Termination of contract of employment

Employment contracts are not perpetual and they inherently can be terminated. The Employment Act provides for processes that have to be followed when a contract of employment is being terminated. A contract of employment for an unspecified period of time may be terminated by either party. On the other hand, a contract of employment for a specified period of time automatically terminates on the date specified for its termination and, unless it is expressly or tacitly renewed or prolonged, no notice is required for its termination. Furthermore, where the purpose or effect of a contract of employment that is said to be for a specified period of time or a specific task is the filling on a lasting basis of a post connected with the normal and permanent activity of an undertaking, it shall be deemed to be a contract of employment for an unspecified period of time. Additionally, a contract of employment to perform a specific task terminates on the completion of the task and no notice of termination is required of either party.

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Notice is an important element for termination of contract of employment. A contract of employment for an unspecified period of time may be terminated by either party upon giving the other party the minimum period of notice in writing as follows. Where the contract is to pay wages at a monthly rate, one month’s notice. Where the contract is to pay wages at a fortnightly rate: one fortnight’s notice where the employee has been employed for less than five years; and one month’s notice where the employee has been continuously employed for at least five years. Where the contract is to pay wages at a weekly rate: one week’s notice where the employee has been employed for less than two years; one fortnight’s notice where the employee has been continuously employed for a period of not less than two years but not exceeding five years; and one month’s notice where the employee has been continuously employed for at least five years. Where the contract is to pay wages at a daily or hourly rate: one day’s notice where the employee has been employed for less than six months; one week’s notice where the employee has been continuously employed for a period of not less than six months but not exceeding two years; one fortnight’s notice where the employee has been continuously employed for a period of not less than two years but less than five years; and one month’s notice where the employee has been continuously employed for a period of at least five years. Where the contract of employment for unspecified period of time is to pay wages at any rate, other than an annual rate, not provided for in the law, either party may determine the contract at the close of any day without notice. The minimum period of notice in respect of a contract of employment for a specified period of time shall be fourteen calendar days.

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There is also provision for payment in lieu of notice in that the employer or employee are not prevented from waiving their right to notice on any occasion or from accepting payment in lieu of notice. In lieu of providing notice of termination, the employer shall pay the employee a sum equal to the remuneration that would have been received and confer on the employee all other benefits due to the employee up to the expiration of the required period of notice. Where the employee terminates the contract without notice in circumstance in which notice was required, and the employer has not waived the right to notice, the employee shall be required to pay the employer in lieu of notice a sum equal to the remuneration that would otherwise have been due to the employee up to the expiration of the required period of notice.

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On any termination of a contract of employment an employer, if so requested by the employee, shall provide the employee with a certificate of termination indicating: the name and address of the employer; the nature of the employer’s business; the length of the employee’s continuous employment with the employer; the capacity in which the employee was employed prior to the termination; the wages and other remuneration payable at the date of termination of the contract; and where the employee so requests, the reason for the termination of employment. The certificate of termination ought not to contain any evaluation of the employee’s work unless the evaluation is requested by the employee.

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