THE VALIDITY OF UNSIGNED EMPLOYMENT CONTRACTS

It’s not uncommon to hear: “The employee never signed the contract, so it’s not valid.” Yet, this belief couldn’t be further from the truth. The absence of a signature on an employment contract does not mean there is no employment relationship.

Both employers and employees often misunderstand the legal implications of unsigned contracts - a costly mistake that can lead to disputes before the Bargaining Council/CCMA or Labour Court.

Let’s unpack what South African labour law actually says about unsigned employment contracts, and when a lack of signature might still hold legal weight.

A Valid Contract Can Exist Without a Signature

In South African law, an employment contract does not need to be in writing or signed to be valid. Section 29 of the Basic Conditions of Employment Act, 75 of 1997 (BCEA), requires employers to provide written particulars of employment, but this is not the same as requiring a written contract.

A contract of employment is formed the moment an individual agrees to perform services for another in exchange for remuneration. Once the employee begins working and receives payment, a legally binding relationship exists -even in the absence of a signed document.

The courts and the CCMA have long recognised that employment can be established through conduct rather than formal documentation. Many contractual terms are implied by law, collective agreements, or standard practice.

For example:

• Working hours: BCEA/Main Collective Agreement

• Leave entitlements: BCEA/Main Collective Agreement

• Minimum wage: National Minimum Wage Act/Main Collective Agreement

• Notice periods: Section 37 of the BCEA/Main Collective Agreement

Meaning, where there is evidence of an employer-employee relationship -services rendered, remuneration paid, and control exercised -the law fills in the blanks.

The Case Law: Naidoo v National Lotteries Commission & Others

A key case illustrating this principle is Naidoo v National Lotteries Commission & Others. In this matter, the employee accepted an offer of employment but refused to sign the contract that followed. After several months, the employer terminated his services, arguing that his refusal amounted to repudiation of the employment relationship.

The CCMA initially ruled that it lacked jurisdiction because no signed contract existed. However, the Labour Court disagreed, finding that dismissal, as defined in section 186(1)(a) of the Labour Relations Act, simply refers to “the termination of employment” - with or without notice.

The court confirmed that a contract of employment does not depend on a signature to be binding. Once an employee commences work and receives payment, an employment relationship exists, regardless of whether the contract was signed.

When Refusal to Sign Becomes Misconduct

While an unsigned contract can still be valid, there are limits. If an employee begins working but refuses to sign the employment contract without a valid reason, this can constitute insubordination.

Employers are entitled to formalise the employment relationship and protect themselves through written contracts that outline terms such as:

• Working hours and remuneration

• Disciplinary procedures

• Confidentiality and restraint of trade

• Applicable Bargaining Council coverage

An employee who refuses to sign to avoid these terms, particularly after starting work, may be acting in bad faith. In such cases, disciplinary action - including dismissal may be justified, provided the employee’s objections to the contract terms are unreasonable.

Common Misconception: “No Contract Means Casual”

A frequent misunderstanding among employers is the idea that an unsigned or unwritten contract means the worker is a “casual”. This is incorrect.

The term “casual employee” generally refers to individuals engaged on an irregular or ad hoc basis -for instance, to meet short-term operational demands. It is not defined by the absence of paperwork, but by the nature and regularity of the work.

If the worker consistently reports for duty, uses the employer’s tools, wears the company uniform, and answers to management, they are not casual. They are an employee with full rights under the Labour Relations Act and the BCEA.

Practical Risks for Employers

Operating without signed contracts exposes employers to significant legal and operational risks. In the event of a dispute, the CCMA or a court will assess the conduct of the parties -not the paperwork -to determine the true nature of the relationship.

This can make it difficult for employers to rely on key provisions such as:

• Probation clauses

• Disciplinary codes and procedures

• Working hours and overtime expectations

• Confidentiality and restraint clauses

Without written proof of agreement, these terms become difficult to enforce, leaving the employer vulnerable.

Best Practice for Employers

An unsigned contract is not a loophole - it’s a liability.

While employment can legally exist without a signed document, employers should always:

• Provide written particulars of employment as required by Section 29 of the BCEA.

• Ensure contracts are signed before or on the employee’s first working day.

• Follow up in writing if an employee delays or refuses to sign.

Record acceptance through conduct -such as the employee working, receiving payment, or acknowledging company policies. Seek advice from an EOHCB Representative if refusal to sign persists without valid reasons.

An unsigned employment contract can still be valid - but it’s far from ideal. The law recognises employment relationships formed through conduct and mutual understanding, yet employers who fail to formalise agreements in writing risk confusion, disputes, and unenforceable terms.

Ultimately, the absence of a signature doesn’t void the contract -but it weakens the employer’s position.

To protect both parties, always issue, explain, and secure signed contracts before work begins. Prevention is far less costly than litigation.