Recently, I’ve noticed a misconception that fixed-term contracts are no longer being used. This is particularly in light of the pending judgement of the Constitutional Court in the Assign Services Case. At our recent Mid-Year Labour Law Update, a number of cases regarding the use of these types of contracts came to light. I think that it is valuable to have a look at these to put to rest any notions of fixed-term contracts being an obsolete tool.
Matjila and others/Eco Group Civils (Pty) Ltd and others – (2017) 26 CCMA 7.1.12
In this case, the employer had been appointed by Rand Water to carry out rehabilitation services on Hartbeespoort Dam. In order to assist in delivering these services, the employer took on 120 employees on fixed-term contracts. These contracts were not renewed by the employer when Rand Water withdrew from the project.
The employees took the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) on the grounds that as they had been employed for longer than three months on the projects (they had worked for a total number of eight years on the project albeit under a different employer) that they were unfairly dismissed because they had been converted to permanent employees as an operation of law.
Section 198B of the Labour Relations Act (LRA) allows for fixed-term contracts still to be concluded as long as:
- A valid reason for employing the employees on a limited duration exists,
- The employee is employed for a public works, job creation scheme or an externally funded post.
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.
Conn / College Street Primary School 26 CCMA 5.2.126
The employee was employed under two successive 12-month fixed-term contracts. The contract was not renewed for a third time as the employee was informed that her services would no longer be required. The reason for this is that the school was going to be converted into a special needs school and the institution would not be offering IT which was her speciality. The IT teacher was dismissed owing to operational reasons.
The employee took the employer to the CCMA, stating that she had been unfairly dismissed. The basis for this is that because she had been employed under a fixed-term contract for longer than three months, she contended that she was a permanent employee according to section 198B of the LRA.
The CCMA found that section 198B did not apply. However, it did find that she had been dismissed for operational reasons but had not been consulted with as the law requires an employer to. The employee was thus reinstated with retrospective effect.
Bongani Cele & Others v Strategic Transport & Adcorp Blu (KNDB6812-17)(CCMA)(8 September 2017)
The employees – who were on fixed-term contracts – lodged a dispute at the CCMA to have themselves declared permanent employees. [They were employed by the Temporary Employment Service (TES) and were performing duties for the TES client.] Their grounds for doing this is that they were employed for longer than three months and, according to section 198B of the LRA, employees on a fixed-term contract, who are employed for longer than three months, are automatically made permanent.
However, contracts of employment cannot be transferred without justifiable grounds. In the current case, the employees were employed by the TES and they wanted to be made permanent employees of the TES client. The Commissioner stated that for the employees to be able to take the matter further, they would either need to be dismissed or their contracts would need to expire without renewal. Ultimately, the Commissioner ruled that the CCMA did not have jurisdiction in this case.
At our Annual Labour Law Update at the end of the year, I will discuss similar cases to have come through the labour law forums between now and the end of the year. For more information, please contact your nearest Global Business Solutions office.
Kind regards
Johnny
