By Simbarashe Gobvu
Termination of employment contract on notice has remained an issue at the workplace regardless of promulgation of Labour Amendment Act Number 5 of 2015 after the historic Supreme Court Zuva judgement which was handed down on the 17th of July 2015.
Most organizations are yet to comply with the current legislation with regard to termination on notice. Some organizations are still terminating contracts of employees on notice with intention to pay compensation for loss of employment. The amended Labour Act has outlawed termination on notice for permanent employees and employers who are still using the formulae to down size their employees risk litigation and may end up paying punitive damages in lieu of reinstatement. Employers must note that compensation for loss of employment is subject to the provisions on section 12(4a) of the Labour Act.
The Section provides that no employer shall terminate on notice unless the termination is in terms of the under listed circumstances:
(a) Code of conduct
- it is a fixed term contract
(c) in case of mutual agreement or
(d) Pursuant to retrenchment.
It must be noted that the Act has not abandoned termination on notice but has given circumstances under which termination on notice is acceptable. The Section supra outlawed termination on notice but gave exceptions. Section 12(4) specifies period of notices for various types of contracts depending on their duration and the new amendment Number 5 did not repeal the section making it applicable but only to those engaged on fixed term contracts.
Employers must therefore note that a contract without limit of time may be terminated on notice only in terms of Section 12(4a) (a), (c) and (d) supra. In terms of the first circumstance, the employer may only do so if it is provided for in the code of conduct for the company. The second circumstance is when parties mutually agree to terminate the contract on notice and the third circumstance is pursuant to retrenchment as provided for on Section 12C of the Labour Act. Upon termination both parties must be aware that compensation for loss only applies to aforementioned circumstances for permanent employees.
Upon termination on notice employees on fixed term contract are supposed to be paid compensation for loss of employment for the period they would have served the organization. Where permanent employee`s contract is terminated on notice, the appropriate remedy of reinstatement or payment of damages in lieu of reinstatement will be inevitable. In the case of Air Zimbabwe versus its employees who were terminated on notice the Supreme Court recently ruled that the employees were entitled to reinstatement or payment of damages in lieu of reinstatement.
The judgment confirmed that the Labour Amendment Act No 5 of 2015 did give protection to permanent employees whose contracts can no longer be terminated on notice by an employer willy-nilly with an intention of paying compensation for loss of employment. https://masvingomirror.com
Opinions expressed herein are solely those of the author and must not be taken as legal advice. Simbarashe Gobvu is an experienced Labour Practitioner and an Independent Arbitrator who write in his own capacity. He can be contacted at [email protected]/ Phone 0773215904 or 0713008767