Contract of Employment (Fixed Term)

Contract of Employment (Fixed Term)

A fixed-term contract is a contractual relationship between an employee and an employer that lasts for a specified period. Fixed term within this context, can imply a fixed duration or a fixed outcome against which the contract will be adjudged or the performance of the employee assessed. 

A fixed term contract runs from an agreed start date and ends on a specified date or on the completion of a specific project ending the employment relationship, the duration of which should be agreed upon in advance. Fixed term employees are entitled to the same rights and benefits as those of permanent employees depending on the time frame of the contract length. This form of contract is legal provided that it is used for the intended purpose of fulfilling a short term assignment.

Make sure that you understand the implications of utilising a fixed term employment contract with regards to labour laws and who is an applicable employee for your organisation. The Labour relations Act states that if an employee is compensated below the legal threshold of R205 433.30 per annum a fixed term contract is limited to a period of 3 months and may only be extended if there are justifiable reasons for doing so. These may include, but is not limited to, the employee is replacing a permanent employee who is temporarily absent, is completing a specific project for a determined period, is a seasonal worker or is a student obtaining vocational training. It is also provided that should the contractor be employed for longer than 3 months without justifiable reason, this employee would be deemed to be permanent and would be entitled to all the rights and benefits of a permanent employee. However, it must be noted that other factors do apply.

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