For how long can a fixed term contract of employment be renewed?

By Simbarashe Gobvu

The issue of employment contract renewal has become a cause for concern in most organizations in Zimbabwe. Employees are subjected to continuous fixed term contract renewal and some have renewed for numerous times as employers take chances to control the employees by means of threat for non-renewal of contract.   As a result of this many employees have remained in fear of loss of job and are subjected to all forms of unfair labour practice.

Section 12(3a) of the Labour Act Chapter 28.01 as amended by amendment number 5 of 2015 provides that a contract of employment that specifies its duration or date of termination, including a contract for casual work or seasonal work or for the performance of some specific service, shall, despite such specification, be deemed to be a contract of employment without limitation of time upon the expiry of such period of continuous service as is—

(a) Fixed by the appropriate employment council; or

(b) Prescribed by the Minister, if there is no employment council for the undertaking concerned, or where the employment council fixes no such period; and thereupon the employee concerned shall be afforded the same benefits as are in this Act or any collective bargaining agreement provided for those employees who engaged without limit of time.

It is clear that the national employment councils have been given mandate to set limits in their CBAs for number of times for contract renewal. It is however noted that the minister has not promulgated any regulations to that effect and only those sectors with limits are bound to abide by them. Continuous renewal of contacts has been challenged in courts and the Supreme Court’s position is that fixed term contracts can be renewed as many times as the employers wishes. Only casual work can transform to become permanent if continuously engaged without break.

Section 12(3) provides that a contract of employment that does not specify its duration or date of termination, other than a contract for casual work or seasonal work or for the performance of some specific service, shall be deemed to be a contract without limit of time:

Provided that a casual worker shall be deemed to have become an employee on a contract of employment without limit of time on the day that his period of engagement with a particular employer exceeds a total of six weeks in any four consecutive months.

Fixed term contracts and casual or seasonal contracts are different types of contracts which are treated separately. Section 12(3) supra is clear that casual contract can transform to permanent status if it goes beyond 6 consecutive weeks in four months. It does not apply to fixed term contracts with specific end date. In the case of Simbi (Steelmakers) (Private) Limited v versus Shamu and others SC71/2015, the Supreme Court clearly differentiated casual work and fixed term contract.

On page 8 of the cyclostyled judgement supra, Patel JA clarified the difference as follows:

“First and foremost, a fixed term contract expires automatically upon the effluxion of its stipulated period, whereas the duration of a contract of casual work will depend upon the nature of the work involved and the circumstances under which it is to be carried out. It is this indeterminate nature of its duration that entails the deemed conversion of a casual contract into one of indefinite employment in terms of the proviso to s 12(3). On a literal and grammatical interpretation of s 12(3), and without any attendant absurdity, the proviso clearly does not apply to an employee on a fixed term contract”.

The clarification above distinguished casual work from fixed term and made it clear that continuous renewal of fixed term contract does not result in casualization of labour since the parties would have agreed to enter the contract. Changing the status of a contract which parties voluntarily accepted to enter is unacceptable at law.  This was denounced again by Patel J.A in Kundai Magodora and others vs Care International SC/ 191/13 where it was held that in principle, it is not open to the courts to rewrite a contract entered into between the parties or to excuse any of them from consequences of the contract that they have freely and voluntarily accepted even if they are shown to be onerous or oppressive.

Be that as it may some National Employment Councils have fixed a number of times a contract can be renewed. For example

Commercial Sectors                                                                      6 contracts

Engineering, Iron & Steel Industry                                               3 yrs

Funeral Industry                                                                            3 yrs

Furniture Manufacturing Industry                                                2 yrs

Grain Marketing Board                                                                         2 yrs

Plastics Manufacturing Industry                                                   10 yrs

Textile Industry                                                                            60 months

Tourism Industry                                                                                 4 yrs. continuous

The law has incorporated limit of continuous renewal and employers and employees must constantly check with the relevant sectors for changes so that they are not caught unaware.

It is however noted that the minister of labour is yet to prescribe number of times a contract can be renewed and employers in those sectors who have not yet prescribed the limit still have room to continuously renew contracts of their employee’s without fear of casualization of labour.

Opinions expressed herein are solely those of the author and must not be taken as legal advice. Simbarashe Gobvu is an experienced La­bour Practitioner and an Independent Arbitrator who write in his own capac­ity. He can be contact­ed at [email protected]/ Phone 0773215904 or 0713008767

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