A contract of employment can be terminated on the following grounds:
* On expiration of the agreed period of employment
* On completion of the specified task
* By notice duly given by either party
* By summary termination in the event of a material breach on the part of either party
* By repudiation (to reject the value or authority of the employer or employee)
* By mutual agreement
* By death of either party
* By the insolvency of the employer
* By the supervening impossibility of performance, where either party becomes permanently unable to perform his/her obligations in terms of a contract.
An employment contract may not be terminated in the absence of a justified reason.
Either party can terminate a contract by serving a notice or paying in lieu thereof. According to the Labour Relations Act, a contract of employment may be terminated for any fair reason. Fair reason includes worker's (mis)conduct, poor work performance and/or incapacity, an employer's operational requirements and a health injury leading to incapacity for work. If an employer wants to terminate the employment contract of a worker (or vice versa), the period of notice is at least:
* One week for workers who have been employed for six months or less
* Two weeks for workers who have been employed for more than six months but less than one year
* Four weeks for workers who have been employed for one year or more.
The notice period for domestic and farm workers (with more than six months of employment) are four weeks. For less than six months of employment, it is one week.
A collective agreement may allow a shorter notice period than what is required under the law. A collective agreement may allow the notice period of four weeks for workers employed for more than one year to be reduced to (not less than) two weeks. According to the law (LRA s187) it is unfair to dismiss a worker for:
* Participating in a protected strike
* Failure to perform the work of strikers during a strike (unless essential to prevent actual danger to life, personal safety or health)
* Compelling the acceptance of a demand in respect of any matter of mutual interest between the employer and employee
* For exercising a right conferred by the Act
* For participating in proceedings against an employer
* (Intended or unintended) pregnancy
* A transfer, or a reason related to a transfer
* A contravention of the Protected Disclosures Act, 2000, by the employer, on account of an employee having made a protected disclosure defined in that Act
* Discrimination on the ground of race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility) and age (unless normal or agreed retirement age).
A dismissal may still be considered fair if the reason for dismissal is based on an inherent requirement of the particular job.
A dismissal that is not automatically unfair, is considered unfair if the employer fails to prove that the reason for dismissal is a fair reason related to the employee's conduct or capacity; or based on the employer's operational requirements; and that the dismissal was effected in accordance with a fair procedure.
Source: § 37-38 of the Basic Conditions of Employment Act 1997 (last amended in 2014); §186-187 of the Labour Relations Act No. 66 of 1995 (last amended in 2014)
The Basic Conditions of Employment Act provides for severance pay. A worker, who is dismissed for reasons based on the employer's operational requirements or whose contract of employment is terminated on account of insolvency, is entitled to the severance pay at the rate of one week of pay for each completed year of service. The amount of severance pay may be increased by mutual agreement between the employer and worker. This agreement prevails over the statutory minimum imposed by the BCEA.
A worker 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. Payment of severance pay does not affect the rights of a worker to any other payable amount.
Source: §41 of the Basic Conditions of Employment Act 1997 (last amended in 2014)