# Regulatory Compliance Category > Labour Relations and Legislation Forum >  Fixed Term Contract expired however still working

## DaBruce

Good day

I would just like to enquire regarding a fixed term contract.
The employee in question was on a fixed term contract for 6 months ending 31 October.
We did inform him that we are planning to rol the contract over for another 4 months.
However we have not given him anything in writing.
I read somewhere that if you dont give the employee an new contract in writing by the time the old one expires and he works further, then he automatically becomes a permanent employee.
Is this true?
If it is then this employee is probably a permanent employee now?

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## Dave A

Let's put it this way - I would get the employee to sign their new fixed term contract as soon as possible. Without it, a change of status to permanent employee will probably be assumed.

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## DaBruce

thanks dave, however if the employee also knows of this (loophole) and does not want to sign the new contract now because he/she assumed the change of status to permanent, is the writing on the wall then?

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## Dave A

We're only on 6th November - paperwork near always comes a little after the decisions are made.

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## DaBruce

Hi Dave, sorry to be a nag, when would you say is the point of no return, our current HR person is on leave and only gets back around the 20th, he is normally the person that does these contracts, would the 20th be too late?

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## Dave A

Hard to say where the point of no return might be exactly, but I wouldn't play around trying to find out.

At the very least I'd issue a letter offering to extend the enter a new employee's fixed term contract for the next 4 months on the same terms and conditions as the previous contract, subject to the employee's acceptance. If the employee doesn't accept, send him / her home until a contract is signed.

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## sterne.law@gmail.com

Probably add in to the letter, "further to our discussion on ????? whereby it was agreed to enter into a NEW 4 month contract.

You should check the original contract with regards to the terms regarding renewal and notice etc, etc

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## CLIVE-TRIANGLE

It is mainly about reasonable expectation. I would imagine the employee could reasonably expect his contract to be renewed on the same terms and conditions. It would most likely not be reasonable to expect enhanced terms and conditions.
But then again, who knows?

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## antonhelp

good day, I am an employee in this situation. I have 2 small kids and a wife to support. I need advice. I hope it will not come to the company forcing my hand. however I can't just roll over and die when they wake up and decide to formalize a roll-over. I am very good at my job, however it looks like the company wants me to fix the mess they created and then wants to put a ignorant family member in the position, he will then most likely mess it up again. what is my chances if I have to take them to the ccma to force them to make me permanent. I am sure it will be difficult if it comes to this, however difficult and supporting my family is a lot better than accepting a new contract and then in a couple of months not be able to support my family

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## Dave A

Without a precedent being quoted, as you might have gathered we're not sure where the line might be exactly. But I suggest three months employment outside of a contract would certainly make for a fairly strong case.




> I have 2 small kids and a wife to support.


I understand where you're coming from. But I'd like to tender the other side of this coin.

I'm an employer.
I have a wife and two kids.
I have over twenty employees.
Many of them have dependants too.
And we're all relying on the business to provide....

At the end of the day, as an employer I can't look at the number of dependants of each employee - I have to look at the extent to which they add value to the business and:
1. employ the people that do add value
2. get rid of the people who don't add value
3. pay each employee fairly in reasonable proportion to their value add
4. rely on them to apply their remuneration wisely to look after their dependants and other personal obligations.

If you want job security (as much as such a thing really exists in the world today), make sure you're contributing to the success of the business that pays all the bills. If you do, any employer worth his/her salt will want to keep you on board for as long as they are able.

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## antonhelp

Thanks for the answer, just to give you a bit more detail, I am working for a company which is 80% family members. I am not a family member.
I have saved the company a perpetual saving of R720,000 per annum through savings I implemented an discount I negotiated
My cost to the company is 60% of that.
I wasnt employed to save them money, I was employed to sort out their mess with their books.
However another family member is finishing his degree at the end of the year, and I feel that they have now started to look for reasons to open up my position.
I was even asked to explain why there is a R8.25 difference in total on a turnover that was declarer over 7 months which totals R48,000,000
It was easy to explain, however the time it took me to explain it did cost the company more than R8.25 in my timewho cares about R8.25 out of R48,000,000

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## CLIVE-TRIANGLE

Hi antonhelp

1) Was your previous contract a fixed term contract with a start and end date?
2) If so, when did it end?
2) If so, what does it say about how and when it must be renewed?

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## antonhelp

1 yes, start date 1 june, end date 31 october.
2 ended 31 october
2 it does not state anything about any possibi;ity of renewal.

PS I received a letter yesterday stating that it is an addendum to the other contract and ends 28 feb 2013, and that there is no possibility of it being renewed/rolled over again.
I have not signed this addendum

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## CLIVE-TRIANGLE

Depending on how this "other contract" and addendum fits in, here is an analysis of the consequences of non-renewal of a fixed term contract:

In terms of common law, a fixed-term contract of employment is a contract of employment of which the termination is linked to a fixed/determined period, or a specific project or task. Dismissal therefore does not take place and a period of notice is not necessary, as an agreement on the termination of the contract is reached at its commencement.

With the inclusion of section 186(1)(b) in the Labour Relations Act, this common-law position changed, however. This section determines that dismissal takes place if an employee reasonably expected the employer 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. Therefore, the employer must first follow the standard procedural and substantive steps (in terms of section 188) before the contract of employment can be terminated fairly. If the employer fails to do so, the employee can lay a complaint of unfair dismissal with the Commission for Conciliation, Mediation and Arbitration (CCMA) or the bargaining council.

Before an employee takes action on the strength of section 186(1)(b), it must be determined whether he expected that the contract of employment would be renewed (or that a temporary position would become a permanent one), and whether this expectation was reasonable. The test is objective. The employee must be able to show that a reasonable person in the same position would have reasonably expected the contract to be renewed and that this expectation was created by the employer. The facts will vary from case to case and must be considered as a whole. They may include: Renewal over a long period which was accompanied by verbal promises or undertakings by the employer and conduct (such as past practices) that suggested the contract would be renewed; the wording of the contract (although not sufficient); the availability of the post; the reasons why the fixed-term contract of employment was concluded initially; the nature of the work; and the manner in which the contract was terminated.

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## Candice Fisher

Hi, I have been with my this company for 20 months now and have signed 3 general worker fixed term contracts, and  a 4th and last 1 being a supervisor contract, when I signed the contract there was no starting or ending date but I've been told it ended 21 december along with the other employees contracts. However since then I have been working in the same position with signing another contract and now they have reduced my remuneration to that of a general worker yet I'm still doing the same work I was. What are my rights

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## Dave A

Hi Candice,

You have posted your question on a thread from 2012. Labour legislation on fixed term and temporary employment contracts have changed since.

Currently a fixed term contract must be for a period of no longer than 3 months, or alternatively connected to an event. A typical example of a temporary employment contract that could legitimately last longer than 3 months would be one linked to the maternity leave of a "permanent" employee. In construction a fixed term contract of longer than 3 months could have an end date set as the completion of a particular stage of the contract. 

So the first question is - is it legitimately a fixed term contract separate from previous contracts? 

The devil will be in the details when seeking the answer to that, but if you're to contest the reduction in rate based on "legal rights", I suggest that would be the starting point.

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## Candice Fisher

Hi Dave
Taking into consideration the information you have given me, the answer to your question would be no, this is not a legitimate fixed term contract. Further development to my situation is that today about three hours before my shift starts, I received a message telling me that I have to report for day shift tomorrow. Can my employer just do that, what exactly can I do?

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