COMMON CONTRACT CLAUSES THAT EXPOSE EMPLOYERS TO DISPUTES

Written by Phumzile Eliya

The hairdressing, beauty, cosmetology, and skincare industry operates in an environment where operational demands are fast-paced, and client expectations remain high. Employers in the personal care sector must manage staff performance, client satisfaction, hygiene requirements, and business sustainability, often under challenging conditions such as peak trading periods and fluctuating turnover.

In such an industry, employment contracts play a critical role. A contract is not merely an administrative document; it is the foundation of the employment relationship. It establishes expectations, regulates key workplace rules, and provides protection for both the employer and the employee.

Most disputes in the personal care sector do not arise from deliberate wrongdoing. They often arise from unclear contractual clauses, informal arrangements, inconsistent application of workplace rules, or failure to align employment terms with the Main Collective Agreement and applicable labour legislation.

For employers, contractual compliance must therefore be approached holistically. A compliant employment contract must reflect:

• The operational realities of the salon or establishment

• The minimum standards set by the Main Collective Agreement

• Statutory requirements under labour legislation

• Clear and practical workplace rules

Where any of these components are overlooked, the risk of disputes and compliance challenges increases significantly.

A Holistic Approach to Drafting Employment Contracts

An employment contract in this industry should never be copied from a generic template without careful consideration. It must be drafted with full awareness of:

Industry-specific wage and leave provisions

• Overtime and public holiday rules

• Commission structures and retail sales incentives

• Recordkeeping obligations

• Fair disciplinary and termination procedures

Where the Main Collective Agreement regulates a condition of employment, that minimum standard must be complied with. Where the Agreement is silent, the Basic Conditions of Employment Act applies.

A contract that ignores these frameworks may expose an employer to compliance inspections, Bargaining Council disputes, or unfair labour practice claims.

1. Commission Clauses That Are Not Properly Structured

Commission remains one of the most common sources of conflict in salons and beauty establishments. In many cases, employers refer to commission in the employment contract but fail to regulate it properly. This creates uncertainty and may result in mistrust between the parties.

Common dispute triggers include:

• No written formula explaining how the commission is calculated

• Confusion over whether the commission applies to services, retail products, or both

• No clarity regarding cancellations, refunds, or discounts

• Disagreements relating to commission thresholds

• Unclear payment dates

• Unauthorised deductions from commission

Where commission is not clearly documented, employees may believe their earnings have been unfairly withheld, while employers may believe deductions and adjustments are standard business practice.

Practical guidance for employers:

Employers should:

• Implement a separate written Commission Agreement

• Clearly distinguish between service commission and retail commission

• Specify how VAT and gross takings will be treated

• Confirm when the commission becomes payable

• Ensure employees understand the commission structure before implementation

Commission arrangements should never be left to verbal understanding.

2. Remuneration Clauses That Lack Transparency

Clear remuneration clauses protect both parties. Where salary structures are vague or poorly defined, disputes are likely to follow.

Common problem areas include:

• Failure to distinguish between basic salary and commission

• Unclear overtime arrangements

• Ambiguity around public holiday pay

• Lack of clarity regarding payment dates

The Main Collective Agreement regulates minimum standards for wages and related conditions. Employers must ensure that remuneration clauses align with these requirements.

Practical guidance for employers:

Contracts should clearly specify:

• The employee’s basic wage or salary

• The pay cycle and payment date

• Overtime rates and applicable conditions

• Public holiday compensation arrangements

• Whether bonuses are discretionary

Transparency reduces misunderstanding and strengthens workplace trust.

3. Deduction Clauses That Create Legal Risk

In the personal care industry, product wastage, damaged tools, stock losses, and customer complaints are commercial realities. However, deduction clauses can easily lead to disputes if applied incorrectly.

Common disputes arise where:

• Employees are held responsible for product losses without proof

• Deductions are made for breakages without proper investigation

• Cash shortages are automatically deducted

• Deductions are applied inconsistently across employees

Practical guidance for employers:

Employers must ensure that:

• Deductions are lawful and properly authorised

• Employees are informed and provided an opportunity to respond

• Proper investigation is conducted before deductions are implemented

• Deductions are supported by clear contractual authority

Improper deductions frequently result in wage-related disputes and damage to the employment relationship.

4. Working Hours, Overtime and Public Holiday Clauses

Operating hours in the personal care industry often extend beyond standard business hours. Weekend work, public holidays, and peak-season scheduling are common, particularly during high-demand trading periods.

Disputes frequently arise where contracts do not clearly regulate:

• Normal working hours

• Shift arrangements

• Overtime approval processes

• Public holiday compensation

• Time off in lieu arrangements

Employers must also be mindful that working hours within the industry are not uniform across all regions. In terms of Clause 32 of the Main Collective Agreement, ordinary working hours may vary depending on the designated area in which the establishment operates. Employers are therefore required to ensure that employment contracts reflect the correct area-based provisions applicable to their business.

Failure to align contractual working hours with the applicable area provisions may expose employers to compliance inspections or retrospective claims for unpaid overtime.

Practical guidance for employers:

Employers should:

• Ensure that working hours in contracts align with the correct area provisions

• Issue written shift schedules

• Maintain accurate attendance registers

• Clearly document overtime approval processes

• Apply public holiday compensation consistently

Proper administration reduces the risk of retrospective claims and improves workforce stability.

5. Leave Clauses That Do Not Reflect Industry Standards

Leave management can be particularly challenging during peak trading periods. Employers must balance operational needs with statutory and collective agreement obligations.

Common disputes arise where:

• Leave approval processes are unclear

• Annual leave accrual is misunderstood

• Sick leave documentation is inconsistent

• Shutdown periods are poorly communicated

The Main Collective Agreement regulates minimum leave standards in the industry. Employers must ensure that leave clauses and internal procedures align with these minimum requirements.

Practical guidance for employers:

Contracts should clearly regulate:

• Annual leave entitlement

• Leave application procedures

• Sick leave and medical certificate requirements

• Public holiday leave provisions

• Business shutdown leave rules

Consistency is essential. Perceived favouritism or unfair treatment often triggers grievances and formal disputes.

6. Probation Clauses That Are Informally Managed

Probation is intended to assess suitability and performance. However, disputes arise where probation is treated as an informal trial period without proper performance management.

Common problems include:

• No performance expectations communicated

• Lack of structured feedback

• Termination without documented review

• Extension of probation without consultation

Practical guidance for employers:

Employers should:

• Set clear performance standards at commencement

• Conduct regular review meetings

• Document feedback and training provided

• Follow fair procedure if termination becomes necessary

Probation does not remove the employer’s obligation to act fairly and reasonably.

7. Termination and Notice Clauses That Ignore Fair Procedure

No contract can override the requirement for procedural fairness. Employers who rely solely on contractual wording without following proper processes expose themselves to significant dispute risk.

Common termination-related disputes include:

• Dismissal without a hearing

• Dismissal based on customer complaints without investigation

• Poor performance dismissal without warnings and support

• Incorrect application of notice periods

Practical guidance for employers:

Contracts should clearly outline:

• Notice periods

• Disciplinary procedures

• Performance management processes

• Grounds for summary dismissal

Proper documentation remains the employer’s strongest defence in any dispute.

8. Confidentiality, Client Information, and Business Protection

Client relationships are central to the personal care industry. In many cases, clients build strong loyalty to a stylist, therapist, or technician. While this loyalty supports business growth, it also creates commercial risk if not properly regulated.

Without clear contractual protection, employers risk losing both employees and clients simultaneously, particularly where client information is accessible, portable, and digitally stored.

Common dispute triggers include:

• Employees retaining client contact details after resignation

• Use of salon/spa booking systems or databases after termination

• Social media marketing that redirects clients to a new employer or business

• Downloading or copying client lists prior to leaving

• Disputes over ownership of client goodwill

• Sharing client information with third parties

Practical guidance for employers:

Contracts should include reasonable provisions regulating:

• Confidentiality of client information

• Return of company property and records

• Protection of business goodwill

• Social media conduct and marketing boundaries

Employers should also ensure that access to booking systems, databases, and client information is managed properly and that access is revoked immediately when employment ends. Business protection measures must be balanced with fairness and enforceability.

Concluding Remarks

A well-drafted employment contract remains one of the most effective tools available to employers in the personal care industry. It provides clarity, strengthens workplace relationships, and reduces the likelihood of disputes.

However, contracts must be drafted holistically. Employers must ensure that employment contracts align with the Main Collective Agreement and broader labour legislation, while also reflecting the practical realities of salon and spa operations.

To minimise disputes, employers should ensure that contracts:

• Clearly regulate remuneration and commission structures

• Provide transparency around deductions

• Reflect correct working hours and overtime requirements

• Align leave provisions with industry minimum standards

• Support fair disciplinary and termination processes

• Protect client information and business goodwill appropriately

Ultimately, contractual compliance is not only about avoiding disputes. It is about strengthening employment relationships, promoting fairness, and supporting sustainable business growth in the hairdressing, beauty, cosmetology, and skincare sector.