What Is a Fixed Term Contract in South Africa

Van der Bank CM “Non-renewal of fixed-term contracts: a critical analysis of the award” 2008 IJLMA 158-167 Finally, if the fixed-term contract of a low-income employee applies to a particular project (which is one of the “legitimate reasons” listed for longer periods) and which exceeds a period of 24 months, that employee is entitled to statutory severance pay upon termination of the contract, unless the employer offers the employee employment or finds employment for the employee with another employer. Severance pay is calculated at the rate of one week`s pay for each year of service. The practice is reprehensible and employers who exploit employees in this way should be shamefully left in abeyance and forced to close their doors. This is nothing less than overt fraud at the expense of the employee. A fixed-term contract is exactly what its name implies. It is a contract that runs from a certain date to another specified date. With the second appointment that is made, the contract (and therefore the employment relationship) is terminated and the employee joins the ranks of the unemployed. In response to Boardwalk`s termination of the business contract with the employer, the employer gave the employees one month`s notice of their employment contract. The CCMA found that the employment contracts had simply been terminated as of right and that no dismissal had taken place. Following the review, the LC reversed the CCMA`s judgment, finding that the workers had been dismissed and that the dismissals had been procedurally and substantially unfair. (a) an employer has terminated the employment relationship with or without notice; In determining whether there had been a dismissal, LAC found that, on the basis of the facts, it was clear that the termination of the commercial contract by the client had been the direct reason for the termination of the employees` employment contracts. The court found no reason to believe that the termination of the commercial contract was made with the intention of helping the employer free itself from the employees. LAC was also unable to find any evidence that there had been a clandestine decision by the employer to dismiss the workers.

[103] LAC concluded that:[104] Limited duration; non-standard employment; employment contracts; automatic termination; fixed period; ยง 186(1)(b); Industrial Relations Act; section 198B; Amendments to the 2014 Act. Employers call these people “independent contractors,” but they are not even within 100 miles of this classification. Some employers even remove P.A.Y.E. and medical assistance and pension contributions and U.I.F. contributions from the wages of these “independent contractors,” but when it comes to cuts, they deny the “contractor” severance pay “because he is a contractor and not an employee,” and when it comes to dismissal, they simply terminate the contract. As highlighted in this article, there are still gaps and uncertainties in the current legal framework related to the use of fixed-term contracts. The most notable are the questions previously raised regarding the legality or non-legality of automatic termination clauses, in which the termination of employment contracts is linked to the termination of a commercial contract between the employer and a third party. [133] As set out in section 4.2.2, LAC noted in the recent performance security case that the existence of an automatic termination clause resulted in the existence of a fixed-term employment contract.

[134] Although the exact date of termination of the employment contract is uncertain, it is certain that the contract terminates automatically when the commercial contract between the employer and the client ends. However, LAC`s conclusion is questionable, particularly with respect to the impact that this conclusion could have on the applicability of section 189 of the LRA. It is regrettable that with the amendments made to the LRA in 2014, the legislator did not take the opportunity to address the legality of such automatic termination clauses. [135] Shortly after the LC`s judgment in Sindane, the LC again reached a different conclusion in Mahlamu v. Conciliation, Mediation and Arbitration Commission. [93] In Mahlamu, the employee was housed by the employer as a security guard on the premises of one of the employer`s clients. The employee`s contract with the employer provided that the contract ends automatically with the termination of the commercial contract between the employer and the client or when the client no longer needs the employee`s services for any reason. Approximately five months after the start of the employment contract, the employer informed the employee that following the termination of the commercial contract by the customer, the employee`s services would no longer be required. The employee was informed that his contract had been automatically terminated in accordance with the terms of his contract. [94] The purpose of this section of the Industrial Relations Act (GRA) is to prevent unfair employment practices by the employer . . .