Employment Contract South Africa: What the Law Actually Requires

You are hiring your first employee. Or your fifth, and you have realised that the arrangement you have been running on — a WhatsApp conversation and a monthly EFT — is not going to hold up if anything goes wrong.

South African labour law is protective of employees, and the burden of proof usually sits with the employer. The contract is where that burden is either met or lost. Here is what the law requires, and what small employers most often leave out.

Written particulars are not optional

Under the Basic Conditions of Employment Act, an employer must supply an employee with written particulars of employment when the employee starts work. This is not the same as saying a contract must be in writing to be valid — a verbal employment contract is binding — but the written particulars are a legal obligation on the employer.

The particulars must include:

• Full name and address of the employer
• The employee's name and occupation, or a brief description of the work
• The place of work, and whether the employee is required to work at various places
• The date of commencement
• The employee's ordinary hours and days of work
• The wage or rate, and the method of calculating it
• The rate for overtime
• Any other cash payments, and payments in kind with their value
• How frequently remuneration is paid
• Any deductions to be made
• The leave the employee is entitled to
• The notice period, or the contract period if it is fixed-term

Keep a signed copy. Keep it for the duration of employment and for three years afterwards.

Notice periods

The BCEA sets minimum notice, and a contract may improve on it but not reduce it:

Farm workers and domestic workers employed longer than six months are entitled to four weeks.

Notice must be given in writing, except by an employee who cannot write. And notice does not make a dismissal fair — that is a separate question of substantive and procedural fairness under the Labour Relations Act.

Leave entitlements

These are minimums and the most common source of disputes:

• Annual leave — 21 consecutive days on full pay per leave cycle for a full-time employee, which works out to 15 working days on a five-day week. Alternatively one day for every 17 days worked.
• Sick leave — over a 36-month cycle, the number of days the employee would ordinarily work in six weeks. During the first six months, one day for every 26 days worked.
• Maternity leave — four consecutive months. The BCEA does not require it to be paid; many employees claim from UIF.
• Parental leave — ten consecutive days.
• Family responsibility leave — three days per year for qualifying employees in defined circumstances.

Annual leave cannot simply be forfeited at year end if the employee was not given the opportunity to take it, and it must be paid out on termination.

The clauses small employers miss

Beyond the statutory particulars, the clauses that prevent most disputes:

• Probation. Permitted, but it does not remove the right to fair procedure. A probationary employee must be given evaluation, guidance and an opportunity to improve before dismissal for poor performance.
• Job description, specific enough to make performance measurable.
• Confidentiality, particularly where the employee handles customer data or pricing.
• Company property — laptop, phone, tools, uniform, vehicle — listed, with a return obligation.
• Deductions. You may not deduct for damage, breakages or shortages unless strict requirements are met, including a fair procedure and the employee's written agreement. Blanket "the employer may deduct" clauses do not comply.
• Disciplinary code, incorporated by reference.
• Working hours and overtime, including whether overtime is by agreement.
• Retirement age, if you have one. Without it, dismissal on grounds of age is difficult to justify.

Fixed-term contracts

A fixed-term contract must have a justifiable reason for being fixed-term — a genuine project, a seasonal peak, covering someone on leave. For employees earning below the BCEA earnings threshold, a fixed-term contract that runs beyond three months without justification is generally treated as indefinite employment.

Rolling someone over on successive three-month contracts for two years does not make them temporary. It creates a reasonable expectation of renewal, and non-renewal can then amount to a dismissal.

Registration you must not skip

Employing someone triggers obligations beyond the contract:

• UIF — register the business and the employee, and pay contributions monthly.
• COIDA — register with the Compensation Fund for workplace injuries.
• PAYE and SDL with SARS, depending on your payroll size.
• Keep an attendance and wage record — the BCEA requires it, and it is the first thing asked for at the CCMA.

The contract is the visible part. These registrations are where unprepared employers get caught.

Getting the contract drawn up

An attorney or labour consultant will charge roughly R1,500 to R4,000 for a properly drafted employment contract, which is worth it for senior roles, unusual arrangements or anything with equity or restraints attached.

For a standard permanent or fixed-term role, FormCraft AI will assemble an employment contract from guided questions — position, hours, remuneration, leave, notice, probation — with the BCEA particulars already built in rather than left as blanks to fill. Add your letterhead, sign it by photographing your signature, and export a PDF for the employee to sign.

First document free each month, then R99 a month for businesses or R50 once off.

Frequently asked questions

Is a verbal employment contract valid?

Yes, it is binding. But the employer must still supply written particulars, and in a dispute the employer generally carries the burden of proving what was agreed. Put it in writing.

Can I dismiss someone during probation?

Only after a fair process. Probation allows a lower threshold for performance dismissal, not the absence of procedure. The employee must be evaluated, told where they fall short, given reasonable support, and given a chance to respond.

Do I need a contract for a casual or part-time worker?

Yes. The written particulars requirement applies regardless of hours. Part-time employees are entitled to treatment no less favourable than comparable full-time employees, on a proportional basis.

Can I pay less than minimum wage during training?

Generally no. The National Minimum Wage applies broadly, with limited exceptions for specific programmes such as learnerships. Check the current rate before setting a wage — it is adjusted annually.

What if the employee refuses to sign?

The obligation is to supply the particulars, and you should record that you did — by email, or with a witness. An employee's refusal to sign does not suspend the employment relationship or your obligations.

Conclusion

A good employment contract is not about protecting yourself from your staff. It is about both sides knowing what was agreed, so that ordinary disagreements do not become CCMA referrals.

Get the statutory particulars in, set out leave and notice correctly, be specific about the job, and register for UIF and COIDA before the first payday. That covers the overwhelming majority of what goes wrong for small employers.

This article is general information, not legal advice. Labour law is fact-specific — take advice on dismissals, restraints and senior appointments.

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