You’ve just landed what should hopefully be your dream job and your new employer has provided you with your employment contract to sign. You want to sign, make it official and celebrate but you are worried that you may be missing something important. What are the key aspects you should be looking for in your employment contract?
Firstly, its important to understand the nature of an employment contract. A contract of employment is defined as an agreement between two parties in terms of which the one party (the employee) undertakes to place his personal services at the disposal of the other party (the employer) for an indefinite or fixed period of time in return for a fixed or ascertainable remuneration, and which entitles the employer to define the employee’s duties and control the manner in which the employee must perform them.
The employment contract is therefore an important document in the employment relationship as it defines and regulates the relationship between the employer and the employee. Accordingly, it is important to carefully consider any employment contract before signing such. There are many potentially important terms that an employment contract can deal with, but these are the top five important items:
1. The nature and description of the job
As an employee you will be required to provide your services to the employer. The employment contract must accordingly specify your job title and a description of the basic requirements of your work. The more specific and clearer your work requirements are defined the better. It is impossible to define each and every aspect of a job, but the contract should provide sufficient clarity to enable you to understand what you are being appointed for and what you will be required to do, including locations you will be required to work at, working hours etc.
2. Remuneration and benefits
An important reason for you taking the job is the good pay and benefits you were promised! These must be spelt out in detail in the employment contract. As an employer is required to compensate you for your labour, your remuneration package (at least at the start of the new job) must be included in the employment contract. The employment contract should detail what your remuneration will be, when it is payable, whether or not it includes commission, whether there will be any deductions, whether an annual bonus is payable etc. Additionally, any benefits you will qualify for, such as medical aid, travel allowances, pension fund etc. must also be included and specify clearly what the respective employee and employer contributions will be.
The term of your employment contract is very important. Employment contracts are typically either permanent or fixed term. The employment contract should specify when your employment will commence and when or on what terms it may terminate. In the case of a fixed term contract, the period of the contract and the options for renewal (if any) should be clearly stipulated. If your appointment is on a permanent basis, it may also be important to note whether your appointment is subject to a probationary period, and if so for how long and on what terms.
Your employment contract should stipulate the various forms of leave for which you will qualify, including the requirements for taking leave. This will include statutory leave such as annual leave, sick leave, maternity leave, family responsibility leave as well as other possible forms of leave such as study leave, sabbatical leave, unpaid leave, half-day leave and more.
Your employment contract should specify how your employment with the employer may be terminated, including the notice periods applicable, under which circumstances a party can terminate and what is expected of each party should the employment relationship be terminated. As an employee it is important that you take note of any restraints on your future employment, confidentiality restrictions and possibly even penalty conditions which may be applicable to you on termination of the contract.
Your employment contract is the starting point for a successful and productive relationship with your employer. What you don’t want at the start of the relationship is questions and uncertainty regarding your relationship. So take the time, and where necessary, obtain legal advice to assist you in understanding your employment contract and ensuring that the employment contract provides the right foundation for your future growth in the organisation.