Generally speaking small employers have up to 9 employees.  Alternatively for the first 23 months a business, not formed by dividing or dissolving an existing business, will still be regarded as small whilst employing up to 49 employees.  So irrespective of actual earnings, even below the current threshold of R205,433.30 per annum, small employers are exempt from the new provisions of s198B (Fixed-term contracts) and s198C (Part-time employment) of the LRA.  This provides considerable benefits for small employers who do not need to concern themselves with the provisions of those new sections, although they are dealt with briefly for information purposes.

Fixed-term contracts

A fixed-term contract terminates on the:

  • occurrence of a specified event;
  • completion of a specified task or project; or
  • date fixed in the contract but not a normal or agreed retirement age.

Employers who have fixed-term contracts, or successive fixed-term contracts for longer than 3 months, must prove that:

  • the nature of the work is of a limited or definite duration; or
  • there is another justifiable reason for doing so.

In general a fixed-term contract is justified if the employee:

  • replaces another employee who is temporarily absent from work;
  • is needed because of a temporary increase in the volume of work that is not expected to last for longer than 12 months;
  • is a student or recent graduate employed to be trained or gain work experience to further employment or a profession;
  • works only on a specific project that has a limited or defined duration;
  • has been granted a work permit for a defined period;
  • does seasonal work;
  • is engaged for an official public works scheme or similar public job creation scheme;
  • has a position funded by an external source for a limited period; or
  • exceeds the normal or agreed retirement age.

Provided the reason is not prohibited by s 6(1) of the Employment Equity Act 55 of 1998, a justifiable reason includes different treatment resulting from applying systems that consider —

  • seniority, experience or length of service;
  • merit;
  • the quality or quantity of work performed; or
  • any other criteria of a similar nature.

After 24 months of being employed on a legitimate fixed-term contract the employee must receive severance pay (but no notice pay) of one week’s remuneration for each completed year of the contract,  calculated in accordance with s 35 of the Basic Conditions of Employment Act, unless otherwise provided in a collective agreement.

Part-time employees

A part-time employee is remunerated wholly or partly on a time basis and who generally works less hours than a comparable full-time employee, as determined by custom and practice.

Employees who ordinarily work less than 24 hours a month for an employer are exempt as well as during the first 3 months of continuous employment with an employer.

In general employers must treat part-time employees on the whole not less favourably than a comparable full-time employee doing the same or similar work, unless there is a justifiable reason for different treatment; and provide part-time employees with access to training and skills development on the whole not less favourable than the access applicable to a comparable full-time employee.

To identify comparable full-time employees consider employees who have the same type of relationship and who do the same or similar work in the same workplace, or if there is no such comparable employee, one in any other of the employer’s workplaces.

Provided the reason is not prohibited by s 6(1) of the Employment Equity Act 55 of 1998, a justifiable reason includes different treatment resulting from applying systems that consider —

  • seniority, experience or length of service;
  • merit;
  • the quality or quantity of work performed; or
  • any other criteria of a similar nature.