The effect of changing public policy on the automatic termination of fixed-term employment contracts in South Africa
A fixed-term contract terminates automatically by expiry after a particular period, upon completion of a project, or the occurrence of an event. The use of conditional employment arrangements is accepted as a commercial reality. Awareness of the potential for the abuse of "automatic termination" clauses in employment contracts as a mechanism for termination is increasing. Recent case law on the issue indicates that public policy, which serves as the test for the validity and/or enforceability of "automatic termination" clauses, has changed. The impetus for the protection of "non-standard" or atypical employees is underscored by policy considerations that have been incorporated by the recent legislative amendments. These developments may very well place a heavier evidentiary burden than before on employers who opt to rely on "automatic termination" clauses to sustain an argument in favour of their validity and/or enforcement.
Keywords: Automatic termination; "automatic termination" clauses; contracting out of statutory protection; contractual waiver of rights; "fixed-term contract"; public policy; public interest; "non-standard" employees; resolutive conditions; temporary employment services; termination by operation of law; validity and enforceability of contractual devices.