Fixed Term Contract
A fixed term contract of employment is similiar to a contract of permanent employment. The difference is that the fixed term contract will stipulate a starting date and an ending date. The duration of the contract is clearly specified between employer and employee.
The contract will state that “Upon the attainment of (state ending date) this contract of employment will terminate, and the employment relationship between the employee and the employer will cease. The contract could also end "upon the happening of a particular event or until a particular task has been completed".
In the fixed term contract the employer will state where benefits such as pension, medical aid, provident fund, any group life assurance facility, etc are applicable or not applicable.
Unfortunately,some employers use the fixed term contract as a means to save money by denying an employee the opportunity of pension/provident fund benefits and medical aid benefits.
Moreover, if a fixed term employee is retrenched, he or she can be denied their severance pay.
"Rolling Over" Fixed Term Contracts
Some employers continue to renew fixed term contracts every time they expire. This is known as “rolling over” the contract.
It is not forbidden for an employer to roll over a fixed term contract. Once or at the most twice is acceptable. However, if a contract has been rolled over for the third or fourth time, the employee now has what is known as “the right of expectation.”
This means that the employee now has the right to expect that such a situation will continue, and their contract will be renewed. If it is not, and the employee is dismissed, there are strong grounds to take the employer to the CCMA on the grounds of unfair dismissal.
Find out more about the CCMA and how they can help you.