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PART 1: THE INDEFINITE AND FIXED TERM CONTRACT OF EMPLOYMENT

In this series of articles, we unpack practical pointers for employers as a trouble shooting guide, based on frequently seen problems and questions raised by employers.

Below is some advice to consider regarding the indefinite and fixed term contract of employment:

  1. Probation periods should be reasonable in relation to the circumstances and nature of the job, and the time it takes to determine the employee’s          suitability for continued employment in the position to which the employee has been appointed.
  1. Whilst less compelling reasons are required to terminate a probationary employee, a fair process of guidance, instruction, counselling and evaluation must still be followed.
  1. Every employee has the right not to be unfairly dismissed. Managerial employees and senior executives also fall within the ambit of the Labour Relations Act (“LRA”) and are also entitled to the rights and protections as set out in the LRA.
  1. Clearly articulate the reason for a fixed term appointment. Fixed term contracts of employment should be linked to an external business imperative such as a temporary fluctuation of workload or absence of an employee. Fixed term contracts of employment should not be used as a substitute for probation or to deprive an employee of permanent employment.
  1. The amount of times a fixed term contract can be renewed is not bound by a magic number before the employee forms the expectation of the renewal of the contract. Such expectation can arise even in the case of one renewal of a fixed term contract.
  1. A fixed term contract of employment should include a clause allowing either party to terminate the contract on written notice, otherwise the employer may be precluded from terminating the employee’s employment prior to the expiry of the contract for reasons based on the employer’s operational requirements.
  1. Restraint of trade agreements are valid and enforceable under South African law, provided that these are reasonable. The restraint must protect some legally recognisable interest of the employer and not merely seek to eliminate competition. A “one-size-fits-all” restraint of trade serves little purpose.

Should you require any more information on the subject, please contact our partner Melanie Hart at melanie@bv-inc.co.za. Part 2 of the series will address disciplinary action and the Disciplinary Code and Procedure.