5 important factors to remember when employing fixed term contract staff

Employers must take the following factors into account when employing fixed term contract staff:

  1. The Labour Relations Act, 1995 (“LRA”) was amended earlier this year in order to regulate the use of fixed term contracts (“FTC’s”).
  2. The amendments to the LRA apply only to employees who earn less than R205 433.30 per annum(“earnings threshold”).
  3. A FTC cannot be for longer than 3 months unless a justifiable reason exists. Justifiable reasons include:
    • 1if the employee is employed to do the work of another employee who is temporarily absent from work (ie sick leave or  maternity leave);
    • if there is a temporary increase in the workload (provided that the contract does not exceed 12 months);
    • if the employee is a foreigner and on a work permit;
    • if the employee is employed on a specific project which has a limited duration; or
    • if the employee has reached the agreed or normal retirement age.
  4. If in the absence of a justifiable reason, a FTC exceeds 3 months, the employee will, for the purposes of the LRA, be deemed to be a permanent employee.
  5. Employees employed on FTC’s for longer than 3 months are entitled to the same benefits as permanent employees.

There is no doubt that going forward, the Department of Labour and CCMA will scrutinize the use of FTC’s in circumstances where employees earn below the earnings threshold.

Siobhan Leyden: Shepstone and Wylie Attorneys