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Revealed: Four vital rules for managing fixed-term contracts

by , 11 December 2013
Managing relationships with people you've only employed for a limited duration is a challenge. Often fixed-term employees are used incorrectly and many employers don't understand how they work. Don't fall into the same trap. Use these four rules to effectively manage fixed-term contracts...

You must manage fixed-term contracts effectively. If you don't, you could find yourself facing endless labour disputes.

So how do you go about managing fixed-term contracts?

Use these four rules to effectively manage fixed-term contracts

The Labour Law for Managers Loose Leaf Service says fixed-term contracts must be managed well and the following aspects are crucial:

Rule #1: The fixed-term contract must be in writing. This ensures your employee can't allege you didn't have an agreement.

Rule #2: The contract must specify the period of employment, in terms of either weeks or months or the event that'll trigger the end date (such as a specifically described project).

Never promise the contract will be renewed or extended.

Rule #3: The contract must explicitly state that no legitimate expectation of continued employment after the expiry of the contract is created by the contract. This means once your employee's fixed-term period has expired, the relationship terminates automatically due to the lapse of time.

Rule #4: Don't allow an employee to resume work once the contract has expired, either because the term has expired or because the specific project has come to an end.

You must remind your employee beforehand (for example, a week or a month depending on the length of the contract) that the contract is due to expire.

You shouldn't confuse this with giving notice – it's merely a courtesy extended to your employee and is indicative of good management.

Mismanaging fixed-term contracts could land you at the CCMA. So use these rules to manage these contracts lawfully.

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