Written by Megan Brook, Candidate Attorney and checked by Jordan Dias, Associate and released by Sarah Thackwell
14 May 2021
The employer conducts a catering business that provides services to a number of customers, including Life St George’s Hospital. The employee was appointed as the employer’s project manager on-site at the said Hospital, for a fixed period, commencing on 11 December 2014 and terminating on 31 December 2014. The employee continued working after the contract expired on 31 December 2014 and, in mid-January 2015, the employer extended his contract until 31 January 2015.
During the fixed term period, it came to the employee’s attention that his position had been advertised to the public. After contacting his immediate superior, he was assured that he too would be considered for the position along with the other candidates. Thereafter, the employee applied for the position.
On 3 February 2015, the employee received notice that his application had been unsuccessful for the position, and thereafter, the employer provided him with two weeks’ notice of termination, the employer having incorrectly assumed that it was required to do so in terms of the Basic Conditions of Employment Act 75 of 1997.
The Commission for Conciliation, Mediation and Arbitration (“CCMA”)
The employee, construing the termination of his contract as a dismissal, referred an unfair dismissal dispute to the CCMA, on the basis that he had become a permanent employee when he continued to work beyond the expiry of the fixed-term contract.
The Commissioner held that the employee became employed on a permanent basis from 1 February 2015 and that he had been dismissed. Having satisfied himself that the employee was dismissed, the Commissioner found that the dismissal was unfair and awarded the employee compensation.
The Labour Court of South Africa (“LC”)
The employer sought to review the award of the CCMA at the LC. The LC dismissed the application to review the decision.
The Labour Appeal Court (“LAC”)
The employer appealed the decision of the LC to the LAC, who upheld the appeal and substituted the award with a finding that the CCMA had no jurisdiction to arbitrate the dispute in the absence of a “dismissal.”
At the LAC, the employer raised several grounds of appeal; firstly, that the CCMA had no jurisdiction to entertain the dispute as it was not one of dismissal. Secondly, that the Commissioner determined the wrong dispute before him and should have actually decided whether the employer had established a reasonable expectation of permanent employment. Lastly, the employer contended that the Commissioner did not exercise his discretion judicially as the compensation amount was grossly excessive.
The LAC reiterated that the test on review was not whether the Commissioner arrived at a reasonable decision but rather whether his decision, in respect of the employee being dismissed, was correct.
The LAC held that the Commissioner’s approach was too technical and failed to consider the practical manner in which the parties actually dealt with each other. The employee became aware that the employer had advertised to fill his position and he made himself available to be considered for same. He raised no issue with this until he received the termination notice. As a result thereof, the LAC remarked there could be no legitimate expectation of being permanently employed. Furthermore, the LAC provided that the fact that the employee rendered services to the employer after the end of January when his fixed-term contract came to an end, did not mean that the fixed-term contract morphed into permanent employment. In addition, the employer’s mistaken belief that it was obliged to pay two weeks’ notice pay, during which time the employee did not, nor was he required to, render any services, did not mean that the employment relationship became permanent.
The LAC held that the fixed term contact ended on 31 January 2015. It further stated that the fact that the employer did not apprise the employee, prior to the expiry of the contract, that the contract would be renewed, extended or terminated, did not mean that it was either automatically extended or that the employment had become permanent; unless provisions of the law specifically provided for that.
The appeal was upheld.
This case demonstrates that, should an employee continue to work for an employer after his or her fixed-term contract has expired, this will not automatically make that individual a permanent employee. This will be determined by the specific facts of each case.