By lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za.
During the holiday season employers often need to hire temporary staff to fill the gaps left by those on leave. It is most important that the employer makes it clear in writing and by its actions that the contracts of these replacement employees are temporary.
Should the employer, even inadvertently, give the temporary employee a reasonable expectation that he/she will be kept on at the end of the temporary assignment, the employee would have the right to ask the CCMA to force the employer to keep him/her on.
Even if the CCMA does not agree to do so it could order the employer to pay the temp financial compensation. The maximum amount of such compensation could be the equivalent of 12 months’ remuneration.
There are also many cases where employers hire staff via a fixed-term contract despite the fact that the job they have been hired to do is itself permanent. Employers might do this in the belief that this will make it easier to get rid of the employee if need be. However, the LRA effectively prohibits such a practice.
The main purpose of a fixed-term contract is supposed to be the filling of a temporary job. That is, the most appropriate time to hire an employee on a fixed-term contract is when the job itself is expected to come to an end at a specific time. It can be very dangerous to employ an employee on a fixed-term contract when the job itself is permanent (unless the temporary employee is merely standing for the permanent incumbent who is away on leave or who has temporarily been deployed elsewhere). The reason for this danger is that, according to the LRA, if the employer (even inadvertently) gives the employee a “reasonable expectation” that the contract will be renewed on expiry, the CCMA or bargaining council could force the employer to renew the contract.
However, the LRA does not define what constitutes a “reasonable expectation”. This confuses employers and allows arbitrators to make their own decisions as to what does and does not constitute a “reasonable expectation”.
In the case of King Sabata Dalindyebo Municipality vs CCMA and Others (2005, 7 BLLR 696) the employer made a habit of regularly renewing fixed term contracts. But then it allowed the last contracts to lapse even though there was still available work for the terminated employees. The Labour Court found that the employees had a reasonable expectation of having their contracts renewed again and forced the employer to renew the contracts.
In the case of Pretorius vs Sasol Polymers (2008, 1 BALR 10) Ms Pretorius was appointed on a fixed-term contract to act in place of the permanent incumbent. When Ms Pretorius’s contract expired the employer advertised the post to be filled on a permanent basis and refused to renew Ms Pretorius’s contract. She referred an unfair dismissal dispute to the bargaining council because she claimed to have had a reasonable expectation that her contract would be renewed. The arbitrator found that:
- The employer had a policy that required a fixed-term employee occupying a permanent post to be made permanent if management approved.
- The fact that management had advertised the post constituted management approval.
- This policy gave the employee a reasonable expectation of renewal of her contract.
- The employer’s failure to give the employee the permanent post constituted an unfair dismissal, and the employee was retrospectively reinstated.
The above shows that employers should not take a chance when dealing with the termination of employment contracts. Instead, they should obtain expert advice from a genuine and reputable labour law expert.
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