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Case Law: Be careful when dismissing a fixed-term employee before the end of his contract

by , 01 December 2015
Are you considering terminating a fixed-term employee's contract early? If so, then you should first take note of the following case:

Case Law: Buthelezi v Municipal Demarcation Board, JA 37/2002

In this case, the Municipalitty carried out an early termination of Buthelezi's fixed-term contract. Buthelezi then claimed this as an unfair dismissal. And the Labour Appeal Court (LAC) agreed with him!

You see, the LAC noted that Buthelezi's fixed-term contract didn't provide for early termination. And because of this, the employer had no right to terminate the contract earlier, even on notice.

Read on to see how you can learn from this case…
 
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What can you learn from this case?

The LAC made it clear that, when a fixed-term contract is entered into, both parties must see it through. So, neither you nor the employee can get out of the contract earlier than the agreed date.

But there's an exception to this! In other words, if you've made provision for the possibility of early termination in your fixed-term contract, then you can do so. For example, you may wish to do so for 'operational requirements' or for incapacity.

This can actually be beneficial to both parties, in that the employee too would not be bound to the contract if, for example, she was offered another job somewhere else.

At the end of the day, the importance of this case stands to remind you to always think very carefully before entering into a fixed-term contract.

You should provide for the possibility of early termination of the fixed-term contract, if you think you might need to.

If you don't do this, then you'll have to stick to the contract's period. And if you an employee takes you for an unfair dismissal, you could end up paying him compensation for the remaining period of the fixed-term contract.

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