30 November 2020

Republished courtesy of IR Network

Erasmus and another / Traffic Management Technologies (Pty) Ltd(2020) 29 CCMA 7.1.18 also reported at [2020] 11 BALR 1170 (CCMA)

Subject matter classification:
Procedural fairness in dismissal – Dismissal – Non-renewal of fixed-term contracts – Employer allowing employees’ fixed-term contracts to lapse after consulting with them over possible retrenchment – Non-renewal of contracts not constituting dismissal.

Fixed-term contracts – Non-renewal of – Employer allowing employees’ fixed-term contracts to lapse after consulting with them over possible retrenchment – Non-renewal of contracts not constituting dismissal.

Mini Case Summary:
After the applicants had worked for the respondent for 15 years on several fixed-term contracts linked to the respondent’s service level agreement with a client, their final contracts were not renewed. The applicants claimed that the respondent had chosen this course after they had accepted voluntary severance packages. They claimed that they had been unfairly dismissed and that they were entitled to compensation, notice pay and severance pay. The respondent maintained that its contract with the client had never been finalised, that the applicants had declined an offer to be transferred to another province and that it had, accordingly, allowed the applicant’s contracts to run their course.
The Commissioner held that the applicants were aware of the terms of their contracts and had been informed six months before the expiry date that they would not be renewed. The applicants could not claim that they had been “deemed” permanent employees because they had always known that their employment was linked to the service level agreement between the respondent and its client. It, therefore, did not appear that the respondent had opportunistically relied on the applicant’s fixed-term contracts to evade its obligations under the LRA. That the respondent could have retrenched the applicants did not negate the clear terms of the contracts. The respondent clearly had a reason for limiting the periods of the applicants’ contracts and the applicants had not claimed that they had a reasonable expectation that their contracts would be renewed. By rejecting the offers of transfer, the applicants had impliedly accepted that their contracts would otherwise expire by operation of law. The applicants had, accordingly, failed to prove that they had been dismissed.

The application was dismissed.