Amos is a fixed-term employee. When his employer gave him a “memo of termination of contract”, he refused to sign it. The employer then said he must resign. Amos feels the employer is trying to get away with something shady and unfair. Is he right? Scorpion Legal Protection takes a look at his case.

It is important that fixed-term contracts specifically state length of service, the start date and the end date of the contract. When the contract ends, the employer must give the fixed-term employee at least one month’s notice informing them of the date of termination and confirmation that the contract will not be extended or renewed. If they do not do this, it can be seen as creating a reasonable expectation that the contract might be extended or renewed. It may be that the “memo of termination” the employer sent to Amos serves as this notice of termination. He can refuse to sign, but ultimately the fixed-term contract will come to an end.

However, if a reasonable expectation of extension or renewal of the fixed-term contract was created, and the employer either ended the contract or renewed it, but on less favourable terms (like lower pay or less hours), this will be seen as a form of dismissal, according to Section 186(1)(b) of the Labour Relations Act. If the employee feels upset by the employer’s decision, he can refer the dispute to the CCMA or relevant Bargaining Council and challenge the fairness of the dismissal.

What counts as reasonable expectation of renewed contract?

The answer is not always straightforward, and will depend on each individual case.

A reasonable expectation would be created if the employer has, for example, renewed or extended the fixed-term contract at least three times before because the work that the employee is doing has not been completed. As a result, the employer promises the employee that as long as the project is not completed, the fixed-term contract will be renewed or extended. Thus, the employer has created an expectation that the contract will be extended for the fourth time because the work has not been completed yet again.

Employers do sometimes abuse the fixed-term contract by employing workers on fixed-term contracts as a way of getting around having to pay them the benefits of a permanent employee. They cannot continually renew fixed-term contracts in place of hiring the employee permanently. For example, in Feni vs SA Five Engineering (2007, BALR) the employee was hired six times on a continual one-month employment contract. After this, the employer did not make the employee sign any new contracts, but continued to give him work for another five months. The employer then ended the employment contract and the employee took the matter to the Metal and Engineering Industries Bargaining Council for unfair dismissal and won the case against his employer.

The issue of disguised fixed-term contracts was identified by lawmakers, who amended the LRA in 2015. In terms of Section 198(B), if the employer enters into fixed-term contracts with its employees without justifiable reasons for why they are not fixing the term of the contract, the employee will be considered to be employed indefinitely. If the employer then ends this contract as if it was a fixed-term contract, it can be seen as an unfair dismissal and challenged at the CCMA or relevant Bargaining Council.

In Amos’ case, it is not clear whether or not he has signed a fixed-term contract with this particular employer before. If this is his first fixed-term contract, then the employer has done right by sending out the reminder that the contract is coming to an end on a specific date (the memo of termination). However, if, for example, this is his fourth fixed-term contract with the same employer and the work he was employed for is not yet complete, then he has a reasonable expectation of continued employment and can take the matter to the CCMA. No employer can force you to resign or sign documents stating that you resign, and you have the right to refuse this.

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* This is only basic paralegal advice and cannot be relied on solely. The information is correct at the time of being sent to publishing. Cases are based on fictional characters unless otherwise indicated.