In South Africa, the foundation of any employer-employee relationship is the employment contract. While informal arrangements, such as oral agreements or implied conduct, can technically establish a working relationship, failing to put terms into writing exposes both employers and employees to significant risk.
Legal Requirements
Section 29 of the Basic Conditions of Employment Act (BCEA) mandates that employers must provide written particulars of employment when a person starts work. These written details must include items such as:
- Full names and addresses of both employer and employee
- Job title and a description of duties
- Place of work
- Hours of work and rest periods
- Details of remuneration, including overtime pay
- Leave entitlements
- Notice periods for termination
While a verbal or informal arrangement does not make employment “illegal,” it introduces uncertainty. Without written proof of key terms, misunderstandings are more likely, and by extension, harder to resolve.
Legal Precedent: Why Written Particulars of Contracts Matter
In Bithrey v Public Health & Social Development Sectoral Bargaining Council and Others (JR1478/22), the Labour Court found that the dismissal of a medical registrar was unfair after the employer terminated the employee’s contract following four years of academic delay, despite the expectation that the registrar programme would last five years. The Court held that the employment contract was vague, lacking a specified duration or clear termination conditions, and that the employee had a legitimate expectation that the appointment would continue for the full five-year term. The Court rejected the employer’s argument that the termination occurred “by operation of law,” emphasizing that unclear or poorly drafted contracts cannot override the requirements of fair dismissal. This case highlights the critical importance of providing clear written particulars in employment contracts, especially regarding duration and termination terms, as ambiguity can lead to legal disputes and findings of unfair dismissal.
The Employer’s Risks: What Can Go Wrong Without a Contract
Some employers underestimate the legal and financial dangers of not issuing formal employment contracts. Even if a working relationship exists, the absence of a written agreement can leave the company exposed to:
- Disputes & CCMA Cases – Without a clear contract, interpretation disputes are common and often resolved in favour of the employee.
- Reputational Damage – Poor HR practices, such as not issuing contracts, harm employee morale and retention, and can damage a company’s public image.
- Financial Liabilities – Employers may face costly claims or settlements, such as backdated overtime, bonuses, or allowances; unjustified terminations; and legal costs and CCMA arbitration awards.
In NUMSA obo Fohlisa & Others v Hendor Mining (2017) 38 ILJ 1560 (CC), the Constitutional Court reaffirmed that labour protections exist regardless of whether a formal contract is in place. In short, the absence of a written contract does not relieve employers of their obligations, but it makes matters harder to defend.
Conclusion:
Working without a written employment contract isn’t illegal, but it is unwise. It creates legal grey areas that compromise employees’ rights and place employers at risk of litigation, penalties, and reputational harm. South African labour law exists to promote fair and transparent employment practices, and one of the most effective tools for ensuring that is a written contract. Whether governed by the BCEA or a relevant Collective Main Agreement, the message is clear – To protect both parties and foster a safe, compliant workplace, always formalise employment in writing.
