Contract ends: When should we get paid?

Labour Q&A with Terry Bell

Fin24 user Raymond T is questioning the time of pay-out after contract termination. He writes:

I have worked for a security company on a fixed-term contract for five years but now our contract is coming to an end at the end of September after the Gauteng Health Department informed the company that the contract will not be renewed after 30 September 2014.

The company send us consultation letters for retrenchment on the 23 August, but this week we received termination letters. Now the company has informed us that our severance pay, bonuses and service monies will only be paid at the end of October.

My question is should we not get all our benefits at the end of our fixed term contract? Is the company allowed to choose a time that is convenient for them to pay our benefits? As employees are we not entitled to all the earnings due to us at the end of a fixed-term contract?

We are scared that something may happen to our monies.

Terry Bell responds:

From what you say, you were on an annual or perhaps shorter period fixed term contract.  

In fact, given the time you have been employed, you should have been on permanent staff. In which case, the company should perhaps be retrenching you on the basis of operational requirements, having lost the Health Department contract.

The minimum payment here would be one week for every completed year of service.  And everything should be finalised when you finish work on September 30.  

There may, however, be a legitimate reason for the delay of a month, but reasons must be given to you.

On your fear that something may happen to your money, I assume the company you were working for continues to exist;  that it is just this contract that has come to an end.  

But does the contract itself end at the end of this month or at the end of October? And does your fixed term contract contain a notice period? Usually, if a contract is on a month-by-month basis over perhaps a year, a full calendar month of notice is usually required.

You state that your contract will end on September 30, but that you were only given termination notices on September 17. This can happen (depending on the conditions in the contract) but it does seem unusual. However, without sight of the contract I cannot comment conclusively.

My advice, if you are not already in touch with a union, is to ensure that all dealings with the company are in writing and that explanations are given to you for what is happening.

If the company is continuing to operate after the end of this contract and the termination of your services, you should have no difficulty in getting your money.

If you send me your contract details, the name of your employer and place of employment, along with any other details you think pertinent, I may be in a better position to help, should this be necessary.

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