“Temporary employment – maybe not that temporary after all.”

“Temporary employment – maybe not that temporary after all.”

The amendments to South African Labour Legislation, especially contained in Section 198 have been the subject matter of much heated debate and criticism the last couple of months, as the Labour Relations Amended Act 6 of 2014, came into effect on the 1st of January 2015. In some cases referred to the CCMA, the Respondent parties even gave notice in the media that rulings will be taken on review in the South African Labour Court.

Most employers are shocked when being informed that their “temporary employee” is not actually temporary when considering the new legislation. This causes much confusion as most employers are under a false impression that if they tell the employee: “I only need you for a while”, they are covered.

Prior to the amendments, the protection these employees on fixed-term contracts were provided by Section 186(1)(b) of the Labour Relations Act were the right to sue for unfair dismissal based on the fact that the employee had a reasonable expectation that the fixed-term contract would be renewed on the same or similar terms.

After several years of referrals and conflicting decisions, the period for which employers may employ an employee on a fixed-term contract is now limited as these employees are also performing temporary service. Section 198B(1) defines a fixed-term contract as a contract which expires upon:

  1. The occurrence of a specified event;
  2. The completion of a specified task or project;
  3. A fixed date, other than an employee’s normal or agreed retirement age.

Section 198B(3) allows employers to employ employees on fixed-term contracts or successive fixed-term contracts for longer than 3 months provided that you have a justifiable reason for fixing the term of the contract.

Employers, who employ employees on successive fixed-term contracts, without considering the latest legislation, should be aware that such employment is deemed to be of an indefinite duration and the employees are then considered permanent.

According to an article published by Johann Scheepers, CCMA Commissioner, commissioners of the CCMA in the analysis of cases involving fixed-term contracts would firstly determine if the fixed-term contract is valid. The following basic requirements will apply for a valid fixed-term contract:

  1. The fixed-term contract must be in writing;
  2. The fixed-term contract must state when the term expires:

            a)  Upon a specified event;

            b)  Upon completion of a specified project or task or;

            c)  On a fixed date other than the retirement age;

3.  Lastly if the fixed-term contract is longer than three months or if the employee has   previously been employed on a fixed-term basis, the fixed-contract must state the reasons therefore.

If these requirements are not met then the contract is not a fixed-term contract and the employment is of indefinite duration. Indefinite employment may only terminate should a fair reason therefore exists, whereas a fixed-term contract terminates on the occurrence of a specified event, task or date.

However to accommodate new and small businesses, the section does not apply to employers that employ less than 10 employees, employers that employ less than 50 employees and whose business has been in operation for less than two years.

What is clear is that all the parties in the labour arena will have their own challenges – arbitrators will face a difficult task to handle these issues between employers and employees, and employers will probably be likely to decrease the use of these types of employees in order to avoid the uncertainties of the new litigation.

We are hopeful that employers and arbitrators will master the new legislation in order to avoid a further increase in unemployment.

As specialists in the field, we are here to assist employers with any uncertainty regarding temporary employment in order to avoid a ruling in your employees favour.

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