Hire in South Africa

An employment contract may be written or oral. However, under the BCEA, employees who work at least 24 hours per month must be provided a written statement of the main particulars of their employment:

• employer’s full name and address
• employee’s name
• employee’s job role and responsibilities
• place of work
• start date of employment
• ordinary hours and days of work
• remuneration or the rate and method of calculating wages
• rate for overtime work
• cash payment or other payment in kind the employee is entitled to
• frequency of method of wage payment
• deductions to be made from remuneration
• leave entitlement
• notice period in event of employment termination or, if employment is for a specified period, the termination date
• any period of employment with a previous employer counting toward the employee’s length of service with the current employer
• a list of any other documents that form part of the employment contract, indicating a location that should be accessible to the employee

Employers with fewer than five employees do not need to provide written information on the three last items listed above.

The employer must ensure the employee understands the contents of the document. Where necessary, they must also confirm the provisions of the document are explained to the employee in a language and a manner they will understand.

Medical examination

An employer is permitted to require an applicant to undergo a medical examination if legislation permits or requires the testing.

Criminal background check

A criminal background check can be performed, subject to the individual‘s informed consent. However, prior authorization from the Information Regulator is required if the criminal record check is to be performed by a third party.

Reference and education checks

Employers are permitted to conduct professional reference and education checks, provided the individual is informed and provides his or /her consent.

There is no prescribed limit on an employee’s probation period. However, the period must be agreed with the employee in advance and be of a reasonable duration.

Termination of employment during the probation period is subject to the contractual termination notice, which is typically not less than one week.

Weekly working time must not exceed 45 hours. Daily working time must not exceed eight hours if the work schedule is more than five days per week; daily working time must not exceed nine hours if the work schedule is five days or less per week.

An employee may agree to work a “compressed working week.” In this arrangement, the employee works on five days per week or fewer and may work up to 12 hours on one or more days per week without this being considered overtime. The employee’s normal weekly working time must not exceed 45 hours and they must not work more than 10 hours of overtime in any given week.

Employees must generally be granted a meal interval of at least 60 minutes after five hours of continuous work. Employees must also be granted a daily rest period of at least 12 consecutive hours; a weekly rest period of at least 36 consecutive hours must also be granted. This weekly rest period must include Sunday, unless agreed otherwise.

Employees may work overtime only if they agree to or if an applicable collective agreement provides for this. Employees must not work more than 10 hours of overtime per week, though a collective agreement may permit them to work up to 15 hours of overtime for up to two months in any 12-month period. An employee can legally refuse to work more than 12 hours in any one day

Employees must be compensated for overtime, with a pay supplement of at least 50% on top of their normal rate. However, by agreement, an employee can be compensated with:

• normal pay for overtime hours worked, plus time off in lieu of 30 minutes for every hour worked
• time off in lieu of 90 minutes for every overtime hour worked but no payment for the overtime hours

The Unemployment Insurance Contributions Act, together with the Income Tax Act, oblige employers to retain records for each employee of remuneration paid, tax which has been deducted and unemployment insurance fund contributions and payments.

These records should be stored for five years from the date of the last entry. They must be available for inspection by the South African Revenue Service and Unemployment Insurance Fund officials.

There are three common types of bonuses in South Africa: the Christmas bonus (or ‘13th cheque’), annual performance bonus and production bonus. Employers are not legally required to pay out bonuses. However, if it arises out of established custom or practice, it becomes a condition of employment.

For example, if the Christmas bonus has become expected, it becomes necessary for the employer to inform the employees at least six months in advance if it will not be paid in any given year. If an employer only advises employees near the year-end that no bonus will be paid, it can be considered unfair labor practice.

To avoid this, many employers have done away with the Christmas bonus. Instead, they have incorporated the amount into the employee’s basic salary.

It is important for employees to be mindful that the payment of bonuses is not guaranteed. At the same time, employers should ensure they inform employees within a reasonable period if bonuses will not be paid.

Employment law does not recognize the concept of the termination of an employee’s employment “without cause” or “at will.” The employer is always required to act fairly when terminating a contract, both substantively and procedurally. Termination of a contract by the employer is generally only permissible if the employee is in breach of the employment contract.

There are three recognized fair grounds for dismissal. For each there are specific procedures that must be followed:

• Misconduct: the employer should conduct an investigation and disciplinary enquiry
• Operational requirements (redundancy/retrenchment): employer and employee should engage in a consultation process to arrive at a consensus
• Incapacity (ill health, poor work performance and incompatibility): this may involve providing the employee with assistance or time to improve or seek alternatives

Notice of termination of employment, when given by the employer, must not be given during any period of leave to which the employee is entitled (except sick leave).

Employees are entitled to resign with notice at any time and for any reason. An employee is also entitled to terminate employment without notice if the employer has made continued employment intolerable or risky.

South African law provides for specific minimum periods of notice to be provided to employees as follows:

• Period of employment 0 < 6 months: 1 week notice
• Period of employment 6 < 12 months: 2 weeks notice
• Period of employment >12 months: 4 weeks notice

The same periods apply to an employee’s resignation if the employment contract does not state the notice period. However, the parties can contractually agree to a longer period of notice. This is common for senior management and executives. A collective agreement may also dictate longer periods of notice.

An employee may be compensated in lieu of notice.

If an employee is dismissed for operational reasons, the employer has to pay a minimum of one week’s remuneration for every completed year of service. Furthermore, additional payments agreed upon in the consultation process must be offered.

The employer may pay remuneration in lieu of notice, irrespective of who gives notice, but with the employee’s agreement.

Restrictive covenants are enforceable in principle. However, the enforcing party must prove a proprietary interest worth protecting and legitimate business interest (e.g. client relationships or trade secrets). The restraint must be reasonable in its nature, duration and geographical area.

For non-competes, a 12 month period is generally regarded as reasonable.

When employment ends, the employee is entitled to receive from the employer a certificate of service stating the following:

• the employee’s full name
• the employer’s name and address
• the dates that employment started and ended
• the title of the job or a brief description of the work for which the employee was employed at the termination date
• the employee’s remuneration at the termination date
• the reason for termination of employment (if the employee requests)
• a description of any bargaining council or sectoral determination that covers the employer’s business

The entitlement to a certificate of service does not apply to employees who work less than 24 hours a month.

A fixed-term contract is one that terminates on the occurrence of a specified event, the completion of a specified task or project, or a fixed date other than an employee’s normal or agreed retirement age.

There are some statutory restrictions on fixed-term contracts, namely:

• It is only applicable to employees who earn below a certain threshold (ZAR 241,110.59 per year)
• For employers with at least 10 employees (or at least50 employees for employers who have been in business for less than 2 years unless the employer conducts more than one business or the business was formed by division or dissolution for any reason of an existing business)

An employer may offer a fixed-term contract or successive fixed-term contracts as long as it is for less than three months. If either the original contract or successive contracts, or their collective duration, will be for a period longer than three months, then a fixed-term contract or successive contract is permissible only if:

• the nature of the work for which the employee is employed is of limited or definite duration; or
• the employer can demonstrate any other justifiable reason for fixing the term of the contract.

The most important aspect of providing a fixed-term contract for longer than three months is that it needs to be for a justifiable reason, such as:

1. Replacing another employee who is temporarily absent from work;
2. A temporary increase in work volume which is not expected to endure beyond 12 months;
3. A student or recent graduate who is employed to undergo training or gain work experience;
4. Exclusive work on a specific project that has a limited or defined duration;
5. A non-citizen who has been granted a temporary work permit;
6. Seasonal work;
7. An official public works scheme or similar public job creation scheme;
8. The position is funded by an external source for a limited period;
9. The employment of a person beyond the normal or agreed retirement age.

If an employer concludes or renews a fixed-term contract that exceeds three months and the nature of the work is not limited or definite, or the employee cannot provide a justifiable reason for the term of the contract, it will be considered an indefinite duration contract.

• The BCEA states employers must pay employees their remuneration in South African currency on a daily, weekly, fortnightly or monthly basis. The most common mode of payment is a direct deposit into a bank account designated by the employee.
• Any remuneration paid in cash or by cheque must be given to the employee at the workplace (or a place agreed to by the employee) during the employee’s working hours or within 15 minutes of the start or end of those hours, in a sealed envelope.
• The employer must remit remuneration to the employee no later than seven days after the completion of the period for which it is payable or, where relevant, no later than seven days after the termination of the employment contract.
• The rules on payment of wages and requirement of payslips do not apply to employees who work less than 24 hours a month.

An employer with five or more employees must provide certain information in writing (i.e. a payslip) when paying an employee. This includes:

• employer’s name and address
• employee’s name and occupation
• pay period
• remuneration in monetary form
• amount and purposes of any deductions
• net amount paid to the employee

Where relevant, the following details should also be provided:

• the employee’s normal and overtime pay rates
• the amount of normal and overtime hours worked during the pay period
• any working time completed worked on a Sunday or public holiday during the pay period
• the total normal and overtime hours worked during the reference period (if the employee is covered by an hours-averaging scheme)

• Employees are entitled to at least 21 consecutive days of paid annual leave. The employee is entitled to take the leave in a single block but, if agreed upon, may take the leave in one or more shorter periods. Employees are entitled to the accrued leave within six months of continuous employment.
• For fixed term or part-time employees, the annual leave entitlement may be calculated proportionately, e.g. one day leave for every 17 days worked (or was entitled to be paid for) or one hour’s leave for every 17 hours worked.
• During annual leave, employees must be compensated at their normal remuneration rate. The general rule is the employer should pay the employee for the whole period of annual leave before it starts. However, by agreement, the employee may instead be paid on their normal payday.
• An employer must permit an employee to take any of their statutory annual leave entitlement during sick leave, maternity leave, parental leave, family responsibility leave, or during a notice period. If a public holiday falls during an employee’s annual leave, on a day when the employee would normally have worked, the employer must grant the employee an additional day of annual leave.

Sick leave entitlement is based on a ‘sick leave cycle’ of 36 months, starting from the date the employee commenced employment. For each sick leave cycle, the entitlement is six weeks. This translates to 30 days of paid sick leave for employees working a five-day week and 36 days for employees working a six-day week.

For the first six months of employment, the employee is entitled to one day of paid sick leave for every 26 days worked. If an employee uses up their six-week statutory paid sick leave entitlement during a sick leave cycle, any further sick leave before the cycle ends will be unpaid.

Employees must be paid their normal remuneration on the normal payment day during sick leave. However, if agreed upon, employees can be paid less than their normal full pay if the number of paid sick leave during a cycle is increased. The payment cannot be less than 75% of normal pay; at 75% of pay, this equates to the employee being entitled to 25% more paid days of leave. This works out to a total of 37.5 days for employees working a five-day week and 45 days for employees working a six-day week.

Employees who work at least four days a week and have been in service with an employer for at least four months are entitled to take paid family responsibility leave of up to three days per year in the event of their child being sick or upon the death of an immediate family member.

This leave cannot be carried over. Employees may apply the leave in units of less than one day. The employer has the right to obtain reasonable proof from the employee.

Maternity Leave

Pregnant employees are entitled to maternity leave of at least four consecutive months. This leave can be taken from any point four weeks before the expected date of birth or earlier if medically necessary. An employee should not work in the first six weeks immediately after childbirth and can do so only if medically certified.

An employee who suffers a miscarriage during the third semester of the pregnancy or bears a stillborn child is entitled to six weeks’ maternity leave after this event, regardless of whether maternity leave has already commenced.

The employee must inform the employer of the intended start and end dates of maternity leave at least four weeks before the leave is planned to commence or as soon as it is reasonably practicable.

Employers do not need to pay statutory entitlements during maternity leave. If the employee has been in employment for at least 13 weeks before the start of maternity leave, and have contributed to the Unemployment Insurance Fund (UIF), the employee will be entitled to receive all or part of the maternity benefits capped at ZAR 17,712 per month and ZAR 4087 per week.

It is relatively common for employers to pay employees at least part of their wages during maternity leave. In such cases, the UIF maternity benefit tops up the pay from the employer up to no more than 100% of the employee’s normal remuneration.

UIF maternity benefit is paid based on the employee’s contribution history, where four years of contributions are required for a full four months of maternity benefit entitlement.

Breastfeeding employees are entitled under the BCEA to two unpaid breaks of at least 30 minutes per day to feed their child.

Paternity/Parental Leave

An employee who is the parent of a child has the right, under the BCEA, to take “parental leave” of at least 10 consecutive days. This leave period begins when the child is born. This is not applicable to the biological mother, who will be entitled to maternity leave.

Other Parenthood-related Leave

An employee who adopts a child under the age of 2 is entitled to an adoption leave period of at least 10 consecutive weeks, starting when the adoption order is issued or the date when the child is placed with the employee prior to the adoption order being finalized, whichever is earlier

If an employee enters into an agreement commissioning a woman to bear a surrogate child, he or she is entitled to take “commissioning parent leave” of at least 10 consecutive weeks. This begins when the child is born.

If a child is adopted by a couple, only one parent is entitled to take adoption leave. Likewise, if two employees have entered into an agreement commissioning a surrogacy, only one of them is entitled to take commissioning parent leave. However, the other parent is entitled to 10 days parental leave in connection with the adoption or birth.

The employee must inform the employer of the intended start and end dates of parenthood-related leave at least one month before the leave is planned to commence, or as soon as it is reasonably practical.

Employees who have been in employment for at least 13 weeks and who contribute to the UIF are entitled to receive benefits during all or part of the leave. The benefit is set at 66% of the employee’s normal pay. If the employer pays the employee part of their wages during leave, the UIF benefit tops up the pay from the employer up to no more than 100% of the employee’s normal remuneration.

There are 12 public holidays per year. If a public holiday falls on a Sunday, the holiday is transferred to the following Monday.

By agreement, a public holiday may be exchanged for another day off. For example, employees may work on a public holiday with normal pay and be granted a day off on another agreed date.