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Even in a small business an employee contract is important. Do you know where your contracts are? Are they up to date? Do they need amending? In a small business all these small big things are very easy to overlook, employee contracts sit in file somewhere gathering dust and they may well be out of date. The importance of employee contracts and how they are stored cannot be ignored and HRSimplified is the best way to manage and store your employee contracts in compliance with all SA legislation.

Employment contracts are a vital document for both staff and employers. A employment contract legally establishes the working relationship and setting out important frameworks and policies. Contracts lay down the rules and the terms of employment and clearly outline all an employee’s rights, responsibilities and obligations. A contract of employment serves to protect job security and employee rights. Furthermore, an employer is protected from risks such as breaches of confidentiality.

But why is a contract of employment a must have in a small business? Here are 5 reasons.

Understand Employee Duties

The obvious thing that a contract of employment does is clearly outline the position, duties and expectations of the employee. The contract should provide a job description with outlined duties and provide a summary of salary and any benefits. As employer you should walk through the contract with the employee to ensure each part of the contract is understood before onboarding begins. Having a contract sets standards and expectations and allows for performance to be better measured without confusion. .

Job Security for Employees

A contract of employment should indicate the terms of employment. It should state any probation period, whether the job is permanent or contract and if a contract when it begins and ends. This information guarantees job security for the employee provided the terms and conditions of employment are not violated. When an employee feels secure in a role they generally perform better. Termination should also be discussed in the contact and an employee needs to be made clear what actions can lead to termination.

Defined Pay Rates and Income

A contract of employment defines pay rates and income no matter if the employee is permanent, part-time or casual. Pay needs to fall in line with SA minimum wage and it is important to comply with this. (HRSimplified ensures compliance). With pay clearly outlined in the contract there is little room for maneuvers when it comes to pay disputes.

Clear Leave Protocols

Leave is an important part of a contract for most employees. Leave needs to be provided in line with SA Legislation. There are different forms of leave and each must be specified. With a contract it means that the procedure for taking leave is always consistent and legal, for all staff. HRSimplified makes managing leave a breeze and can monitor how much leave they have on the fly.

Confidentiality for Employers

Another top reason that contracts of employment are essential for small business is that the create confidentiality between the employer and employee. It’s a good idea to include a confidentiality clause in each worker’s employment contract, to protect your business.

HRSimplified and Employment Contracts

Employment contracts are essential in a small business, both for the employer and the employee. Managing, storing and accessing these legal documents of often a challenge and this is where HRSimplified plays a huge role. HRSimplified has a fully comprehensive employment contract storage and management system, the system also stores related documents such as copies of ID, drivers license and certificates of any kind. HRSimplified makes finding employment contracts east to find and categories them as permanent, part-time or casual providing start and end dates for contract staff. All contracts are stored securely, and their storage fully complies with POPI legislation. To have a closer look and employment contract management in HRSimplified visit

In Summary…

As you can see, employment contracts are absolutely essential in the workplace, protecting both employer and employee. Next time you’re asked to sign an employment contract before stepping into a new role, make sure you take the time to read it over and make sure it reflects your understanding of the position, salary and benefits. And employers, ensure you’re protecting your workers, and your business, with clear, well-defined contracts.

Find a Free copy of a Employee Contract that you can use as a Template here

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