A well-drafted employment contract, containing all the necessary employment contract clauses, is more than a formality — it’s a vital tool for protecting your business and maintaining legal compliance. In South Africa’s dynamic labour environment, clear contracts aligned with the Basic Conditions of Employment Act (BCEA) and Labour Relations Act (LRA) provide clarity and help avoid costly disputes.
Here are the top 10 employment contract clauses every South African business should include:
1. Employment Contract Clauses: Probation Period and Performance Review
Why This Employment Contract Clause Matters
The probation period and performance review clause is one of the most critical employment contract clauses. It sets the tone for the entire employment relationship and provides a structured framework for both employer and employee to assess suitability and fit within the organisation. This employment contract clause is especially important because it outlines how an employee’s performance will be assessed during the initial stages of employment and provides clarity around expectations.
The Labour Relations Act (LRA), particularly Schedule 8 of the Code of Good Practice on Dismissal, supports probationary employment provided it is fair and reasonable. This clause ensures that employees understand they are under evaluation, and employers understand their duty to provide support, feedback, and fair assessments.
Key Components of this Employment Contract Clause
• Specify the probation period
• Structured performance reviews
• Confirmation or termination procedure
• Notice period during probation
• Performance expectations
Real-World Example
In Tharratt v Volume Injection Products (Pty) Ltd (2005, 6 BALR 652), the employer failed to support a probationary employee before dismissal. The CCMA found the dismissal unfair due to the lack of guidance and awarded compensation.
2. Employment Contract Clauses: Job Description and Duties
Why This Employment Contract Clause Matters
Clearly defining job responsibilities in your employment contract clauses is crucial for minimising misunderstandings and aligning expectations. The job description and duties clause outlines what the employee is being hired to do.
Key Components of this Employment Contract Clause
• Duties in detail
• Flexibility wording
• Reporting structure and location
• Performance standards
• Amendments to role
Real-World Insight
Employers often face disputes because of vague or outdated job descriptions. Updating them when responsibilities change protects your business.
3. Employment Contract Clauses: Remuneration and Benefits
Why This Employment Contract Clause Matters
The remuneration and benefits clause eliminates ambiguity around pay, benefits, and deductions. It’s vital for compliance with Sections 29, 33–34 of the BCEA.
Key Components of this Employment Contract Clause
• Gross salary and frequency
• Benefits
• Overtime and bonuses
• Statutory deductions
• Total Cost to Company (CTC)
Real-World Insight
Disputes often stem from vague bonus promises. Clarify terms in writing to avoid conflict.
4. Employment Contract Clauses: Working Hours and Overtime
Why This Employment Contract Clause Matters
Clearly defined working hours and overtime clauses ensure expectations are aligned and protect employers from future claims.
Key Components of this Employment Contract Clause
• Ordinary hours
• Meal and rest breaks
• Overtime policy
• Exemptions
• Remote or flexi-time
Real-World Insight
Employers have faced massive claims for unpaid overtime due to unclear clauses. Include clear provisions in your contracts.
5. Employment Contract Clauses: Leave Entitlements
Why This Employment Contract Clause Matters
The leave entitlements clause is both a legal requirement and key to employee satisfaction.
Key Components of this Employment Contract Clause
• Annual leave
• Sick leave
• Family responsibility leave
• Maternity and parental leave
• Leave application procedures
Real-World Insight
Specify leave carry-over rules to prevent misunderstandings.
6. Employment Contract Clauses: Disciplinary and Grievance Procedures
Why This Employment Contract Clause Matters
This clause outlines how misconduct and disputes will be handled. Referencing the LRA Code of Good Practice: Dismissal ensures fairness.
Key Components of this Employment Contract Clause
• Reference to disciplinary code
• Examples of misconduct
• Grievance process
• Fair procedure
• Consistency
Real-World Insight
Clear procedures reduce the risk of successful CCMA referrals.
7. Employment Contract Clauses: Confidentiality (Non-Disclosure)
Why This Employment Contract Clause Matters
Protecting sensitive information is crucial. This clause aligns with POPIA and prevents reputational damage.
Key Components of this Employment Contract Clause
• Definition of confidential information
• Obligation of confidentiality
• Return of materials
• Duration of clause
• Exceptions
Real-World Insight
In TWK Agri v Botha (2023), a confidentiality clause helped secure legal remedies against data breaches.
8. Employment Contract Clauses: Restraint of Trade (Non-Compete)
Why This Employment Contract Clause Matters
Protect your competitive advantage by preventing unfair competition post-employment.
Key Components of this Employment Contract Clause
• Justification for restraint
• Geographic and time limits
• Non-solicitation
• Severability clause
• Optional compensation
Real-World Insight
In Reddy v Siemens Telecommunications (Pty) Ltd, a 12-month restraint was upheld by the court.
9. Employment Contract Clauses: Termination and Notice Periods
Why This Employment Contract Clause Matters
Outlines how the employment relationship may end and under what conditions. Must comply with BCEA and LRA.
Key Components of this Employment Contract Clause
• Notice periods
• Grounds for termination
• Garden leave
• Pay in lieu of notice
• Return of property
Real-World Insight
Avoid conflict by setting out clear notice and exit rules.
10. Employment Contract Clauses: Compliance with Labour Law and Company Policies
Why This Employment Contract Clause Matters
This clause ensures the contract aligns with South African labour laws and internal policies.
Key Components of this Employment Contract Clause
• LRA and BCEA reference
• Policy incorporation
• Governing law
• No contracting out
Real-World Insight
This clause provides legal clarity and signals a commitment to lawful employment practices.
Final Thoughts
Solid employment contracts are a business’s first line of defence. By including these ten clauses and aligning them with labour law, South African employers can ensure clarity, legal compliance, and operational efficiency from day one.
Need help drafting or reviewing your contracts?
Contact Vermeulen Attorneys — our expert Labour Law team ensures your employment contracts protect your business while meeting every legal requirement.
FAQs
Is it mandatory to include all 10 clauses in an employment contract?
Yes — most are either legally required or highly recommended for compliance and protection.
Can I dismiss an employee during probation without a hearing?
No. Even during probation, you must follow a fair procedure.
Can a contract exclude overtime pay?
Only for senior employees earning above the threshold. Others must be paid as per BCEA.
What’s the standard probation period in South Africa?
Typically 3 months, but it must be reasonable for the role.
How do I enforce a confidentiality clause after an employee leaves?
Through legal action — including interdicts and damages claims if there’s a breach.
Can I restrain a former employee from joining a competitor?
Yes, if the clause is reasonable in time, area, and scope.
What happens if I don’t provide a written employment contract?
You risk non-compliance with the BCEA and face greater legal exposure.
Are company policies part of the employment contract?
They are if incorporated by reference. Be sure to notify employees.
Can I make changes to the contract later?
Only with mutual agreement — always confirm changes in writing.
What if there’s a conflict between the contract and the law?
The law prevails. Include a compliance clause to reinforce this.
