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Must a fixed-term contract have an end date?

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Contractbroken-freedigitalphotos.jpgQuestion: Must a fixed-term contract with an employee have an end date?

Answer: Not necessarily. There may be an event, task, or project of which the duration is uncertain and where the end date is not known.

Brief explanation:

The term ‘fixed-term contract’ was given more substance by the amendments to the Labour Relations Act. These amendments came into effect on 1 January 2015. The provisions surrounding fixed-term contracts are important in respect of employees who are employed for more than 3 months and earn below the relevant threshold. Such employees may be regarded as permanently employed if their contracts don’t contain a justifiable reason for the ‘fixed term’.

Unlike the general reference to a ‘temporary’ contract of employment, one’s first impression is that the term ‘fixed-term contract’ is more specific. It seems to suggest that there must be a start date and an end date. However, the newly introduced Section 198B defines a ‘fixed-term contract’ as a contract of employment that terminates on –

(a) the occurrence of a specified event;

(b) the completion of a specified task or project; or

(c) a fixed date other than an employee’s normal or agreed retirement age.

From the above we can see that the Act allows for circumstances where the duration is uncertain and where it would not be possible to specify an end date. So, how does an employer go about wording a contract in these circumstances? We suggest that you clearly describe the event, task or project. For example, the contract will terminate “… at the end of grape picking season on the Dewberry Farm”; or “… once you have painted the interior walls of the tool shed”; or “… upon completion of the audit for DBF Engineers”.

While notice of termination may not be strictly necessary in these cases, it would still be a good idea to anticipate the end date as it approaches. Then communicate with the employee about the date on which the event, task or project (and employment) will come to an end.

For more details on fixed-term contracts in general click here: http://www.labourwise.co.za/labour-articles/fixed-contracts-update

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