Introduction

The Industrial Court of Eswatini recently delivered a pivotal judgment in the matter of Mfanimpela Hlatshwako v ICAP Eswatini (136/2021) [2026] SZIC 53 (7 July 2026) providing much-needed clarity on the legal consequences of the expiry of fixed-term employment contracts and, in particular, the limits of the doctrine of legitimate expectation in the Eswatini employment law context. The judgment, delivered on 07 July 2026, reinforces that there is a distinction between statutory provisions and common law principles particularly when those principles lack a specific legislative anchor. It confirms that, where the legislature has specifically addressed the consequences of the expiry of a fixed-term contract, the statutory framework cannot readily be displaced by an employee’s reliance on a legitimate expectation of renewal.

 

Factual Background

The dispute arose from an employer-employee relationship that commenced on April 2, 2012. The parties entered into a series of 12-month fixed-term contracts that were renewed consecutively over a period of approximately six (6) years. On June 30, 2018, the Respondent (ICAP Eswatini) advised the Applicant that it did not intend to continue the relationship, effectively allowing the final contract to expire by effluxion of time.

 

The Applicant approached the Court seeking compensation for what he termed an unfair termination, arguing that he had a legitimate expectation of renewal because his contract had been extended on six previous instances.

 

The case therefore raised a significant question: can a history of successive renewals of fixed-term employment contracts, without more, create a legally enforceable expectation of further renewal under Eswatini law?

 

The Legal Conflict: Statutory Protection versus Legitimate Expectation

The core of the Respondent’s defence rested on a point in limine involving Section 35(1)(d) of the Employment Act, 1980. This section explicitly states that protection against unfair termination shall not apply to “an employee engaged for a fixed-term and whose term of engagement has expired”.

 

Furthermore, the employment contract itself contained two critical clauses:

Clause 2: Stated that the agreement was contingent on available funding and donor-agency tasks.

Clause 3: Expressly provided that the renewal or non-renewal of the contract shall be at the sole discretion of the employer.

 

These provisions were important because they demonstrated that the continuation of the employment relationship was not expressed to be automatic. The contract itself contemplated the possibility that the relationship would come to an end upon expiry of the agreed term and expressly reserved the employer’s discretion regarding renewal.

 

The Court’s Reasoning

The Court, presided over by Judge M.M. Thwala, examined the Applicant’s reliance on the principle of legitimate expectation, which is often successfully invoked in South African labor law. However, the Court made a sharp distinction between the two neighbouring jurisdictions.

 

While the South African Labour Relations Act 66 of 1995 (‘LRA’), specifically section 186(1)(b), expressly recognises that a failure to renew a fixed-term contract constitutes a dismissal if the employee reasonably expected a renewal, the Court noted that Eswatini has no similar provision in its statutory law. The Court held that:

 

• Section 35(1)(d) of the Employment Act 1980 appears to preclude reliance on a legitimate expectation of renewal.
• The principle of legitimate expectation does not, in itself, give rise to a legal right to the renewal of a fixed-term contract under current Eswatini statutes.
• The Court’s hands were tied because the Applicant’s claim was based solely on the insistence of renewal due to past history, rather than any other matter that might arise at common law under Section 8 of the Industrial Relations Act, 2000.

 

Conclusion

In dismissing the Applicant’s claim, the Industrial Court has reaffirmed the finality of fixed-term contracts upon their expiration date and provides useful guidance to both sides of the employment relationship. For employees, this underscores the precarious nature of back-to-back renewals. The fact that an employer has renewed a contract repeatedly does not, without more, necessarily guarantee further renewal. Employees working under such arrangements should therefore distinguish between an expectation created by past conduct and a legally enforceable entitlement to continued employment. For employers, it validates the use of fixed-term agreements as a tool for workforce management, provided the contracts are clearly defined and the reasons for non-renewal are anchored in the agreement and the law.

 

In the present case, the contractual provisions relating to funding, donor-agency requirements and the employer’s discretion to renew or not renew the agreement provided important context for the Court’s consideration of the dispute.

 

Employers should nevertheless exercise caution. The judgment should not necessarily be read as establishing that an employer may use fixed-term contracts without regard to the broader requirements of employment law. The enforceability and effect of any particular contractual arrangement will ultimately depend upon the applicable statutory provisions, the terms of the agreement and the facts of the individual case.

 

Ultimately, the decision demonstrates that while legitimate expectation may remain relevant in appropriate circumstances, its existence cannot, without an appropriate legal foundation, override the express terms of a fixed-term employment contract or the statutory consequences attached to its expiry.

 

Should you require further elucidation on the subject you may contact the writer.