A fixed-term employment contract is a contract in terms of which an employee is afforded employment for a fixed period of time, on certain terms and conditions. The contract and the employment relationship then automatically expire on the agreed-upon date.
In this part we will discuss the question whether an employee, whose contract had expired, has a claim against the employer for re-instatement.
This was the question that had to be dealt with by the Labour Court in MAOKO v METAL AND ENGINEERING BARGAINING COUNCIL & OTHERS 2010 ZALC 101.
The facts of the case can be briefly summarized as follows: The Applicant approached his former employer, the Third Respondent (‘Henlec’), for work as he was currently working as a security guard and not earning enough to support himself and his family. Henlec offered him work as a trainee guillotine
operator on a six month contract. The Applicant understood that this would be made permanent based on his performance. He started on 18 June 2007 and resigned from his previous employment. At the end of this period, instead of being made permanent he was asked to sign another contract for three months.
Although he initially refused, the employer persuaded him to sign that contract as well. He says he was reluctant to sign it, but felt he had no choice. The new contract ran from 14 January 2008 to 20 March 2008. Towards the end of that contract, the employer’s attitude towards the Applicant became abusive. He
entered another six month contract which ended on 24 September 2008. He was advised that this was the last contract he would be on. The Applicant interpreted this to mean that he would be permanently employed thereafter. That contract expired and he carried on working, but in January 2009 the Applicant
was given another contract to sign which ran from 12 January to 9 April 2009. He signed this despite his previous belief that he ought to have been permanently employed at the end of September 2008.
The employee then referred a dispute to the CCMA, claiming re-instatement on a permanent basis and at a higher remuneration rate.
The essence of the arbitration award is that the arbitrator found that the Applicant had knowingly entered into the fixed term contracts and if he complained that he had been forced to do this, that issue was not one the arbitrator could investigate, because only the Labour Court could deal with the interpretation of the contract. Having found that the Applicant knowingly undertook engagements on a fixed term basis, the arbitrator concluded that the Applicant had not been dismissed as he knew the contract was due to end on 9 April 2009.
In terms of section 186(1)(b) of the Labour Relations Act, a dismissal will occur if “an employee reasonably expected the employer to renew a fixed term contract of employment on the same or
similar terms but the employer offered to renew it on less favourable terms, or did not renew it”.
The Labour Court decided that whether or not a reasonable expectation is created depends on the facts of the case. Factors which will be considered are the actual terms of the contract, the history of previous renewals. The conduct of the employer in dealing with the relationship, what the employer said to the
employee at the time the contract was concluded or thereafter, and the motive for terminating the relationship have been cited as factors to be considered when determining whether an employer implied that a fixed-term contract would be renewed.
In this instance, the employee did not rely on the provisions of Section 186(1)(b) of the LRA and therefore did not claim that there was a reasonable expectation of renewal of the contract, instead he claimed he had an expectation of permanent employment.
The Labour Court found that the first difficulty with this is that his own action in signing the short term contract in January 2009, runs contrary to his claim that he was permanently employed after September 2008. Secondly, the courts have generally been reluctant to accept that the definition of a dismissal in section 186(1)(b) also includes cases where the employee did not have an expectation of renewal of a fixed term contract but had an expectation of permanent employment.
The Labour Court confirmed the arbitrator’s decision that the employee had not been dismissed, and that the employment contract had expired.
Even if the employee had relied on the provisions of Section 186(1)(b) of the LRA, it is my submission
that he would not have succeeded with his claim.