EMPLOYER X employs all staff on fixed term contracts of three months at a time, after which contracts are normally renewed. During the 9th month of employment Employer X is involved in an argument with an employee, Nomsa Mokwena. He informs Nomsa that the contract will not be renewed. Nomsa alleges that this is unfair dismissal, as she had an expectation that the contract would be renewed and the employer did not follow proper procedures. Does she have a case?

The Labour Relations Act says the non-renewal of a fixed term contract or the offer to renew it on less favourable terms can be regarded as a dismissal. This would be the case if the employee reasonably expected that the contract would be renewed.

So what is a reasonable expectation? The Labour Court and the CCMA have often grappled with this question. Ultimately it depends on the circumstances of the case. But certain principles have been established. Amongst other things, one would look at the wording of the contract, the underlying reasons for having a fixed term contract, what the employer said to the employee at the time of concluding the contract, the number of times the contract was renewed, the conduct of the employer and the circumstances surrounding the termination.

Examples of where fixed terms contracts would be quite legitimate, include seasonal fluctuation in workload, absence of a particular staff member for reasons such as maternity leave, etc. Where an employer uses fixed term contracts as a means to assess employee performance or as a backstop in the event of employee misconduct, the employer will most certainly face problems if challenged upon the termination of the contract.

Getting back to Nomsa's case: Although the onus would be on Nomsa to prove that she had a reasonable expectation that her contract would be renewed, she is likely to succeed. If the employer wanted to dismiss her after the argument, the employer would have had to follow procedures. Failing to do so would at least be procedurally unfair. The basic principle is therefore not to enter into or terminate fixed term contracts for the wrong reasons.

Jan Truter, www.labourwise.co.za

Back to www.bizland.co.za