LABOUR LAW

Fixed term contracts

Be careful to enter into fixed term contracts with employees.  The new Labour Law in SA, which took effect in early 2015, provides that fixed terms contracts can only be entered into where the employer has a justifiable reason why it is a fixed-term contract.  "Justifiable reason" means a good reason, in layman's terms.

Employers have been hiding behind fixed-term contracts for decades as they did not wanted to pay benefits in terms of the employment of employees, such as medical, leave etc.  At some stage the labour brokers were used to fulfill the obligations mentioned.

But labour brokers have now been restricted vastly in their role in the labour law and the obligations, as referred to above, have been returned to the employers.

The situation now is that employers may only enter into fixed-terms contracts where the end date is justifiable.

Further to this, the employer now runs the risk that employees do not only hold the expectation that their fixed-contract should be renewed on the same terms if their fixed-term contracts have been continuously renewed.  In terms of the new labour laws of South Africa they now have an expectation of permanent employment!