Wednesday, July 23, 2008

Employers are, understandably, often reluctant to enter into a permanent employment relationship with an individual whom they might only have met briefly during an interview.
Where a recruitment agent has been employed, employers might not even have had the benefit of being acquainted with the applicant employee during an interview, and feel compelled to accept the applicant for employment on the recommendation of the agent.
One apparently obvious answer to the dilemma is to ensure that the employment contract contains a probationary clause.
According to Schedule 8 of the Labour Relations Act, “the purpose of probation is to give the employer an opportunity to evaluate the employee’s performance before confirming the employment”.  This implies that the status of the employee during probation is less than permanent and that it is a simple matter either to dismiss the employee during probation, or to simply not “confirm the appointment”.
Not so.  An employee on probation has the right to expect his employer to take all steps necessary during probation to ensure that his performance is satisfactory, including giving whatever instruction, training, guidance or counselling may reasonably be necessary.
Although an employer must follow a fair procedure if he contemplates terminating the employee’s employment during probation, the employer’s grounds for dismissal do not have to be quite as compelling as they would be for an employee who has completed the probationary period.
However, it cannot be correct to infer that an employee serving a probationary period should have to wait for someone to “confirm the appointment” before feeling secure.
Assuming the employee’s contract is open ended, but subject to a six months’ probationary period, the employee may regard himself as a permanent employee from the start, in the secure knowledge that he cannot be fairly dismissed during probation unless there are good grounds and a fair procedure is followed.
Although the grounds might not have to be as “compelling” as for employees who have completed the probationary period, there must still be reasons, and the employee should be able to contest those reasons if a fair procedure is followed.
Is a fixed term contract a better solution?  Maybe, but certainly not if it is simply intended to “roll over” the first fixed term contract into the next.
As soon as the employer creates a reasonable expectation that the contract will be renewed on the same or similar terms, and does not renew it, the employer will have achieved nothing by entering into a fixed term contract.  He could just as well have entered into a permanent employment relationship, subject to a probationary clause.
However, fixed term contracts certainly have their place, and are perhaps not always correctly used.  Too often one finds that an employer makes the mistake of determining the duration of a fixed term contract on a time basis only, whereas it could easily be linked to work.
An employee’s employment could terminate, by effluxion of time (and therefore without notice and without any procedure) if, for example, it is linked to a project undertaken by the employer.
An employer in the construction industry could employ a bricklayer for “as long as it takes for a building to reach roof height”.  Or, the employment could be linked to the employer’s contract with another. The employee, for instance, could be employed as a driver for a car hire company for as long as the car hire company has a contract to operate its business on the premises of, say, the Cape Town International Airport. 
The advantages of fixed term contracts are obvious – no retrenchment packages are payable, and no procedure needs to be followed on termination.  But employers would do well to remain vigilant and not to create the “reasonable expectation” that the fixed term contract will be renewed.
Bob von Witt is Director, Employment Law Department, Bowman Gilfillan, Cape Town