Page 89 - Q&A

What is the labour position with historical
fixed-term contracts?

January 2020
“I work for a construction company and was appointed in 2014 on a fixed-term
contract of two years which would automatically renew annually thereafter if
the project work is not completed. The project is ongoing and so my contract
keeps renewing, but I don’t get the same benefits as the other workers in the
office that are permanently employed and have been there shorter than me. I
know I signed a contract, but it does feel like I’m being prejudiced because I’m
on a fixed-term contract.”

The position regarding fixed-term contracts is now largely regulated by
Section 198(B) of the Labour Relations Act 66 of 1995. Essentially, these
provisions, although only applying to employees that earn less than the
set threshold determined by the Minister of Labour, are aimed at protecting
vulnerable employees who are denied job security and benefits by being
placed on countless fixed term contracts that are successively renewed without
justifiable reason.

Section 198(B) essentially prohibits persons after 1 January 2015, from being
placed on fixed-term contracts or successive contracts for longer than three
months without justifiable reasons. Section 198(B) additionally provides
protection to such employees by stating that they are to be treated no less
favourably than permanent employees performing the same or similar work,
again, unless there are justifiable reasons for the different treatment. Labour
The question of whether Section 198(B) applies to your position becomes
important when considering that your fixed-term contract was concluded in
2014, prior to the commencement of Section 198(B). Our Labour Appeal Court
recently held that Section 198(B) does not apply retrospectively to fixed-term
contracts that were concluded before its commencement and that endure
after the commencement of Section 198(B) without renewal. This does raise the
question whether your contract’s automatic renewal in accordance with its terms
would amount to renewal or not. But in principle, the provisions of Section 198(B)
would not apply retrospectively to your fixed-term contract, unless the renewal
thereof could be construed as creating a new fixed-term contract which would
be subject to Section 198(B).
Importantly, though, the provisions of Section 198(B) that relate to similar
treatment has been held by the Labour Appeal Court to have retrospective
application in the sense that it applies to all fixed-term contracts irrespective of
their date of conclusion. This means that unless there are justifiable reasons for
your treatment and benefits being different to other employees in the office that
do the same or similar work to you, you may be justified in demanding to be
treated on the same terms as these employees.

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