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Consider these two factors when you draft employment contract clauses that deal with remuneration and benefits or your contracts won't be legal

by , 08 January 2015
As an employer you need an employment contract to regulate your relationship with your employee.

This contract sets out the terms and conditions of employment that will apply for the time the person is in your employ. This includes what you'll pay him (his remuneration) and the benefits he'll get.

That's why when you draft your employment contracts, you must put clauses that specifically deal with remuneration and benefits.

Sadly, our labour experts often find that employers get this part wrong.

The result?

They end up with ineffective contracts that don't comply with labour laws. As you know, an illegal contract puts your company at risk of all sorts of workplace disputes.

Don't be that employer who drafts illegal contracts.

To make sure your employment contracts are legal, make sure you consider these two factors when you draft clauses that deal with remuneration and benefits.

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You'll always have legal contracts on your hands if you take these two remuneration and benefits factors into account

1. Consider what law applies
It's crucial your contracts of employment are in line with the relevant laws, say the experts behind the Labour Law for Managers Loose Leaf Service.
This way you'll avoid problems later on that could arise when you make an offer of employment only to find out the salary and benefits you've offered your employee aren't in line with the statutory minimum.
That's why it's important to always ask yourself:
  • Is there a bargaining council agreement in place that covers my industry and which specifies minimum terms and conditions (i.e. minimum pay and benefits)?
  • Is there a sectoral determination that affects my employees because of the sector I operate in?
  • Does a collective agreement with a union apply (i.e. do you negotiate any minimum levels of pay or benefits with your union)?
If your answer is 'yes' to any of these questions, refer to the correct law before you put your employee's contract together.
In addition, check chapter 4 of the BCEA. It deals with everything about employment and remuneration.
2. Consider the relevant policies and procedures
Your employment contract isn't the only document that regulates your relationship with your employee or his remuneration and benefits. Your employee is also subject to any policies and procedures you may have in place, such as:
  • Your policy on remuneration and benefits;
  • Your policy on bonuses;
  • Your car allowance or cell phone policy;
  • Your share incentive scheme; and
  • Your pension fund rules.
When you draft clauses in your contract that deal with remuneration and benefits, make sure these are consistent with any relevant policies and procedures. This will stop you creating loopholes for your employees to exploit.
We'll stress this once again: Having an illegal employment contract opens your company up to workplace disputes.
So be sure to consider these factors when you draft employment contract clauses that deal with remuneration and benefits. It's the only way to make sure your contracts are legal.
PS: All in all your contracts must consider five factors. You'll find the rest of them in the Labour Law for Managers Loose Leaf Service. The Loose Leaf also contains the type of clauses you must include in your contract when it comes to remuneration and benefits, a contract of employment sample you can use and so much more.

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