The Essential Elements of an Employment Contract


The employment contract – that is entered into between employer and employee – signals the beginning of an employment relationship. There are a number of essential elements that a contract of employment is based on that are useful for employers to know before they draw any of these documents up or commission these to be drawn up.

Employment Contracts are Based on Section 13 of the Constitution

The basis of employment contracts can be found in section 13 of the Constitution. This states as follows:

“No one may be subjected to slavery, servitude or forced labour.”

An employment contract needs to be consensual. Both parties – in other words, the employee and employer – need to agree that they will enter into an employment relationship. No-one can force either party to enter into an employment relationship.

The Concept of ‘Work’ is Central to the Employment Contract

Basson, Christianson, Dekker, Garbers, Le Roux, Mischke and Strydom (2009) in – Essential Labour Law – give the following definition of an employment contract:

“The contract of employment is a voluntary agreement between two parties in terms of which one party (the employee) places his or her personal services or labour potential at the disposal and under the control of the other party (the employer) in exchange for some form of remuneration which may include money and/or payments in kind.”

If it is not at the heart of the employment contract that work is being offered by the employee to the employer, the contract is not an employment contract. The concept of work is not generic. It differs from one employee to the next. (Just as an aside, the concept of ‘work’ is also central to the issue of Equal Pay for Work of Equal Value which was introduced into the Employment Equity Act during the last round of amendments. Follow this link to read our article on the subject.)

Work is Only Work if it is Remunerated

If an activity is seen as work, the employee performing said work must be remunerated for it by the employer. This remuneration can take the form of money or payment in kind. (It’s interesting to note that with the new National Minimum Wage, which is set to come into force on 1 May 2018 at an amount of R20, it’s not clear as to whether or not this R20 per hour includes such benefits or if this amount is the base salary. Click here to read the latest about the National Minimum Wage.)

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