GOVERNANCE
FIXED-TERM
CONTRACTS
&
THE AMENDED LABOUR RELATIONS ACT
THE INCEPTION OF THE LABOUR RELATIONS ACT 65 OF 2014 ON 1 JANUARY 2015 PROVIDES NEW PROTECTION TO EMPLOYEES ON FIXED-TERM CONTRACTS .
The Amendment Act ’ s provisions that now regulate fixed-term contracts are provided for in the new Section 198B . This section does not apply to employers who have fewer than 10 employees , nor to those who employ more than 50 employees during the first two years of the business ’ s existence , nor to employees earning more than the statutory remuneration threshold of R205 433,30 . It also does not apply to employees on a fixed contract that 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 that will be 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 .
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 individual employed on a fixed-term contract for longer than three months must not be treated less favourably than an employee 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 Amendment Act , i . e . on 1 April 2015 , for fixed-term contracts of employment entered into before the commencement of the Amendment Act . One would think that this provision 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 sub-section is worded .
Those employees on fixed-term contracts of employment must now be afforded 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 who utilise fixed-term contracts of employment . These considerations will include assessing what justifiable reasons might exist to extend the duration of fixed-term contracts ( for example , temporary increases in the volume of work or employment on a specific , limited project ), analysing the terms and conditions of employment of fixed-term employees , determining the possibility of concluding a collective agreement with the trade union , and analysing fixed-term contracts of employment entered into prior to the Amendment Act .
It should also be borne in mind that the existing provisions on the law of dismissal and the concept of reasonable expectation of renewal of a fixed-term contract of employment remain , and in fact now extend the expectation to include an expectation of permanent employment .
Other questions will relate to the right of the employer to employ the employee on a fixed-term probationary period and the existing provisions of certain bargaining councils on the utilisation of fixed-term contracts , which may differ , for example , in respect of the permissible duration of fixed-term contracts .
Gavin Mulvenna
PAGE 34