Not so fixed term after all: Severance Pay in relation to Fixed Term Contract employees during a retrenchment process

Not so fixed term after all: Severance Pay in relation to Fixed Term Contract employees during a retrenchment process

Podcast

Not so fixed term after all: Severance Pay in relation to Fixed Term Contract employees during a retrenchment process

Podcast

00:00 00:00

Download MP3

CDH Conversations Podcast hosted Director Bongani Masuku and Associate Tshepiso Rasetlola from the Employment Law Practice, where they discussed the general principles of retrenchments and, how it affects fixed-term contract employees.

The episode focused on severance pay in respect of fixed-term contract employees by highlighting the CCMA case of SA Revolutionary Allied Workers Union on behalf of Ntshangase & Others and Mjayeli Security Services which dealt with the question whether fixed-term contract employees are eligible to be paid severance pay. The employees had been on a fixed term contract (FTC) or a period in excess of 24 months and earned below the threshold. The commissioner found that the employees in this case had been terminated for reasons relating to the employer's operational requirements and were entitled to being paid severance in terms of section 41 (BCEA) both by reason of their retrenchment and by reason of the amendment to section 198.

Great consideration to be taken in setting the period of employment in FTCs, and in any subsequent extensions and/or renewals. If below the threshold, then provision to be made for the payment of severance should employment terminate, and they meet the requirements of section 198B(10)(a). Proper advice must be obtained when considering terminating FTCs and the ramifications thereof both in terms of section 189 and 198B.