Termination of Employment
Who can terminate an employment contract?

Termination is the ending of employer/employee relation and it can happen in various ways. The employer can terminate an employment contract; an employee can terminate; the employer and employee can mutually terminate the contract or the contract can be terminated automatically.

Lawful termination can be done in several ways

  1. Termination by Employer
    An employer may terminate an employment contract; however, this termination has to have reasons that are acceptable by law and has to follow the procedure that is set by law and which is fair. The reasons for termination by the employer include:
    (a) Termination on disciplinary grounds
    (b) Termination by reason of poor performance
    (c) Termination by reason of ill health
    (d) Termination by the operational requirement
    (e) Termination of employment for incompatibility
  2. Termination by Employee
    This is commonly known as resignation and notice is issued by the employee. (Rule 6, Code of Good Practice, GN 42)
  3. Automatic Termination
    A contract of employment may automatically terminate due to circumstances such as death or retirement or the lapse of time for a fixed-term contract or sequestration of the employer. (Rule 5, Code of Good Practice, GN 42)
  4. Mutual Termination
    Mutual termination signifies that there is an agreement between the employer and employee to end their contractual relationship. (Rule 4, Code of Good Practice, GN 42)
In what circumstances can a probationary employee’s contract be terminated?

Termination of probationary employees may be done on grounds of incompatibility, incapacity, grow misconduct, poor performance and any other reasons provided under the law. (Rule 10, Code of Good Practice, GN 42 of 2007)

Severance pay is the pay of 7 days per each year worked to a maximum of 10 years. The following employees are not entitled to severance pay after termination.

  • Employees terminated for reasons of misconduct
  • Employees terminated on grounds of incapacity, incompatibility or operational requirements of the employer but who unreasonably refuse to accept alternative employment with that employer or any other employer
  • Employees who attain retirement age
  • Employees whose fixed term contract has expired
  • Employees who resign. (Section 42 ELRA)

Constructive termination is where an employer makes an employment intolerable which may result to the resignation of the employee, that resignation amounts to forced resignation or constructive termination. (Rule 7, Code of Good Practice, GN 42 of 2007)

Terminal Benefits