A Fixed Term Employment Contract has a specific time period, with dates known to the employee. This contract is necessary when an employer wishes to employ someone for a particular period only (for example, when an employer needs to hire a temporary employee whilst an employee is on maternity leave or off for surgery). The dates where the employee will be leaving to go on maternity leave and return from maternity leave are made known to the temporary employee.
A Fixed Purpose Employment Contract is used when an employer wishes to employ someone for a specific purpose, and it is difficult to determine how long it will take the employee to complete the project or task (for instance, planting, burning firebreaks, or entering data into a new computer system).
Employers need to understand that when the end date is reached (fixed term) or the project is completed (fixed purpose), the contract must be terminated, and the employee joins the ranks of the unemployed. When employers use these contracts to avoid the implications of a permanent contract by re-employing the same employee repeatedly using one of these temporary contracts, employers risk the employee being viewed as a permanent employee by the CCMA.
The test is whether the repeated renewal of temporary contracts has created the expectation of continued employment in the employee’s mind. To avoid this risk, where employees have been employed in terms of temporary contracts, these employees should not be re-employed for a period of 3 – 6 months.