Case-Law & Legislation Review: Subject: Unfair Dismissal Fixed Term Contract Of Employment

By Gary Watkins who can be contacted at www.caselaw.co.za; www.workinfo.com

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# NUMSA obo Buthelezi & Others vs. LTR Appointments CC

Case No: MEKN1064

Award Date: 20 May 2005

Jurisdiction: MEIBC:  Durban

Commissioner: Owen L

Subject: Unfair Dismissal Contract Of Employment

ISSUE:  The employees were employed on fixed term contracts, which expired.  The meaning of the word “dismissal” was central to the resolution of this matter.  None of the employees were formally informed that their contracts were expiring and would not be renewed.  They were informed to return where there could possibly be jobs for them. Held that the 56 employees were dismissed.  The failure to renew the contracts of employment was caused by the non-availability of work and the employees were advised that they had the right to refer this dispute to the Labour Court.

SUMMARY OF FACTS:  The employees had been employed by LTR Appointments PMB on fixed term contracts which expired on 15th December 2004.  On 15th December 2004 they stopped working as they had been informed that they were to be paid their leave pay on the 24th of December 2004.  This decision was amended and it was agreed that leave pay would be paid on 15 December 2004.  They were then informed to return to work on 10 January 2005 when they would be re-employed. On returning to work on 10th January 2005 they were informed that there were no jobs for them and their fixed term contracts were not renewed. Subsequently, 8 of the employees had been re-employed.

SUMMARY OF JUDGEMENT:  The Commissioner held that the meaning of the word “dismissal” was central to the resolution of this matter.  According to Grogan (Workplace Laws) “The notion of a reasonable expectation clearly suggests an objective test: the employee must prove the existence of acts which would lead a reasonable person to anticipate renewal. The facts that will found a reasonable expectation will differ from case to case, but will most commonly take the form of some prior promise or past practice – e.g. where the employer has habitually renewed the contract.” And du Toit in Labour Relations Law “The wording of the contract is important, but not conclusive. Subsequent conduct may give rise to reasonable expectation, notwithstanding the declared intent of the parties.”  Although the test is an objective one, the expectation is “essentially of a subjective nature, vesting in the person of the employee” and not necessarily shared by the employer. 

The surrounding circumstances must determine whether the termination of a fixed-term contract at the end of the period was fair. Employers do not have an unfettered discretion to renew or not to renew in terms of fixed-term contracts. The Commissioner found that the employer informed the employees on 15 December 2004 that they should return on January 10th where possibly there would be work for them.  They interpreted this to mean that there would be work for them and as a result the employees reported for work on 10 January 2005. This interpretation was reinforced when none of the applicants were instructed to return their work issued clothing and nothing was said about the UIF aspects on 15th December 2004. It was only on 10th January 2005 that the applicants were told to return their work issued clothing and were informed about the UIF aspects. Additionally, in a notice to the union office dated 8 December 2004, no mention was made of the termination of fixed term contracts, but dealt only with the shut down period in December/January and payment dates for leave pay. If the employer had intended to terminate the contracts at the end of December he should have been clearer.  The Commissioner found that the employees did have a reasonable expectation that their contracts would be renewed and that they were dismissed.  As the employer alleged that the reason for the termination of the contracts were operational requirements, the employees were advised that they could pursue the matter in the Labour Court.