Employment Contracts: What Must Be in Yours (And What They Can't Legally Include)

The Contract You Signed Without Reading

Most South Africans sign their employment contract on the first day, excited to start the new job. They skim it at best.

Months or years later, they discover a clause they didn't understand has locked them into something unfair—a non-compete they can't escape, a notice period they can't afford to give, or a "probation" period that has stretched for a year.

This guide explains what the law requires, what is illegal, and what to look out for.

What the Law Says About Employment Contracts

Employment in South Africa is primarily governed by:

Basic Conditions of Employment Act (BCEA) — sets minimum conditions.
Labour Relations Act (LRA) — governs dismissal, unions, and dispute resolution.
Employment Equity Act (EEA) — prohibits unfair discrimination.

Here is the most important rule: The BCEA sets a floor, not a ceiling.

Your employment contract can give you more than what the BCEA requires, but it can never give you less. Any clause that gives you fewer rights than the BCEA automatically has no force—the minimum still applies regardless of what you signed.

What Must Be in Your Employment Contract

The BCEA requires that within one month of starting work, your employer must provide you with a written summary (called a Section 29 document or "particulars of employment") covering:

Full name and address of the employer.
Your name and occupation (or a brief description of your work).
Place of work.
Start date.
Working hours (ordinary hours, days of the week).
Wage or rate of pay and payment intervals (weekly, monthly).
Any other cash payments or benefits.
Notice period for termination.

If you never received this document, your employer is in breach of the BCEA—that is a starting point for any dispute.

Notice Periods: What Is Legal?

Notice periods are one of the most misunderstood parts of an employment contract.

Minimum BCEA Notice Periods

| Length of Employment | Minimum Notice | |---|---| | 6 months or less | 1 week | | More than 6 months but less than 1 year | 2 weeks | | 1 year or more | 4 weeks (or 1 month for farm/domestic workers) |

Your contract can give you longer notice, but never less than these minimums. If your contract says "1 week" and you've been employed for 2 years, that clause is invalid—the BCEA minimum of 4 weeks applies.

Can an Employer Pay Out Your Notice Instead?

Yes. An employer who wants to end your employment immediately can pay you your notice period salary instead of requiring you to work it out. This is called payment in lieu of notice.

Similarly, if you want to leave early, you can negotiate with your employer to pay them the equivalent of your unworked notice (or simply work it out).

Probation: What Are Your Rights?

Probation is a legitimate tool employers use to assess new employees—but it is not a free pass to dismiss you unfairly.

The Rules

There must be a fair reason to dismiss during probation, just like with any other employee.
The probation period must be reasonable in length for the position. A 3-month probation for a general worker is fine. A 12-month probation for a cleaner is likely unreasonable.
You are entitled to performance feedback during probation and a chance to improve.
You cannot be dismissed during probation without a fair process.

An employer who fires someone at the end of probation without reasons or without a hearing is likely committing an unfair dismissal.

Fixed-Term Contracts: Watch These Clauses

When Is a Fixed-Term Contract Valid?

An employer can use fixed-term contracts for work that is genuinely temporary:

A specific project with a defined end date.
Seasonal work.
Replacing an employee who is on leave.

What the LRA Says (Section 198B)

For employees earning below the BCEA threshold (R254,371.67 per year as of 2024), fixed-term contracts longer than 3 months must have a justifiable reason for not being permanent.

If no justifiable reason exists, the employee is deemed to be permanently employed after 3 months—regardless of what the contract says.

Employers who abuse fixed-term contracts to avoid giving employees permanent status face significant legal exposure.

The "Rolling Contract" Trap

Some employers renew a 3-month contract repeatedly, thinking this avoids permanent employment obligations. The LRA looks at the reality of the arrangement, not just the paperwork. If you have been working in the same role for the same employer for years on repeated fixed-term contracts, you may already have permanent employment rights.

Clauses to Be Suspicious Of

1. Restraint of Trade

This clause says you cannot work for a competitor, or start a competing business, for a period after you leave. Restraints of trade are enforceable in South Africa if they are reasonable in:

Time (e.g., 12 months is far more defensible than 3 years).
Geographic area.
The legitimate business interest it protects.

An overly broad restraint—like "you may never work in this industry in South Africa"—is unlikely to be enforced by a court.

2. "Ex Gratia" Bonuses

Beware of bonus clauses that say bonuses are "ex gratia" (at management's discretion) and "not part of your remuneration." Courts have sometimes found that regular discretionary bonuses become contractual entitlements over time, depending on the circumstances.

3. Variation Clauses

Clauses that allow the employer to unilaterally change your job description, location, or working hours are red flags. Significant unilateral changes to your employment conditions may constitute constructive dismissal.

4. "Garden Leave" Clauses

During your notice period, your employer may put you on "garden leave" — you're paid but told not to come in or do any work (to protect confidential information or client relationships). This is legal if it's in the contract.

5. Indefinite Restraints on Intellectual Property

Any clause that says everything you create, even in your personal time, belongs to the employer should be queried. A reasonable IP clause covers work done in company time with company resources relating to your role.

What To Do Before You Sign

Read the entire contract. All of it.
Ask for time. A reputable employer will give you 1–2 days to review it. If they refuse, that's a warning sign.
Flag anything you don't understand. Ask HR or get an attorney to review it.
Negotiate. Many contract terms are negotiable, especially for senior roles. Notice periods, restraints, and bonus structures are all fair to discuss.
Never assume the standard "these are our policies" exempts them from the BCEA. If a term is below the legal minimum, it does not apply to you—but you need to know your rights.

Key Takeaways

Your contract can give you more rights than the BCEA minimum, but never less.
Minimum notice periods range from 1 to 4 weeks depending on your length of service.
Probation is not a free dismissal—you still need a fair reason and a fair process.
Fixed-term contracts exceeding 3 months require justification; repeated rolling contracts may create permanent employment.
Restraints of trade must be reasonable to be enforceable.
Read the contract, ask questions, and negotiate before signing.

Unsure about a contract clause, or signed something that may not have been legal? Find a labour law attorney on LekkerLaw to review your situation.