LEGISLATION PAGE 38
RELATIONS LRALABOUR
ACT
Fixed-Term Contracts and the amended LRA – What to do ?
With the inception of the Labour Relations Amendment Act 65 of 2014 on 1 January 2015 , new protection is afforded to employees on fixed-term contracts .
The amendment Act ’ s provisions , which now regulate fixed-term contracts of employment , are provided for in the new section 198B . This section does not apply to employers who employ fewer than 10 employees , or to employers who employ more than 50 employees during the first two years of the employer ’ s business , or to employees earning more than the statutory remuneration threshold of R 205 433.30 . It also does not apply to employees employed in terms of a fixed contract which is permitted by any statute , sectoral determination or collective agreement .
An employer is permitted to employ an employee to whom the new section applies on a fixed-term contract or successive fixed-term contracts for up to three months . ( The meaning given to the word “ successive ” will be critical – there is no specific explanation or provision to the effect that fixed-term contracts may or may not be interrupted by a certain period of time when calculating the three-month period . The probable interpretation will be that the collective duration of separate fixed-term contracts will be utilised to determine whether the three-month period has been exceeded .)
The employer may employ the employee on a fixed-term contract or successive contracts for longer than three months only if the nature of the work for which the employee is employed is of a limited or definite duration or if the employer can demonstrate any other justifiable reason for fixing the term of the contract . ( This should surely read “ contract or contracts ”). Section 198B ( 4 ) sets out a non-exhaustive list of justifiable reasons for fixing the term of the contract .
Employment in terms of a fixed-term contract concluded in contravention of section 198B is deemed to be of indefinite duration , unless the nature of the work is of a limited or definite duration or the employer can demonstrate any other justifiable reason for fixing the term of the contract .
An employee employed on a fixed-term contract ( this should no doubt read “ contract or contracts ”) for longer than three months must not be treated less favourably than an employee employed on a permanent basis performing the same or similar work , unless there is a justifiable reason for different treatment . This provision on treatment applies three months after commencement of the amending Act , i . e . on 1 April 2015 , for fixedterm contracts of employment entered into before the commencement of the amendment Act . ( One would think that this provision on treatment would only become effective after the employee is deemed to be permanent , or at least after any longer justifiable duration , as is permitted – but that is not the way the relevant subsection is worded .)
Employees employed on fixed-term contracts of employment must now be afforded an equal opportunity to apply for vacancies . Section 198C also introduces new provisions in respect of part-time employees .
There are therefore a number of urgent considerations to be dealt with by employers