There are instances in which the services of employees are required not only for a specific period but also for a specific occasion. The limited duration of the need of employees would necessitate that they be employed on a fixed-term contract, which should be in accordance with section 198(B) of the Labour Relations Act (LRA).

Section 198B(3) of the LRA allows employers to enter into successive fixed-term contracts with employees if the employer can demonstrate that the nature of the services is for a limited duration or provide for any other justifiable reason which warrants the need for it.

Employers must note, however, that s198B(4) of the LRA requires a justification for placing employees on fixed-term contracts and provides a list of scenarios deemed justifiable. For seasonal employees, s198B(4)(f) of the LRA specifically makes provision for them, stating that one of the justifiable reasons for placing employees on fixed-term contracts will be if they are employed to perform seasonal work.

The Labour Court case of AMCU v Piet Wes Civils CC stated the following:

“The very purpose of the enactment of s198B was to provide security of employment, except in circumstances where a fixed term contract is clearly justified, such as seasonal work or employment to carry out a specific task or to do so within a specified period.”

Although the Court alluded to seasonal work, in this instance, the Court held that the employer failed to demonstrate a justifiable reason for placing the employees on a fixed-term contract. Employers must bear in mind that, in any proceedings, the onus to establish the justifiable reason for implementing a fixed-term contract falls on their shoulders. This duty is conferred upon employers on s198B(7) of the LRA.

Should an employer enter into a fixed-term contract with an employee in contravention of s198B(3) of the LRA, then according to s198B(5), the contract will be deemed to be for an indefinite period. Employers must note that a fixed-term contract that continues for more than three (3) consecutive months without a valid reason, as stipulated in s198B, will deem that employee a permanent employee in terms of the law. Therefore, it is advised that employers establish solid grounds for placing employees on fixed-term contracts.

Article by Zothani Maseko

Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)