Home
/
Our Insights
/
Article Detail
/
Home
/
Home
|
Login
Our Team
Our Expertise
Our Insights
BOND CALCULATOR
SUBSCRIBE
Our Team
Our Expertise
Our Insights
You can share this article in the following networks2:
Does working beyond expiry date in fixed-term contract constitute permanent employment?
15 January 2021
1101
I was employed on a fixed-term contract from 15 July 2013 – 14 July 2014. When my contract expired, I continued working in my position and performing the same tasks. The expiration of my contract was never made an issue. I was, however, dismissed two years later due to the expiration of my contract. Was I a permanent employee? Was my dismissal fair? What is my recourse?
In
Department of Agriculture, Forestry and Fisheries v Teto and Others
, the Labour Appeal Court (“LAC”) considered whether the termination of employees initially engaged on fixed-term contracts constituted a dismissal on the basis that the employees had become indefinitely employed when they were permitted to work beyond the expiry date in their fixed-term contracts.
In this case, the employees had been engaged on fixed-term contracts for the duration of one year but had continued to work for the employer in their same positions performing the same tasks for another two years before their services were eventually terminated. The General Public Service Sectoral Bargaining Council found that the employees were permanent employees and had been unfairly dismissed. The employees’ reinstatement was ordered.
On review, the Labour Court held that:
1.
Although there was an employment relationship between the employer and the employees, the employees were not permanent employees.
2.
The Court further held that, the employees had been treated unfairly as their services had been terminated abruptly and as such compensation equal to up to 12 months’ remuneration was ordered.
3.
It set aside the award of the bargaining council and awarded payment of compensation equal to 12 months’ remuneration as opposed to reinstatement.
On appeal, the employer argued that it was not the employer of the employees at the time of the termination as they were temporary employment service employees. It further alleged that on the expiry of the fixed-term contracts the employees were no longer employed by the employer and instead became employees of an agency, which paid their salaries. The evidence of the employees was that on the expiry of the fixed-term contract, they had been informed that they would continue in their same positions on an indefinite basis, but their salaries would no longer be paid through the government payroll system. Instead, they would be paid through a service provider. The employer paid the agency, and, in turn, the agency paid the employees. The reason for this was that the employees’ positions did not appear on the organogram of the employer. Importantly, there was no employment contract entered into between the employees and the agency, the employer made arrangements for their travel to work, and paid daily subsistence allowances.
The Labour Appeal Court held that:
1.
If an employee is initially employed on a fixed-term contract and continues to work for the employer after the fixed-term contract ends, then the contract is deemed to be tacitly novated into that of permanent employment.
2.
The bargaining council had reached the correct conclusion when finding that the employees had become permanently employed and were permanent employees on their dismissal.
3.
The Court acknowledged that some of the terms and conditions of the employees’ employment had changed, for example, there had been a reduction in remuneration, but it was held that this factor is not decisive.
4.
The employees remained employed by the same employer, albeit on different terms.
5.
It would generally be assumed that the parties intended for the new contract to be of an indefinite duration unless there were facts to the contrary.
Thus, the appeal was dismissed.
The employees cross-appealed against the Labour Court’s judgment alleging that they should be reinstated as opposed to being awarded compensation. Regarding the cross-appeal, the Labour Appeal Court held that reinstatement is the default remedy if a dismissal is substantively unfair unless there are exceptional circumstances that warrant the granting of compensation instead. The employer had not made out a case that any exceptional circumstances exist and as such the cross-appeal was upheld. The employees were subsequently reinstated.
The above should by no means constitute legal advice. It is always best to consult an attorney when faced with this situation to advise on the best possible way forward and to stay up to date with relevant legal precedents.
Previous
When is a consumer entitled to a refund?
Next
Client’s rights to cost estimates when instructing legal practitioners
Tags:
Contract
,
Dismissal
,
Employee
,
Employer
,
Employment law
,
Labour law
Share:
Talk to us
Get in touch with us to discuss how we can help you with your challenges
Get in touch
Popular Insights
Wrongfully Arrested by the Police: How Much Money Can You Claim?
Understanding Living Wills
Understanding Tenant Rights to Property Possession
Surrogacy and the Legal Process
Related Insights
Don’t lose your title deed!
When should you register your B-BBEE transaction with the B-BBEE Commission?
Health and safety and the employer
Recent Insights
Don’t lose your title deed!
When should you register your B-BBEE transaction with the B-BBEE Commission?
Health and safety and the employer
You can share this article in the following networks:
Offices
+27 21 840 8000
law@mblh.co.za
Facebook
Back to top