Fixed-term contracts are commonly used in employment, with both employers and employees agreeing to the temporary nature of the arrangement. However, despite entering into these agreements with a clear understanding, employees often argue that the natural conclusion of such contracts amounts to unfair dismissal or even permanent employment. Surprisingly, many of these claims are valid.

In the case of November v Kele Mining Solutions and Others (JR217/23) [2024], the Labour Court, in its decision on 31 July 2024, emphasized that employers and CCMA commissioners should not solely rely on the explicit language of termination clauses in Fixed-term contracts. The Court reinforced that parties cannot contract out of the employee’s protection against unfair dismissal, regardless of any “automatic termination” provisions in the contract. The Court also outlined a comprehensive approach for determining whether an automatic termination constitutes a dismissal:

1. Determine the Trigger Event: The first step is to establish if the ‘trigger event’ that would activate the automatic termination clause has occurred.
2. Examine the Employment Contract:
   • Is the contract for a fixed period?
   • Is the duration tied to the completion of a specific task or the occurrence of a particular event that can be objectively verified?
   • Does the contract attempt to circumvent statutory protections against unfair dismissal or the right to challenge the fairness of a dismissal?
   • Is the termination based on the client’s discretion or decision?
3. Assess the Application of Section 198: Determine if the case falls under Section 198, 198A, or 198B of the Labour Relations Act (LRA). These sections may imply permanent employment, which would support a claim of dismissal.
4. Review the Events Leading to Termination: Consider what events triggered the termination and whether these are justified by sound economic and commercial reasoning.
5. Evaluate the Impact on Statutory Rights: Analyse whether enforcing the termination clause would unfairly infringe on the employee’s statutory rights, including the right to fair labour practices and the right to challenge a dismissal.
6. Consider Additional Factors:
   • Did the employee reasonably expect the contract to be renewed?
   • Was the decision to terminate influenced by bias or an improper motive?
   • Were there alternative positions available, or was the employee unfairly selected for termination?

Ultimately, the Court concluded that after evaluating all relevant evidence and applying the appropriate value judgment, a commissioner must decide whether the employee has proven the existence of a dismissal.

Conclusion

Consulting with labour experts, such as WLC Labour, can help ensure compliance with applicable legislation.

Disclaimer: This content is intended for informational purposes only and does not constitute legal advice.