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UNSIGNED EMPLOYMENT CONTRACTS

What to do?


Contrary to popular belief there is no requirement in terms of labour legislation that an employer and employee must enter into a written contract of employment in order for an employment relationship to exist. However, in terms of section 29 of the Basic Conditions of Employment Act (BCEA), an employer must present to employees in writing, on the day they start to work for the employer, with particulars regarding the employment relationship. This is normally done in the form of a contract of employment, making the document formal and binding on both parties.


The importance of an employment contract and the conclusion thereof prior to the commencement of employment cannot be emphasised enough. The contract of employment formalizes the relationship and creates certainty for both parties in the employment relationship. Without a contract of employment, employers will find it for instance difficult to prove that the relationship with the employee was for a limited duration or that the employee for instance agreed to work overtime in terms of section 10 of the BCEA.


For some strange reason, employees will almost always refuse to sign a contract of employment after commencing employment. The reasons for this could be that the employee believes that the employer is trying to exploit them by inserting something in the contract to which they did not agree, or simply because they believe that they will not be bound by the rules of the company in the absence of such an agreement. The latter is definitely not true and such employees will quickly learn that the company’s rules and policies are not employment conditions and that if they were aware of such rules or could reasonably have been expected to be aware of them, then they may face disciplinary action.


The written particulars that must be disclosed to the employee in terms of section 29 of the BCEA follows:


(a) the full name and address of the employer;

(b) the name and occupation of the employee, or a brief description of the work for which the employee is employed;

(c) the place of work, and, where the employee is required or permitted to work at various places, an indication of this;

(d) the date on which the employment began;

(e) the employee’s ordinary hours of work and days of work;

(f) the employee’s wage or the rate and method of calculating wages;

(g) the rate of pay for overtime work;

(h) any other cash payments that the employee is entitled to;

(i) any payment in kind that the employee is entitled to and the value of the payment in kind;

(j) how frequently remuneration will be paid;

(k) any deductions to be made from the employee’s remuneration;

(l) the leave to which the employee is entitled;

(m) the period of notice required to terminate employment, or if employment is for a specific period, the date when the employment is to terminate;

(n) a description of any council or sectoral determination which covers the employer’s business or industry;

(o) any period of employment with a previous employer that counts towards the employee’s period of employment;

(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.


When any matter listed above changes the written particulars must be revised to reflect the change(s) and the employee must be supplied with a copy of the document reflecting the change. If an employee is not able to understand the written particulars, the employer must ensure that they are explained to the employee in a language and in a manner that the employee understands. The written particulars in terms of section 29 of the BCEA must be kept by the employer for a period of three (3) years after the termination of employment.


In terms of section 33A of the BCEA, no employer may require or accept any payment from a job applicant in return for employment or the allocation of work.


So how must employers deal with employees that for some strange reason refuse to sign their employment contracts?


The answer should be simple and that is that if the applicant was presented with a contract prior to the commencement of employment and refused to sign the agreement, then no agreement was reached, and the applicant will not work for the employer and cannot be considered to be an employee of the employer.


In most cases however, the applicant became an employee on the day they commenced employment in the absence of a signed employment agreement. If the employee now refuses to sign the agreement, the employer may have to become creative in order to confirm the specifics of the employment relationship. It is therefore suggested that the rights of the employee in terms of the BCEA, as well as the verbal agreement held between the parties, are confirmed in writing instead of agreed upon.


Another approach may be to remind the employee of the contract that must be signed, instruct the employee to sign the contract within a reasonable period of time, and invite the employee to submit reasons for their failure to sign the contract. Should the employee not raise any objections in terms of the contents of the contract and it can be proven that the employee challenges the authority of their employer, they may now be disciplined for refusal to adhere to a valid instruction (insubordination). If the employee however objected to something specific in terms of the contents of the contract, the employer will not be able to prove that the employee is guilty of misconduct and a dismissal will be unfair.


Employers must take note that they cannot dismiss an employee that refused to sign an employment contract if the employee for instance objected to specific provisions in the contract. If the employee is dismissed in order to compel the employee to accept a demand in respect of any matter of mutual interest between the employer and employee, then that dismissal will be automatically unfair in terms of section 187 of the LRA. An automatic unfair dismissal will be heard by the Labour Court and could result in up to 24 months of the employee’s remuneration being awarded as compensation.


On the other hand, employers must take cognisance that if they have entered into a binding employment agreement with an applicant, the applicant effectively becomes an employee even though the employee has not yet started to work for the employer. Should the employer decide to cancel the employment agreement before the anticipated start date it could be seen as an unfair dismissal in terms of section 186 of the LRA.



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