Contract of Employment: Is it necessary?

Is a contract of employment necessary? Yes. Not only is it required by the Basic Conditions of Employment Act to provide an employee with a contract of employment, failure to do so by the first day of commencement of employment could result in the employer being liable for hefty fine (BCEA Schedule 2) or worse, the employer could be imprisoned (BCEA Section 93); but if you don’t, you won’t be safeguarded by the actions of the employee.


A contract of employment regulates the conditions of employment between the employer and employee as well as all the company policies and disciplinary codes that the employee is required to abide by. If there is no contract regulating these matters, it is extremely difficult to take action against the employee - if there is no contract, or if the employee has never been informed, then he has the right to conclude that it does not exist. Assumptions are your enemy.


The onus is on the company to prove that the employee was aware of the rule/policy that he/she broke. How do you do that if nothing is written down and there are no signatures on the paperwork? This will be difficult, and remember that if you terminate an employee for something you assumed he/she knew he/she shouldn’t do, and you end up at the CCMA, the Arbitrator will not look favourable on your assumptions and will want proof of the employee’s knowledge.


If you are concerned that you do not have adequate contracts in place, please contact us and we will assist you in safeguarding your company.