THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case No: JS72/2024
In the matter between:
SOLIDARITY OBO NEL RH Plaintiff
and
PARAMOUNT AEROSPACE SYSTEMS (PTY) LTD Defendant
Heard: 14 August 2025
Delivered: 09 September 2025
This judgment was handed down electronically by circulation to the parties’
legal representatives by email. The date for handing down judgment is deemed
to be 09 September 2025.
JUDGMENT
ITZKIN, AJ
Introduction
[1] The plaintiff (Mr Nel) claims damages from the defendant (Paramount) in
terms of section 77(3) of the Basic Conditions of Employment Act 1 (BCEA), arising
1 Act 75 of 1997.
2
from Paramount’s alleged breach of contract through its termination of Mr Nel’s
fixed-term contract of employment (FTC) prior to the FTC having run its course.
[2] Mr Nel’s FTC, which was extended several times, and prior to the term of the
final extension coming to an end, Paramount dismissed him based on operational
requirements by terminating his FTC on one month’s notice. Mr Nel ’s claim is for the
amount payable for the outstanding (i.e. unexpired) period of his extended FTC as at
the date of the termination of his FTC.
[3] Paramount opposes the claim on the basis that the termination of Mr Nel’s
employment with one month’s notice accorded with the FTC (and was thus not in
breach thereof).
[4] At the commencement of the trial, Mr Nel’s representative confirmed that
although the pleadings and pre- trial conference minute make reference to aspects
pertaining to an unfair dismissal (in addition to the contractual claim) , his case is
confined to a contractual claim. The parties’ representatives also confirmed their
agreement regarding the deletion of paragraph 4.1 of the pre-trial conference minute,
which referred to a disputed fact regarding whether Paramount had failed to consult
in accordance with section 189 of the Labour Relations Act
2 (LRA).
The essential chronology
[5] On 24 May 2018, Mr Nel concluded an FTC with Paramount, which provided
for his employment to commence on 4 June 2018 and to terminate on ‘31 June 2020
/ End of F1 Mirage Contract’.
[6] Clause 3 of the FTC provided as follows:
‘3. COMMENCEMENT AND DURATION
3.1. The Employee's employment with the Company shall commence on
the Commencement Date and shall automatically terminate without notice on
2 Act 66 of 1995, as amended.
3
the Termination Date, unless it expires or is terminated prior to the
Termination Date in accordance with the provisions of this Agreement.
3.2 During the Contract Period, either Party shall be entitled to terminate
the employment relationship by giving the other party 1 (one) months' notice
of termination. The Company may elect to pay the Employee in lieu of notice.
3.3 The Employee expressly acknowledges and agrees that he has no
expectation of this Agreement being renewed or extended beyond the
Termination Date or of being employed for longer than the Contract Period.
The Employee further agrees that no representations have been made by the
Company to in any way indicate that a new fixed per iod contract will be
concluded or that this contract will be renewed after the Termination Date. It is
also understood that this Agreement is not an offer of permanent employment,
nor is the Contract Period to be regarded as a probationary period.
3.4 Should the Part ies at any time agree to renew this Agreement or
extend the Contract Per iod, no such renewal or extension shall be valid and
binding on either Party, unless it is recorded in writing and signed by both
Parties.
3.5 The Company shall be entitled to terminate this Agreement without
notice for any reason recognised by law as being sufficient.’
[7] Clause 10 of the FTC provided as follows:
‘10. TERMINATION
10.1 Notwithstanding the provisions of clause 3 above, the Company may
terminate the Employee's employment with immediate effect prior to the
Termination Date If the Employee is at any time: Notwithstanding the
provisions of clause 3 above, the Company may terminate the Employee's
employment with immediate effect prior to the Termination Date If the
Employee is at any time:
10.1.1 guilty of dishonesty, or any other gross misconduct, or gross
incompetence or wilful neglect of duty, or commits any other serious breach of
this Agreement, or
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10.1.2 acts in any manner (whether in the course of his duties or otherwise)
which is Iikely to bring his name or the name of the Company into disrepute or
prejudice the interests of the Company; or
10.1.3 be or become of unsound mind; or
10.1.4 become incapable of performing his duties hereunder by reason of ill
health or other incapacity whether accidental or otherwise; or
10.1.5 be convicted of a criminal offence; or
10.1.6 for any other reason recognised in law as sufficient to justify summary
dismissal.
10.2. On the Termination Date or on the termination of this Agreement prior
to the Termination Date in terms of the provisions of this clause, the Employee
shall forthwith return to the Company in accordance with its instructions all
equipment, correspondence, records, specifications, software, models, notes,
reports and other documents and any copies thereof and any other property
belonging to the Company including but not limited to the Company's keys,
credit cards, equipment and passes which are in his possession or under his
control. The Employee shall, if so required by the Company, confirm in writing
his compliance with the obligations under this clause.
10.3. The Employee agrees that the Company may in its sole and absolute
discretion, require the Employee not to attend at work and/or not to undertake
all or any of his duties hereunder during all or any part of any period of notice
whether given by the Employee or the Company provided always that the
Company shall continue to pay the Employee's salary and contractual
benefits.
10.4 The termination of the Employee's employment shall be without
prejudice to any right the Company may have in respect of any breach by the
Employee of any of the provisions of this Agreement which may have
occurred prior to the Termination Date.’
[8] There were two extensions of the FTC by way of extension letters:
8.1 The first extension letter is dated 19 March 2020, and it provided for an
8.1 The first extension letter is dated 19 March 2020, and it provided for an
extension ‘until 31 July 2022 / end of F1 Mirage Project’.
5
8.2 The second extension letter provided for a further extension until 31
July 2024. It also provided for an additional condition that the extension would
be contingent on him successfully applying for an L1-Visa, and that ‘[a]ll other
terms and conditions agreed upon remain unchanged’.
[9] During Mr Nel’s employment, he was deployed by Paramount to work in the
United States of America at Airborne Tactical Advantage Company (ATAC), with
which Paramount had partnered in terms of a contract.
[10] There is no dispute that Mr Nel successfully obtained his L1-Visa following the
final extension of the FTC being put into place.
[11] On 8 August 2023, Paramount issued notices of termination to Mr Nel and
three other employees.
[12] However, on 21 August 2023, ATAC retrac ted the termination letter and
issued a notice to Mr Nel , initiating a retrenchment consultation process in terms of
section 189 of the LRA.
[13] On 15 September 2023, Paramount issued a notice of termination of Mr Nel’s
employment, which stated that his employment was being terminated, on one
month’s notice, based on its operational requirements.
[14] Mr Nel’s FTC was thus terminated with effect from 14 October 2023.
[15] The termination of Mr Nel’s FTC by Paramount thus occurred nine and a half
months prior to the date of 31 July 2024 provided for in the last FTC extension letter.
[16] As at the termination of Mr Nel’s employment, Mr Nel’s monthly remuneration
amount was R61 190.24.
Evaluation
6
[17] Mr Nel’s case relied heavily on the judgment of the Labour Appeal Court
(LAC) in Buthelezi v Municipal Demarcation Board3 (Buthelezi).
[18] That case involved an unfair dismissal claim (unlike the present case, which is
a purely contractual claim). However, in the determination of the unfair dismissal
claim, the LAC made reference to the position under the common law of contract. It
did so in the context of the controversy regarding whether the employee’s dismissal
was unfair on account of the employer having breached the employee’s FTC by
impermissibly terminating it during its subsistence.
[19] The LAC framed the issue in these terms:
‘[7] In essence, the appellant contended that the dismissal was
substantively unfair because the respondent had no right in law to terminate
the fixed-term contract of employment between them prior to the expiry of its
term even if there were operational requirements which could have justified a
termination of contract for an indefinite period. He also argued that the court a
quo, having found that the dismissal was substantively and procedurally
unfair, should have awarded him compensation. He further contended that the
court a quo erred in finding that his retrenchment complied with the
requirements of section 189 of the Labour Relations Act 66 of 1995 (“the
Act”). On behalf of the respondent these contentions were disputed and it was
submitted that, where there are operational requirements that would justify a
dismissal, an employer is entitled to dismiss an employee even if his contract
of employment is for a fixed term. It was submitted on behalf of the
respondent that there was a fair reason for the dismissal of the appellant
which were based on the respondent’s operational requirements. It was
further submitted on the respondent’s behalf that, in any event, even if the
dismissal was unfair, the court a quo’s decision that the appellant should not
be awarded any compensation was justified and correct.’
be awarded any compensation was justified and correct.’
[20] The LAC held as follows:
3 [2005] 2 BLLR 115 (LAC).
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‘[9] The first question that arises in the present matter is whether the
respondent was entitled to terminate the employment contract between it and
the appellant when it cancelled it . There is no doubt that at common law a
party to a fixed- term contract has no right to terminate such contract in the
absence of a repudiation or a material breach of the contract by the other
party. In other words there is no right to terminate such contract even on
notice unless its terms provide for such termination. The rationale for this is
clear. When parties agree that their contract will endure for a certain period as
opposed to a contract for an indefinite period, they bind themselves to honour
and perform their respective obligations in terms of that contract for the
duration of the contract and they plan, as they are entitled to in the light of
their agreement, their lives on the basis that the obligations of the contract will
be performed for the duration of that contract in the absence of a material
breach of the contract. Each party is entitled to expect that the other has
carefully looked into the future and has satisfied itself that it can meet its
obligations for the entire term in the absence of any material breach.
Accordingly, no party is entitled to later seek to escape its obligations in terms
of the contract on the basis that its assessment of the future had been
erroneous or had overlooked certain things. Under the common law there is
no right to terminate of a fixed-term contract of employment prematurely in the
absence of a material breach of such contract by the other party .’ (Emphasis
added.)
[21] The question that arises from this dictum is whether, if a FTC provides for a
right on the part of either party to terminate on one month’s notice (without specifying
the reasons that must underpin such termination), it can lawfully be terminated on
notice, or whether in providing for an ‘early’ termination, the contract must also
notice, or whether in providing for an ‘early’ termination, the contract must also
provide for the circumstances under which such termination may be effected (i.e. the
reasons for which such notice may be given).
[22] For present purposes, the question is whether the FTC must specify that it
may be terminated on notice based on operational requirements , or whether it is
sufficient for it to merely provide for termination on notice.
8
[23] This distinction is relevant because in the present case , the FTC provides (in
clause 3.2) for termination on one month’s notice, but the FTC contains no reference
to the permissible reasons for which such notice may be given.
4 (That clause is to be
read with clause 10.3, which permits Paramount to require Mr Nel not to attend at
work “during all or any part of any period of notice whether given by the Employee or
the Company”.)
[24] It appears to have been unnecessary for the LAC in Buthelezi to articulate the
position in relation to this distinction, because it appears that the FTC in that matter
did not provide for premature termination (on notice) at all.
[25] A labour lawyer’s intuitive position would likely be that it is necessary for the
termination of an employment contract to be based on a permissible reason. The
LRA, which provides for fair dismissal protections, makes that position clear. But
does that position operate in the realm of the common law of contract?
[26] The issue has formed the subject of a series of judgments of this court , from
which it appears that the answer to this question is ‘no’.
[27] In Lottering & others v Stellenbosch Municipality,
5 this Court (per Cheadle AJ)
confirmed that a n FTC may only be terminated on notice if there is a specific
provision permitting termination on notice during the contractual period.
[28] The judgment in Magopeni v Acacia Mining SA (Pty) Ltd & others
6 is also
authority for the proposition that , where parties enter into an FTC of employment,
there are two exceptional scenarios in which a premature termination may be
4 Although it was contended during the trial, on behalf of Paramount, that by operation of clause 3.5
(which provides that “[t]he Company shall be entitled to terminate this Agreement without notice for
any reason recognised in law as sufficient” ), operational requirements are referred to by implication,
this construction is unsustainable, given that dismissals for operational requirements are not
recognised in law as being a sufficient basis for termination without notice (colloquially referred to as
summary dismissal).
5 (2010) 31 ILJ 2923 (LC) at para 14.
6 [2020] ZAGPPHC 300 (30 March 2020) at para 40.
9
effected. The first is that there should be a repudiation or material breach of the
terms of the contract. The second is where the terms of the contract provide for such
termination. In the latter instance, this Court has held that by entering into an FTC for
a specific period, the parties intend to be bound by the contract for the stipulated
duration unless there is an express provision made for earlier termination.
7
[29] In Farinha v Boogertman and Partners8 (Farinha), this Court (per Van Niekerk
J, as he then was) consider ed the issue in the context of a project-linked FTC which
contained a provision allowing either party to give notice of termination during its
subsistence.
[30] The Court held as follows:
‘[11] In the present instance, the contract is a hybrid. The preamble to the
agreement record that the period of employment is the duration of the
Fourways Mall Project. Clause 3 of the contract introduces a right to terminate
the contract during the course of the fixed term . One might question, as the
applicant's attorney did, why the preamble was necessary if the intention was
to conclude a contract that could be terminated on notice. But the contract is
what it is, and the court must make sense of it. But the approach to be
adopted is one that requires the court to have regard, initially at least, to the
language read in context, having regard to the purpose of the document and
the background to the preparation and production of the document. The
language of clause 3 is clear. It imposes notice periods that either party may
invoke to terminate the contract. While as Mr Morgan submits, the clause
does not expressly refer to any right to give notice to terminate the contract, it
is difficult to conceive of any other purpose that the clause might serve.
Indeed, the heading to the clause ('Termination of Service') makes clear the
notice periods are established precisely for the purpose of terminating the
notice periods are established precisely for the purpose of terminating the
contract. Further, the background to and preparation of the document was the
subject of the evidence by the applicant and the director responsible for the
project and signatory to the agreement on behalf of the respondent, Mr
7 See also Nkopane & others v Independent Electoral Commission (2007) 28 ILJ 670 (LC).
8 (J 437/2019) [2021] ZALCJHB 17 (11 February 2021).
10
Hennie Coetzee. The applicant did not suggest that the contract was
immutably one for the duration of the Fourways Mall project - he conceded
that if he were to become medically incapacitated, for example, or render
performance to an unsatisfactory standard, that the respondent would be
entitled to terminate the contract prior to the completion of the project. The
applicant specifically referred to force majeure as a basis that would entitle the
respondent to terminate the contract before the contemplated date. While I do
not wish to categorise a need to retrench as force majeure, the fact remains
that the applicant himself contemplated that circumstances outside of the
control of either party might legitimately give rise to a lawful termination of the
contract on notice. That being so, I fail to appreciate on what basis the
applicant contends that clause 3 should be disregarded as superfluous and
disregarded.
…
[13] I find that the terms of the contract concluded between the parties are
such that all things being equal, the applicant would be employed by the
respondent for the duration of the Fourways Mall project, but that either party
remained entitled during that period to give the other one calendar months '
notice of its intention to terminate the contract . In other words, clause 3 of the
contract permitted either party to terminate the contract on notice before the
expiry of the fixed term stipulated in the preamble. Although the respondent
failed initially to give a calendar months' notice, prior to the commencement of
the trial, the value of the applicant's remuneration for the balance of the notice
period was tendered and accepted. It follows that by terminating the contract
as it did, the respondent was not in breach of contract and that the applicant
has no claim for contractual damages.’ (Emphasis added.)
[31] The circumstances of this case accord substantially with those in Farinha, and
the conclusions drawn therein find application in this matter.
the conclusions drawn therein find application in this matter.
[32] Mr Nel’s FTC was a hybrid contract with a fixed term, but it entitled either
party to give the other one calendar month’s notice of its intention to terminate it
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during its subsistence. 9 Paramount provided Mr Nel with one month’s notice of
termination of his employment contract as permitted by clause 3.2, and such
termination was therefore not in breach of the contract.
[33] It follows that Mr Nel’s claim falls to be dismissed.
[34] As an aside, it is worth mentioning that during the evidence of Paramount’s
witness, Ms Paballo Mmolots i,
10 she testified that the F1 contract was terminated by
ATAC, and that the termination thereof took effect in October 2023. Whilst this, if
established, would provide for the automatic termination of Mr Nel ’s FTC by
operation of the provision linking the term to the ‘[e]nd of the F1 Mirage Contract’, the
contention that the contract terminated in October 2023 was not pleaded by
Paramount, foreshadowed in the pre- trial conference minute, or pointedly put to Mr
Nel during cross-examination. It, in any event, has no impact on the outcome herein,
as I have already found that Paramount lawfully terminated the FTC by invoking the
notice provision.
[35] With reference to the issue of costs, in Paramount’s heads of argument, it
adopted the position that if Mr Nel’s claim is dismissed, no costs order ought to be
made against him . I agree that the requirements of law and fairness are best
satisfied by making no order as to costs.
Order
1. The plaintiff’s claim is dismissed.
2. There is no order as to costs.
Riaz Itzkin
Acting Judge of the Labour Court of South Africa
9 More recently, in Sedumedi v Sefako Makgatho Health Sciences University (2025) 46 ILJ 2015 (LC),
this Court (per Meyerowitz AJ) recently adjudicated a contractual claim based on the alleged
premature termination of a FTC. It upheld an employee’s claim for contractual damages, having found
that the employment contract did not provide for the employer to terminate the contract on notice, and
only provided for the employee to do so.
10 Paramount’s Human Resources and Payroll Manager.
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Appearances:
For the Plaintiff: I Stockenstrom of Solidarity
For the Defendant: J Cordier
Instructed by: Cummings Attorneys