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Terminating fixed-term contracts a headache

Ivan Israelstam

 

Until the new labour laws being currently discussed are implemented it will be easy to appoint a worker on the basis of a fixed-term contract. However, it is when you want to end the employment relationship that the pain begins.

 

The employer’s need to terminate the contract could have a number of different reasons. For example, during a retrenchment exercise, the employer may need to terminate all temporary contracts so that it may give preference to saving the jobs of the permanent employees.

 

There could be a variety of factors contributing to the need for operational requirement dismissals (retrenchment). These include:

  • Faulty or archaic equipment or technology, ineffective management systems or underskilled/demotivated employees can reduce productivity, increase financial losses and affect jobs
  • Employers may need fewer employees due to labour saving devices or technology.
  • A desire to evade labour legislation might result in the contracting out of work instead of giving it to employees
  • Bankruptcy or losses caused by mismanagement or misappropriation of funds
  • Strikes and lockouts that weaken your company and chase customers and work away
  • A drop in sales due to economic factors such as the strengthening of the Rand
  • Rationalisation to shed “surplus” employees resulting from buy-outs or mergers. Beware, retrenchments for reasons related to a takeover as a going concern will be automatically unfair.

 

However, the above factors will not automatically render a retrenchment fair. For example, the courts have traditionally taken into account four key factors when deciding whether a retrenchment is fair. Viz:

  • Was there a sufficient operational reason for the retrenchment or was the retrenchment a sham
  • Was a fair criterion used for choosing the employees to be dismissed or should other employees have been retrenched instead
  • Before deciding to retrench did the employer consult properly with the employees or trade union on measures to avoid or reduce the number of retrenchments as well as on numerous other issues related to the retrenchment
  • Did the employer give the employees or union all the information relevant to the retrenchment and to the consulting process.

However, a fifth factor has suddenly come to the fore.

 

In the recent case of Buthelezi vs Municipal Demarcation Board (2005, 2 BLLR 115) the Labour Appeal Court found that retrenchment of an employee prior to the expiry of his/her fixed-term contract was unfair. In this case Mr Buthelezi had a five-year fixed-term contract with the Demarcation Board but was retrenched one year after commencement. Prior to retrenchment he was invited to apply for an alternative post but was unsuccessful. The Labour Appeal Court found that the employer did not have the right to terminate the fixed-term contract before its natural expiry date.

 

This decision is most surprising because, where the job of a fixed-term employee genuinely becomes redundant what is the employer required to do? Did the Court expect the employer to keep the employee on its books and, despite the absence of work, continue to pay the employee for four years until the contract expired?

 

Labour law gives an employer the right to retrench for good reason. The Court’s startling decision means that:

  • as regards retrenchment, a temporary employee with a fixed-term contract has stronger rights that a permanent employee
  • the practice of terminating the contracts of temporary employees in a retrenchment exercise as a means of saving permanent jobs needs to be urgently reviewed
  • the terms and wording of fixed-term contracts need to be radically revised
  • no employer should enter into or terminate a fixed-term contract before consulting with a labour law expert.
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To book for our seminars on NEW CHANGES AND DANGERS IN LABOUR LAW in Cape Town (9 March), Durban (15 March) and JHB (20 April) please contact Ronni via (011) 782-3066, 0845217492 or [email protected].

Ivan Israelstam is the Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 082 852 2973 or via e-mail address: [email protected]. Website address: www.labourlawadvice.co.za

 

What does POPI compliance mean?

By Jan du Toit

 

Latest developments – Registration of Information Officers:

 

On 17 May 2021 the Information Regulator’s long awaited online portal went live for the registration of Information and Deputy Information Officers.

 

The Information Officer of a Responsible Party is the person at the head of your company (CEO or MD) or any person acting in such capacity, or specifically appointed by the MD or CEO to be the Information Officer. Registration must be completed before the end for June 2021.

 

The address for the portal is  https://justice.gov.za/inforeg/portal.html   

 

The following information is required to successfully register: 

  • Company name.

  • Company registration number.

  • Company type.

  • Company physical and postal addresses.

  • Company telephone and fax numbers.

  • Information Officer gender, nationality, full name and surname, ID or passport number.

  • Deputy Information Officers same details as per above.

 

POPIA Compliance – what must be done?

With a little more than a month left before POPI becomes fully effective, many employers may find themselves out of time to become fully compliant to amongst other considerations, the 8 processing conditions prescribed in the Protection of Personal Information Act.

 

To be considered compliant the following must be considered and applied in the business of a Responsible Party before 1 July 2021. 

  1. POPI training / awareness sessions for the CEO / MD, managers and others tasked with the company’s POPI compliance project. Have a look on our website for the next POPIA training dates.

  2. Compliance audit to be conducted company-wide per department / division to determine the current processing practices within the organization and to establish what needs to be done to be compliant.

  3. Correction of contraventions as identified, and to introduce reasonable technical and organizational measures to prevent the loss or unauthorized access of Personal Information.

  4. Introduction of Data Subject rights and consent in the business through policies and consent clauses / paragraphs / contracts.

  5. The introduction of a PAIA manual (Promotion of Access to Information Act) that incorporates data subject rights and participation in terms of POPIA. This manual must be published on one of the company’s websites. It is also important to note that the current exemption granted by the Minister of Justice for some business to not have such a manual in place currently, expires at the end of June 2021.

  6. General staff POPI policy and legislation awareness training.

  7. Registration of the company’s Information Officer (the CEO, MD or any person acting in such position).

  8. Follow-up assessment on compliance measures and adherence thereto.

 

It is important to note that no institution, not even the Information Regulator, can “accredit” any Responsible Party in South Africa to be compliant in terms of legislation. Compliance (or otherwise) will only be determined should an investigation be launched by the Information Regulator following a complaint. Should such an investigation confirm a lack of compliance, consequences such an administrative fine not exceeding R10m may follow (which one may luckily pay off in instalments). Further to this those whose rights are infringed upon by a Responsible Party not adhering to the requirements of POPIA, may also institute civil proceedings. Such  proceedings may result in compensation being awarded for loss, as well as aggravated damages determined at the discretion of the court.

 

In terms of section 19 of the Act, the Responsible Party (business owner / employer) is required to introduce reasonable organizational and technical measures to secure the integrity and confidentiality of Personal Information. The organizational measures referred  to above includes inter alia both internal and external policies to introduce the principle of protection of personal information in the workplace, as well as the rights of data subjects.

 

To allow you more time to focus on your business, the author of this article compiled a bundle of detailed policies for your business, ready to use. This includes all relevant forms to be used and a template document with draft consent clauses / paragraphs / rules  to be incorporated into service and employment contracts, job applications, credit and other applications forms, WhatsApp and Facebook groups / pages, and Independent Contractor agreements.

 

Also included is an Operator Agreement as required in terms of section 21 of the Act and a consent letter for existing clients / service providers, to agree to the continued processing of their Personal Information beyond June 2021.

 

The policies bundle includes: 

  • Privacy notice template to be published on your website.

  • Personal information protection policy.

  • Personal information retention policy.

  • Data breach policy.

  • Data breach register - form.

  • Data breach report - form.

  • Data security policy.

  • Data subject access request policy and procedures.

  • Data subject access request forms.

  • Processing agreement with third parties as Operators - contract.

  • Data subject participation - draft consent paragraphs / clauses to be incorporated into service and employment contracts, job applications, credit and other applications forms, WhatsApp and Facebook groups / pages and Independent Contractor agreements

  • Guidelines on the appointment of deputy information officers, inclusive of appointment letter.

 

For only R3750 you can now order you set of POPI policies, ready to use. Contact Jan du Toit for further assistance at [email protected]

 

 

 

 

 

 

 

 

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The OHS Act and the Responsibilities of Management

30 September 2021 (08:30 – 16:00)

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30 September 2021 (09:00 - 16:00) (Fully Booked)

Interactive Online Course

27 October 2021 (09:00 - 16:00)

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01 October 2021 (09:00 - 16:00) (Fully Booked)

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28 October 2021 (09:00 - 16:00)

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Compensation for Occupational Injuries and Diseases Course

01 October 2021 (08:30 - 16:00) (Fully Booked)

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15 October 2021 (08:30 - 16:00)

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Basic Labour Relations

07 October 2021 (09:00 - 16:00)

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AARTO and the Impact on Your Business

08 October 2021 (09:00 - 12:00)

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POPIA: Protection of Personal Information Act

15 October 2021 (09:00 - 12:00)

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Workshop Chairing Disciplinary Hearings

21 & 22 October 2021 (09:00 - 16:00)

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Strategic Human Resources Management (HRM) and - Business Partnering

27, 28 & 29 October 2021 (08:30 - 16:00)

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29 October 2021 (09:00 - 12:00)

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