Chapter 6
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Problem 11: Fixed-term contract has not been renewed

For the past nine months, Thami has been employed on a three-month contract, which has been renewed twice. At the end of the third three-month period, he is told that the company will not be renewing the contract. However, the company employs someone else for the next three months to do the same job as Thami.

WHAT DOES THE LAW SAY?

Thami’s contract is a fixed-term contract which is deemed to become permanent after three months unless there is a justifiable commercial reason for renewing the contract for another three-month period. For example, it could be that the specific project Thami was working on needs him to work on it for another three months to complete it. After this, the employer is not allowed to renew the contract again. If Thami continues working for the company, he will be entitled to a permanent contract of employment. In addition, the company has created a reasonable expectation that the contract will become permanent. By asking Thami to leave because his contract is up, while replacing him with someone else, this means that Thami has been unfairly dismissed. This is an unfair dismissal which is covered by the Labour Relations Act (LRA). Thami can challenge the dismissal in terms of the LRA. . (See Automatically unfair dismissals)

WHAT CAN YOU DO?

You can help Thami first by writing a letter to the employer stating that he believes he has been unfairly dismissed. If the employer refuses to reinstate him then you can help Thami to apply for reinstatement or compensation through the CCMA or a Bargaining Council. (See Problem 4: Dismissed employee wants the job back; See What steps can be taken if there is an unfair dismissal?; See Solving disputes under the LRA)