Is Severance Pay Due If Employees Are Employed On Fixed-Term Contracts

In our previous article, we discussed the entitlement to severance pay in terms of Section 41 of the Basic Conditions of Employment Act (BCEA) and the circumstances under which the benefit arises. Severance pay entitlement arises when an employee's contract of employment is terminated for operational requirements. In terms of the section, the right to severance pay is thus limited to a specific reason for termination.

The Labour Relations Act (LRA), as amended, makes provision for the entitlement of severance pay to employees whose fixed-term contracts come to an end. Section 198B of the LRA provides the requirements for using fixed-term contracts to employees earning below the current threshold (R 241 110.59 per annum).