if the 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 of a previously existing business).
• An employee who works for fewer than 24 hours per month for an employer.
• During the first three months of continuous employment with an employer.

An employee must be treated no less favourably
The part-time employee must be treated on the whole not less favourably than a comparable full-time employee doing the same or similar work, taking into account the working hours of the part-time employee, unless there is a reason for different treatment.

The part-time employee must be given the same access to training and skills development as a comparable full-time employee.

The part-time employee must be given the same access as full-time employees to opportunities to apply for vacancies.

General Provisions
Section 198D of the LRA sets out the general provisions relating to non-standard employment. It deals with “justifiable reasons” for different treatment of fixed-term and part-time employees, compared to permanent full-time employees.

Section 198D also sets out the dispute resolution process that may be followed should a dispute arise from the interpretation or application of sections 198 A-C of the LRA. Such a dispute may be referred for conciliation to the CCMA or a bargaining council with jurisdiction within six months after the act or omission occurred.

Justifiable reasons for different treatment
In essence it is regarded as justifiable to treat a fixed-term or part-time employee differently on the grounds of:

• seniority, experience or length of service;
• merit (i.e. performance); the quality or quantity of work performed; or
• other criteria of a similar nature provided it does not constitute unfair discrimination in terms of the Employment Equity Act.

Doc 1.2L – CCMA info sheet – Section 198A-D of the LRA (Non-standard employment)

A dispute concerning the interpretation or application of section 198A, B and C may be referred to the CCMA or a bargaining council for conciliation and arbitration. A dispute, other than a dismissal dispute in terms of s198A(4) , must be referred within 6 months of the act or omission.

EXCLUSIONS FROM THE BASIC CONDITIONS OF EMPLOYMENT ACT 75 of 1997 (BCEA)

Certain categories of employees are entirely excluded from the BCEA while other categories of employees are excluded from some sections of the Act.

Complete exclusion from the application of the Act

The entire BCEA does not apply to the following persons:

• Independent contractors (Definition of employee in section 1).
• Members of the State Security Agency (section 3(1) (a)).
• Unpaid volunteers working for an organisation serving a charitable purpose (section 3(1) (b)).

The Minister may, on the advice of the National Minimum Wage Commission and by publishing a notice, deem any category of persons to be employees for the purposes of the whole or any part of the BCEA, any other employment law (excluding the Unemployment Insurance Act) or any sectoral determination (section 83(1)).

Exclusion from the application of the entire Act except Sections 9A and Chapter 10
• People who earn less than the BCEA threshold and who are classified as “workers” – “any person who works for another and who receives, or is entitled to receive, any payment for that work whether in money or in kind” – who work for less than four hours on any day must be paid for four hours work on that day. (section 9A)

• Chapter 10 of the BCEA concerns monitoring, enforcement and legal proceedings. All reference to “employees” in this chapter should be read to include “workers”. This means that workers should also be subject to the protection offered by labour inspectors who serve to promote, monitor and enforce compliance by employers with employment law. (section 62A)

• A worker has the right to refer a dispute to the CCMA concerning the failure to pay any amount owing to that worker in terms of the BCEA, the National Minimum Wage Act 9 of 2018, a contract of employment, a sectoral determination or a collective agreement.

The Minister may, on the advice of the National Minimum Wage Commission1 and by publishing a notice, deem any category of persons to be employees for the purposes of the whole or any part of the BCEA, any other employment law (excluding the Unemployment Insurance Act) or any sectoral determination (section 83(1)).

Exclusion from the application of the entire Act except for Section 41, section 62A and chapters 3, 4, 5 and 6
● Persons employed on vessels at sea in respect of which the Merchant Shipping Act applies are excluded from the application of the BCEA except for section 41, section 62A and chapters 3, 4, 5 and 6 of the BCEA.

The following sections are not excluded:
● Section 41 provides for the entitlement to severance pay where an employee’s services have been terminated based on operational requirements (retrenchment).
● Section 62A: Chapter 10 of the BCEA concerns monitoring, enforcement and legal proceedings. All reference to “employees” in this chapter should be read to include “workers”. This means that workers should also be subject to the protection offered by labour inspectors who serve to promote, monitor and enforce compliance by employers with employment law.
● Chapter 3 regulates an employee’s entitlement to leave, including, but not limited to, annual leave, sick leave, maternity leave, parental leave, adoption leave, commissioning parental leave, family responsibility leave, etc.
● Chapter 4 sets out the legal requirements concerning particulars of employment and remuneration.
● Chapter 5 regulates an employee’s rights when his or her services are terminated, or when he or she wishes to resign.
● Chapter 6 sets out the law governing the prohibition of the employment of children and forced labour.
● However, in terms of a sectoral determination covering such persons, the whole or part of the BCEA may be made applicable (section 3(3)).

Exclusion from Chapter Two – Regulation of Working Time
Chapter Two (sections 6, 9, 10, 11, 12, 14, 15, 17(2) and 18(3)) regulates all aspects of working hours, including ordinary hours of work, overtime, averaging hours of work, meal intervals, rest periods, pay for work on Sundays and night work. With the exception of section 7 (regulation of working time), Chapter Two does not apply to:

● Senior managerial employees;
● Employees engaged as sales staff who travel to the premises of customers and who regulate their own hours of work;
● Employees who work less than 24 hours a month for an employer.

Sections 9, 10(1), 14(1), 15(10). 17(2) and 18(1) do not apply to work which is required to be done without delay owing to circumstances for which the employer could not reasonably have been expected to have made provision and which cannot be performed by employees during their ordinary hours of work (effectively work that needs to be done in sudden emergency situations).

Sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) do not apply to employees earning more than the statutory minimum established in terms of section 6(3). This was established at R241, 110.59 with effect from 1 March 2023.

Note that section 7 applies to all the above-mentioned employees who are otherwise excluded from the application of Chapter Two. Section 7 sets out what employers must take into account when regulating working time i.e. the requirements of occupational health and safety legislation, the health and safety of the individual employees, the Code of Good Practice on the Regulation of Working Time, and the family responsibilities of employees.

Exclusion from Chapter Three – Leave
Chapter Three does not apply to:
● An employee who works fewer than 24 hours per month for an employer,
● Unless agreed otherwise, leave granted in excess of that provided for in the BCEA.

In addition, section 27 of Chapter Three, regulating Family Responsibility leave, does not apply to the following employees:
● Employees who have worked for an employer for less than four months.
● Employees who work for less than four days a week for that employer.

Exclusion of Chapter Four – Particulars of Employment and Remuneration
Chapter Four regulates the information that an employer is required to provide to employees. The entire Chapter Four (sections 29 to 35) does not apply to:
● Employees who work less than 24 hours per month for an employer.

Section 29 requires an employer to provide to each employee at the commencement of employment various particulars of employment in writing. These particulars are set out in section 29(1) and include the full name and address of the employer, the name and occupation of the employee, description of the work, the place of work, hours of work, remuneration, overtime, deduction, leave, notice periods, etc.

See Doc 1.3E Checklist – compulsory employment details 

See Doc 1.3G CCMA Info Sheet – written particulars of employment 

The following written particulars of employment do not have to be provided in the case of employers who employ fewer than five employees-

● Section 29(1) (n) – a description of any council or sectoral determination that covers the employer’s business;
● Section 29(1) (o) – any period of employment with a previous employer that counts towards that employee’s employment;
● Section 29(1) (p) – a list of any other documents that form part of the contract of employment, indicating a place that is reasonably accessible to the employee where a copy of each may be obtained.

Although domestic workers are no longer excluded from the application of section 29, it will be unlikely that an employer will employ five or more domestic workers. Therefore, subsections (1) (n), (o) and (p) will rarely apply to domestic workers.

Exclusion from Chapter Five of the Act – Termination of Employment

Chapter Five (sections 36 to 42) deals with the termination of employment and does not apply to employees working less than 24 hours in a month for an employer (section 36).
Such employees are therefore excluded from the following rights/protections:
● Statutory notice periods of termination of employment provided in section 37.
● Payment instead of notice (section 38).
● The entitlement to temporarily remain in accommodation provided by the employer after termination of employment (section 39).
● Entitlement to payment by the employer for any paid time off or any accrued leave pay (section 40).
● Entitlement to severance pay (section 41).
● Entitlement to a certificate of service (section 42).

The employment of foreign nationals

• Employment of foreign nationals is governed by the Immigrations Act, 10 of 2002, Immigration Regulations issued on 22 May 2014 and the Employment Services Act, 4 of 2014.
  Immigrations Act 2002
  Immigration Regulations, 2014
  Employment Services Act 2014

• An employer may not employ a foreign national whose status does not allow him/her to be employed, or on terms and conditions, or in a capacity, that differs from those associated with his/her status.
• The employer bears the obligation to determine the status or citizenship of the person. In terms of legislation, the employer will commit an offence if a foreigner is employed in contravention of the Immigration Act, which crime is punishable with a fine or imprisonment.
• The employer must ensure that a skills plan is drafted and implemented to ensure the skills are transferred from the foreigner to a SA citizen or permanent resident.
• The Employment Services Act, 2014, in section 8(4) determines that a foreign national who is employed without the required work visa can still enforce any claim he/she may have in terms of the law or his/her employment relationship, against his employer.
• The foreign national, irrespective of his/her legal status, is therefore afforded the protection of the South African labour legislation, through the Department of Employment and Labour and the various dispute resolution forums like the CCMA, Bargaining Councils, the Labour Court and Labour Appeal Court. This is based on the principle that even if the contract of employment is invalid, the foreign “worker/employee” (which encompass a broader interpretation not necessarily connected to the validity of the employment contract) will satisfy the description of an “employee” as defined in statutes, and thus worthy of its protection.
• The Immigration Act makes provision for various types of work visas:
  • General Work Visa is valid for up to 5 years and may only be applied for by a foreign national who is already in possession of a job offer in SA. There is, however, an obligation on the employer to demonstrate that the position in question was offered to citizens of SA and despite its diligent search the skills and qualifications could not be found.
  • A Critical Skills Visa can be issued for up to 3 years with the possibility of an extension. The foreign national who applies for the visa does not have to be in possession of a job offer and may stay in SA for up to 1 year to obtain employment. He/she must register with the specialised SA Professional group within which his exceptional skill is required or utilised.
  • An Intra Company Transfer Visa may be issued to a foreigner to work in the SA operation of his/her company for a period up to 4 years and this work visa is not renewable. This is
    deemed as a secondment and the foreign national will not be employed in SA.
  • A Corporate Visa may be issued to a company enabling it to employ a number of foreign nationals who hold certain skills for a specific period of time. This visa may be issued on recommendation of the Department of Trade and Industry.

• The following visas do not allow employment in SA:
  •  Relative visas
  • Spousal/life partner visas in the absence of a specific accommodation
  •  A retired person visas
  • A medical treatment visas
  • Volunteer visas for all foreign nationals

• The Immigration Act provides for foreign nationals to enjoy all the right, privileges, duties and obligation of a SA citizen, with the exclusion of specific rights, privileges and duties explicitly ascribed to SA citizen, e.g., the Employment Equity Act’s definition of a designated group meaning black people, women and people with disabilities who are citizens of the Republic of SA by birth or decent or became citizens by naturalization before 27 April 1994 or after 26 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date, but who were precluded by apartheid policies.