Open Source Startup: Employment Contract Template for South Africa

Welcome to Chapter 1 of Open Source Startup: Employment Contract Template for South Africa. For a table of contents, head over to the Introduction here

Handshake employment is fine. Until something goes wrong. Two out of the three businesses in my immediate vicinity have been visited by the Department of Labour for an audit. And everyone has hired a bad nut.

Covering yourself with a simple but effective employment contract is really important - both for you and the team you're building. Here's a nice, solid employment contract example for you to use.

Notes and things to think through:

Clause 4: Job Description. This is important and should be updated every year, even if just to reconfirm role and responsibilities. Startups have lots of role creep, so make sure you account for that in the job description.

Clause 5.2. Termination time frames. You might want to double check this - the wording on Basic Conditions of Employment can be a little confusing. It's designed to protect the employee, not the employer - regulatory blow-back from horrible labour practices in South Africa.

Clause 7.1. Termination. This refers to a Disciplinary Code - which means you have to have one. Look out for an upcoming post on this.

Clause 8. Remuneration. Feel free to structure this however you want, but I've found it's simply too much admin for a small business to undertake fancy salary structures. Really depends on your access to a qualified Finance Team. Even with a great one at forgood, we've tried to keep things simple (cost to company).

Clause 9. Hours of Work. I know this sounds ridiculous. But remember who South African labour law is trying to protect - it's not developers! I've been told my my legal team that, by law, you have to have these in place. Even if you're planning on working longer hours. That's the beauty of an output-based culture - you don't clock watch.

Clause 10.3. Leave. This is quite a nice trick to find ways of using additional leave as an incentive. Pre-warning, it's quite a complex path to go down and you have to be careful that you don't drive the wrong kind of behaviours. Personally, I believe that 15 days leave isn't enough for anyone to refresh themselves. Although, you do need to count the exorbitant amount of public holidays South Africa (13 at last count - meaning everyone typically gets a minimum of 28 days leave). If you want to give extra leave, you can link it to outputs and overtime. I prefer outputs, although this template deals with overtime. Whatever you do, make it clear to avoid confusion in your team.

Clause 12. Maternity Leave. This is another tricky one - how to find a balance between supporting your female team members through one of life's most important experiences - and putting huge pressure on your cashflow. I understand how corporates can give 4 months off, full pay - that's the perk of working for the man/woman. I'm not sure small business can sustain that - so here's my middle ground.

Remember to add an Annex B that includes your employees Job Description.

All done!

Disclaimer: The information in these posts work for us. I cannot and will not guarantee that they'll work for you. Consult the right professional to make sure.


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