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What does the labour law say about fixed 3 month contracts?

Section 198B(1) defines a fixed term contract as a contract of employment that terminates on:

·         the occurrence of a specific event;

·         the completion of a specified task or project;

·         a fixed date other than an employee’s normal or agreed retirement age.

·         The nature of the work is of a limited or definite duration. (Examples of this is where the person is employed to complete a specific task, for example, a building which may take longer than three months to complete (section 198B(3)(a)).

 

The protections  on fixed term contracts do not apply to:

•    Employees who earn R205 433,30 per annum

•    Employers who have fewer than 10 employees; or

•    Employers who have fewer than 50 employees and who have been in business for fewer than two years unless the employer has more than one business or the business was formed from other existing businesses.

If the employee is protected and the employer has more than 10 employees or has been in business for more than 2 years or has more than 1 business, the duration of fixed term contracts is limited to three months.

You may only extend the duration of a fixed term contract, if there is a justifiable reason for extending the employment of these employees  after three months. Examples of justifiable reasons to extend the duration of the contract:

 

·      is replacing another temporarily absent employee;

·      is employed due to a temporary increase in work which is not expected to endure beyond 12 months;

·      is a student or recent graduate employed for the purpose of being trained or to gain work experience to enter a job or profession;

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·      is employed to work exclusively on a specific project of limited or defined duration.

·      is a non-citizen granted a work permit for a defined period;

·      is employed to perform seasonal work;

·      is employed on an official public works scheme or similar job creation scheme;

·      is employed in a position funded by an external source for a limited period;

·      has reached the normal or agreed retire age in that business.

 

If any of the above is present, a fixed term contract may be extended past 3 months.

Checklist:

  1. Are we dealing with a protected employee:  R205 433.30 p.a?
  2. Are we dealing with protected employer? Fewer than 10 employees or fewer than 50 employees who has been trading less than 2 years? Or the employer has more than one business.
  3. If No, limited duration of fixed term to 3 months
  4. If Yes, then protections do not apply.
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