When an employment agreement (contract) comes to an end
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.