Mistake? 4 common mistakes with fixed term contracts
Four common mistakes regarding fixed term contracts include:
Mistake 1: no written employment contract
One of the biggest mistakes employers make is not to implement written employment contracts, or to settle for a generic employment contract that offers minimal protection when there is a dispute in the workplace. The employee is employed from the moment he/she accepts employment, irrespective of how the relationship is recorded – via an oral or written agreement. A written agreement (employment contract), however, creates clarity by confirming the terms and conditions of employment agreed upon and protects the employer in terms of the employment relationship going forward.
The employment contract can be of immense value to the employer if used effectively. Making a mind shift regarding employment contracts from an “administrative burden” to “risk mitigating tool” can save employers a lot of time and money in the long run.
Mistake 2: disguising permanent employment
It is crucial that an employer enters into the correct type of employment contract. Ask yourself: is the position of a permanent/indefinite nature; or is the position of a temporary nature, for a specific time period or for a specific project? Employees employed on a fixed term basis for longer than three months, will be deemed to be permanent employees, unless the longer fixed term period is justifiable in terms of the Labour Relations Act (“LRA”).
Mistake 3: creating an expectation
Mistake 4: different terms and rules
There is a myth that the same legislation, discipline, policies and procedures does not apply in the same way to fixed term employees, as it does to permanent employees. The only difference between a fixed term and a permanent employee, is the term of employment.
Fixed term employees must be treated the same as permanent employees with regards to wages, leave and other benefits. Employees on fixed term contracts must also be given equal access to opportunities to apply for vacancies as well as be entitled to severance pay upon termination of employment where the employee is employed on a fixed term contract exceeding 24 months.
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