Poorly drafted contracts costly

Many employers avoid the cost of drafting legal employment contracts and get employees to sign purported contracts that do not meet the minimum legal requirement of a contract resulting in them getting into legal problems when the employee contract has to be terminated. Not long ago, I had an employer who thought had terminated a contract of an employee only to be told that the employee was permanent because the contract did not meet the minimum legal requirement of an employment contract. The problem was further complicated by the illegal conditions of service that were included. The contract had a clause that made overtime illegal and required a worker to work 60 hours a week when the NEC maximum was 45 hours a week, the contract further provided for 15 days vacation leave per year yet the legal requirement is 30 days per year.

The contract further lacked clarity on when it would be terminated.
Section 12 (2) of the Labour Act gives the minimum issues that should be added in an employment contract. Further, the employer has to expressly state the type of employment contract that he is giving to an employee. The type of an employment contract will determine the way the contract will be terminated.

Many employers wrongly assume they have the right to unilaterally terminate the employment contract on terms they choose without following the law. All contracts have to be terminated as guided by the law, where a contract is permanent then the only route the employer can follow is to either do compulsory retrenchment, mutual separation or voluntarily retrench a worker. As for employees on fixed term contract, the termination is at the expiry of the contract and the employer has also to give related notice.

Section 12B of the Labour Act puts pressure on the employer to reengage a fixed term contract employee if they still work. It is illegal to terminate a fixed term contract while work is still there and replace with another employee.

Another problem area with employment contracts is other conditions of employment offered by the employer which become a source of conflict at termination. These include fuel allowance, housing allowance, medical aid, school fees, bonuses, incentives and profit share. In most cases, the wording used to grant these benefits lacks clarity opening the employer to litigation.

In conclusion, employers need to ensure that they have legally crafted employment contracts so that they can avoid the risks of related contractual dispute.

Davies Ndumiso Sibanda can be contacted on:email:[email protected] <mailto:[email protected]> Or cell No: 0772 375 235.