Does merely being employed on the basis of a series of fixed-term contracts, without more, create a reasonable expectation in terms of s186(1)(b) of the LRA?
The provisions of s186(1)(b) of the LRA were interpreted in University of Pretoria v CCMA and Others (2012) 33 ILJ 183 (LAC) (Davis JA) as follows:
‘ The words employed in s186 envisage that two requirements must be met in order for an employer’s action to constitute a dismissal:
- a reasonable expectation on the part of the employee that a fixed term contract on the same or similar terms will be renewed; and
- a failure by the employer to renew the contract on the same terms or a failure to renew it at all.
These words do not however carry the meaning which is urged by third respondent, namely that, by being employed on the basis of a series of fixed terms contracts, an employee has without more a reasonable expectation of a permanent appointment. The distinction between the fixed term contract and a permanent contract has a clear economic rationale. An employer in the position of appellant may have discretionary funds for a limited period. During this period, it offers a series of fixed term contracts to a particular employee. At some point these funds are depleted and the employer can no longer afford a further fixed term contract. By contrast, the creation of a permanent post would necessitate a more permanent source of funding”
 The words chosen by the legislature, absent an amendment to the legislation, cannot carry the burden of third respondent’s case in that it covers a restrictive set of circumstances, namely a reasonable expectation of a renewal of that which had previously governed the employment relationship, namely a fixed term contract which had previously been enjoyed, which had now expired and, by virtue of the factual matrix created, at best, a reasonable expectation of a renewal.’