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The difference between a permanent and temporary contract

What is the difference between a permanent and a temporary staff?

During the last couple of years, employers had become more fastidious in their employment practices.  The decision to employ someone does not come easy anymore, since a mistake can become quite costly.  Be this due to the implementation of the national minimum wage or some other factor, employers are quite hesitant to employ a person on a permanent basis.


 


Unfortunately, many employers seem a bit confused about what differentiate a temporary employee from a permanent employee.  For some unknown reason, many employers believe that if a person works only a couple of days a week, or gets paid per hour of work,  they are only temporary workers. This is unfortunately incorrect.  


Some employers believe that a probation contract is only a temporary contract.  Again, this is a fallacy.  Unfortunately, such fallacy has huge potential financial risks to the employer.  However, employees that work less than 24 hours in a month, are exempt from specific Sections of the Basic Condition so Employment (See Section 6(1c))

   


The Basic Conditions of Employment provides a description of when a person may be considered a permanent employee.  If any one of the following is present, the employee can be considered permanent unless the contrary is proven:   

  1. If the person’s work is directed or controlled by another person or firm.
  2. If the person work for more than 40 hours per month for at least the last 3 months.
  3. If the person is economically dependent on the other person or firm.
  4. If the firm/person provides to tools/equipment of the trade to the person.
  5. If the person only works for the other person or firm.

In order to proof that an employee is only a temporary worker, the employer must have a signed 'fixed term' contract in place.  Failure to do so would place the onus on the employer to proof that the employee had been employed on temporary terms.  This can be very difficult to do, as merely stating the terms verbally would not be sufficient proof.  


On the other hand, a ‘Fixed-term’ contract (or temporary employee) means an employment contract that terminates on one of the following: 

  1. The occurrence of a specific event (for example, when a person is employed to replace another person that went on maternity leave, and the said person returns from maternity leave).
  2. The completion of a specific task or project (for example, in the construction industry, when the project, or the employee’s work on the project, is finished).
  3. The end date arrived (for example, when the contract specifies a specific date of termination).

Despite the above, an employer may not issue a ‘Fixed-term’ contract for longer than 3 months unless it abides by the limitations as set out in the Labour Relations Act (LRA) 66 of 1995, Section 198B(B).  These limitations would be discussed at a later stage. 


It is also important to note that any employee that works for longer than 3 months, should receive the same benefits as a permanent employee.  

 

The general rule of thumb, if there are any uncertainty, is to employee on a permanent basis, and should the operational requirements render the position redundant at a later stage, to follow the LRA, Section 189 route for termination based on operational requirements.   

   

For more queries, please visit our website at www.consupport.co.za.