Employment Conditions in South Africa

The PI (Public Interest) score is a measure used in South Africa to determine the level of financial reporting, audit, and review requirements for companies. This scoring system was introduced by the Companies Act, 2008, and its purpose is to assess the public interest impact of a company. The PI score is calculated annually and is based on various factors which reflect the company’s size, complexity, and impact on the public.

Employers are required to maintain accurate and up-to-date records of employees’ personal information, employment history, and remuneration. They should keep the records for a minimum of three years after the end of employment.

Non-compete (restraints of trade) and non-solicitation clauses are common but should be reasonable in scope, territory and duration. Other considerations that the court will take into account are the seniority of the employee, their ability to damage the employer’s competitive advantage and whether the employer has a protectable interest. Employers should either add appropriate restraint of trade clauses in employment agreements or create separate agreements for that.

When a business (whole or in part) is transferred, employees either automatically transfer to the new employer with their existing terms and conditions, or on terms and conditions of employment that are at least any less favorable to their existing terms and conditions.

Employment contracts typically include clauses on the ownership of intellectual property created during employment. This is crucial in information and technology industries.

While the LRA does not mandate a probation period, employers may include it in the employment contract. The probation period should be reasonable and related to the job’s nature, allowing the employer to assess the employee’s performance. The duration should be pre-determined and can be extended if necessary, based on performance evaluation. Employers must follow proper procedures if they decide to terminate employment during or after the probation period, which includes but is not limited to, following an incapacity procedure for poor work performance and monitoring the employee’s performance during the probation period.