The classification of Temporary Employment, Fixed term contracts, and part time Employees as per the Labour Relations Amendment Act No.6 of 2014
The Labour Relations Amendment Act No. 6 of 2014 was promulgated in 2014 and came into effect on the 1st of January 2015. The amendments in a nutshell affect organisational rights and trade unions as well as various aspects of employment.
One important amendment to employment law is that a written contract of employment is not a prerequisite for a person to argue that he or she was employed and therefore qualified as an employee, be it fixed term, permanent or temporary.This new kind of employment is known as “non-standard” employment.
The insertion of Section 198A, B, and C has classified three kinds of non-standard employees who enjoy protection from the LRA – 1. employees placed by temporary employment services 2. employees engaged on fix-term contracts and 3. part-time employees. However this protection is only provided for employees who earn an amount equal or less than R205 433.30 per annum (the threshold)
Temporary employment (Insertion of Section 198A)
Section 198A states that Employees earning below the threshold and who have worked for more than three months will be considered employees. Employees who work as substitutes for employees who are temporarily absent will not be deemed temporary employees. (Eg. temporary staff who replace an existing employee who is on sabbatical or maternity leave).
To prevent abuse of the 3 month period that constitutes temporary work, section 198A provides that the termination of an employee’s assignment for the purpose of avoiding “deemed” employment will constitutes a dismissal. It is important to note that an employee who is deemed to be an employee must be treated similar to employees who are permanent and who perform the same or similar work.
A company or employer must be aware of the fact that if an employee has worked for longer than 3 months there is the risk of the employee being deemed to be a permanent employee of the company. Once this deeming occurs, the employee will be entitled to be placed on the company’s payroll and will most likely be entitled to all employee benefits as well.
Fixed term employment (Insertion of section 198B)
A fixed term contract is a contract which terminates upon the occurrence of a specific event, the completion of a specified task or project, or on a fixed date other than employee’s normal or agreed retirement age.
Employers may employ on a fixed term basis for longer than 3 months or extend the fixed term contract only if the nature of the work is of limited or definite duration, or if the employer can demonstrate any other justifiable reason for fixing the term.
The conclusion of a fixed term contract will be justified if the employee:
- is replacing another employee who is temporarily absent from work;
- is employed on account of a temporary increase in the volume of work which is not expected to endure beyond 12 months;
- is a student or recent graduate who is employed for the purpose of being trained or gaining work experience in order to enter a job or profession;
- is employed to work exclusively on a specific project that has a limited or defined duration;
- is a non-citizen who has been granted a work permit for a defined period;
- is employed to perform seasonal work;
- is employed for the purpose of an official public works scheme or similar public job creation scheme;
- is employed in a position which is funded by an external source for a limited period; or – has reached the normal or agreed retirement age applicable in the employer’s business
A fixed term contract must be in writing and must state the reasons for fixing the term. If no valid fixed term contract is in place the employee is by default deemed to be a permanent employee.
Section 198C has also changed in so far as an employee will be “deemed to be dismissed” if he or she had a reasonable expectation of permanent employment and the employer failed to retain or offer to retain him or her on less favourable terms. However the LRA does not recognise an employee or a fixed term contract of employment if an employee earns above the threshold stated above.
Part-time employment (Insertion of Section 198C)
According to Section 198C a part time employee is a person who works fewer hours than full-time employees who perform the same or similar work. A part time employee is therefore an employee who is paid according to their actual time worked. The amendments now stipulate that part-time employees must be provided with access to training and skills development and must also be given the same opportunities to apply for vacancies as full-time employees. In essence part time employees may not be treated less favourably than full-time employees performing same or similar work unless the reasons are justified. Justifiable reasons could entail seniority, experience, length of service, merit, quality or quantity of work, or any other similar criteria as the list is not exhaustive (S198D). Once again the LRA will not apply to Employees above the threshold, or to employees working less than 24 hours per month.