Fixed Term Contracts

Fixed Term Contracts

Human Resources

How are they affected by the proposed labour amendment bills?

It is important to state that the proposed amendments do not prohibit employers from employing individuals on fixed term contract.

However, one of the proposed changes is looking at where an employee is on a Fixed Term Contract for more than 6 months. In these instances the employer will be required to ensure that he/she is given the same benefits that a permanent employee would receive, for example medical aid.

This time period is not based on the duration of the fixed term contract itself but rather the total period that the employee has worked at the organisation. Therefore, if an employee is employed on a 4 month fixed term contract and the contract is renewed or extended for a period which exceeds 6 months in total, he/she will be entitled to the same benefits as a permanent employee.

In addition, an employee that has been in the employ of the employer on one or more fixed term contracts for a period of 2 or more years shall be entitled to severance pay (1 week for every completed year’s service) upon termination of the contract.

These and other proposed changes to the Basic Conditions of Employment, Employment Equity Act and Labour Relations Act will more than likely be passed towards the end of 2013.