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Abstract
A fixed-term employment contract is an example of atypical or non-standard employment. Fixed-term appointments can have many benefits when utilised for proper and lawful reasons. These contracts are frequently abused, however, by unscrupulous employers and are generally regarded as providing less security to employees than permanent employment. The article considers the general use of fixed-term contracts and addresses selected issues pertaining to the 2014 amendments to the Labour Relations Act 66 of 1995 in as far as these contracts are concerned. The article also considers the potential effect these amendments might have on common historic problems associated with fixed-term contracts and highlights certain unresolved problem areas and uncertainties.
Highlights
South African labour laws are largely premised on the regulation of typical or standard employment relationships.1 Typical or standard work is generally regarded as being the norm and representative of the type of work and work relationships over which labour laws have maximum coverage.2 Though no definition has been formulated to date, typical or standard employment can broadly be defined as the employment of an individual by another person on an ongoing basis, at an agreed rate of pay, and for agreed fixed hours of work per day or week
Could employment contracts contain automatic termination clauses which stipulate that the contract will automatically terminate on a reduction in business for the employer? How broadly can such a reduction in business be defined? Would this not be at odds with the unfair dismissal protection currently provided to employees through section 189 of the Labour Relations Act of 1995 (the LRA)? Would this essentially mean that employers would be able to circumvent the provisions of section 189? While the answer to the latter questions was answered in the negative in the matter of Fidelity Supercare, it does seem as if the door to such an approach might have been opened through the more recent finding in Enforce Security
Most notable are the questions raised earlier pertaining to the lawfulness or otherwise 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
Summary
South African labour laws are largely premised on the regulation of typical or standard employment relationships. Typical or standard work is generally regarded as being the norm and representative of the type of work and work relationships over which labour laws have maximum coverage. Though no definition has been formulated to date, typical or standard employment can broadly be defined as the employment of an individual (the employee) by another person (natural or juristic – the employer) on an ongoing basis (an indefinite basis), at an agreed rate of pay, and for agreed fixed hours of work per day or week. Atypical employment arrangements commonly include casual labour, independent contractors, part-time employees and fixed-term appointments (fixed-term contracts of employment).. Group v Fikile 2017 38 ILJ 1041 (LAC) (discussed in paras 4.2.1 and 4.2.2 below), South African courts seem to be appreciative of the increased need by both employers and employees for flexibility in work arrangements. Fixed-term appointments can have many benefits when utilised for proper and lawful reasons (such as the completion of a temporary project).10 These contracts are frequently abused by unscrupulous employers. The article will argue that some progress has been made towards providing better protection to fixed-term employees as a result of the 2014 legislative amendments to the LRA, some uncertainties over the use of these forms of contracts and some opportunities for abuse still exist
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