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September 4, 2019
Learnership Agreements
September 4, 2019

The latest case law updates to fixed-term contracts

 • By : Jonathan Goldberg | Global Business Solutions

The addition of section 198A-D to the Labour Relations Act (LRA) – deals with fixed term contracts, temporary employment services and part time employees – during the 2014 round of amendments these have been debated a lot in our courts over the past number of years.
The most notable of these cases was Assign Services (Pty) Limited v National Union of Metalworkers of South Africa and Others (CCT194/17) [2018] ZACC 22; [2018] 9 BLLR 837 (CC); (2018) 39 ILJ 1911 (CC); 2018 (5) SA 323 (CC); 2018 (11) BCLR 1309 (CC) (26 July 2018). In this matter, the Constitutional Court ruled that TES employees earning under the Basic Conditions of Employment Act (BCEA) threshold (which is currently R205 433 per annum) and who work for longer than three months will be deemed to be employed solely by the Client (where they are placed) for the purposes of the LRA only.
The matter of Nama Khoi Local Municipality / IMATU obo Raymond August is another case in which fixed-term contracts have come to the fore.

The applicant had employed the employee on two back-to-back fixed-term contracts. Both of these contracts were three months long.
When the second fixed-term contract expired, the employee was given a notice that indicated his temporary employment had finished.
The Independent Municipal and Allied Trade Union (IMATU) referred a dispute to the South African Local Government Bargaining Council (SALGBC) in terms of under s198D of the Labour Relations Act (LRA). IMATU aimed to have the employee be re-appointed on an indefinite contract. In its award, SALGBC found that the employee had indeed been employed for an indefinite duration. It ordered that the employee be reinstated.
The applicant lodged review proceedings in the Labour Court. The grounds for the case were that:
The relief under s198D relates to the interpretation and application of s198B,
However, it does not include the capacity to reinstate an employee whose services have been terminated.
In addition, IMATU never requested reinstatement. It only asked for a declaration that the employee’s contract was indefinite. The review was based on the fact that the SALGBC had acted ultra vires. (In other words, the SALGBC had acted in an area where they were not supposed to.) This is because reinstatement is a remedy for unfair dismissal – which was not the case before the SALGBC.

The Labour Court highlighted that s198B has its own process for dispute resolution:
This section makes it possible for employees to refer disputes to the courts while the employment relationship is still in place. (This is in order for the status of the employment relationship to be determined as well as for a declaration that the fixed-term contract is indeed an indefinite one.)
The Labour Court was of the opinion that s198D was proactive because it entitles employees to correct the state of affairs while the employment relationship is still intact.
The Labour Court highlighted that separate dispute resolution processes exist under s191 and s198D of the LRA:
The s198D process was not intended to apply after employment is terminated. This is because the section does not grant relief similar to s193 and s194, for example possible retrospective relief or compensation. These two measures of relief only apply to disputes relating to unfair dismissals and unfair labour practices.

Given the facts, the Labour Court set aside the arbitration award.

If your business is heavily involved with temporary employment services, you need to take heed of decisions and have them at your fingertips. This is because in the midst of CCMA or bargaining council proceedings, there’s a tendency for emotions to run high and for people to say things that they should not. Thus when you step into such a forum, you need to have your facts before you so that you can refer to them at a moment’s notice.

Your business needs flexible staff. A mixture of that between temporary employment services, fixed term contracts and part time employees will ensure your survival through turbulent economic times. The understanding of what the legislation amendments mean and the courts and arbitration interpretation is crucial for your business. There is no problem using the combination of flexible staff as above but it is how you utilise it that provides the ultimate value to the organisation and it gives the flexibility needed in very uncertain and turbulent times.

Join me for the Annual Labour Law Update seminar on 5 November in East London, where I will be unpacking governing Fixed-term contracts and Temporary Employment Services, the latest labour law amendments, arbitration awards, as well as Labour Court and Constitutional Court rulings.