The Importance of the Contract of Employment – Part 3

Aug 25, 2021

In Part 1 we discussed the importance of the contract of employment and that it is a legal requirement that employers must provide employees with a written contract of employment or a letter of appointment specifying the main terms and conditions of employment.

There are five types of contracts. In Part 2, we discussed the permanent and fixed term contract. In this final article, Part 3, we discuss the following three types of contracts.

Temporary contract of employment

This is in fact merely another name for a fixed term contract of employment, and the same stipulations apply.

A further important paragraph or term to be included would be as follows:

“This contract of employment may be terminated by either party to the contract providing to the other party to the contract 1 month written notice of intention to terminate, for any reason recognised in law as being sufficient.  The employer may terminate this contract of employment at any time during the duration of the contract, for reasons of the incapacity or misconduct of the employee, or the operational requirements of the employer.

Should this contract be terminated for any of the above reasons, the employee agrees that he shall have no claim against the employer for any outstanding benefit, including remuneration, to the end of the contract.”

Project contract of employment

Here again, the project contract of employment is also in fact a fixed term or temporary contract of employment.

The difference is that instead of stipulating a starting date and an ending date (a contract which runs according to time,) the project contract of employment is a contract where an employee is employed by the employer to complete a certain project.

In other words, the date of completion of the project is unknown – it may be six months, it may be 12 months or even longer.

Thus, the contract will stipulate wording something like:

“the employment shall commence on (stipulate starting date) and shall end upon completion of the project.”

A further important paragraph to be included would be as follows:

“This contract of employment may be terminated by either party to the contract providing to the other party to the contract 1 month written notice of intention to terminate, for any reason recognised in law as being sufficient. The employer may terminate this contract of employment at any time during the duration of the contract, for reasons of the incapacity or misconduct of the employee, or the operational requirements of the employer. Should  this contract be terminated for any of the above reasons, the employee agrees that he shall have no claim against the employer for any outstanding benefit, including remuneration, to the end of the contract.”

Probationary contract of employment

Conditions relating to probation are usually stipulated in the contract of permanent employment. It is however, important that the employer should stipulate all the conditions applicable to the probation period.

It is important that as a minimum, the following should be stipulated:

[a] that the period of probation will not be extended.

The reason for this is that the employer is the best judge of whether or not a particular employee is going to “make the grade” or not. The employer is also the best judge of how long it should take a newly employed person to “ make the grade.”

If the employee is unable to prove himself within the stipulated period of probation (say three months) then our view is that any extension of time, in itself, will not achieve anything.

In other words, if the employee is unable to prove himself within the reasonable period of time afforded by the employer, then he is unlikely to ever be able to prove himself.

There is therefore no point in extending the period of probation – it simply wastes the employer’s time and money.

Note:

Employers must take note of the following extract from the Schedule 8 of the Labour Relations Act (The Code of Good Practice – Dismissal.):

Incapacity: Poor work performance

(1) A newly hired employee may be placed on probation for a period that is reasonable given the circumstances of the job.

The period should be determined by the nature of the job, and the time it takes to determine the employee’s suitability for continued employment.

When appropriate, an employer should give an employee whatever evaluation, instruction, training, guidance or counselling the employee requires to render satisfactory service.

Dismissal during the probationary period should be preceded by an opportunity for the employee to state a case in response and to be assisted by a trade union representative or fellow employee.

(2) After probation, an employee should not be dismissed for unsatisfactory performance unless the employer has:

  • (a) given the employee appropriate evaluation, instruction, training, guidance or counselling; and
  • (b) after a reasonable period of time for improvement, the employee continues to perform unsatisfactorily.

(3) The procedure leading to dismissal should include an investigation to establish the reasons for the unsatisfactory performance and the employer should consider other ways, short of dismissal, to remedy the matter.

(4) In the process, the employee should have the right to be heard and to be assisted by a trade union representative or fellow employee.

Author:

Wallace Albertyn

Wallace Albertyn is a Senior Associate and Legal Advisor at LabourMan Consultants.

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