An employment contract may be terminated for the following reasons:
1) Gross Misconduct or fundamental breach
An employer may terminate an employee’s employment contract for gross misconduct or fundamental breach of the employment contracts.
The Employment Act considers the following acts as constituting gross misconduct:
1. Being absent from work without leave or lawful cause;
2. Being intoxicated at the workplace;
3. Willfully neglecting to perform duties under the employment contract;
4. Using abusive language or behaving in an insulting manner to the employer or other person of authority;
5. Committing, or on reasonable and sufficient grounds is suspected of having committed, a criminal offence against or to the substantial detriment of the employer or its property;
6. Failing to obey a directive from the employer that is within the scope of duties;
7. Being arrested for an offence punishable by imprisonment and not being released within 14 days of the arrest.
If an employer terminates an employee on the ground of misconduct, poor performance or physical incapacity, it must follow due process.
This entails:
1) Explaining to the employee in a language he or she understands, the reasons for the termination;
2) Allowing the employee to have a representative of his or her choice present during the explanation; and
3) Hearing and considering any representations that the employee and the representative, if any, may make regarding the employee’s termination.
After following due process, an employer who finds an employee guilty of gross misconduct may summarily dismiss the employee.
2) Poor Performance
For an employment to be terminated on account of poor performance, the following actions must precede the termination;
1) The employer must demonstrate that there has been an appraisal of the employee’s performance over a period with the participation of the employee, and there has been no improvement;
2) A performance improvement plan should be agreed, containing specified targets and timelines and allowing for a reasonable period of time (a minimum of two months) for the employee to improve his or her performance; and
3) Assessment of the employee’s performance over the specified period of time should clearly demonstrate that the employee has failed to achieve the targets set out in the performance improvement plan.
Before terminating the contract of employment for poor performance, an employer must;
1. Explain to the employee in a language he or she understands, the reasons for the termination;
2. Allow the employee to have a representative of his or her choice present during the explanation; and
3. Hear and consider any representations that the employee and the representative, if any, may make regarding the employee’s termination.
After following due process, the employer may terminate the employee’s employment by giving notice or paying wages in lieu of notice.
3) Physical incapacity
An employer may terminate the services of an employee on the ground of physical incapacity due to illness or physical disability.
Before doing this, an employer must provide evidence to demonstrate that the employee is incapable of carrying out his work and that there are no suitable or alternative opportunities available to the employee.
Before terminating the contract of employment on the grounds of physical incapacity, an employer must;
1) Explain to the employee in a language he or she understands, the reasons for the termination;
2) Allow the employee to have a representative of his or her choice present during the explanation; and
3) Hear and consider any representations that the employee and the representative, if any, may make regarding the employee’s termination.
After following due process, the employer may terminate the employee’s employment by giving notice or paying wages in lieu of notice.
4) Redundancy
An employer may implement redundancies for various reasons, including the following;
1. When there is an economic downturn caused by factors beyond the control of an employer that lead the employer to contemplate reducing staff numbers;
2. Where based on commercial judgment an employer considers that there are too many employees employed in a particular area or overall and there is need to reduce numbers;
3. Where there is mechanization of the modes of production that reduces the need for staff number;
4. Where there is reorganization of the business or a new business strategy or model is adopted in order to run the business more efficiently and/or profitably and this involves reduction of staff number.
There are mandatory procedural requirements that an employer must comply with before terminating an employee’s employment on account of redundancy;
The employer must notify the labour officer in charge of the areas where the employee, the affected employee and/or the relevant labour union (if the affected employee is a member of a union) of the reasons for and extent of the intended redundancy;
The notices of intended redundancy must be issued at least one month before the intended date of termination on account of redundancy;
The employer must have consultations with the employees;
Where some of the employees of a particular class will be declared redundant, the employer must, in the selection the employees to be declared redundant, have due regard to seniority, skill, ability and reliability of the employees.
After following the above process, the employer may terminate the contract of employment by giving notice or paying wages in lieu of notice.
In addition to the foregoing, an employee whose services have been terminated on account of redundancy is also entitled to severance pay (which is calculated at the rate of at least 15 days for every completed year of service) and payment of all leave accrued but not taken.
5) Expiration of contract
A fixed term contract of employment terminates automatically when the end date thereof reaches.
Remedies for unfair dismissal
Whether or not an employer conducts the termination in a fair manner, an employee is entitled to dispute the lawfulness or fairness of his or her termination.
The general rule set is that an employee’s employment must be procedurally and substantively fair.
Even where termination is allowed pursuant to an employment contract and by giving due notice, the employee still has the ability to make a claim for unfair termination.
If the Employment and Labour Relations Court finds that the termination was not justified or was unfair, it may order the employer to:
Reinstate or re-engage the employee in a position comparable to that in which the employee was employed prior to his or her termination;
1) Pay the employee wages or salary in lieu of notice that should have been given;
2) pay the employee the equivalent of up to 12 months gross monthly wages or salary as compensation for unlawful termination; or
3) Make an order for damages payable to the employee in instances where the employer's actions were particularly egregious to the employee (for example discrimination).
1) Gross Misconduct or fundamental breach
An employer may terminate an employee’s employment contract for gross misconduct or fundamental breach of the employment contracts.
The Employment Act considers the following acts as constituting gross misconduct:
1. Being absent from work without leave or lawful cause;
2. Being intoxicated at the workplace;
3. Willfully neglecting to perform duties under the employment contract;
4. Using abusive language or behaving in an insulting manner to the employer or other person of authority;
5. Committing, or on reasonable and sufficient grounds is suspected of having committed, a criminal offence against or to the substantial detriment of the employer or its property;
6. Failing to obey a directive from the employer that is within the scope of duties;
7. Being arrested for an offence punishable by imprisonment and not being released within 14 days of the arrest.
If an employer terminates an employee on the ground of misconduct, poor performance or physical incapacity, it must follow due process.
This entails:
1) Explaining to the employee in a language he or she understands, the reasons for the termination;
2) Allowing the employee to have a representative of his or her choice present during the explanation; and
3) Hearing and considering any representations that the employee and the representative, if any, may make regarding the employee’s termination.
After following due process, an employer who finds an employee guilty of gross misconduct may summarily dismiss the employee.
2) Poor Performance
For an employment to be terminated on account of poor performance, the following actions must precede the termination;
1) The employer must demonstrate that there has been an appraisal of the employee’s performance over a period with the participation of the employee, and there has been no improvement;
2) A performance improvement plan should be agreed, containing specified targets and timelines and allowing for a reasonable period of time (a minimum of two months) for the employee to improve his or her performance; and
3) Assessment of the employee’s performance over the specified period of time should clearly demonstrate that the employee has failed to achieve the targets set out in the performance improvement plan.
Before terminating the contract of employment for poor performance, an employer must;
1. Explain to the employee in a language he or she understands, the reasons for the termination;
2. Allow the employee to have a representative of his or her choice present during the explanation; and
3. Hear and consider any representations that the employee and the representative, if any, may make regarding the employee’s termination.
After following due process, the employer may terminate the employee’s employment by giving notice or paying wages in lieu of notice.
3) Physical incapacity
An employer may terminate the services of an employee on the ground of physical incapacity due to illness or physical disability.
Before doing this, an employer must provide evidence to demonstrate that the employee is incapable of carrying out his work and that there are no suitable or alternative opportunities available to the employee.
Before terminating the contract of employment on the grounds of physical incapacity, an employer must;
1) Explain to the employee in a language he or she understands, the reasons for the termination;
2) Allow the employee to have a representative of his or her choice present during the explanation; and
3) Hear and consider any representations that the employee and the representative, if any, may make regarding the employee’s termination.
After following due process, the employer may terminate the employee’s employment by giving notice or paying wages in lieu of notice.
4) Redundancy
An employer may implement redundancies for various reasons, including the following;
1. When there is an economic downturn caused by factors beyond the control of an employer that lead the employer to contemplate reducing staff numbers;
2. Where based on commercial judgment an employer considers that there are too many employees employed in a particular area or overall and there is need to reduce numbers;
3. Where there is mechanization of the modes of production that reduces the need for staff number;
4. Where there is reorganization of the business or a new business strategy or model is adopted in order to run the business more efficiently and/or profitably and this involves reduction of staff number.
There are mandatory procedural requirements that an employer must comply with before terminating an employee’s employment on account of redundancy;
The employer must notify the labour officer in charge of the areas where the employee, the affected employee and/or the relevant labour union (if the affected employee is a member of a union) of the reasons for and extent of the intended redundancy;
The notices of intended redundancy must be issued at least one month before the intended date of termination on account of redundancy;
The employer must have consultations with the employees;
Where some of the employees of a particular class will be declared redundant, the employer must, in the selection the employees to be declared redundant, have due regard to seniority, skill, ability and reliability of the employees.
After following the above process, the employer may terminate the contract of employment by giving notice or paying wages in lieu of notice.
In addition to the foregoing, an employee whose services have been terminated on account of redundancy is also entitled to severance pay (which is calculated at the rate of at least 15 days for every completed year of service) and payment of all leave accrued but not taken.
5) Expiration of contract
A fixed term contract of employment terminates automatically when the end date thereof reaches.
Remedies for unfair dismissal
Whether or not an employer conducts the termination in a fair manner, an employee is entitled to dispute the lawfulness or fairness of his or her termination.
The general rule set is that an employee’s employment must be procedurally and substantively fair.
Even where termination is allowed pursuant to an employment contract and by giving due notice, the employee still has the ability to make a claim for unfair termination.
If the Employment and Labour Relations Court finds that the termination was not justified or was unfair, it may order the employer to:
Reinstate or re-engage the employee in a position comparable to that in which the employee was employed prior to his or her termination;
1) Pay the employee wages or salary in lieu of notice that should have been given;
2) pay the employee the equivalent of up to 12 months gross monthly wages or salary as compensation for unlawful termination; or
3) Make an order for damages payable to the employee in instances where the employer's actions were particularly egregious to the employee (for example discrimination).
