Employees have the right not to be unlawfully or unfairly dismissed [LRA s185].  This simply means that senior management may ‘dismiss’ lawfully and fairly.  So employees do not have a ‘guaranteed job for life’.  A complex blend of common law and legislation governs ending employment.  Employees have the right to refer grievances and disputes externally to the CCMA or bargaining council and even the labour courts.  Senior managers must comply with the law to avoid the risk of being subjected to unnecessary expenses, ridicule and embarrassment in those forums.  The common law and the Basic Conditions of Employment Act (BCEA) regulate lawfulness, whereas the Labour Relations Act (LRA) protects employees against unfairness

Termination checklist

Senior managers who know and understand the law respect these rights by ensuring that they:

  • follow fair procedures as provided in the LRA Code of Good Practice: Dismissal;
  • investigate grievances and perceived breaches of reasonable standards;
  • report suspected criminal behaviour to the police for investigation;
  • avoid using language suggestive of criminal behaviour [like ‘charges’ and ‘guilty’] when communicating with their employees;
  • allow employees to respond to written allegations of unacceptable behaviour or performance;
  • ensure that the reason for possible termination is validly related to behaviour or performance;
  • ensure the fairness of the reason by confirming that any unacceptable:
    • behaviour has seriously damaged or destroyed the relationship of trust;
    • performance has seriously damaged or destroyed the relationship of confidence.
  • pay reasonable notice pay [BCEA s38 and at least the minimum provided in BCEA s37(1)] when terminating employment;
  • deprive the employee of notice pay if the reason is based on a material breach of contract [such as gross misconduct] being a ‘cause recognised by law’ – BCEA s37(6) – see below];
  • pay ‘severance pay’ in addition to notice pay [BCEA s41(5)] if and when the reason for termination is based on ‘operational requirements’ as defined in BCEA s41 after following the statutory procedures in LRA s189;
  • provide the employee with:
    • written notice of termination [see below BCEA s37(4)(a)]; and
    • certificate of service [see below BCEA s42].

Excerpts from the BCEA

Chapt 5: Termination of employment

36   Application of this Chapter.

This Chapter does not apply to an employee who works less than 24 hours in a month for an employer.

37   Notice of termination of employment.

(1)  Subject to section 38, a contract of employment terminable at the instance of a party to the contract may be terminated only on notice of not less than—

(a)        1 week, if the employee has been employed for 6 months or less;

(b)        2 weeks, if the employee has been employed for more than 6 months but not more than one year;

(c)         4 weeks, if the employee—

(i)         has been employed for one year or more; or

(ii)        is a farm worker or domestic worker who has been employed for more than 6 months.

(2)

(a)  A collective agreement may not permit a notice period shorter than that required by subsection (1).

(b)  Despite paragraph (a), a collective agreement may permit the notice period of four weeks required by subsection (1)(c)(i) to be reduced to not less than two weeks.

(3)  No agreement may require or permit an employee to give a period of notice longer than that required of the employer.

(4)

(a) Notice of termination of a contract of employment must be given in writing, except when it is given by an illiterate employee.

(b)  If an employee who receives notice of termination is not able to understand it, the notice must be explained orally by, or on behalf of, the employer to the employee in an official language the employee reasonably understands.

(5)  Notice of termination of a contract of employment given by an employer must—

(a)        not be given during any period of leave to which the employee is entitled in terms of Chapter Three; and

(b)        not run concurrently with any period of leave to which the employee is entitled in terms of Chapter Three, except sick leave.

(6)  Nothing in this section affects the right

(a)        of a dismissed employee to dispute the lawfulness or fairness of the dismissal in terms of Chapter VIII of the Labour Relations Act, 1995, or any other law; and

(b)        of an employer or an employee to terminate a contract of employment without notice for any cause recognised by law.

38   Payment instead of notice.

(1)  Instead of giving an employee notice in terms of section 37, an employer may pay the employee the remuneration the employee would have received, calculated in accordance with section 35, if the employee had worked during the notice period.

(2)  If an employee gives notice of termination of employment, and the employer waives any part of the notice, the employer must pay the remuneration referred to in subsection (1), unless the employer and employee agree otherwise.

39   Employees in accommodation provided by employers.

(1)  If the employer of an employee who resides in accommodation that is situated on the premises of the employer or that is supplied by the employer terminates the contract of employment of that employee—

(a)        before the date on which the employer was entitled to do so in terms of section 37; or

(b)        in terms of section 38,

the employer is required to provide the employee with accommodation for a period of one month, or if it is a longer period, until the contract of employment could lawfully have been terminated.

(2)  If an employee elects to remain in accommodation in terms of subsection (1) after the employer has terminated the employee’s contract of employment in terms of section 38, the remuneration that the employer is required to pay in terms of section 38 is reduced by that portion of the remuneration that represents the agreed value of the accommodation for the period that the employee remains in the accommodation.

40   Payments on termination.

On termination of employment, an employer must pay an employee—

(a)        for any paid time off that the employee is entitled to in terms of section 10(3) or 16(3) that the employee has not taken;

(b)        remuneration calculated in accordance with section 21(1) for any period of annual leave due in terms of section 20(2) that the employee has not taken; and

(c)         if the employee has been in employment longer than four months, in respect of the employee’s annual leave entitlement during an incomplete annual leave cycle as defined in section 20(1)—

(i)         one day’s remuneration in respect of every 17 days on which the employee worked or was entitled to be paid; or

(ii)        remuneration calculated on any basis that is at least as favourable to the employee as that calculated in terms of subparagraph (i).

41   Severance pay.

(1)  For the purposes of this section, “operational requirements” means requirements based on the economic, technological, structural or similar needs of an employer.

(2)  An employer must pay an employee who is dismissed for reasons based on the employer’s operational requirements or whose contract of employment terminates or is terminated in terms of section 38 of the Insolvency Act, 1936 (Act No. 24 of 1936) severance pay equal to at least one week’s remuneration for each completed year of continuous service with that employer, calculated in accordance with section 35.

(3)  The Minister may vary the amount of severance pay in terms of subsection (2) by notice in the Gazette.  This variation may only be done after consulting NEDLAC and the Public Service Co-ordinating Bargaining Council established under Schedule 1 of the Labour Relations Act, 1995.

(4)  An employee who unreasonably refuses to accept the employer’s offer of alternative employment with that employer or any other employer, is not entitled to severance pay in terms of subsection (2).

(5)  The payment of severance pay in compliance with this section does not affect an employee’s right to any other amount payable according to law.

(6)  If there is a dispute only about the entitlement to severance pay in terms of this section, the employee may refer the dispute in writing to—

(a)        a council, if the parties to the dispute fall within the registered scope of that council; or

(b)        the CCMA, if no council has jurisdiction.

(7)  The employee who refers the dispute to the council or the CCMA must satisfy it that a copy of the referral has been served on all the other parties to the dispute.

(8)  The council or the CCMA must attempt to resolve the dispute through conciliation.

(9)  If the dispute remains unresolved, the employee may refer it to arbitration.

(10)  If the Labour Court is adjudicating a dispute about a dismissal based on the employer’s operational requirements, the Court may inquire into and determine the amount of any severance pay to which the dismissed employee may be entitled and the Court may make an order directing the employer to pay that amount.

42   Certificate of service.

On termination of employment an employee is entitled to a certificate of service stating—

(a)        the employee’s full name;

(b)        the name and address of the employer;

(c)         a description of any council or sectoral employment standard by which the employer’s business is covered;

(d)        the date of commencement and date of termination of employment;

(e)        the title of the job or a brief description of the work for which the employee was employed at date of termination;

( f )       the remuneration at date of termination; and

(g)        if the employee so requests, the reason for termination of employment.