The employment contract can come to an end when the employee resigns, reaches retirement age, is dismissed or is retrenched. Depending on the circumstances, the employer has the following obligation towards the ex-employee:
The employee resigns
When the employee resigns, it must be in writing. If an employee refuses to work the required statutory notice period, the employer does not have to remunerate the ex-employee for the notice period and may claim any damages suffered as a result thereof. If parties come to a mutual agreement that the employee is not required to work the notice period, the employer still has to remunerate the employee for the notice period. The employer must also remunerate the ex-employee for accumulated leave due to the employee.
The employee reaches retirement age
The employment contract will terminate when the employee reaches the agreed upon retirement age. The agreed upon retirement age must be stipulated in the employment contract. The employer must also remunerate the ex-employee for accumulated leave due to the employee. Any ex gratia (out of goodwill) payment is solely at the discretion of the employer. This is not a legal requirement.
The employee is dismissed
Under no circumstances can an employee be dismissed prior to holding a disciplinary hearing. Once the employee has been found guilty and there are sufficient grounds to proceed with a dismissal, an employee can be dismissed. The ex-employee is entitled to his/her salary up to the last working day. This includes the finalisation of the disciplinary hearing. The employer must also remunerate the ex-employee for accumulated leave due for accumulated leave due to the employee.
It is important to determine whether the dismissal is with or without a notice period. If a notice period is applicable, the employer has to decide whether the ex-employee is required to work the notice period. If not the employer still has to pay the employee for the notice period.
The employee is retrenched
A retrenched employee is entitled to remuneration for accumulated leave, notice pay (if applicable) and severance pay of at least one week’s remuneration for every completed year of service. The employer has an obligation to provide an ex-employee with a certificate of service and final payment from upon termination of employment. A U119 has to be completed and submitted to the Department of Labour. It is advisable to provide the ex-employee with a copy of the U119 form.