There is a fallacious belief that hiring staff on the basis of a fixed-term contract will make life easier for the employer.
This is often not the case, especially when the employer wants to end the employment relationship before the contract’s expiry date.
Companies may have various reasons for wanting to terminate such contracts prematurely. For example, during a retrenchment exercise, the employer may need to terminate all temporary contracts so that it may give preference to saving the jobs of the permanent employees.
However, due to the fact that the parties are bound to the expiry date, ending the contract early for any reason is a major challenge.
In the case of Sedumedi vs Sephako Makgatho Health Sciences University (Lex Info, 4 April 2025. Labour Court Case number J502/2022) the employer terminated the employee’s fixed term contract almost two years early for reasons of operational requirements. (That is, he was retrenched). He took the matter to the Labour Court which found that his employment contract did not contain any clause entitling the university to terminate Mr Sedubedi’s contract before its expiry date.
The Court therefore ordered the employer to pay the employee R2,063,472 for the unexpired portion of his contract. The Court also awarded partial legal costs.
This decision means that:
- as regards retrenchment, a temporary employee with a fixed-term contract may have stronger rights that a permanent employee
- the terms and wording of fixed-term contracts need to be radically revised
- no employer should enter into or terminate a fixed-term contract before consulting with a labour law expert.
The employer in the case cited above had to pay out more than two million rand because it mistakenly believed that it had the legal right to end the employment contract before its expiry date.
Such costly errors can be avoided if management is trained in understanding the law relating to fixed term contracts and in the extent to which labour law favours employees.
The innovative video series WALKING THE LABOUR LAW TIGHTROPE assists employers to provide their managers with very inexpensive training that allows the managers to achieve necessary knowhow at times suitable to their very busy schedules. Its 48 chapters, averaging 10 minutes in length each, can easily be watched at junctures when the manager has time. This greatly informative yet very engaging and practical video series provides crucial and user-friendly learning through the use of a stimulating, animated case study that runs throughout the 48-chapter series. Each chapter contains clear and important advice needed by workplace management on the basics of labour law over a very wide range of topics.
A further advantage is that the manager can, for a full year, easily go back to any of the 48 videos for purposes of refresher training or in order to access information on how to deal with a current workplace issue. This solves the problem of managers forgetting what they have learned.
This video series helps management to walk the shaky labour law tightrope and to run the workplace productively without falling into the labour law abyss.
To access our groundbreaking video series: WALKING THE NEW LABOUR LAW TIGHTROPE please go to www.labourlawvideos.co.za or contact Ivan on [email protected]
