New dispensation for employees on contracts

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Amongst the range of amendments to the Labour Relations Act (LRA) which commenced on 1 January 2015, was the introduction of an amended Chapter 9, which is now called Regulation of Non-Standard Employment.

This amendment seeks to protect employees who are on fixed term or part time contracts, or who are employed by a labour broker and who earn below the statutory threshold which currently stands at R205 433.30.

The most significant consequences of these provisions are that from 1 April 2015:

• fixed term employees (those whose employment is for a limited or definite duration) are deemed to be in indefinite employment with the employer if there is no justifiable reason for their employment being of a limited or definite duration;
  
• if there is a justifiable reason for having employees on a fixed term contract, they must be treated 'not less favourably' than permanent employees performing similar work unless there is a justifiable reason not to do so; and
  
• part time employees (those who work for more than 24 hours a month and are paid wholly or partly by reference to the time worked and who work for fewer hours than a comparable full-time employee) must be treated 'on the whole not less favourably' than existing permanent employees unless justifiable reasons exist.

For parties who are not exempt from these provisions, the three month period commenced at midnight on 31 December 2014.
The following parties are exempt from these provisions:

• employers who employ fewer than ten employees;
  
• employers who employ fewer than 50 employees and whose business has been in operation for less than two years (unless the employer conducts more than one business or the business was formed by the division or dissolution of an existing business for any reason); and
  
• employers who hire employees in terms of a fixed term contract which is permitted by any statute, sectorial determination or collective agreement.

From 1 April 2015, unless there is a justifiable reason for a continuation of the employees' contracts on a fixed term basis, unjustified fixed term contract employees who were employed on 1 January 2015 would automatically have become permanent employees.

Also, justifiable fixed term contract employees, also employed on 1 January 2015, will be entitled to the same benefits as their permanent counterparts, as will part time employees, unless the employer can prove that "the different treatment is the result of a system that takes into account: seniority, experience or length of service; merit; the quality or quantity of work performed; or other criteria of a similar nature".

Included in the reasons which allow employers to extend a fixed term contract beyond three months are:

• to replace a temporarily absent employee (for example, an employee who is on maternity leave);
  
• a temporary increase in work, not expected to last beyond 12 months;
  
• the employment of a student or recent graduate to get training or work experience;
  
• the employment of an employee to work exclusively on a specific project for a limited or defined duration;
  
• the employment of a non-citizen in terms of a work permit for a defined period of time;
  
• the employment of an employee to perform seasonal work;
  
• the employment of an employee as part of an official public works or job creation scheme;
  
• the employment of an employee for a position funded by an external source for a limited period; or
  
• the employment of an employee past the normal or agreed retirement age.

Labour brokers

Labour broker employees who were employed to work for the same client on 1 January 2015 will be deemed to be the client's employees from 1 April 2015.

The three month period commenced from midnight on 31 March 2015 for those labour broker employees who had worked for the same client since before the amendments came into effect. They, too, must be treated 'not less favourably' than their permanent counterparts once the three month period expires.

Labour brokers and clients, who terminate the services of their employees prior to the expiry of the three month period in order to avoid their being deemed to be the client's employee, will find themselves at the receiving end of an unfair dismissal dispute.