CDH Conversations Podcast hosted Director Bongani Masuku and Associate Tshepiso Rasetlola from the Employment Law Practice, where they discussed the general principles of retrenchments and, how it affects fixed-term contract employees.

The episode focused on severance pay in respect of fixed-term contract employees by highlighting the CCMA case of SA Revolutionary  Allied Workers Union on behalf of Ntshangase & Others and Mjayeli  Security Services which dealt with the question whether fixed-term contract employees are eligible to be paid severance pay. The employees  had been on a fixed term contract (FTC) or a period in excess of 24  months and earned below the threshold. The commissioner found that the  employees in this case had been terminated for reasons relating to the employer's operational requirements and were entitled to being paid severance in terms of section 41 (BCEA) both by reason of their retrenchment and by reason of the amendment to section 198. 

Great consideration to be taken in setting the period of employment in FTCs, and in any subsequent extensions and/or renewals. If below the threshold, then provision to be made for the payment of severance should employment terminate, and they meet the requirements of section  198B(10)(a). Proper advice must be obtained when considering terminating  FTCs and the ramifications thereof both in terms of section 189 and  198B.