Department of Agriculture, Forestry and Fisheries v Teto and Others

The first to third respondents (Teto, Titus, and Koopman) were initially employed by DAFF on one-year fixed-term contracts from 15 July 2013 to 14 July 2014 in the Working for Fisheries Programme (WFFP). One day before their contracts expired on 13 July 2014, they met with DAFF management who agreed they would continue working on an indefinite basis. Their salaries would be paid through implementing agencies (including Management for Excellence, Jaymat Environ Solutions CC, and Cederberg Municipality) rather than directly through the government Persal system, though DAFF remained in control of their work. This arrangement continued until 25 August 2016 when they were dismissed without explanation or fair procedure. Throughout this period, they performed the same tasks, reported to DAFF managers, worked at DAFF premises, and DAFF controlled all aspects of their employment including travel arrangements and daily allowances. The arrangement with service providers was merely a payment mechanism because their posts were not on the establishment organogram.

• Whether the respondents remained employees of DAFF after the expiry of their fixed-term contracts
• Whether the commissioner had jurisdiction to determine the unfair dismissal dispute
• Whether the dismissals were substantively and procedurally fair
• Whether reinstatement was the appropriate remedy
• What happens when an employee continues working after the expiry of a fixed-term contract
• Whether technical defects in the review application should have resulted in its dismissal

The appeal was dismissed with costs. The cross-appeal was upheld with costs and the order of the Labour Court was substituted with an order dismissing the application for review with costs. This effectively reinstated the commissioner's original award ordering the retrospective reinstatement of the respondents.

When an employee continues to render services to an employer after the expiry of a fixed-term contract and receives remuneration for those services, the contract is deemed to be tacitly relocated or novated. Unless a contrary intention can be inferred from the facts, it will generally be assumed that the parties intended the new contract to be of indefinite duration, terminable by reasonable notice given by either party. The employment relationship is determined by the substance of the arrangement including control, direction, and workplace integration, not merely by payment mechanisms. Under section 193(2) of the LRA, in the absence of exceptional circumstances (employee not seeking reinstatement, intolerable employment relationship, impracticability, or purely procedural unfairness), the primary remedy for unfair dismissal is reinstatement, and the employer bears the onus to prove exceptional reasons justifying a different remedy.

The court noted that the commissioner's reference to the new contract as a "permanent" contract was perhaps a mischaracterisation, but he clearly meant that the new contract was one of an indefinite nature terminable by reasonable notice. The court also observed that given its view on the merits, there was no need to pronounce on the preliminary point that the application for review was technically defective and should have been dismissed on that ground alone (relating to non-filing of original papers and non-compliance with the Justices of the Peace and Commissioners of Oaths Act and its regulations). The court noted that equity demanded that costs should follow the result in the case.

This case clarifies important principles regarding the continuation of employment after fixed-term contracts expire and reinforces the primacy of reinstatement as a remedy for unfair dismissal in South African labour law. It establishes that when employees continue working after fixed-term contracts expire, the contract is tacitly novated into one of indefinite duration unless contrary intention can be shown. The case also emphasizes that the primary remedy for unfair dismissal is reinstatement unless the employer proves exceptional circumstances under section 193(2) of the LRA. The judgment demonstrates that employment relationships are determined by the substance of the arrangement (control, direction, duties) rather than mere payment mechanisms, preventing employers from avoiding obligations through artificial payment structures using intermediaries.