Labour Law

Fixed-Term Contract

A fixed-term contract employs someone for a defined period or project. After 3 months, fixed-term employees earning below the threshold have the same rights as permanent employees.

Legal Definition

Section 198B of the LRA (inserted by the Labour Relations Amendment Act 2014) restricts the use of fixed-term contracts for employees earning below the BCEA threshold. After three months, the employer must justify the fixed term. Failure to do so creates an expectation of indefinite employment.

📖 Constitutional / Statutory Basis: Section 23, Constitution of the Republic of South Africa, 1996; Labour Relations Act 66 of 1995 s198B

Practical Example

You are employed on a series of three-month contracts doing the same job continuously for two years. The employer treats each as a new contract. After the LRA amendment, this is unlawful — you are effectively a permanent employee.

Frequently Asked Questions

Can a fixed-term contract be terminated early?

Only if the contract provides for it or by agreement. Early termination without good cause can constitute unfair dismissal.

Am I entitled to severance pay at the end of a fixed-term contract?

Not automatically. If your contract has a reasonable expectation of renewal and is not renewed, you can claim for unfair dismissal at the CCMA.

What is a reasonable expectation of renewal?

If the employer's conduct created an expectation — e.g., regular renewals, assurances — the employee may have a claim if the contract is not renewed.

Related Terms

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