New Model Private College v Commission for Conciliation, Mediation and Arbitration & Others

Educators had worked for the School for several years on fixed-term contracts that were consistently rolled over. In 2020, they entered 12-month fixed-term contracts. On 15 December 2020, educators were issued letters advising their contracts would end on 31 December 2020, but inviting them to apply for positions in 2021 subject to enrollment numbers and business constraints. Educators applied but received no response. On 29 December 2020, the School issued letters advising educators they participated in an unlawful strike on 2 December 2020 and the School was taking legal advice and reserved its right to institute disciplinary action. The contracts expired on 31 December 2020. Educators received certain WhatsApp communications in early January 2021 regarding school opening and meetings. On 13 January 2021, the School opened but educators were not re-engaged. On 4 February 2021, educators referred an unfair suspension dispute to the CCMA, claiming they received letters about disciplinary action but were not given a hearing while new staff were employed.

• Whether educators who had a reasonable expectation of renewal of fixed-term contracts were 'still employees' capable of being suspended after their contracts expired
• Whether the commissioner erred in law by finding that a reasonable expectation of contract renewal under section 186(1)(b) of the LRA creates an actual employment relationship for purposes of an unfair suspension dispute
• Whether the appropriate dispute was unfair dismissal under section 186(1)(b) of the LRA rather than unfair suspension
• The distinction between deemed dismissal under section 186(1)(b) and actual existence of an employment contract

The arbitration award issued by the second respondent was reviewed and set aside, and substituted with an order that the educators (3rd to 26th respondents) were not unfairly suspended by the applicant. There was no order as to costs.

The fact that the LRA deems the failure to renew a fixed-term contract (where a reasonable expectation of renewal exists) as constituting a 'dismissal' under section 186(1)(b), does not mean that the failure to renew a fixed-term contract in such circumstances per se gives rise to the actual existence of such a contract capable of being suspended. An unfair suspension dispute is premised on a contract of employment (or at least an employment relationship) actually being in existence on the date of suspension. A commissioner commits a material error of law in finding that because employees had a reasonable expectation of renewal of their fixed-term contracts, they were 'still employees' and thus capable of being suspended after their contracts had expired.

The court noted it was not clear whether all of the commissioner's factual findings reasonably supported her conclusion, and it appeared the commissioner may have left some material facts out of account, but given the approach adopted there was no need to explore this further. The court also observed that had the commissioner presided over an unfair dismissal dispute arising from an alleged dismissal under section 186(1)(b), she may well have found that the educators had a reasonable expectation that their fixed-term contracts would be renewed (or that they be retained on an indefinite basis), and thus that the School's failure to renew constituted a dismissal, and she might then have found no fair reason for dismissal and awarded 12 months' compensation if appropriate.

This case clarifies an important distinction in South African labour law between the deemed dismissal that arises under section 186(1)(b) of the LRA when a fixed-term contract is not renewed despite a reasonable expectation of renewal, and the actual existence of an employment contract for purposes of other labour disputes such as unfair suspension. It establishes that a reasonable expectation of contract renewal does not per se create an existing employment relationship that can be suspended. The case demonstrates the importance of properly characterizing labour disputes and ensuring the jurisdictional requirements for each type of dispute are met. It reinforces that unfair suspension disputes require proof of an existing employment relationship at the time of the alleged suspension, whereas unfair dismissal under section 186(1)(b) is based on a legal fiction that treats non-renewal as dismissal.