Put another way, no matter how far you look into the future, the expectation is that this job will always be needed. In Allan v Maidstone Country Club [2003] 3 BALR 255 (CCMA) the applicant was employed on a renewable fixed-term contract as a manager of the club. That is, as long as the fixed-term employee receives the same benefits as his/her permanent colleagues and as long as the employer continues to renew the fixed-term contract, the employee has no legal grounds to complain. However, in order to mitigate the risks associated with fixed term contracts it is important to conduct regular reviews of those contracts. The arbitrator found that: The employee was not on a fixed-term contract but on a normal contract with a probationary clause; In any case, if the employee's performance was poor the employer was obliged to provide counselling and training before considering dismissal; Mixing up probationary clauses with fixed-term contracts is not the only way in which employers get into trouble. In the case of King Sabata Dalindyebo Municipality vs CCMA and Others (2005, 7 BLLR 696) the employer made a habit of regularly renewing fixed term contracts. Therefore, employers are obliged to indeed conclude a written agreement setting out the structure and particulars of the fixed term contract; The nature of the work must of course be for a limited duration. Also, in the above scenario, the fixed-term employee would not expect the employer to put him/her on the company pension fund because, by nature, such funds are for long-term employees. Working beyond expiry date in fixed-term contract – permanent employment. The arbitrator found that: These cases make it clear that before employers consider using fixed-term contracts as short-cuts, they should consider whether the short-cut they use will lead them to the CCMA or bargaining council. The employee lodged an unfair dismissal dispute and the employer claimed that the employee's performance had been poor. Section 198D is a process whereby Employees can proactively redress non-compliance of Section 198A; 198B and 198C of the LRA in the form of a declaratory order and such is not a stand-alone process of redress, once the employment relationship had been terminated. Who is a part-time employee? Fixed Term Contracts. This is because the employer may well have the right to treat a fixed-term employee who is in a genuine fixed-term job differently to permanent employees. Therefore, each fixed-term contract must be assessed on its own merits. Termination of fixed-term employment contracts could still amount to unfair dismissal Feb 7, 2018 | Labour and Employment Law Employers should take note that failing to renew a contract of employment, even when the contract period has been fulfilled, can still constitute a dismissal in terms of the Labour Relations Act (LRA). An employer cannot avoid this provision by using continuous fixed term contracts limited to three (3) months each. The CCMA, bargaining councils and the Labour Court are some of the fora. The employee lodged an unfair dismissal dispute and the employer claimed that the employee's performance had been poor. When the matter was set down for conciliation the commissioner ruled that the CCMA did not have jurisdiction to determine the dispute as the dispute related to the same dismissal that was subject of the first referral. The contract was not renewed and this (the non-renewal of this contract) was the subject matter of the dispute between the parties. A fixed term contract is exactly what the name implies. This is commonly referred to as “rolling over” the contract. Information sheet by the CCMA on Transfer of Contracts of Employment - When a company is transferred or sold ‘as is’ to a new owner, the employees’ contracts of employment are transferred to the new company without any changes. Thus, it is where employers fill permanent jobs with fixed-term employees that things go wrong. Once the fixed-term contract of employment has been terminated, an Employee can challenge the fairness thereof in terms of Section 186 (1)(a) or Section 186 (1)(b) (i) or (ii), with relief obtainable under Section 193 and Section 194 of the LRA. The employee was employed under two successive 12-month fixed-term contracts. An employee has been employed on a fixed-term employment contract for a number of years. Recently employers have suffered a spate of losses at the CCMA and bargaining councils, in cases relating to fixed-term contracts. On November 15, 2018, Ntsoko was advised that his fixed-term contract would not be renewed for 2019. In Nyama v Twala's Construction (2007, 2 BALR 166), the employer terminated the employee's fixed-term contract before its expiry date. Copyright © 2021. The arbitrator found that Armscor had taken a unilateral approach to terminate the contract, without considering the peculiarities of the situation. In Nyama v Twala's Construction (2007, 2 BALR 166), the employer terminated the employee's fixed-term contract before its expiry date. It is when fixed-term employees perceive that they are losing out on benefits or a job that they are likely to become unhappy. As there was no justification for this, the arbitrator decided the dismissal was unfair and that the employer had to pay the employee the wages he would have earned until the contract's expiry.In Feni v SA Five Engineering (2007, BALR), the employee was hired via six successive one-month employment contracts. Ivan Israelstam is chief executive of Labour Law Management Consulting. South African employers often lose at CCMA and bargaining councils in cases relating to fixed-term contracts. The LRA defines a fixed-term contract that terminates on the occurrence of a specified event; the completion of a specified task or project; or a fixed date other than … The LRA defines a fixed-term contract that terminates on the occurrence of a specified event; the completion of a specified task or project; or a fixed date other than an employee’s normal or agreed retirement age; and. All Rights Reserved. This ruling was upheld by the LC on review. This will usually include an employee going on maternity leave or where an employee provides services to a company, which will only be for a fixed period or at the occurrence of a specific event. This is not a legitimate function of a fixed-term contract. The LRA was amended to include that fixed term contacts cannot be renewed after 3 months, unless one of the exceptions in Section 198B (3) and / or (4) applies. The resultant termination was unfair. It must be recalled that the case that the employees pursued in the CCMA was that they were in fact permanent employees and not employed subject to a fixed term contract and as such were entitled to a retrenchment process upon termination … As soon as the employee started working for the employer without a valid fixed-term contract he became a permanent employee; No valid reason was given for the dismissal; Proper pre-dismissal procedures were not followed; The employer was to reinstate the employee with full back pay. In Abrahams v Rapitrade (Pty) Ltd (2007, 6 BALR 501) the employee was hired on the basis of a contract containing a probationary clause. [18] As to remedy, the arbitrator took into account that the contract had been renewed for three months. If the employer has indeed created a reasonable expectation that the contract would be renewed, this could lead to a dispute for unfair dismissal being referred to the CCMA. Employers often lose at CCMA and bargaining councils in cases relating to fixed-term contracts of employment. Section 198B of the LRA sets out the following requirements relating to fixed terms contracts: The fixed term contract must be in writing. a) An employer who employs less than 10 employees; b) An employer who employs less than 50 employees and whose business has been in operation for less than two years, unless, the employer conducts more than one business; or the business was formed by the division or dissolution for any reason of an existing business; In addition, section 198B does not apply to employees employed on fixed-term contracts, if such fixed-term contracts are considered permissible by any statute, sectoral determination or Collective Agreement. However, if the job itself is genuinely of fixed duration, the employee's legal case will be weakened. If you have any question, please e-mail us without hesitation. For example, employers are fond of employing workers on fixed-term contracts as a way of testing out whether the employee is going to fit into the organisation.This is not a legitimate function of a fixed-term contract. The Labour Appeal Court (“LAC”) dealt with the issue in the recent case of University of Pretoria v CCMA & others (case no. The provisions dealing with fixed-term contracts of employment only apply to employees who earn below the threshold prescribed by the Minister of Labour (R205 433.30 per annum). [13] A fixed term contract means a contract of employment which terminates on the occurrence of a specified event; the completion of a specified task or project; or on a … However, if the job itself is genuinely of fixed duration, the employee's legal case will be weakened. ... offered three year fixed term contracts and that this Court has jurisdiction to Thus, it is where employers fill permanent jobs with fixed-term employees that things go wrong. 24 July 2002, On 3 rd December 2001, 53 employees were employed on a fixed term contract for 3 months, as parking marshals at a company for a project that was due to run for a year. Recently employers have suffered a spate of losses at the CCMA and bargaining councils, in cases relating to fixed-term contracts. On the other hand, a fixed-term job is one where, at the time of the job's inception, it is clear that the job will last for only a limited duration. Have you been unfairly dismissed or unfairly treated at work? Employers tend to employ employees on a fixed term contract for specific reasons. Unions, Employees, Employers, Employer Organisations, Need assistance with demarcation between sectors and areas, Temporary Employer / Employee Relief Scheme, TEMPORARY CLOSURE OF THE CCMA EKURHULENI (BENONI) REGIONAL OFFICE, 2020 VOTE OF THANKS FROM THE CCMA DIRECTOR, The nature of the work must of course be of limited duration. Upon the second date being … The point at which the employer gets caught out is not normally at the date of employment but rather at the stage when the employee loses either benefits or the job itself. Bringing trivial case to CCMA could cost you, CCMA commissioners face off in Labour Court. As soon as the backlog has been cleared, the fixed-term job has come to an end and it is fair to allow the fixed-term contract to expire. A permanent job is one where there is no reason to expect the work to come to an end. A key reason for this is that employers do not understand … If an employer created a reasonable expectation of permanent employment to a fixed term employee, such an employee may refer an unfair dismissal dispute to the CCMA when his/her contract of employment terminates. The arbitrator found that: Mixing up probationary clauses with fixed-term contracts is not the only way in which employers get into trouble. The danger in fixed term contracts comes when the employer continues to renew the contract every time it expires. However, when the employee's performance was found wanting the employer claimed that the employee was on a fixed-term contract and informed the employee that this contract was not going to be renewed. The use of fixed-term contracts of employment appeals to employers for a number of reasons, some of which are legitimate; others are frowned upon by the Labour Courts … The reason is that employers do not … In this case as the duration of the project was not under the employer’s control, there was justification for a fixed-term contract to be used. For example, where a temporary backlog in the collection of debts arises, the employer may hire another employee for two months to help remove the backlog. Labour Guide. However, if the employer has created a reasonable expectation that the contract would be renewed, it could possibly lead to an unfair dismissal dispute at the CCMA. In Feni v SA Five Engineering (2007, BALR), the employee was hired via six successive one-month employment contracts. SYNOPSIS: A fixed term contract is a useful form of temporary employment for many employers. An employee who works on a fixed-term contract in excess of 24 months and is also employed to work exclusively on a specific project that has limited or defined duration, will be entitled to severance pay at the termination of the contract, unless the employer procures alternative employment with another employer on the same or similar terms and conditions. For example, employers are fond of employing workers on fixed-term contracts as a way of testing out whether the employee is going to fit into the organisation. In terms of section 198B, there are two main remedies available to an employee employed on a fixed-term contract – to be deemed indefinite (section 198B (5)) or to be afforded parity (section 198B(8)(a)) after three months. Following a change of ownership, the applicant’s employment contract was terminated, with notice, as his contract made provision for same. In summary then, employers should reserve fixed-term employment contracts for filling fixed-term jobs. But then it allowed the last contracts to lapse even though there … The last fixed-term contract was signed on October 31, 2017 and was to run from January 1 to December 31, 2018. The point at which the employer gets caught out is not normally at the date of employment but rather at the stage when the employee loses either benefits or the job itself. Then the employer terminated the employee's employment and he referred a dispute to the Metal and Engineering Industries Bargaining Council. Distinguishing between legal and illegal use of fixed-term contracts can be tricky, so obtain advice from a reputable labour law expert. Forms: FREE: Preview: Reasonable expectation of renewal of fixed term contracts Category Employment agreements COVID-19 Workplace Compliance Health, Safety and Claims Management Course, 09 & 10 February 2021 (08:30 - 13:00) (Fully Booked), The OHS Act and the Responsibilities of Management, 12 February 2021 (09:00 - 12:00) (Fully Booked), Health and Safety Representative and Committee Training Course, POPIA: Protection of Personal Information Act, The website is not compatible with this IE version,please upgrade to the latest version of Internet Explorer. So, what is the difference between a fixed-term and a permanent job? The use of fixed term contracts of employment appeals to employers for a number of reasons, some of which are legitimate and others of which are frowned upon by the … The principles, processes, procedures and fora were specially created for the enforcement of the special rights and obligations created in the LRA. He was then given work to do for another five months without a contract being signed. What if the other party does not honour CCMA or Bargaining Council award? March 3, 2020 by client-admin in Labour Law. the use of fixed term contracts. Monday, April 16, 2018 - 7:55pm. In Abrahams v Rapitrade (Pty) Ltd (2007, 6 BALR 501) the employee was hired on the basis of a contract containing a probationary clause. Employees cannot keep their employers on a fixed term contract indefinitely. According to sections 193 and 194 of the Labour Relations Act (LRA) the awards and orders that … Section 198A; 198B and 198C come with its own resolution process in the form of Section 198D and allows for Employees to pursue disputes about whether any of these provisions apply to their employment relationship whilst the employment relationship is still ongoing. Put another way, no matter how far you look into the future, the expectation is that this job will always be needed. Reasonable expectation would, however, depend on several factors. As soon as the backlog has been cleared, the fixed-term job has come to an end and it is fair to allow the fixed-term contract to expire. Where employers misuse fixed-term contracts for other reasons, they are risking labour law problems. A permanent job is one where there is no reason to expect the work to come to an end. Fixed-term Contracts of Employment: Ensuring Compliance with the Labour Relations Act. For example, where a temporary backlog in the collection of debts arises, the employer may hire another employee for two months to help remove the backlog. Each consecutive year, the fixed … # THE DEPARTMENT OF JUSTICE and CCMA, Maritz, PSA, Nortier & Duminy. A key reason for this is that employers do not understand the legal purpose of fixed-term contracts and the circumstances under … The situation mentioned above of the temporary debtors clerk serves as a typical example. Parity means that an employee should be treated no less favourably than the permanent employees, doing the same/similar work. In summary then, employers should reserve fixed-term employment contracts for filling fixed-term jobs. One of the 2014 amendments to the Labour Relations Act (LRA) sought to curb the reliance on fixed-term contracts by employers, which took the form of continuous renewals of fixed-term contracts even in cases where it was clear that the nature of the work was of an indefinite nature and permanent employment was more appropriate. Employers must understand that labour law amendments entail that an employer may employ an employee on a fixed-term contract or on successive fixed-term contracts for … Section 198B of the LRA sets out the following requirements relating to fixed-terms contracts: Section 198B is also not applicable to the following employers: Importantly, as previously stated, should an employer not have a justifiable reason for fixing the term of the contract, the employee would be deemed to be indefinite. On the other hand, a fixed-term job is one where, at the time of the job's inception, it is clear that the job will last for only a limited duration. The reason is that employers do not understand the legal purpose of fixed-term contracts and the circumstances under which they are safe to implement or terminate. The situation mentioned above of the temporary debtors clerk serves as a typical example. Should an employer terminate the services of an employee as if the contract was a valid fixed-term contract when it was not, such could be seen as an alleged unfair dismissal. In the context of a fixed-term contract, in seeking appropriate relief, an Employee may also refer an unfair dismissal dispute in terms of Section 186 (1)(a) of the LRA if the employee believes that the employer’s trust in the termination of the employment by operation of law was misplaced (like an employee continuing working even after the contract had ended), or alternatively, the Employee may file for an unfair dismissal claim in terms of Section 186 (1)(b)(i) or (ii) in circumstances where the employer created a reasonable expectation to renew the contract or to offer employment on an indefinite basis. The LRA itself sets out a list of items which are considered justifiable, but this is not an exhaustive list. The amendments to the Labour Relations Act (“the LRA”) in particular section 198B thereof, which amendments came into operation on 1 January 2015, clarifies the legal position regarding fixed-term contracts of employment. Given the fact that the further evaluation of the employee’s performance was the real reason behind entering into the fixed term contract in the first place, the commissioner may have overlooked the real nature of the contractual relationship. It is a contract which runs from one specified date to another specified date. Importantly, the contract must specify or indicate a justifiable reason for fixing the term. Scholtz & others & Dynamic Labour Brokers (2000) to CCMA 7.1.4 . In particular, where fixed term contracts are used by employers to avoid the He was then given work to do for another five months without a contract being signed. This is because the employer may well have the right to treat a fixed-term employee who is in a genuine fixed-term job differently to permanent employees. Categories: | Tags: | View Count: (7292) |. Then the employer terminated the employee's employment and he referred a dispute to the Metal and Engineering Industries Bargaining Council. When an employee’s fixed-term contract has expired, the employee is not automatically entitled to continued employment. Where employers misuse fixed-term contracts for other reasons, they are risking labour law problems. The use of fixed term contracts of employment appeals to employers for a number of reasons, some of which are legitimate and others of which are frowned upon by the Labour Courts and Commission for Conciliation, Mediation and Arbitration (“the CCMA”). Section 198B of the LRA provides that the three-month period may be extended if the nature of the work for which the employee is employed is of a limited or definitive duration or the employer can demonstrate a justifiable reason for fixing the term of the contract. Also, in the above scenario, the fixed-term employee would not expect the employer to put him/her on the company pension fund because, by nature, such funds are for long-term employees. Severance pay includes one week’s compensation for each completed year of the contract. Employment in terms of a fixed term contract (newly concluded or renewed) for longer than three (3) months will be deemed to become permanent employment without a justifiable reason. It is specifically noted that a fixed-term contract means a contract of employment that terminates on - (a) the occurrence of a specific event; (b) the completion of … Recently employers have suffered a spate of losses at the CCMA and bargaining councils, in cases relating to fixed-term contracts. If an employee’s fixed term contract expires the employee is not automatically entitled to further employment. Conn / College Street Primary School 26 CCMA 5.2.126. That is, as long as the fixed-term employee receives the same benefits as his/her permanent colleagues and as long as the employer continues to renew the fixed-term contract, the employee has no legal grounds to complain.It is when fixed-term employees perceive that they are losing out on benefits or a job that they are likely to become unhappy. 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