The Labour Amendment Act and fixed-term contracts

24 Sep, 2023 - 00:09 0 Views
The Labour Amendment Act and fixed-term contracts

The Sunday Mail

Part I

IT is not uncommon for employers to give employees fixed-term contracts.

In fact, this has been a topical area among trade unions and employers’ organisations. The Labour Amendment Act has also been interpreted in various ways in so far as the issue of termination on notice is concerned. In this week’s instalment, we want to look at the law that governs fixed-term contracts.

What is a fixed-term contract? Why do employers resort to fixed-term contracts? How is this contract terminated should things come to that. Let us look into some of these questions and also the effect of the amendment of the Labour Act, especially provisions of Section 12 (3a) of the Labour Act.

What is a fixed-term contract?

A fixed-term contract of employment is one that specifies its duration. The beginning and end of that contract is provided for in terms of the agreement itself. The opposite of a fixed-term contract is one that does not speak to its duration.

If a contract is silent on its duration, it is deemed, by operation of the law, to be a contract without limit of time.

The law in Zimbabwe allows parties to enter into fixed-term contracts. There are many reasons employers resort to fixed-term contracts. They include the following:

For many employers, it is important to have flexibility in their workforce.

It may also cover a job where funding has been provided to undertake a specific task. A fixed-term contract may cover some seasonal work.

It can also work as a probationary period of sorts to see how the employee works, what they bring to the table and how they fit into their organisation.

They can also be great when an employer has a strict budget as they can predict labour costs more easily.

The law also recognises that these contracts can be renewed, even repeatedly. In UZ-UCSF Collaborative Research Programme in Women’s Health v Shamuyarira 2010 (1) ZLR 127 (S), the Supreme Court held that the continued renewal of fixed-term contracts over a period does not create a legitimate expectation of re-employment or permanent employment. In future articles, we will look at the doctrine of “legitimate expectation” and what it entails in greater detail.

This position of the law was repeated in the case of Magodora & Ors v Care International Zimbabwe SC 24/14, where the court held that the plain meaning of Section 12B (3) (b) is that the employee in a contract of fixed duration must have had a legitimate expectation of being re-engaged upon its termination and that he or she was replaced by another person who was engaged in his stead.

In that case, there had been complaints about contracts that are repeatedly renewed, and the argument from employee circles          was that this amounted to casualisation of labour.

Section 12(3a) of the Labour Act

In 2015, lawmakers came up with an amendment of the Labour Act through a section which provides that:

“(3a) 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.”

Fixed-term contracts have their challenges, especially on employees who are under such an arrangement. For example, employees who are on such contracts would not be entitled to annual paid leave. This is due to the duration of the contract itself, which may be shorter, and not permissive of annual leave to be taken. For example, if an employee is on a fixed-term contract for a year, there is no real possibility of annual leave being taken in such circumstances.

There is also exposure for pregnant employees. In a bid to avoid paying maternity leave, the employer could simply decide not to extend the fixed-term contract when it comes to an end.

Section 18 of the Labour Act (Chapter 28:01) was, however, amended in 2023, to remove the qualifying periods for maternity leave. This means a woman can just come to an employer with a pregnancy and be entitled to paid maternity leave. The mischief still remains that some employers may use the fixed-term contracts to evade maternity leave.

Section 12(3a) of the Labour Act was introduced by Section 4 of Act 5 of 2015, which amended the Labour Act. This amendment came through at a time when lawmakers were also confronted with the realities of the Zuva judgment. The section also came through against the background of complaints of casualisation of labour.

The Bill that later became the Amendment Act stated thus in Clause 4: “This clause sets out to protect employees from employers who perpetually renew ‘fixed-term contracts’, so has to avoid obligations that come with permanent employees, such as longer notice periods, retrenchment packages and pensions. After a period of continuous service determined by the employment council, a ‘fixed-term contract’ employee shall be deemed to be a permanent employee who will be afforded the same obligations or entitlement by the employer.”

The purpose stated in the Bill speaks to what the legislature wanted to see in contracts of a fixed nature, in particular that after a period of continuous service determined by the employment council, a worker shall be deemed to be a permanent employee who will be afforded the same obligations or entitlement by the employer.

LEGAL DISCLAIMER: The material contained in this article is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the article. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.


Arthur Marara is a practising attorney, author, human capital trainer, business speaker, thought leader, law lecturer, consultant and legal proctor (UZ). He is also a notary public and conveyancer. He has vast experience in employment law and has worked with several organisations. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email [email protected]


Share This: