Just because you place a contract or agreement before a staff member does not mean they have to sign it. Nor may it be legally enforceable if they do.

Human resources management is a tricky element of running a business. For many SMMEs, there is no HR department, and some contracts are sketchy at best.

So what do you need to include, and how can you make them legal and fair to all parties.

What to include in an employment contract

Of course, the basics include the date, employee name, and address.

An introductory paragraph outlining your intention to offer them the position, the position title, and for which company.

At this stage, it is essential to reiterate confidentiality regarding matters concerning the offer and the business as a whole.

Terms of agreement

The section of terms of the agreement includes the employee contract:

• the effective date
• remuneration
• a detailed account of the duties of the position
• termination of employment terms
• confidentiality clauses
• social media clauses if appropriate
• annual leave
• sick leave
• hours of work
• granting of credit
• collective arrangements or agreements the company has
• the need for flexibility
• training
• security
• and a general category for anything that would apply to that specific business.

You can include a separate disciplinary code if required. Some companies include this in an annexure. It is sometimes far more detailed than can fit in the standard contract.

Types of contracts

Legally, different types of contracts protect the employer and employee. They also have tax implications. So ensure you lay out the correct agreement, so the expectations are clear on both sides.

Fixed-term contracts are for employees that take on a specific task or for a particular period.

The agreement needs to have the position and remuneration, including the tax implications, overtime, deductions, and annual leave if applicable. The inclusion of sick leave if appropriate, family reasonability leave, and a notice of termination. Of course, include confidentiality and other relevant documents. There has to be an apparent start and end date for the project or contract. You can include a probationary period of up to three months.

An independent contractors agreement is specifically for contractors to your business. It is for specific skills you may need, for a period, or a particular job. You must include:

• Warranty and duration
• consultant duties
• confidentiality
• Inventions, discoveries, and copyright
• remuneration, liability, and termination.

Depending on the business, a contract may include authority to represent the company, cession, assignment, and any governing law.

If you are unsure about employee contracts, consulting with an HR company that can contract with your business is advisable. They are also valuable when dealing with disciplinary issues and terminations.

Bizcash is an alternative financial service provider. We aim to be the preferred partner to South African based SMME companies to help them grow their business.

We offer effective cash flow management products, loans, and bespoke insurance products.

Get in touch with us on 0861 93 93 93 or email us at info@bizcashscf.co.za or contact us here.

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