The difference between a contract of employment and letter of appointment

Let’s take you through a contract of employment first. Quite simply, it’s a basic minimum legal requirement of the Basic Conditions of Employment Act. It should be issued on the very first day of employment because technically the person should not be working on your premises without it !! An employee is not legally protected without this and there are Workmen’s compensation issues etc if this is not in place there are civil legal issues at stake.

This document includes all the factors around:
1. What the employee’s duties are and where those duties are to take place

2. What the employer offers and provides:
Times of work; Overtime; Salary; Bonuses; Annual leave; Sick leave; Medical aid; Pension etc.

3. The rules for:
Termination of employment; Resignation; Retirement. Any payment conditions .. eg commission paid 2 month’s in arrears..

A prospective employee is not obliged to resign to take up employment unless a written letter of offer or appointment has been given to him/her. An appointment or offer letter in terms of the Occupational Health and Safety Act is a legal requirement under certain sections and regulations of the Act.. All of these appointment /offer letters must be in writing. And should not just be an email. The letter must contain information regarding the exact position to which the new employer is being appointed, it should contain exact remuneration details. It should mention the expected start date of the new employee. It should also include any details of conditions required before the offer is fully valid.. eg a certified copy of a valid driver’s license may be required and the prospective employer may wish to have it verified ..Dates should be set for these conditions. It should be signed by both the prospective employee and the Employer.

Why you need to know the difference
You need to know the difference, because if you think you’ve covered your bases by simply giving your employee an offer of employment. You’re wrong! You can have a combined document but it is best to have both.. A signed copy of each must be given to the Employee and should be kept by you in a staff file There are certain employees who, by law, must have an appointment letter outlining their specific health and safety duties. If you don’t comply, the Department Of Labour will fine you or even take you to court! And if you don’t have proper Contracts of Employment and you end up in the CCMA, you are automatically on the back foot with the commissioners.