Termination of employment

Grounds for termination

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

An employee may only be terminated for just cause or excuse. ‘Just cause or excuse’ is not defined by legislation. Generally, misconduct, poor performance and redundancy are accepted as just cause for termination.

Notice

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

Notice of termination must be given. Salary in lieu of notice may be paid.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

An employer may dismiss an employee without notice or payment in lieu of notice where the dismissal is for misconduct.

Severance pay

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

Severance pay is payable where the termination is by way of retrenchment or upon closure of business. Case law dictates that, if the financial position of the employer permits it, and especially if the retrenchment exercise is carried out with the aim of increasing efficiency and profits, fair and reasonable benefits should be made available. Currently, one month’s salary for each year of service is considered fair and reasonable. However, for EA employees, the law prescribes that the statutory minimum termination benefits are as follows and pro rata in respect of an incomplete year of service, calculated to the nearest month:

  • 10 days’ wages for every year of employment if he or she has been employed for a period of less than two years;
  • 15 days’ wages for every year of employment if he or she has been employed for a period of two years or more but less than five years; and
  • 20 days’ wages for every year of employment if he or she has been employed for a period of five years or more.
Procedure

Are there any procedural requirements for dismissing an employee?

Approval of a government agency is not required prior to a dismissal. However, depending on the grounds for dismissal, there are differing procedural requirements.

Employee protections

In what circumstances are employees protected from dismissal?

All employees are protected from unjust dismissal.

Mass terminations and collective dismissals

Are there special rules for mass terminations or collective dismissals?

Mass or collective dismissals are subject to the same rules. In addition, prior notice has to be given to the Labour Department at least 30 days before the termination date.

Class and collective actions

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Employees may make claims only on an individual basis for unjust dismissal. However, the courts may hear the matters together.

Mandatory retirement age

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

Yes. The minimum retirement age is 60.