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On a daily basis I still receive enquiries from employees stating that they have been working for anything from two months to five years or more, on a fixed term or a temporary contract which is continually rolled over or renewed by the employer each time it expires. In almost every case, the employee informs me that they are not afforded the same benefits, such as pension or provident fund, that are given to the so-called permanent employees within the organization.
In some instances, employees inform me that they do not enjoy the benefit of paid annual leave, or paid sick leave, or even paid family responsibility leave, because the employer maintains that the payment for annual leave or sick leave and so on is included in the basic salary. Therefore, according to the employer, the employee's monthly salary includes an extra payment for 1.25 days annual leave and payment for 0,83 days sick leave.
Firstly, the practice of continually rolling over or continually renewing a fixed term or temporary contract every time it expires is unacceptable. Reference to section 200A of the Labour Relations Act will reveal that, in determining who is an employee, the words " irrespective of the form of contract" are used. This means, quite simply, that the "contractor" or person employed is regarded, in terms of the act, as "an employee" until the contrary is proved.
There is therefore no justification for the employer to deny such employees the benefits of pension or provident fund and medical aid on the basis that they are not "employees ", but are "contractors." Obviously, the rules of the applicable pension or provident fund and medical aid facility will play a part in this, but it is unfair to deny these benefits to employees who have been in the employer of the company for a year or longer on the basis that the employment relationship is that of a "contractor" and not that of an "employee."
Employers should be in a position to know for what period of time it is necessary to employee a person on a temporary or fixed term contract, and other contract should state clearly that it will not be renewed and that no offer of permanent employment will be made. When that contract expires, the employment relationship is terminated and the employee joins the ranks of the unemployed. If there is a need to continue that employment relationship then it may be continued on a renewed contract or a new contract altogether, but certainly should not be renewed a second time.
If there is a need for that, then quite obviously the position should be converted to permanent employment. The practice that employers follow of "including" payment for annual leave, sick leave and so on, in the employees monthly salary or wages, is in fact, illegal. This practice is particularly prevalent among the labour brokers and temporary employment agencies.
The Basic Conditions of Employment Act is quite clear in stating, "an employer may not pay an employee instead of granting paid leave in terms of the section, except on termination of employment and in accordance with section 40."
This means, quite simply, that the employee will accrue annual leave and will accrue a paid sick leave entitlement in terms of the act, and any accumulated annual leave days must be paid to the employee on termination of the contract, or during the tenure of the contract the employee would be entitled to take any a accumulated annual leave days on full pay in terms of the act.
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