An explanation of the recent amendments to labour law regulating the rights of fixed-term, part-time and other employees.

Who is an employee?

  • An employment relationship exists when one person ("employee") places his/her services at the use and control of another person ("employer") in exchange for money ("compensation").
  • The employment relationship begins when the employer and employee agree on the terms and conditions of their employment relationship and not only when the employee starts working.
  • The terms and conditions of that employment relationship are contained in a contract of employment.
  • A contract of employment may be permanent or fixed term.
  • A contract of employment must comply with labour law; however, if the terms and conditions contained in the contract of employment are more favourable to the employee than the law, the terms and conditions will stand. For example, if the contract of employment entitles an employee to 25 days annual leave, as opposed to labour law providing only 15 days annual leave, the contract of employment will stand.
  • Labour law applies to all employees, which include permanent, fixed term and part-time employees, as well as employees employed by labour brokers, and this entitles them to certain rights.

Who is a permanent employee?

  • A permanent employee is a person employed for an undetermined period of time. A contract of employment for an undetermined period of time has no agreed date of termination. Such a contract is terminated by either the employer (dismissal) or the employee (resignation) on notice.
  • If an employee is dismissed by his/her employer, it must be for a fair reason (such as, theft) and the employer must follow a fair procedure (such as holding a disciplinary hearing) in doing so. 

Who is a fixed term employee?

  • A fixed term employee is a person employed for a determined period of time. A contract of employment for a determined period of time has an agreed date of termination, being either a specific calendar date or the occurrence of a specific event.
  • Usually, a fixed term contract of employment can be for any period of time. However, if an employee is compensated under the legal threshold (currently being R205 433.30 per year), labour law limits such a period to 3 months. The 3 month period may only be extended if there is a justifiable reason for doing so, for example:
    • Replacing an employee that is temporarily absent (maternity leave).
    • Doing work on a specific project for a determined period (building a house).
    • Doing seasonal work (harvesting vegetables).
    • Students attending training or obtaining work experience (vocational training).
  • A fixed term employee, compensated under the legal threshold, employed for longer than 3 months (without a justifiable reason) will be deemed to be a permanent employee and may not be treated less favourable than permanent employees doing the same or similar work. Such an employee must also be provided with the same work opportunities as permanent employees.
  • If a fixed term employee, compensated under the legal threshold, is offered a renewal of his/her contract, such an offer must be in writing and provide the reasons of such renewal.
  • A fixed term employee, compensated under the legal threshold, who is employed for longer than 2 years shall be entitled to severance pay on termination of employment or alternative employment, if possible. Severance pay includes one week’s compensation for each completed year of the contract.
  • If an employer created a reasonable expectation of permanent employment to a fixed term employee, such an employee may refer an unfair dismissal dispute to the CCMA when his/her contract of employment terminates.

Who is a part-time employee?

  • A part-time employee is a person compensated based on the period of time s/he works (the hours s/he works) which is less than the period of time the employer’s permanent employees work.
  • A part-time employee, compensated under the legal threshold, may not be treated less favourable than the employer’s permanent employees doing the same or similar work. These employees may only be treated differently if there is a justifiable reason for doing so. Examples of such a justifiable reason may include the permanent employee being more senior or experienced; performing more work or a better quality of work; or any other justifiable reason permitted by law.
  • A part-time employee, compensated under the legal threshold, must be given similar access to training and development and be given the same work opportunities as permanent employees.

What is a labour broker?

  • A labour broker is referred to in labour law as a temporary employment service ("TES").
  • A labour broker is an employer whose employees work for a client. Examples of these employees may include an employee substituting a temporarily absent employee of the client (sick leave) or as determined by law.
  • The labour broker enters into an agreement with a client in terms of which the labour broker’s employee will work for that client for a determined period of time, in exchange for remuneration. However, if an employee is compensated under the legal threshold, labour legislation limits such a period to 3 months.
  • An employee of the labour broker, compensated under the legal threshold, employed for longer than 3 months by a client will be deemed to be an employee of that client. Such an employee may not be treated less favourable than the client’s permanent employees doing the same or similar work and may only be treated differently if there is a justifiable reason for doing so. Examples of a justifiable reason may include the permanent employee of the client being more senior or experienced; performing more work or a better quality of work; or any other justifiable reason permitted by law.
  • If the labour broker does not comply with labour law, the employee is entitled to certain remedies, forcing the labour broker and/or the client to comply. The labour broker and his/her client will both be liable toward the employee in respect of a labour dispute.
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