Failure to renew a fixed term contract : Interrogate all the facts

In terms of section 186(1)(b)(i) of the LRA, dismissal means that:‘an employee employed in terms of a fixed term contract of employment reasonably expected the employer –

(i)            to renew a fixed term contract of employment on the same or similar terms but the employer offered to renew it on less favourable terms, or did not renew it; or

(ii)           to retain the employee in employment on an indefinite basis but otherwise on the same or similar terms as the fixed term contract, but the employer offered to retain the employee on less favourable terms, or did not offer to retain the employee…’

Once  an employee accepts the offer for a position which is clearly a fixed term contract there can be no turning back to the erstwhile permanent contract of employment which had subsisted before. Furthermore,  reasonable expectation that a fixed term contract would be renewed can be supported by practice or assurance by senior managers . If it is found that existed such an expectation, then reinstatement is an adequate remedy.  

The case of MARIA CHRISTINA CAMPHER v  COMMISSION FOR CONCILIATION  MEDIATION AND ARBITRATION  and OTHERS , judgment whereof was handed down by the Johannesburg Labour Court on the 30th June 2020 ( neutral citation not available) discussed the above principles. It alerts us, as commissioner to interrogate all aspects of the evidence presented and argued at the arbitration. We as commissioners have an obligation to ensure that a fair trial be conducted. It is apparent from this case, the summary whereof I have presented, that we owe a duty to be scrupulously careful in such disputes.                                   

Pertinent facts informing the decision were as gleaned from the full judgment are as follows

  1. The Applicant  was employed by the SABC, third Respondent, as  a Payroll Manager: Technical and Compliance on permanent basis, a position she held from 2008 to April 2013.
  2. She was then offered a position of Chief Financial Controller, which was a five-year fixed term contract, with effect from 1 May 2013 which was prematurely terminated on 31 October 2016.
  3. Following meetings she had  with managers from the SABC’s Group Employee Relations Department, she was advised that the SABC intended to terminate her services because there was ‘no room’ for her in the structure.
  4. She was subsequently served with a letter dated 25 October 2016 notifying her that the SABC had resolved to terminate the employment relationship and pay her for the balance of her fixed term contract which was 18 months.
  5. Subsequent to obtaining a tax directive from South African Revenue Service (SARS), she was paid an amount of R1,796,952,31.
  6. She referred an unfair dismissal disputed to the CCMA, seeking reinstatement.
  7. The  two main issues for determination during arbitration were identified as follows:
    1. Whether the Applicant was employed on permanent basis? If so, whether her dismissal was procedurally and substantively unfair justifying her reinstatement?
    1. Alternatively, if it were to be found that she was employed on a fixed term contract, whether she had a legitimate expectation that her contract would be renewed for a further period of five years. 
  8. The Commissioner  found that
    1.  her dismissal was substantively fair and that
    1.  she was not a permanent employee of the SABC but was on a five-year fixed term contract which had been prematurely terminated by the SABC.
    1. She failed to prove that she had a legitimate expectation that her fixed term contract would be renewed beyond the five-year period.

On review

  1. The labour court found that she had continued on the fixed term contract which was actually on a higher position and salary with all the benefits and that therefore she couldn’t cry foul now that the SABC resolved to terminate the contract and pay her out.
  2. On the issue whether she had a reasonable expectation that her fixed term contract would be renewed, the evidence before it was that she had knowledge that people in her position had their contracts renewed. Moreover there was uncontroverted evidence that  contracts do get renewed as one witness, a Mr Olivier, confirmed this practice in his evidence. There was also a list with names of the staff members in the Finance and Human Resources Departments whose fixed term contracts had been rolled over. Add to that was a workshop she had attended wherein she was assured that in the new proposed structure everyone would be placed.
  3. It found that the Applicant had no reason to doubt that her employment with the SABC would have continued beyond the expiry of her fixed term contract in any similar position as assured by her senior managers, It held the view that “delimiting” her  position from the structure or its absence from the new organogram was accordingly not fatal to her case that she had a reasonable expectation that her fixed term contract would be renewed.
  4. It was critical of the     Commissioner whom it found had ‘clearly misconceived the nature of the enquiry and, consequently, there was no fair trial of the issues’ In other words she diverted from the correct path in the conduct of the arbitration and as a result failed to address the question raised for determination.

Conclusion

  1. It set aside the award holding that there was a failure of a fair trial
  2. Her dismissal was procedurally and substantively unfair.
  3. The SABC was ordered to reinstate her to the same or similar position to the one she occupied before her dismissal and on the same or similar terms and conditions of employment  with effect from 1 May 2018.
  4. The SABC was ordered  to  pay her full back pay for the period between 1 May 2018 and the date of the judgment ( which was 30th June 2020)

Saber Ahmed Jazbhay

Commissioner

1st July 2020

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