There are still employers who try to avoid proper probation by using fixed term contracts. And coming up with clever legal arguments to try and circumvent statutory provisions. The Labour Court would have none of it.
We frequently get enquiries from employees who had been appointed ‘on probation’ for a few months, and then find themselves still working for the employer some two months after the probationary deadline, without any formal confirmation of their employment status, and lacking a ‘permanent’ contract.
In the recent case of National Union of Public Service and Allied Workers (NUPSAW) V Mfingwana and Others (C251/17)  ZALCCT 4 (20 February 2020), the employer who found itself in a situation like this and came up with some creative ideas to try and circumvent the law, was in fact a Trade Union! The Labour Court made some interesting and noteworthy observations about their approach.
The Union employed Mr Mfingwana (‘M’) as an organiser on a fixed-term contract for six months, from 1 October 2015 to 31 March 2016.
This contract was not renewed, but M continued working for the union.
In July 2016, the union proposed and got M to sign an addendum to the original contract, backdating and extending it from 1 June to 31 November 2016.
M was then promptly advised on 5 November that his contract would not be renewed when it expired on 30 November.
M claimed to have been unfairly dismissed, based on a reasonable expectation of permanent appointment (the position of Organiser is not a temporary one); and that since he had been allowed to continue working as if permanent after expiry of the initial 3-month contract on 31 March, he was to be deemed a permanent employee in terms of s198B of the LRA.
The CCMA found that it was an unfair dismissal:
The CCMA found that M’s employment was deemed to be permanent / indefinite w.e.f. 1 January 2016, subsequent to having served a 3-month fixed term contract for which there had been no justifiable reason.
The Labour Court – on review
The union (as the employer) came up with a creative legal argument to rebut the deeming provision.
It submitted that the subsequently signed addendum by the parties which extended the fixed term contract until 30 November, ‘novated’ any claim that M might have had to be deemed a permanent employee, arising from the initial contract. [For the non-lawyers, ‘Novation’ in contractual law essentially means that one obligation is replaced with a new obligation or that the old obligation is being discharged by the new obligation.]
The Labour Court rejected this argument by examining the principles of novation in our law and emphasising that a novation is only valid and enforceable if the contract that it novates, is legally valid in the first place.
The Labour Court confirmed the CCMA’s finding of an unfair dismissal and the review was dismissed.
Employers who still use fixed-term contracts as probationary mechanisms, will be caught out sooner or later. Even creative legal arguments or forcing employees to sign new fixed-term contracts, will not cure the situation.
A rose by any other name is, after all, still a rose.
© Judith Griessel