Years of service is an important and fundamental aspect in the employee-employer relationship. This term and its value rapidly becomes most relevant when an employee-employer relationship comes to an end, with emphasis on the calculation of severance pay in any retrenchment exercise as well as mitigating and aggravating factors and circumstances in disciplinary action.
When an employee returns after termination of employment, how can employers approach years of service?
What happens to the years of service?
Should the relationship be terminated by way of Incapacity, misconduct or operational requirements, the years of service will cease to accumulate.
If the employment relationship recommence within a reasonable period after termination, the years of service would not reset the clock but instead revive it. This would mean that, should any sort of severance pay be a subject up for discussion if the time comes, there would not be a break in years of service. The employee would enjoy the full benefits of the unbroken years of service.
This seems quite straight forward, as there is always the possibility of the employer deciding to forgive said employee for any misconduct-related dismissals or in the circumstantial change of a no-fault dismissal.
What complicates matters is where an employee decides to resign. A reasonable and logical approach would certainly deem this voluntary act to certainly reset the clock.
In Insurance & Banking Staff Association obo Aucamp v Old Mutual Life Assurance Co (2000) clarity was given on the resignation of an employee, and what it meant for the accumulation of years of service.
Calculating severance pay, Section 41 of the Basic Conditions of Employment Act (BCEA) provides that an employer must pay an employee who is dismissed for operational requirements severance pay equal to at least 1 week’s remuneration for each completed year of continuous service with that employer.
However, a brief break in service of less than 1 year does not disentitle an employee to severance pay for the period prior to the break.
In summation: if an employee resigns and you re-hire said employee within 1 year of the resignation, the clock does not reset for years of service but instead revives it. The years of service prior to the resignation will be seen as a continuous period of service.
ABOUT THE AUTHOR
Gert Brink obtained his LLB degree from the University of the Pretoria and completed his board examinations and articles in Pretoria. He was subsequently admitted as an attorney of the North Gauteng High Court in Pretoria in 2015. He is currently a SEESA Labour Legal Advisor at our Pretoria office.