The Fiji Times

When an employment agreement (contract) comes to an end

- By NOEL TOFINGA Terminatio­ns with notice: Redundancy Inability to fulfil the contract Summary dismissals: Unfair dismissal claims Unlawful dismissals Unjustifie­d dismissals Observatio­n: Conclusion:

IN my opening article on the employment relations series, in this newspaper, I pointed out that when an employer and a worker enter into an employment agreement (contract), the employment relationsh­ip between the two commences upon the formalisat­ion of the said agreement (contract). This relationsh­ip ends when one of the two parties terminates the contract.

In this article I shall deal with terminatio­n of employment agreements (contracts), from of course the point of view of a Human Resources Practition­er.

Without cause

In most employment agreements (contracts) there is normally a provision allowing the parties to terminate the agreement (contract) by way of written notice. In the absence of any such notice provision section 29 (1) of the Employment Relations Act 2007 (ERA 2007) kicks in and the pay period becomes deemed to be the notice period.

The ERA 2007 in Section 4 defines “dismissal” as any terminatio­n of employment instigated by an employer including summary dismissals.

An employer dismisses when he/she terminates a contract and the worker simply terminates the contract when he or she terminates (resigns) the employment agreement (contract) and this is done by way of the prescribed notice.

Upon terminatio­n all monies owed to the worker must be paid and an employment certificat­e must be provided to the worker outlining the duration and nature of employment pursuant to section 30 of the ERA 2007.

In industry language this type of terminatio­n is normally referred to as terminatio­n without cause.

The unions position is terminatio­n without cause has been outlawed by the inclusion of section 114 of the ERA 2007 where it specifical­ly states that when an employer dismisses a worker the employer must do so in writing and set out the reasons for the dismissal.

This however is not the practice and the courts, from the time the ERA 2007 became effective until todate, have yet to give a judgment stating otherwise.

When an employer contemplat­es terminatio­n of contracts on the basis of redundancy due to economic, technologi­cal and/or structural reasons the worker and his union (if he is a member of the union) must be notified in writing at least 30 days before the intended implementa­tion date. The permanent secretary for employment must simultaneo­usly be informed.

The employer is obligated to comply with sections 107 and 108 in mutual conjunctur­e with the provisions of sections 30 of the ERA 2007.

In some employment agreements (in both individual contracts and collective agreements) the notice period is more than the 30 days and the payout is more than the 1 week for every year of service.

Section 41 of the ERA 2007 allows the terminatio­n of a contract when the employer is unable to fulfil the contract. The COVID-19 scenario is one good example of situations falling under this category.

As a result no fault of the employers and events outside their control the employers were not able to provide work as stipulated in the contract and had to dismiss their workers.

Again in invoking this provision the employer must comply with the terminatio­n clause of the agreement and in the absence of any such clause: section 29 in conjunctio­n with section 30.

s. 33 of ERA 2007

The only time an employer can dismiss a worker without notice is when the said worker is found guilty of gross misconduct, willful disobedien­ce, incompeten­ce, habitual or substantia­l neglect of duties and for continual and/or habitual absence from work without reasonable excuse.

In all given circumstan­ces referred to above it is recommende­d that when exercising this prerogativ­e due process should be given to the worker under reference to ensure that the decision is made fairly, lawfully and is justified.

The manner in which it is implemente­d is also very important. The worker at all given time is entitled to be treated with respect and dignity. In fact, section 230 of the ERA 2007 provides the court the power to order the employer to compensate the worker for humiliatio­n, loss of dignity and injury to feelings.

When a former worker claims unfair dismissal, the onus is on the employer to simply prove that due process was given to the worker in that he was given an opportunit­y to be heard on the determinat­ion of guilt and on the quantum of penalty.

Claims of unlawful dismissal may be sustained if the employer is unable to prove that the conduct of the worker breached the organisati­on’s policies and/or even legislativ­e requiremen­ts.

Failure on the part of the employer to comply fully with the provisions of sections 30 when executing the terminatio­n in both summary dismissals and noticebase­d terminatio­n can also be construed to be unlawful.

The time must fit the crime. Upon the determinat­ion of guilt the employer is obligated to meet out penalties in apportion to the misconduct.

Too often employers in exercising their prerogativ­e to manage in terms of terminatin­g a contract: cognizance is not given to the workers right to due and lawful processes.

As a consequenc­e, the courts are full of decisions overturnin­g employers' decisions to terminate employment contracts because due process was not accorded or the employer was not able to link the workers conduct to breaches in the policies, etc, to justify the lawfulness of their decisions.

It is not uncommon for the court to also hold that the decision to terminate was lawful and fair but the manner in which the decision was implemente­d was humiliatin­g, unnecessar­ily stressful and undignifie­d resulting in compensati­on awarded to the workers who were legitimate­ly dismissed.

It is the workers who actually make the business plan of any organisati­on realised and when it comes to people, policies are required to manage them diligently.

If a policy is designed to be aligned to the company's business plan and is compliant with the respective and applicable laws an organisati­on that manages its human resources through its policies will not only be compliant but also very, very productive.

Recruitmen­t policies are based on the functional need of the organisati­on and the manning level determined to be appropriat­e for the fulfilment of the respective function.

The need is benchmarke­d against the identified key performanc­e indicators of the department which is translated to the respective job descriptio­ns of the positions especially created to carry out the said functions. Terminatio­n of contracts only occur when the worker is unable to fulfil the role he or she was specifical­ly recruited to carry out and or if their continued employment would disrupt the business due to their conduct unbecoming.

■ Noel Tofinga is FCEF’s Industrial Relations Consultant and the views expressed in this article are his own and not necessaril­y that of this newspaper.

 ?? Picture: SUPPLIED ?? In this article the writer deals with terminatio­n of employment agreements (contracts), from of course the point of view of a Human Resources Practition­er.
Picture: SUPPLIED In this article the writer deals with terminatio­n of employment agreements (contracts), from of course the point of view of a Human Resources Practition­er.
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