TERMINATION OF THE EMPLOYMENT CONTRACT
January 17, 2016
Once employed, employees do not look forward to having their contracts terminated.
Unfortunately, most employers recently found any easier scapegoat. My conviction is that the raison d’être behind the retrenchment and termination of employment contracts on notice is that employers are seeking to hide behind labour costs due to their financial glitches.
By the way, I am not advocating for life time employment models. However,l encourage all employees to prove their worth. In others words, be competent! Before I get into the legalities of terminating the employment contract, let me borrow a statement from one famous businessman who said, “You can take everything I have, but leave me with my people and I will be able to rebuild again.”
A competent workforce can be used to regain financial invincibility. In light of that, l recommend that retrenchment must be the last option. Rather, employer’s should craft performance based contracts. Usually, termination of the employment contract involves releasing an employee against his or her will. The process is unavoidably painful to the affected employee.
Termination of contracts, however, are a necessary part of business life and must be carried out promptly when the need for such actions become obvious.
When an employee is dismissed or fired, it is generally thought the employee would have been at fault. On the other hand, some lay-offs are usually done when business slows down during economic downturns. This can be outside the employee’s performance. Retrenchment may be voluntary.
In the case of Samuriwo vs Zimbabwe United Passenger Company 1999 (1) ZLR (H), wherein Garwe (as he then was) had to say, ‘…the code in compliance with S (section)101 of the Act steers clear of other matters that have nothing to do with misconduct, such as termination for other reasons’. In this case supra places beyond dispute the fact that there are several legally permissible ways of terminating the employment contract apart from dismissal in terms of codes of conduct following disciplinary proceedings as provided for in the codes of conduct.
The several ways of terminating employment contracts include (a) death of the employee (b) liquidation of the organisation (c) retrenchment (section 12C) of our labour Act (d) dismissal section 12B and in line with section 101 (e) expiry of a fixed term contract (f) completion of business project (g) supervening impossibilities (f) incapacity to perform the agreed tasks (g) retirement.
In the Zambian labour law, depending on the type of contract involved, employment can be terminated, not at the initiative of the employer, in circumstances that include: the expiry of a fixed-term contract, the completion of the task for which the contract was concluded, the death of the employee, or any other manner in which a contract of service may be lawfully terminated or deemed to be terminated, whether under the provisions of the Employment Act or otherwise. Under the South African law section 188 of the Labour Relations Act, a termination is unfair if the employer fails to prove that the reason for dismissal is: (a) a fair reason related to the employee’s conduct or capacity; or (b) based on the employer’s operational requirements; and (c) that the dismissal was effected in accordance with a fair procedure. The Labour Relations Act classifies terminations for certain reasons as being automatically unfair.
Back home before 26 August 2015, section 12 (4) of our Labour Act chapter 28:01 made it legally permissible to terminate the employment contract on notice as learnt from the cases of Art Corporation Ltd v Moyana 1989 (1) ZLR 304 (S) at 308G-309G and Chirasa and others v Nhamo NO and another (2003) ZWC 72 and the popular Don Nyamande and another v Zuva Petroleum pvt ltd (2015) SC 43/15.
The above judgement where reached as a result of the provision of Sec 12 (4) of the Principal Act which read “….Except where a longer period of notice has been provided for under a contract of employment or in any relevant enactment, and subject to subsections (5), (6) and (7), notice of termination of the contract of employment to be given by either party shall be —” The above lead to thousands of employees being dismissed from work. Case law proves that the loophole was existent from the inception of the Principal Act but it became popular in 2015 on the judgement of Don Nyamanda and K Donga vs Zuva Petroleum case. However, the Amendment of section 12 of Cap. 28:01 of the principal Act by the insertion after subsection (4) of the following subsections:
“( 4a) No employer shall terminate a contract of employment on notice unless-
( a) the termination is in terms of an employment code or, in the absence of an employment code, in terms of the model code made under section 101(9); or (b) the employer and employee mutually agree in writing to the termination of the contract or
(c) the employee was engaged for a period of fixed duration or for the performance of some specific service; or (d) pursuant to retrenchment, in accordance with section 12C.
(4b) Where an employee is given notice of termination of contract in terms of subsection (4a) and such employee is employed under the terms of a contract without limitation of time, the provisions of section 12C shall apply with regard to compensation for loss of employment.”. This has changed or has outlawed the termination of the employment contract by giving notice if the termination is the initiative of the employer, that is, this statue restricts the common law’s right of the employer to terminate the employment contract by only giving the employee notice of termination.
But basing on this provision, the employees are still at liberty of terminating the employment contract by giving the employer notice of termination but in compliance with section 12 (4) Cap 28:01.
The new provisions of Sec 4(a) of Cap 28:01 entail that we have to read section 12 (4) together with 12C . Dismissal is another way of terminating the employment contract, but it has to be practised in compliance with section 12B, Cap 28:01 where it outlines the circumstances in which the employee could have been unfairly dismissed. (1) Every employee has the right not to be unfairly dismissed. An employee is unfairly dismissed— (a) if, subject to subsection (3), the employer fails to show that he dismissed the employee in terms of an employment code; or
(b) in the absence of an employment code, the employer shall comply with the model code made in terms of section 101(9). (3) An employee is deemed to have been unfairly dismissed—
(a) if the employee terminated the contract of employment with or without notice because the employer deliberately made continued employment intolerable for the employee;
There the CoC should be used when dismissing the employee. ln the case of absence of the code, the national code shall be used (SI 15 of 2002) (b) if, on termination of an employment contract of fixed duration, the employee—
(i) had a legitimate expectation of being re-engaged; and (ii) another person was engaged instead of the employee.
If an employee is dismissed and another person is employed instead, it makes the dismissal unfair. However, this clause applies only when the employee was dismissed when their contract expires. Legitimate expectation does not apply when the employee has been dismissed on the grounds of misconduct. Read more of my articles on The Sunday Mail website (www.sundaymail.co.zw) as I look into the ILO — Termination of Employment Recommendation, 1982 (No. 166) concerning termination of employment at the initiative of the employer.
Brenald Chinyowa contributes weekly on www.sundaymail.co.zw and writes in his personal capacity. Feedback email chinyowab@gmail.com. Blog: profbrenald.blogspot.com
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