January 15, 2019
In South Africa it is not uncommon for employees to be tenants. This is most often the case when a domestic worker or gardener occupies a cottage on the property of their employer. Usually the accommodation is part of the remuneration package, and often the employer pays the utilities and sometimes even provides food. The dual nature of the relationship can make things complicated if it becomes necessary to terminate one or other of those contracts, but in law the situation is straightforward.
We’ll look first at the simple application of the law, and then consider a couple of alternative scenarios.
In the simplest scenario you terminate the employment of your domestic worker, including accommodation. You must give reasonable notice, compliant with the terms and conditions of employment (e.g. you may have agreed a contract stipulating 90 days’ notice). If you wish to terminate the employment prematurely and the Basic Conditions of Employment Act applies, you must give one month’s notice of termination. The employee is then required to vacate the premises provided, unless other provisions have been made. In the event of premature termination of a contract, the employee is entitled to accommodation for one month, or longer, according to the outstanding period of the contract.
Employment terminated, accommodation is extended
But perhaps the contract of employment is concluded, or the employee retires or is sick and unable to work. Their replacement does not wish to live on your premises and therefore the accommodation does not need to be vacated. You are happy for the former employee to remain a tenant. In this case the employee becomes a conventional tenant. You draw up a lease as you would for any other tenant. Whether you charge a rent or allow them to stay as a “grace and favour” tenant is between the two of you, but it is still advisable to have a written lease in place. Some families promise accommodation for life to a loyal domestic worker. If you have made this commitment in the past you are obliged to honour it, whether or not it was in writing.
Employment continues, lease is cancelled
On the other hand, you are very happy with your domestic worker, but your daughter is returning from varsity and wants to live in the property currently occupied by the employee. You wish to cancel the lease but retain the employee. In this case you are bound by the Rental Housing Act and the Consumer Credit Act. Firstly, you must check the lease agreement (or the employment contract, if the provision of accommodation is an integral part of that and not a separate agreement). You must then give notice in accordance with the provisions of the lease or employment contract. See our article Lease Agreement – How To End It With Dignity. If there is no specified notice period given, you must give one month’s notice (20 business days to be compliant with the CCA).
If the tenant refuses to leave as requested, you may then resort to eviction. You must comply with all the statutory measures and procedures that apply to your situation, i.e. if the property is in an urban area, the Prevention of Illegal Eviction (PIE) applies (see our article on PIE). If the property is in a rural area and is subject to the Extension of Security of Tenure Act (ESTA), then the provisions of that Act must be followed.
Bear in mind that if you have to evict your employee from your property, you will place your working relationship under severe strain, making it difficult for you both to continue as employer and employee. Try to resolve the situation without resorting to eviction if you can. It may mean being flexible with the notice period to allow your tenant time to find alternative accommodation. Be aware that they now may have to travel a distance to work and be sensitive to how that might impact their start and finish times. Review the employment contract to reflect the new live-out status and consider the implications for total remuneration. If accommodation was provided gratis as part of the package, you will need to revisit the wage you pay. Make sure all contracts are up to date and represent fair and reasonable employment practices.
Take professional advice
If you need help with any aspect of lease agreements or employment contracts for your domestic workers, we can help. Simon Dippenaar and Associates are experts in property and contract law. We will make sure you are fully compliant with all relevant regulations. Contact Simon on 086 099 5146 or email email@example.com.