One of the most popular new year’s resolutions regarding an individual’s work aspirations is to start a new job and achieve greater success in the new year. This is all good and well, but such ambitious aspirations often leave employers in a severe predicament, especially when operations kick off in full swing during the beginning of the year. This article aims to assist employers who might find themselves in a similar situation, and we will touch base on what contractual conditions and legislative duties are expected from both parties.
The most common examples of how an employee’s service can be terminated are by his resignation or a summary dismissal after a fair hearing was held. Their services can also be terminated if an independent chair finds the employee guilty of severe misconduct or by means of a medical or poor work performance incapacity process where the employee’s services were terminated due to him being unable or incapable of performing further duties.
When it comes to resignation, you often find that employees exercise their right to terminate the employment relationship via a unilateral act where they would simply tender their resignation, whether it be written or not, to the complete surprise of their employer. You will also often find that only a few employees adhere to their contractual obligation to work their prescribed notice period leaving the employer with an operational nightmare. This is particularly witnessed when an employee resigns to avoid disciplinary action. On 10 December 2020, the Labour Appeal Court (“LAC”) handed down judgment in the matter of The Standard of Bank of South Africa Limited v Nombulelo Cynthia Chiloane (JA85/18) and put to an end to the erroneous view that an employee has a right to resign in breach of their contractual notice period in the face of a disciplinary enquiry. In essence, an employee’s resignation only takes effect when the contractual notice period runs its complete course. An employer is entitled to proceed with the employee’s disciplinary enquiry during their notice period. Therefore, an employee who owes their employer a period of notice cannot avoid that period by resigning with immediate effect, unless the employer agrees that they may do so.
Even though resignation is generally regarded as a unilateral act, SEESA advises all employers to always request a written resignation letter from the employee to ensure they capture his intention. Once in receipt of such a resignation letter, an employer can take some of the following actions:
- Accepts an employee’s resignation in writing to limit any risk of the employee withdrawing his resignation and also to minimise any risk of unclear intentions;
- Accept an employee’s resignation in writing, but demand him to work his contractual notice period where he otherwise indicated he wouldn’t;
- Refuse the employee’s resignation in writing due to the employer’s need to pursue further disciplinary action, especially if the employee resigned to avoid disciplinary action.
When an employer documents every aspect of the termination process in writing, it will allow for a smooth exit and thorough record of the employee’s employment period, especially if this aspect should ever become a dispute in the future.
Section 37 of the Basic Conditions of Employment Act (“BCEA”) prescribes the following notice periods:
- One week, if the employee has been employed for six months or less;
- Two weeks, if the employee has been employed for over six months but not more than one year;
- Four weeks if the employee has been employed for one year or more; or is a farm worker or domestic worker who has been employed for over six months.
The BCEA further stipulates that an employee is not entitled to any annual leave during his notice period, although an employer may grant such if his operations will allow it. Suppose an employee intended to work his notice period but eventually fails to report for duty. In that case, there is no duty on the employer to pay the employee for days not actually worked.
Section 42 of the BCEA stipulates that an employer must provide the employee with a Certificate of Service upon termination of the employment relationship. The Certificate of Service must contain 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 employer’s business is covered;
- The date of commencement and termination of employment;
- The title of the job or a brief description of the work for which the employee was employed at the date of termination;
- The remuneration at the date of termination and;
- If the employee so requests, the reason for termination of employment. A reference letter in support of the employee to find alternative future employment is also welcome but not an obligation.
Upon commencement of the employment relationship, the employer must register his employees at the Unemployment Insurance Fund (UIF) and at the Compensation Fund in terms of COIDA and in a similar fashion, the employer must provide an employee with a copy of his UI19 form upon the termination of the relationship. The UI19 form will enable the employee to lodge a claim for unemployment funds with UIF should he qualify.
Further, the employer must make an arrangement for a payout if the employee received pension or provident fund benefits. After the employer processes the withdrawal form, the employee may withdraw the monies, keep the same in the fund or move it to another fund.
Finally, Section 40 stipulates that the employer must pay the employee any outstanding statutory monies, which include leave pay, salary until the last day worked and/or notice pay should it apply.
From the above, it is clear that the termination of an employee’s employment relationship, is a daunting and tedious task involving many administrative functions, but be assured that SEESA is here to assist.
Want to know more about the process to follow when terminating an employee? Kindly contact your nearest SEESA Labour Legal Advisor. Alternatively, leave your details on our website, and a SEESA representative will contact you.
About The Author:
Jodie Schultz started her career at SEESA in 2022 as a Labour Legal Advisor. She obtained her LLB degree in 2019 and was admitted as an attorney in 2021.
References:
- Basic Conditions of Employment Act 75 of 1997 (as amended);
- The Standard of Bank of South Africa Limited v Nombulelo Cynthia Chiloane (JA85/18) [2020] LAC.