There is no doubt that the impact of COVID-19 has had devastating effects on the economy and, more specifically, the business sector. This, coupled with the recent events of unrest, has placed many employers in the difficult position of having service agreements cancelled by clients or the closing down of businesses. This then results in contracts ending or employers often having to terminate employment. As much as this should be a last resort, if employers do not follow proper procedure or take cognisance of employees rights as per the Basic Conditions of Employment Act, the result is that they could end up in some hot water at the CCMA or Bargaining council to put it lightly.
Chapter 5 of the Basic Conditions of Employment Act 75 of 1997 (hereafter referred to as the Act) provides a clear picture of how notice must be given and what amounts are due to employees. The first aspect that must be noted is that Chapter 5 does not apply to any employee that works less than 24 hours in a month for an employer.
Section 37 of the Act deals with notice of termination and requires that a party may terminate a contract only on notice of not less than:
- One (1) week if the employee has worked four (4) weeks or less.
- Two (2) weeks if the employee has worked more than a month but less than a year.
- Four (4) weeks if the employee has been employed for more than a year or is a farm worker or domestic worker who has been employed for more than four weeks.
Collective agreements may permit a shorter notice period, however, employees are not required to give a more extended notice period as stipulated above.
The notice of termination of an employment contract must be given by an employee in writing except where an employee is illiterate. Further, when employers give notices of termination to employees, they must be explained by an employer in an official language that the employee understands.
Importantly, employers cannot give notice during any leave period to which the employee is entitled, and further notice may not run concurrently with any leave period to which the employee is entitled.
Employers should be mindful that a contract coming to an end and being terminated are two very different events. A termination would not hamper an employee’s right to refer an unfair dismissal dispute to the CCMA, but a contract ending, provided that no reasonable expectation of renewal has been given, would not be regarded as a dispute that the CCMA would have jurisdiction over.
Employers may also elect to pay out the notice period to employees as an alternative to employees working their notice period. It must also be noted that employers must pay, to employees, upon termination any leave pay or time off which the employee would have been entitled to.
Section 41 deals with Severance pay. It must be noted that only employees who have been dismissed regarding operational requirements (retrenched) are entitled to severance pay. As per the Act, employees are entitled to one (1) weeks remuneration for each completed year of service. It must also be noted that an employee who unreasonably refuses to accept an employer’s offer of alternative employment with that employer or any other employer is not entitled to severance pay in line with section 41. If there is a dispute on severance pay, the dispute may be referred to the CCMA.
Upon termination, an employee is entitled to a Certificate of Service, which states the following:
- The employee’s full name
- The name and address of the employer
- A description of any council or sectoral employment standard by which the employers business is covered.
- Date of commencement and date of termination of employment
- The job title or a brief description of the work for which the employee was employed at the date of termination.
- The employee’s remuneration at the date of termination; and
- If the employee requests the reason for the termination.
Should you have any further questions on the above, kindly contact your nearest CEO office for assistance.
Article by: Krian Rathinam
Dispute Resolution Official – Durban