An employment contract is the agreement between employer and employee setting out the terms of the working relationship - role, remuneration, hours, leave and notice requirements among them.
What it means
It can be written or verbal, but South African law requires an employer to give an employee written particulars of employment covering the key terms, even where no formal contract document exists. Whatever its form, it is the legal source of truth payroll draws from for basic salary, allowances and benefit entitlements.
Where it fits in
Payroll configuration for a new employee - basic salary, allowances, pay frequency, leave cycle - should trace directly back to what the employment contract specifies. Changes to pay or terms require either a contractual variation or a separate fixed-term arrangement, not an unrecorded payroll adjustment.
Key rules
- Written particulars of employment are a statutory requirement even without a full contract document.
- Basic salary, allowances and benefits configured in payroll should match the contract, not deviate from it informally.
- A permanent contract has no fixed end date, distinguishing it from a fixed-term contract.
- Material changes to pay or terms require a contractual variation, agreed and documented.
