MEMBER FIRM OF
Termination of employment
Grounds for termination
May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?
An employee may only be terminated for just cause or excuse. ‘Just cause or excuse’ is not defined by legislation. Generally, misconduct, poor performance and redundancy are accepted as just cause for termination.
Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?
Notice of termination must be given if the termination is not owing to any misconduct, poor performance or breach of contract by the employee. Salary in lieu of notice may be paid.
In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?
An employer may dismiss an employee without notice or payment in lieu of notice where the dismissal is for misconduct, poor performance or breach of contract by the employee.
Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?
Severance pay is only statutorily payable in respect of employees falling within the purview of the Employment Act 1995 (EA employees). Severance pay is payable where the termination is by way of retrenchment or upon closure of business.
Case law dictates that, if the financial position of the employer permits it, and especially if the retrenchment exercise is carried out to increase efficiency and profits, fair and reasonable benefits should be made available. Currently, one month’s salary for each year of service is considered fair and reasonable. However, for EA employees the law prescribes that the statutory minimum termination benefits are as follows and pro rata in respect of an incomplete year of service, calculated to the nearest month:
If the employee’s contract of employment provides for more favourable severance pay to be made, the employer should comply with it.
Are there any procedural requirements for dismissing an employee?
Approval of a government agency is not required before a dismissal. However, depending on the grounds for dismissal, there are different procedural requirements. The Labour Department must be informed of any termination from employment due to retrenchment by submitting a PK Form.
In what circumstances are employees protected from dismissal?
All employees are effectively protected from unjust dismissal.
Mass terminations and collective dismissals
Are there special rules for mass terminations or collective dismissals?
Mass or collective dismissals are subject to the same rules. Also, prior notice has to be given to the Labour Department at least 30 days before the termination date if the termination is owing to redundancy or business closure.
Class and collective actions
Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?
Employees may make claims only on an individual basis for unjust dismissal. However, the courts may hear the matters together.
Mandatory retirement age
Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?
Yes, mandatory contractual retirement age is permissible provided that it is not less than the minimum retirement age of 60.
