Contracts, also called Agreements, are binding on the signatories.
There are many different types of contracts; one of the most common is the Contract of Employment, also called the Letter of Appointment.
The Employment Contract regulates the conditions of service of employees in an organisation.
If the contract is properly worded in such a way that it complies with the law and both parties are fully informed about the rights, duties and obligations which are present in the employment relationship then the employment relationship is well regulated.
There are certain minimum requirements that employers must provide to employees, there are also procedural obligations to be followed in dealing with employees, these provisions are contained within the Basic Conditions of Employment Act, the Labour Relations Act and other legislation.
Businesses may wish to adopt a Code of Conduct which will be applicable to all employees; this Code of Conduct can form part of the Contract of Employment.
Employers may also wish to enter into an annual Performance Contract with employees. At the end of each performance year an evaluation is conducted to measure the performance of the individual against predetermined criteria.
If an employee performs at or above the standard for the occupation type or level then the employee would qualify for recognition and reward, if not, and upon repeated non-performance, the services of an employee could be terminated due to poor work performance after a fair process has been followed.