Posted on 14 November 2024
Recent Labour Court Judgments Reshape Fixed-Term Employment
The legal landscape of fixed-term employment in South Africa has been significantly influenced by various Labour Court judgments, whereof two recent judgement have now provided crucial clarity on the interpretation and application of Section 198B of the Labour Relations Act (LRA).
The Nkangala TVET College Case: Redefining Funding-Based Justification
In Nkangala TVET College v Ndlovu and Others [2024] ZALCJHB 15, the Labour Court addressed the common practice of using external funding as justification for fixed-term contracts. The case involved an employee who had been employed on successive fixed-term contracts for three years, with the College arguing that their government funding structure justified the temporary nature of employment.
Judge Van Niekerk’s landmark judgment established that external funding alone cannot automatically justify fixed-term employment. The Court held that employers must demonstrate:
“The mere existence of external funding is insufficient to justify a fixed-term contract under Section 198B. There must be a demonstrable and direct link between the funding arrangement and the temporary nature of the position.”
This judgment has far-reaching implications for educational institutions and NGOs that traditionally rely on external funding to justify fixed-term appointments.
The Motswako Security Solutions Case: Project-Based Employment Under Scrutiny
The case of Motswako Security Solutions v Commission for Conciliation, Mediation and Arbitration [2023] ZALCCT 71 further developed our understanding of Section 198B compliance. The matter involved security guards employed on fixed-term contracts linked to specific client contracts. Despite continuous employment exceeding three years, the company maintained that client contract durations justified the fixed-term nature of employment.
Judge Rabkin-Naicker’s judgment decisively rejected this approach, stating:
“The existence of a client contract, in itself, does not constitute justification under Section 198B. Employers must establish that the work is genuinely temporary in nature, regardless of the commercial arrangements underpinning it.”
Practical Implications of These Judgments
These cases collectively establish several critical principles for South African employers:
The Nkangala judgment requires employers to:
- Prove direct correlation between funding and position temporality
- Maintain transparent documentation of funding arrangements
- Demonstrate genuine temporary nature of work beyond funding cycles
The Motswako decision demands that employers:
- Look beyond client contracts when justifying fixed-term employment
- Establish clear project scope and timeframes
- Ensure equal treatment between fixed-term and permanent employees
Section 198B Compliance in Light of Recent Case Law
When drafting fixed-term contracts, employers must now consider the enhanced requirements emerging from these judgments. The Nkangala case particularly emphasises that employers must maintain comprehensive records demonstrating:
“A clear and unambiguous justification for the fixed-term nature of employment, supported by objective evidence beyond mere operational preferences or funding structures.”
Protecting Your Organisation
Following these landmark decisions, South African employers must take several crucial steps:
The Nkangala judgment requires:
- Regular review of all funding-based fixed-term contracts
- Enhanced documentation of funding-position relationships
- Clear communication with employees about contract terms
The Motswako precedent necessitates:
- Thorough analysis of project-based employment justifications
- Regular assessment of contract durations
- Implementation of equal treatment policies
Legal Requirements Under Section 198B
Both judgments reinforce that Section 198B compliance requires:
As per Nkangala: “Employers must maintain clear records demonstrating genuine justification for fixed-term employment, beyond mere administrative or financial convenience.”
As per Motswako: “The duration of fixed-term contracts must be objectively justifiable, with clear evidence of the temporary nature of the position.”
Moving Forward: Ensuring Compliance
In light of these significant judgments, organisations must review their fixed-term employment practices. The courts have clearly indicated that superficial compliance is insufficient, and employers must demonstrate substantial justification for fixed-term arrangements.
Professional Assistance Available
At Laboured South Africa, we specialise in helping organisations navigate these complex legal requirements. Our team is well-versed in the implications of both the Nkangala and Motswako judgments and can assist in ensuring your fixed-term employment arrangements meet all legal requirements.
Seek Expert Guidance
Given the complexity of these recent judgments and their implications for Section 198B compliance, professional legal guidance is essential. Contact our team of labour law specialists for comprehensive support:
Telephone: 082 330 3939 Email: info@laboured.org.za Website: www.laboured.org.za
Let us help you align your fixed-term employment practices with the latest legal requirements while protecting your organisation’s interests.
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