In recent times there have been many amendments to our labour laws regarding fixed-term contracts and temporary employment services. Employers can fix an employee’s employment period by stating that the individual is employed for a specific period of time or for a specific project.
Should an employer require the fixed-term employee to work for a longer period than that stipulated in the original fixed-term contract, the employer can renew the said fixed-term contract by way of extending another fixed-term contract to the employee.
In practice, however, it often arises that an employer allows a fixed-term employee to work beyond the fixed-term or date as specified in the contract, the question is then what happens in a scenario such as this?
To illustrate the above scenario, a practical example is set out hereafter. Let’s say that a Building Contractor (the employer) estimates that he would need Mr. Painter (the fixed-term employee) for a period of 3 months to complete the necessary work to be done on-site. As a consequence, the Building Contractor and Mr. Painter have signed a fixed-term contract which stipulates that Mr. Painter will render services to the Building Contractor as a painter from 1 January up until 31 March.
The Building Contractor’s 3-month estimation was too short a time to complete the work which Mr. Painter was appointed to do and as such the Building Contractor needs Mr. Painter for seven more days to complete the necessary work.
Mr. Painter proceeds with work up until 7 April without concluding another fixed-term contract with the Building Contractor. On 7 April the Building Contractor informs Mr. Painter that this is his last day of work. Mr. Painter feels aggrieved by this and refers the matter to the CCMA as an unfair dismissal dispute.
Section 198B of the Labour Relations Act states that an offer to employ an employee on a fixed-term contract or to renew or extend a fixed-term contract, must be in writing and state the reasons for fixing the contract and the reason for the extension. Further to this, John Grogan in his book, Workplace Law – 12th Edition, states that a contract of employment may arise tacitly if an employer permits a person to work for some time without concluding an express contract.
The result therefore when applying S198B to the facts is that if the Building Contractor allows Mr. Painter to work for seven days after the 31st of March without concluding another fixed-term contract, a contract of employment may arise tacitly.
If Mr. Painter works for more than 24 hours in a month in the absence of a fixed-term contract which stipulates a start and end date, the Basic Conditions of Employment Act will apply to Mr. Painter and Mr. Painter can be deemed to be an employee of the Building Contractor. In such an instance, the Basic Conditions of Employment Act will regulate the basic terms and conditions of employment in the absence of a written permanent or fixed-term contract of employment.
As soon as Mr. Painter is deemed to be permanently employed, the only ways in which the Building Contractor would be able to terminate the contract is by way of following the normal dismissal process or if Mr. Painter resigns of his own accord or if the Building Contractor retrenches Mr. Painter.
The consequences of allowing Mr. Painter to continue working after 31 March in the absence of a signed fixed-term contract could have a detrimental impact on the business of the Building Contractor as he might be unwittingly employing individuals on a permanent basis without this being his intention.
It is therefore of utmost importance that every employer should ensure that they understand the nature of a fixed-term contract and are well informed of the consequences if an employee works past the fixed date as stipulated in the fixed-term contract itself.
If ever in doubt, employers should consult with their labour law advisors before embarking on implementing and/or renewing fixed-term contracts as each case has its own merits.
Article by: Meghan Louw
Dispute Resolution Official – Port Elizabeth