1. The document discusses the definition of dismissal in terms of South African labour law, specifically regarding failure to renew fixed-term employment contracts or offering less favorable renewal terms. 2. It examines factors like the employer's conduct, assurances, practices and the availability of work that could lead an employee to reasonably expect renewal of a fixed-term contract or indefinite employment. 3. The Labour Relations Amendment Act provides that employment concluded or renewed in contravention of its rules regarding successive fixed-term contracts of over three months will be deemed indefinite.

1. FAILURE TO RENEW CONTRACT OF EMPLOYMENT AND RIGHT TO
EXPECTATION OF EMPLOYMENT (PRACTICE NOTE 4 OF 2016)
1. Dismissal in the context of the Labour Relations Act 66 of 1996(LRA) has always
been defined and provided for in terms of section 186 of the LRA.
2. Section 186 provides as follows:
186. Meaning of dismissal and unfair labour practice
(1) "Dismissal" means that-
(a) an employer has terminated a contract of employment with or without notice;
(b) an employee reasonably expected the employer to renew a fixed term contract of employment
on the same or similar terms but the employer offered to renew it on less favourable terms, or did
not renew it;
(c) an employer refused to allow an employee to resume work after she-
(i) took maternity leave in terms of any law, collective agreement or her contract of employment;
or
(ii) was absent from work for up to four weeks before the expected date, and up to eight weeks
after the actual date, of the birth of her child;
(d) an employer who dismissed a number of employees for the same or similar reasons has
offered to re-employ one or more of them but has refused to re-employ another; or
(e) an employee terminated a contract of employment with or without notice because the
employer made continued employment intolerable for the employee.
(f) an employee terminated a contract of employment with or without notice because the new
employer, after a transfer in terms of section 197 or section 197A, provided the employee with
conditions or circumstances at work that are substantially less favourable to the employee than
those provided by the old employer.
3. In the present context more interest is spurred in the definition in relation of
failing to renew a contract of employment on same or similar terms or offering a
less favourable contract of employment than the previous contract of
employment1
.
1
Section 30 of the Labour Relations Amendment Act 6 of 2014 (LRAA) provides as follows:
. Section 186 of the principal Act is hereby amended— (a) by the substitution in subsection (1) for
paragraphs(a) and (b) of the following paragraphs, respectively: ‘‘(a) an employer has terminated [a
contract of] employment with or without notice; (b) an employee employed in terms of a fixed term
contract of employment reasonably expected the employer— (i) to renew a fixed term contract of
employment on the same or similar terms but the employer offered to renew it on less favourable terms,
or did not renew it; or (ii) to retain the employee in employment on an indefinite basis but otherwise on the

2. 4. The purpose of the those sections of the LRA is to prevent the unfair practice
by employers of keeping an employee on a temporary basis, without
employment security such as pension and medical aid until such time as the
employer wants to dismiss the employee without complying with the obligations
imposed by the LRA in respect of permanent employees2
.
5. A series of offers by the employer to the employee to engage in repeated fixed-
term contracts, instead of extending an offer of indefinite employment to that
employee, has been the topic of hot debate and dispute in the arena of labour
law under the following circumstances: (a) where the employer is in the position
to do so; and/or (b) where the employer was responsible for creating a
reasonable expectation that repeated renewals would result in indefinite
employment when possible3
.
6. Section 198B4
provides the solution when employing employees on repeated
fixed term contracts.
same or similar terms as the fixed term contract, but the employer offered to retain the employee on less
favourable terms, or did not offer to retain the employee.’’; and (b) by the substitution in subsection (1)
2
Biggs v Rand Water 2003 24 ILJ 1957 (LC) 1961A-B stated: "Section 186(1)(b) was included in the LRA
to prevent the unfair practice of keeping an employee on a temporary basis without employment security
until it suits an employer to dismiss such an employee without the unpleasant obligations imposed on
employers by the LRA in respect of permanent employees.
3
See Yebe v University of KZN 2007 28 ILJ 490 (CCMA) para 4.5. The court held that the series of
renewals in this case created a reasonable expectation that the employment relationship would be
renewed, and the employer's failure to renew the employment relationship proved to be a dismissal.
4
Section198B (3) of the LRAA provides as follows: An employer may employ an employee on a fixed
term contract or successive fixed term contracts for longer than three months of employment only if— (a)
the nature of the work for which the employee is employed is of a limited or definite duration; or (b) the
employer can demonstrate any other justifiable reason for fixing the term of the contract.

3. 7. An employer may employ an employee on a fixed term contract or successive
fixed term contracts for longer than three months of employment only if5
;
7.1. the nature of the work for which the employee is employed is of a limited or
definite duration;
7.2. or the employer can demonstrate any other justifiable reason for fixing the term
of the contract.
8. In terms of section 198B (5), any form of employment concluded or renewed in
contravention of subsection (3) is deemed to be of an indefinite duration.
9. The purpose of this note is to consider the legal approach that could regulate or
guide the series of fixed term contracts and allow employees to be employed
indefinitely when such a reasonable expectation is created by the employer.
10. Often times the employee as the weaker part in any bargaining occasion is
always at the mercy of the employer who purports to throw a life line of a series
of fixed term contracts, whilst avoiding to employ the worker, for a permanent
period.
5
See section 198B (3) of the LRAA.

4. 11. The primary focus of judgments in evaluating the reasonability and fairness of the
fixed-term contract are based on the three main aspects of section 186(1)(b) of
the LRA:
11.1. Whether the failure to renew a fixed-term contract constitute a dismissal;
11.2. Whether "on the same or similar terms" were included in the renewal;
11.3. and whether the employee can prove that his/her de facto expectation of the
renewal was indeed reasonable.
12. Even where a contract words that the renewal and/or subsequent renewals do
not create a reasonable expectation, such reasonable expectation could arise,
taking into account the practice, any assurances, and any further conduct of the
employer6
.
13. Such fixed term contracts must be the same or similar to each other7
.
6
See in this regard Mediterranean Woollen Mills (Pty) Ltd v SACTWU 1998 19 ILJ 366 (LAC).
7
See the position in Dierks v University of South Africa 1999 20 ILJ 1227 (LC) 1146F-G.

5. 14. Remedies are only available to employees who subjectively relied on a
reasonable expectation created by the employer for the renewal of a fixed-term
contract, provided that the expectation has an objective basis8
.
15. The number of times, or the expectation created by the employer in renewing
and/or extending contracts, may contribute towards a reasonable expectation of
renewal of the contract and ultimately permanent employment.
16. Employees can successfully argue reasonable expectation based on the
following criterion9
:
16.1. the significance or otherwise of the contractual stipulation,
16.2. agreements,
16.3. undertakings by the employer,
16.4. or practice or custom in regard to renewal of the employment,
16.5. the availability of work,
16.6. the purpose of or the reason for concluding the fixed term contract,
16.7. inconsistent conduct,
16.8. failure to give reasonable notice,
16.9. and the nature of the employer's business.
8
SA Rugby (Pty) Ltd v CCMA 2006 27 ILJ 1041 (LC).
9
See Dierks v University of South Africa (supra). See also King Sabata Dalindyebo Municipality v CCMA
& others (2005) 26 ILJ 474 (LC), McInnes v Technikon Natal (2000) 21 ILJ 1138 (LC) [also reported at
[2000] 6 BLLR 701 (LC); SACTWU & another v Cadema Industries (Pty) Ltd [2008] 8 BLLR 790 (LC)

6. 17. There are also instances where no reasonable expectation has been found not to
exist10
.
18. It is interesting to note as to how the LRAA now provides indefinite employment as
remedy for reasonable expectation in failure to renew contract cases.
Dated at Pretoria this 4th
day of May 2016
MT Kufa
LLB, LLM (Unisa)
(Advocate of the High Court of South Africa)
10
See in this regard, SA Rugby Player Association v SA Rugby (Pty) Ltd (2008) 29 ILJ 2218 (LAC); Black
v John Snow Public Health Group (2010) 31 ILJ 1152 (LC).