A Fixed Term Employment Contract has a very specific time period, which dates are known to the employee. This contract is necessary when an employer wishes to employ someone for a specific time period only (for example where an employer needs to employ a temporary employee whilst an employee is on maternity leave or off for surgery). The dates where the employee will be leaving to go on maternity leave and return from maternity leave are made known to the temporary employee.
A Fixed Purpose Employment Contract is used when an employer wishes to employ someone for a specific purpose and it is difficult to determine how long it will take the employee to complete the project or task (for instance, planting, burning firebreaks, or entering data into a new computer system).
It is important for employers to understand that when the second date is reached (fixed term) or the project is completed (fixed purpose), then the contract is terminated and the employee joins the ranks of the unemployed. Where employers use these contracts as a means of avoiding the implications of a permanent contract by re-employing the same employee over and over again using one of these temporary contracts, employers risk the employee being viewed as a permanent employee by the CCMA.
The test is whether the repeated renewal of temporary contracts has created in the mind of the employee the expectation of continued employment. If employees have been employed in terms of temporary contracts, there should be a period of 3 – 6 months before being employed again so as to avoid this risk.